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You're seeing now the the fresh summer collection of lower piano. This Jason Ohh, really is the thin summer Gillet. OK, really beautiful cashmere. Continue. It's called like the King's cashmere or something. And then this is called a lovely yellow boating sweater. Anyways, I took sacks to my tailor and I took him to Lora Piana, and then at some point I just ******* lost them. And then I haven't seen him since. So you took him to your Taylor and Taylor? Wow, great that the show remains accessible. To the every man and woman there sucks. But yeah. Ohh, looking at two, it's like twins. Oht. God, it's so perfectly Italy. He was the Sri Lankans too. Wow. Lord. Oh my God. You guys have an announcement today. Announcement? Good to see. Everybody's focused on what matters. OK, everybody, welcome to all in episode 86, end of the world. Except for these two **********. We thought it would be really funny to to find the exact same outfit at Laura Piano. I feel fully styled. What a great look. Guys look so good. It's like dumb and Dumber in Italy. Let your winners ride. Man David. We open sources to the fans and they've just gone crazy. Queen. Hey everybody, welcome to episode 86 of the All in podcast we're not dead yet, still publishing with us from Italy, the Rain Man and the dictator in matching outfits. Gentlemen, how is Italy? It's fantastic. And also with us, the Sultan of Science himself, David Friedberg, from an undisclosed conference somewhere which we can't talk about. How you doing? I'm off the record this week. Off the record this week, and a little hungover, it seems. Yeah, you need a cup of coffee. Drinking a little Scotch last night, late night, little Scotch. I went Scotch and beer and it was a it was a late night. All right, everybody, we got a lot of news to get through. Let's just parse through some of the data, because data has been coming in and the minutes from the June fed are out. The key quote significant risk that elevated inflation could become entrenched if the public began to question the resolve of the Fed. So they went from transient. To now fearing entrenched jobs have slipped a little bit. This is something we've been talking about. But just to give some context here, we're still a historic number of job openings. We peaked in March 11.9 million. In May we we dropped down to 11.3 and 11 million for six straight months. It's just extraordinary. If you look at this Fred chart, it's just astounding to think that this many jobs are available to for one, in the United States, there are two jobs. Available for every one person who needs a job and. This, they're just absolutely stunning. If you look at the what do you think this is the precursor to dropping down dramatically in the white collar sector is what the data is showing. What is major wage or major wage inflation? I mean, yeah, that work, that work clearly has to be done and if you lay people off. The number of unemployment not unemployed will go up. But at the end of the day, the thing that we know here is we have a structural unemployment problem, as you said, two openings for every person. Which means those openings aren't paying enough for people to leave the sidelines and get on the field. Yeah. Or or they've been incentivized to to be on the sidelines. Exactly. So, yeah, these these job openings might actually be indicative of the opposite of what the Fed is telling us, right? the Fed wants us to believe. That they can just keep jacking up rates and we're not going to go into recession because we have all these open job wrecks. But what if we should see the labor market is really two separate markets. There's sort of white collar professionals and you're seeing all of these tech companies that were involved in slam on the brakes really quickly right now. So we're going to see greater unemployment there. And then on the blue collar side, you have this issue of record low labor participation and so you still have inflation. Lyrics I can't fill all the jobs because there's all these like warped incentives around that there are two just put a number on it, sacks, we're we're 10% off the peak in terms of participation and if those folks would participate. It would really fill a lot of these jobs that would increase the production of goods and services. That might take some of the pressure off inflation, and it would also increase monetary velocity, rights acts. People would spend the money they make, which then get us out of this mess, possibly. I think part of the problem with the Fed's approach here is that it's assuming that if they just keep jacking up rates, that will that will reduce demand and that will stop or slow down inflation. And there's some truth to that. However, I don't think this inflation is purely a problem of excess demand. I think there's also a supply problem, meaning that not enough goods and services are being produced. And the commodities, the inputs that we need to the production of goods and services, those prices are increased, they've been inflated. And that started well before the Ukraine war. But I think the Ukraine war has now exacerbated this problem with respect to energy and food. If you had 7 minutes for your over under for sacks to mention Ukraine, you took the under you want. I'm just mentioning it as as a exacerbate or of the situation. I think that's actually really good framing that it's an exacerbated. This is a real start with this, yeah. So if you look at the quits, let me just give you the quits number because this is really interesting. These are people who are quitting jobs. It's still at a record high. So this concept of the great resignation, we're still having over 4 million people quit their jobs every month. Free pandemic quits averaged under 3,000,000 a month. And if you look at that chart, it's just staggering to think that in an economy that's going down, people are still quitting. Now. What is that indicative of? It's indicative of people believing that they can get another job. You don't quit your job if you don't think you can get another one, or you have some savings available and you wanna Yolo. Maybe, you know? You know, spend a little free time going on vacation or there's a new economy emerging, right? I mean, one of the the cases to be made is that the pandemic and the stimulus that followed created a staggering short shift in the types of jobs and the types of businesses that people, you know, used to make money. And, you know, a lot of people were able to shift to work from home. And when you shift to work from home, you have more flexibility and freedom to choose other jobs that you can now do from home. And people don't want to work in restaurants. They don't want to work in fast food. And if they can find another job, a gig like or services like or on demand type job where they can have more freedom and flexibility and more earnings in their life, they'll make that choice. And this happened so quickly because of the shutdown, the lockdowns and then the stimulus, the trillion dollars or $2 trillion that poured in. It created all these new opportunities and all these new incentives for new types of work. And the fact is the old economy, the old businesses, all the fast food restaurants and the coffee shops, they're sitting with half employment and they can't fill the jobs because that's. You know, that that used to be a job that there was demand for it's and now it's not the case. You know, and I think that that's what, by the way, I don't, I don't know if that necessarily reverts in the near term because I do think that there's been a substantial, almost permanent change in some of these sectors of the economy. Not necessarily all. Some will revert, but it leaves big gaps in parts of the economy. And maybe fast food restaurants are not going to be as cheap as they used to be because in order to get people to work there, you got to charge more. And there's other parts of the economy like services and selling stuff on Etsy and whatnot that are working for people. Let me just put a number on that and then hand it off to you sacks to just put a number on that. The jobs that fell the most, white collar off 325,000 and manufacturing 208,000, the jobs that are increasing the most, hospitality and retail. So exactly to your point, people feel more options. This whole thing was accelerated during the pandemic sex. Well, the question I want to ask Freeberg is do you actually think that these new options of work from home and remote work have actually made the economy more productive? Me, that obviously employees, if you give them the no freedom over the decision of their trade off between work and leisure and let them make the economy more expensive. How so? If you take a big step back to the day before the lockdowns started, we had a normal functioning and economy that was growing by, call it, 2% a year. And the minute that we enforce these lockdowns, I actually think what we did was we started a supply side recession. It's what Zach said earlier. So what does that mean? Let's just say you're a factory and you make wheels, OK? Just make something really simple. You were growing at 2% a year. Everything seemed hunky Dory. You had employees, it was fine. You used to sell your products, make 1015% profits. Everything was fine. And then the day after, the government said you need to shut your factory down because we can't have people spending too much time close together because we need to get a handle on this pandemic. OK, so you shut it down. And then for the next 12 or 18 months, what happens? That stuff sits idle. These people that used to work for you get 2 1/2 trillion dollars put into their bank accounts. They spend their time doing other things. And then all of a sudden people say, OK, it's time to start the factory up again. People want to buy. Wheels. And now all of a sudden you find that because everything all around the world was shut down, there's no rubber to make the wheels, there's no steel to make the axle. There's no people to put them all together. And So what happens? Well, prices go up because again, you gave everybody else 2 1/2 trillion dollars, so they're like, well, I used to pay a dollar for your wheel. I'm willing to pay you $2.00. Now just make the wheel give it to me before you give it to somebody else. So that is like the classic definition of a supply side recession. There's another piece of that too and sorry just to finish the point and the Fed basically confirmed this in the minutes that they just released today. Jason, can you just read the quote that you had in the in the notes? Well the the one up top a significant risk that elevated inflation should become entrenched if the public begins to question the resolve their resolve. I think the point is that, you know we were kind of in a supply side recession and now by raising rates to some crazy amount, the end of which we are still not. Sure about May actually then trigger the demand destruction to have a demand side recession. And so I don't, I don't know that we've lived in a modern point in time where both things have been true, right. There's been a principle of macroeconomics that you're everybody's always kind of debating. Is this a supply side issue and is it a demand side issue. We know that in COVID it was a supply side issue. We took all the supply out of the market. And now we're trying to figure out when we exhaust, you know, all of the money we've given people and we destroy demand and take the incentives for demand to go away, right? Consumer confidence is now starting to turn. What happens then? Well, we're going to figure that out in the next six or nine months. But The thing is you have both that are true. It's not as if the supply side of the economy has been fixed. It's not as if everybody is running at 100% capacity. It's not as if all the supply chain issues have been worked out. So I don't know, I just think it's a very complicated situation. Yeah, it's it's a perfect pivot. And just to build on that chamath the downstream effects, we always talk about the 2nd order impact because people are not going to work anymore downtown areas. Are dying, so office space, commercial real estate, sacks, you're in that so you can comment on what's happening. And then restaurants and commuting and all the stuff that was happening downtown. San Francisco's downtown let Mayor London breed had a press conference and she's been tweeting, hey, we have to revitalize, you know, Soma in San Francisco, that's never going to happen. That that's off the table. That's like Biden tweeting. We gotta drop gas prices. It's like, I mean, we have complete the market. Look into politics, sacks. Don't worry. We got plenty of politics for you. I'm just seeing it on. So there's your flop, gentleman. The jobs are Francisco real estate. I I read an amazing statistic today. From like one of the major brokers they they said that by the end of the year they're expecting 30 million square feet of office vacancy, 30 million in San Francisco by the end of the year. San Francisco is tiny by the way because of sub leases and and then tenants rolling off. So the first thing I did is I tried to Google what's the total square footage in San Francisco and I think it's about 75 million of office space. Percent vacancy by the end of the year? I've never heard of such a thing. 40%, let's be clear, San Francisco's fairly unique and a bit of an outlier in the circumstance because so much of it was, you know, tech heavy and so much of it went remote. Yeah. And the city and it all got crime. But, like, generally, that's not the case. I mean, you know, New York is apparently still pretty stable, right? And Miami is obviously doing well. LA often. But here, here's the piece that people aren't really thinking about, which is the only reason it's stable is because tenants sign up for long term leases. And This is why it turns out that we work as a pretty bad business model is because if you're if all your leases are month to month and you hit a recession, your revenue gets whammied. This is why landlords like long term leases with creditworthy tenants. They signed seven years, 10 years and so on, letters of credit right here. What that means though is that as these tenants start to roll their leases role over the next few years, they don't need as much space because they've either gotten remote or they're like hybrid now and so they're thinking of their office. This is a headquarters, which everyone needs to go to and more as, like a coworking space their employees occasionally go to. So they're all reducing their footprints. This is why San Francisco keeps increasing. Its vacancy is that as more and more of these leases roll, there's just no need. They don't need as much space, so they're also downsizing. Now, here's the problem. Here's the problem is that these buildings have debt on them, right? And that debt has what's called a debt service coverage ratio DSCR. And basically you become you as a building owner, become in default on your debt covenants if your revenue from the building drops below a certain number. And here's the problem, all these new leases that get signed, to the extent there are any, they're going to be at a fraction of what the old leases were because this, this vacancy is going to create a massively low market clearing price. Am I right to understand that they're not allowed to sign those leases because they're under it? So can the landlord not take it as better than nothing or do they? And that allowed to take it. It's not that. It's just that the market clearing prices can be so much lower than their old leases that when they then look at the revenue from the building and and by the way that buildings can have a lot of vacancy on it. Now they're just not being able to hit their, their, their debt service coverage ratio. So they will be in default. What that means is I don't understand how in a place like downtown San Francisco, half the buildings don't end up getting owned by the banks. Well, the banks don't want to own all these buildings, so they're going to be a fire sale. But I don't know who the buyers are going to be. They just have to convert it, right. I mean that's the only thing they got to convert these to residential. Because we have a housing crisis still. That's the only years and years that takes years and years and that's that's a repositioning play. First you need the cooperation of the city government, which isn't going to happen. You need that, you need developers to come in and have the capital to, to basically make all those changes. Again, it takes a long time, but but think about the systemic risk from that, right. If you know that a huge chunk of the real estate in is the commercial real estate in downtown San Francisco, which used to be blue chip, I mean the most blue chip, right. Who are those financial institutions? Own those assets because they are now toxic assets and they will be revealed to be toxic assets as soon as the leases role well and then there are debt funds and banks as well, right. And so you what are the cascading effects when those shoes start to drop? Yeah. OK. And so just to put a finer point also on the the jobs and that was our flop. Net international migration has just plummeted. We're we're well under a million folks coming into the country. So the obvious solution. To our employment issues is to recruit people from other countries. But let's go to the turn card. Yeah, there it is. We have just stopped letting people. Trump just absolutely closed the borders as you can see 2016. Biden also is in favor of closing the borders. It's also sentiment. It's like, you know, America is not the shining light on the hill it used to be not in the same way. And there and there are could easily have three or 4 million people coming into the country if we wanted to. Yeah, but we have 3 million people have come in just under Biden and illegal. Immigration, does that chart count illegal migration? No, this is legal. This is legal. OK, well, so just make sure you count that because we've basically had an open border policy. Yes, it's fine. If we didn't allow those workers in, what would happen? OK, let's go to the turn card consumer Confidence Conference Board. Consumer confidence index in June fell to 98.7 from 103.2 in May. Expectation was 100. So it's under the expectation, the expectation index. So when you look at. Consumer confidence. There's two your confidence in the present situation. That's the blue on the chart and then there's your expectations of the future. And what you see is a huge divergences there starting to happen. People are starting to look towards the future as negative, but they feel pretty good about today. And so, gentlemen, what do you think of this chart? It seems to me like this is sort of akin to what Sachs was relaying about that founder at the CO2 conference, which is like, you know, he thinks everybody else is going to, you know, roll up their sleeves and. And buckled down, but he has no intention of doing it. I think people are roughly the same way. And I think their behavior is, well, you know, if things are going to get hard, I'll deal with it in the future. But right now, I have money in my pocket. And, you know, if you look at airlines and how many people are trying to travel, if you just look at, like, the cost of a hotel room, if you look at what's happening this summer, it does not seem like people are slowing down or tapping the brakes in any way. Yeah. Yeah. I get concerned about credit because it's not coming from wage gains. You know, the increased cost is there, the increased income it's not. And you know, we're seeing continued month after month increases in consumer credit balances. And that I think, you know, this was the point I made a few episodes ago was I don't think people are going to slow down how they're living and how they're spending. It's exactly what they did to show there's a, there's an inertia, there's actually. Yeah, I don't know. Well, I I just think after two years of a lockdown, I do think that people are anxious to reestablish some amount of normalcy. And this is really the first summer where everybody writ large can be out and do the things that they were planning on doing. That fake summer. Yeah, last year was a little bit of a head fake. And look, you have two years of pent up plans of, you know, 50th anniversaries and weddings and all of this stuff that's happening. And so I think people are really spending money and if you look at it, you know, the the consumer is holding up. Amazingly, it's got to be some combination of jobs, home prices and and this inflation. But This is why I there has not been a downtick in demand. I don't know why everybody thinks that there's been a downtick in demand. It had there was an article today numbers yet it's not showing up in the numbers yet. No. OK. Then it finishes anecdotal and guests very subtle. OK, sure it is. There is a subtle. I actually disagree with you guys. I actually think that the economy is pivoting on a dime here and it's it's starting to show up suddenly in the numbers. Here's some other data points. Consumer sentiment, biggest drop in consumer sentiment. In 40 years, that was in the last month. Right track, Wrong track polling. Only 10% of the country thinks we're on the right track. If you poll people and ask, are we in a recession, something like this, 60% of the country already thinks we're in a recession. There's a slight political tint to that. More Republicans than Democrats think we're in a recession. However, even roughly half of Democrats think we're in a recession. So I think those are all feelings, not behavior, though, sacks. We're looking at the data, not the sentiment. I think the behavior will catch up with the sentiment, I think. I think the behavior is pivoting. It's just that I think you have to dig beneath the surface surface and you have to look at things like retail sales, things like that. I'm not sure, David, if you look back on all the number of times consumer sentiment is dipped that the correlation to spending patterns is so uniformly predictive as we think. I mean I think that there are, there's a slight positive correlation I remember, but I don't think it's like, you know, .75 point 81, it's not that. So there's this weird preference falsification that happens when you get asked what do you think is going to happen? And what do you do? And I think a lot of consumers, that's why they have, you know, we know the data in America like less than a month of savings or whatever those numbers are, despite all of the sentiment analysis and all of the stuff, you would think that there be behavior change. But mostly people kind of just live in the moment and you know that that's partly because they don't have the structural support to save or other things. But the reality is that most folks, from what they say to what they behave there is a gap. Yeah. And to your point. Max, this is starting to catch up. We're seeing a slight downtick and we'll go to real estate next. But if you look, I was doing some research on gasoline because that's obviously where people getting hit the most. The average household is now spending 5000 a year on gasoline. That's almost double last year. So this is going to have an impact. It's going to catch up. But there's so many jobs available and there's so many people unemployed, I think it's manageable. So to your point, your mouth, it feels like consumers can manage even this great headwind. Let me just put a point to it. I think the average. Per capita income in the US, about $38,000 a year. That works out to about $17bucks.50 an hour, roughly. Think about a person with that level of earnings. The average household in the US has historically, you know, spent about 1/3 on housing, about 13% on food and about 16% on, you know, their car and their gas. And they only have about 12% leftover for savings. So, you know, if that 13% on food. Has jumped by 30%. The 16% that they're spending on gas has jumped by 40% or 50%. And even if housing prices take up a little bit, all of a sudden your savings are gone and you're actually not saving, actually doubled Freeburg. It's doubled. I guess. So, yeah, by the way, it's worse than you say. No, it's worse than you say because you're using a per capita number. Yeah. Yeah. And So what? But I think what I'm trying to highlight is that there is a distribution, there is a group of the United States, a small percentage of minority that have earned good income and are are having their 50th anniversary. Samap is talking about taking their travel, and that shows up in the numbers. There's outside spending happening with a segment of the economy. And what Sachs is saying, I think is right as well, which is that the majority of Americans are facing this really critical budget crisis where their personal spending levels are now exceeding their income levels and there's a critical need for credit and for personal debt and spending to go down. And that's what's going to drive significant risk in the next couple of months and quarters and years. Is that the majority? It looks some of the numbers will look good because there's a segment of the economy. That it's overspending. But the majority of the economy is, as Sachs is saying, probably turning on a dime. And I think both things can be true. Yeah, let me, let me maybe tie a couple of these things together because I I I tend to agree with you, like, I think that we have been in a supply side recession. That is what has caused inflation. We have to go through a process. Of taking all the excess money that's been put in out. And when you do that, we will destroy demand and then that'll trigger a demand side recession because people will asset values and we will destroy asset values. So that process asset values went real quick, yeah, that will happen. Second, so the balance sheets of that segment of the population that is overspending right now, once they're balance sheets really take the hit, may take a hard look at what their savings are, they're going to cut spending. Right. Yeah. So but the point is I think we're still firmly in that first phase and I and I and I hate to be the bearer of bad news, but the reason why I think that we're still in the first part of this process is because people, broadly speaking, still have a lot of savings because of all the stimulus checks. There is still a lot of money. So what, how will we know? Maybe is the better point when all of that excess savings has been, you know, torn away from these people because of high prices, I suspect. It's when Jason's first chart starts to close, right. So when people are, you know, go and they're more motivated to reenter the workforce, I think that's a signal freeberg. Your signal is another one, which is when credit delinquencies really start to spike, it's because people then, you know, tapped out their savings, then they tap their credit cards and then all of a sudden they become delinquent. When all of those things happen, you're probably now at a point where that first phase of the supply side issues are largely done and now you get to the demand destruction. But all of those roads unfortunately lead to the same conclusion, which is like, you know, equities get really under pressure. There is no scenario where there's a bit to equities. Why would you buy something that has lower earnings in the future? Or why would you buy something that has a lower discount rate for profits in the future? In this case, both are true. All right, let's get to that because the piece we haven't got to, so here's the river card is housing because people's homes are the majority of their wealth here in the United States and that, I think, will be the true indicator. Come out to your point. Labour participation certainly won, but when this hits housing, that's when we're going to know we're in the end game. The mortgage rate just hit 5.3%. Why? Why do you say housing is the end game? Well, I I think we haven't seen the collapse of housing prices yet. We're in a housing shortage and historically mortgages are still at, you know, the 30 year average. So let me just give you the statistics here. The mortgage rate is 5.3% if you look at this chart from our childhood on our parents in the 80s. Paying 1516 seventy 1717% for their mortgages, we're well below the 50 year average even with the rate hikes. And so the 50 year average for mortgages, the 30 year mortgage is 7.77. So we're at 5.3 well below that. But well, this has been a very quick turn around from 2 1/2% mortgages all the way up to 5.3% home sales have started to show weakness. So to saxis point, this is starting to show up in the numbers, but ever so much we're down 6%. Almost 7% year over year and 3.5% month over month, but we're holding up historically. So for the last 10 years we've been selling over 5,000,000 homes a month with the exception of the pandemic shutdown. And that's this next chart you're going to see here. And this is a really amazing chart I found, which is existing home sales versus a 30 year fixed rate mortgage in our childhoods in the 80s were selling 23 million homes a year. As you see the rates that's the orange line come down massively from 17% and then under 10% housing starts to flip, people start flipping. This is more and more often. But we're still at that 5,000,000. That number's got to drop down to probably 4 and then we would actually have some capitulation feedback from the panel. I mean, look, there's an old saying that a recession is when your neighbor loses his job and a depression is when you lose your job. And the reality is we haven't had the big job losses yet. It's starting. We can start to see it in the number of open Recs are getting closed. And then there were those job loss numbers that just came out which were a little higher than expected. So the job losses are starting, but so far it's really been the step prior to that, which is people are seeing their 401K's get destroyed, stock markets down, they're seeing their wages get destroyed by inflation, food and gas prices being much higher. So there's a really good reason why people are so sentiment is so negative out there. People feel poorer than they were before, and this could get worse. Like you're saying, Jason, with their nest egg in their homes getting hit. I agree, that's the next shoe to drop, just like the commercial real estate is the next shoe to drop. But. I think the really big question over the next six months is what sort of job losses do we see because that really is going to be the big determinant of of of how hard this recession hits. Yeah, I agree with you. And it's it doesn't look like if we, if we're losing 300,000 jobs a month, it's going to take a long time for us to even to get to 1 for one jobs. And so this is very clear. Honestly, I think, I think you are right, but I think we're not even close to that. I just don't see where all of a sudden there are these writ large mass layoffs. For example. I would believe what you're saying if the headline in the Wall Street Journal said Walmart lays off 10,000 people, right. That's not what's happening in in fact, it's the exact opposite Walmart's like, well, you know, we seem to have record demand, we're raising prices and and every supplier. Will have to pay a gas tax and a supplier tax and deal with it. So I just think that you're you're going to be right in the end. I just think we're way too early in this process to get to that place where we were debating this. I I don't see. So are you on board with the the Ackman trade basically. You know Ackman basically came out that tweet storm a couple of days ago basically saying that listen inflation is still the big problem, not recession. The economy is humming along. There's plenty of jobs and we're going to have a persistent problem with inflation. I think he's kind of right and. Kind of wrong. I think that you can have inflation and a recession at the same time. This is one of my point is I think we have been in a supply side recession meaning? The day of the pandemic, it's not as if demand stopped. It's not as if you and I, David, didn't want to go out or use door dash or take an Uber or watch a movie in a movie theater. We were not allowed, right? And so we found other ways in, in order to fulfill our demand. That's why Shopify, you know, did so well on behalf of the merchants that they served. That's why Robin Hood did so well. That's why Fortnite did so well, right? We found other places to spend money. But what went away was the supply and those incentives didn't come back and they're still not back. That's why prices keep going up. This is the problem is the definition of a recession, right chamath where something problem is that most people don't understand that you can have a supply side recession and a demand side recession. They just manifest in different ways. So, well, I think, I think, I think like I guess Ackman is roughly right in some ways, he's roughly not so right. In some others. I think that we have an issue where we are going to transfer. The supply side issues that are driving inflation. To average everyday consumers and their ability to buy things. I still think that the average everyday consumers desire to buy things is what it was from before and on. The margin is probably higher. I do think at some point it will start to change when prices get high enough, but I don't think we've reached that point of equilibrium yet. And the reason is because companies like the Walmarts of the world who see this demand. On literally a real time basis. Knows better than anybody else when and how much they can raise prices downstream into their supply chain. So when you see something like this in the Wall Street Journal, I would just encourage us all to say they must see that demand is the same or better. And so they're going to now push those price increases down to everybody else because now Walmart says here is an opportunity for me to defend my earnings power. And This is why I think we're in this first inning of this. So I don't know whether Ackman is right or wrong, but I think we're in the early phases of a two phase recession and I don't know what that looks like because I've never lived through one of those. And I think in many ways it's the combination of the two and it was it was largely because of government failure, government failure and how we reacted to the pandemic. In hindsight, Sachs was right all along. We overreacted by shutting everything down. We probably could have kept some supply online by understanding masking. Early on and then second, we exacerbated with failed government policy because we gave everybody trillions and trillions of dollars and we entered the capital markets and perverted it with another seven or 8 trillion more. And by the way state that has consequences. Well the consequences are still talking about giving stimulus now in order to help people deal with. We are not, we are not learning and you can't pour fire. So if I, you know the fire, if I had to basically put what we are all saying. Into a neat little bow, I would say there needs to be a multi phased economic correction. One that corrects the supply that we took out of the market during the pandemic, one that corrects for all the excess money and then one that corrects for demand. That's a lot of stuff we have to do. It's a lot. And so the more misguided government policy we have, the farther away from finding that equilibrium point we're going to be. The longer it's going to take, the more damage it's going to be. So sacks the Fed is, obviously, it's pretty much consensus they going to do another .7575 basis points later this month could be 50 basis points. Who knows? They're there seems to be a couple of people saying that that might happen. If that does happen and it feels like inflation is starting to top out, do you think inflation? You know, starts to turn or do you think we're still going to see prices go up because it does feel like it was starting to bounce along the ceiling. Where, where do you think is going to happen if the .75 happens? You're seeing the market rally today in the last few days, especially growth stocks because of this idea that the Fed is tackling inflation, they're raising rates and the market is looking out six months and seeing the possibility of recession and they believe that is going to bring down demand and bring down prices and it could mean what I just described. Would be a soft landing. I just am skeptical there's going to be a soft landing because of what jamath is saying, which is this is a multi part problem and until we fix the supply side, I don't think that merely reducing demand is going to get us out of this. I really agree with you. It's a production problem, it's a demand problem and it's also, as we just talked about it a few minutes ago, an employment problem because the businesses that need to grow, that need to generate revenue, cannot get the businesses that are dependent on people to do service. Jobs cannot get those jobs filled and so they cannot grow their revenue cannot make their profits. And there's a trickling effect in the economy of that. You know what we talked about that kind of job shift, that job market shift that's happened. So all three and so all three are just this like dislocation that's happened totally, right. And it's unclear, you know, someone very smart I was talking to yesterday. Who is a former? Member of an administration said we just there's literally no way to predict, but we just don't because think about the complexity of throwing three rocks in a in a pond, how do those three rocks interact and how do the ripples interact is really what we're trying to predict and it's very hard to do. I mean if you translate this into the markets for one second. I think what we've done since November of 21, then, Nick, you should play this clip because, you know, not to say, you know, we didn't see this coming, but we really did. You know, we pointed to, you know, one of our friends and the person somebody else that we kind of know, Bezos and Elon. And we said when the two smartest capital allocators in the world start divesting, they clearly understand and see things that the rest of us should pay attention to and to ignore. It seems reckless. Or you're the clip and we'll be back in 30 seconds after the clip. The two most important founders of our generation, the two smartest people who have really consistently won, Elon Musk and Jeff Bezos, have collectively sold more than $11 billion of their holdings this year alone. And if you can't take all of that and decide for yourself what's right for you and your family, you're doing yourself a disservice. I think it's important for me to never sort of, like, be forced to tell folks whether I'm buying or selling, although I'm willing to do it in moments where I think it's important, but I think it's really important to understand the context. And so I think, like these folks that, like, think. Derisively about individuals who are managing risk. I think it's really naive, and I think it's it creates a lot of missed opportunity for them as well. If the smartest people in the world are now selling their core holdings that they told you they would never sell, and you are not reconsidering your position on things, you're either much smarter than them or you're being really, really reckless. And that was November, you know, and and at that moment I started a bunch of. Things in process, which we can talk about at the end, but I also sold a bunch of stuff, warriors position, I started a process at that point and I sold a piece in December and then I just sold the last piece this week. But then you know, I sold a big piece of sofa in that moment, but the the the point was more the following, which is since that clip to today, what we've gone through is a massive rerating of the discount factor of these companies, assuming nothing else changes, right. That's all we've done. We've, we've not questioned whether earnings can change. You know, all we said is, OK, well now we're going to take the discount rate up, which means the value of this company is less than it used to be. That's all we've done through all of this wealth destruction that's happened since November. But now the second shoe has to drop, which is if you believe that after this supply side issues are resolved, you go through a demand destruction phase. The earnings of these companies are in real trouble and Jason you posted something I think about the social media companies and addressing is gonna get hit, right. So one of the first things to go in a recession is advertising. If you're going to belt tighten at a company, where can you do it? Well you lay off employees but you can't get out of your leases as we talked about in real estate, but you can cut your spending on marketing. And so right now they they the, it's looking pretty bleak for Facebook because of the headwinds they have. So the earnings could drop which means and by the way you talk ratio could be total. We talked about that. Are not real, right? Well, we talked about that. We talked about that over the last few weeks, which is every time the market rallied oddly, Facebook would be stagnant or trade off. And we know when I called people on Wall Street, what they said was because, you know, we think this is the company that has the most pressure on earnings. I don't know if that's true or not, but they took every opportunity in rallies to trim their position in Facebook. Now if that's true, you have to remind yourself that is one of the 10 best companies in the entire world. And so if you're going to go and question the earnings power of one of the 10 best. Companies in the world you may want to consider the earnings power of every other company that's not Facebook. There are some neat things to the Facebook story. They are facing a unique disruptive moment with Apple ankling their ability to target users. Supposedly Google might follow suit with that which would be super anticompetitive and also the surging Tik T.O.K taking market share from them. There's some good news in energy which will then dovetail into politics and into this farming situation Friedberg Turkish government claims it discovered. 700 million metric tons of rare earth minerals. It's 15 times China's reserve. If this is true, you guys probably know we use about 150,000 metric tons a year right now. That's going to double by 2030. This is something like 4000 years at the current demand and this would put them far beyond anybody elses chamath. You've got investments in this space and I don't know if you've been tracking this news. Thoughts on another massive discovery of rare earths? What did you guys just have? Dinner? Dinner or serve? What do you guys? And that's the best she brought. She brought us Panini. Still, show me. There's an incredible restaurant here in Milan called DeSantis which makes the best paninis you've ever tasted. Is this a harbinger of the future, De Santis? What could be more perfect than that? The DeSantis Panini. Here you go. This is the Oracle. Sacked with the subliminal influence. Absolutely. So good. This is what's gonna get us out of this situation, DeSantis. Alright Chuck, just quickly on the rare earths, uh, if this is actually true? What would this do? And have you been tracking this situation? Because it does seem there's some truth to it. Yeah. I think it's important to just take a step back and kind of look at this thing with not, like, complete skepticism, but just a little skepticism. It's not surprising that there's additional deposits all around the world. Meaning we've always said rare earths are not particularly that rare. It's just the question is, you know, which of the 17 rare earth elements at what grade, meaning at what percent concentration does it? Exist and then really importantly, at what cost to extract it economically? Yeah, right. So meaning there's a ton of underdeveloped rare earth athletes in Canada, the US, Africa, Australia, Brazil, Brazil. They're just under, under developed because when you put all of these factors together, it's really tough. So the government release says they're going to process like 570,000 tons of ore that'll produce around 10,000 kilotons per year of rare earths. That implies sort of a 1.75 to 2% grade. It's fine. So there's just a lot more work. I would just sort of say it's really directionally great. A lot more work needs to be done and more importantly, they need to release enough of this detail so folks like us and others can actually diligence it to, to tell you more accurately. But the press release was exciting. Freeberg, this reminds me a little bit of the peak oil head fake we had, you know, 15 years ago. Everybody basically said we're not going to find more oil. Here's what's left of oil. And then Norway's like, yeah, we just found more oil than existed previously and. They're pulled out, and the whole concept that the world's gonna run out of oil is now gone. So freeberg what is happening in science that we just can't predict what resources are available. We know very little about what's inside the below the a certain depth of the crust of the earth. So. You know, there's some estimates, but we're always surprised and we know very little about the distribution of those elements in the crust of the Earth and below the crust of the earth. You know, my name's an incredible industry. I, I don't know the state-of-the-art in engineering and mining very well. But you know, from a pure geophysics point of view, by some estimates we have 10 billion years of energy reserves below the crust of the earth that we can access in the form of nuclear reserves, geothermal power. And that's excluding, you know, some of the the, you know, the the potential of some of these elements and what they could do. And building a more sustainable energy economy. Why are people so pessimistic when we keep surprising ourselves and more resources? Anyone wants a great book? I've none of you guys were at the dinner that I did a few weeks ago where we had Steven Pinker come for dinner. Yeah, Rita's book, enlightenment now. Or you could watch one of his videos on YouTube where he's got, like, all 60 slides and he highlights. Like, you know, humans have a tendency to focus on the risks and the concerns and the downsides. And we miss the incredible optimism that is apparent as we actually look at the data of what's happening with our species and what we're doing on our planet. We have every reason to be optimistic. You know, we have fewer wars than we've ever had. Murder rate per capita is lowest in it ever been. Longevity is increasing, health is increasing, processing, everything's increasing. And I think that the same is true in terms of, you know, scientific breakthroughs, discovery and engineering our way to a more sustainable energy and food future. This is one of the great things about having you as a friend Freeburg is your relentless optimism and your actual cool, calm, collective lack of anxiety and other amazing news. The EU Parliament has flipped again. Credit Thornburg is completely tilted. We talked about the virtue signaling EU Parliament, you know, and Germany turning off their nuclear power plants and and just securing the bag for Putin. The EU Parliament flipped and they are now saying these virtuous signaling knuckleheads, they came to the census and now they believe nuclear is green. Also green according to the EU Parliament is natural gas. So this to me feels like the beginning of the end for Putin and Saudi Arabia if you look at the US becoming a net exporter of energy. It's quite possible the EU could become that as well, if they actually, and this is a big F if they actually. You know, start building nuclear, it could be the beginning of the end of what some people are calling the woke green movement. And this certainly over this realization that to transition to the next car to the beyond the carbon economy is going to require continuing to invest in and support the carbon economy until those alternative solutions emerge and to have dual track investing. And I think that's what we're seeing around the world in the United States and Europe now. And Europe has always been farther, way farther left in the United States in taking this point of view. And I think now this, this has been a wake up call for everyone and all it took was just a little bit of $6 gasoline and for people to personally suffer for them to change their virtue signaling nonsense. Yeah, this is this is markets at work. Yeah. This is simply educating the public. Would you rather be beholden to Putin? They pivoted because of you rather have nukes. They pivoted from banning energy production to banning food production. She talked about the Netherlands, they're about to get there, about to get. So on the energy side, I did a in the group chat. Just a little breakdown on the math. I think it may be interesting for people to understand. But today globally around the world, every single country in the world that is involved in the oil business is able to produce exactly 1,000,000 more barrels per day than we need. So let's assume that we, you know, need 100 million barrels of oil a day as a, as a, as a world to continue to do everything we want to do. We produce 101 million. So we're right on the knife edge. By August we're going to go through a capacity increase in OPEC plus, which is, you know, OPEC plus, Russia, etcetera. Saudi Arabia is gonna go from 10 million barrels a day to 11 million barrels, so not a huge increase. Russia has is is thought to be able to cut production if they feel pressure up to 5,000,000 barrels a day without having any impact to their economy. So JP Morgan, I think and. Credit Suisse, they they did this sensitivity analysis and here's what they found. They found that if Russia were to cut 3,000,000 barrels of oil, so we would go from being oversupplied by 1,000,000 to undersupplied by two, the price of oil would go to about $180 a barrel. If they cut 5,000,000, so the threshold at which their economy doesn't really get that impacted. The price of oil could go as high as $380 a barrel. While you would say, OK, well, we just need to pump more oil from other places. And this is the problem. In all of these rules that have existed for so long, the capacity doesn't exist, right. We were destroying supply. Governments all around the world were making it very difficult to generate the supply of nuclear, to generate the supply of oil and to generate the supply of Nat gas. So Saudi Arabia says we can get to 12 million. Well, guess what? They can only start. Work in 2024, they'll be done in 2027. Yeah. So to your point, all of a sudden we realized, wait, we needed these bridge fuels all along. How did we allow all of the supply destruction to happen? And now we need to unwind it? It's going to be a very complicated process. And if any of these things happen, if Russia decides to play hardball against Europe or America, we better hope that it's a mild winter because very quickly you can go from plus 1,000,000 barrels to minus 2. In a heartbeat, yeah. And that start and the last point on this about Saudi Arabia, you'd say, OK, well, Saudi Arabia is going to go from 10:50, so that's good. They have been at 11 million for sum total of eight weeks in their entire lifetime. If we look at this. I mean, Americans also buying 20 to 25 mile per gallon cars, that's got to end too. And so personal responsibility is part of this. The really interesting thing is China already has this plan. Their nuclear strategy with the Belton Rd initiative is to put 30 nuclear reactors. In countries outside of China that they're trying to have influence in and they're they're building 30 nukes right now. They got 150 planned. So China's just ultimately savvy and thinking big here about energy independence, and we need to follow them other big anybody have anything else on the energy situation before we go to the farming situation? Let's get to the farming situation. OK, so Dutch farmers are in revolt after a new proposed law to cut emissions on Tuesday, Dutch lawmakers. Voted on proposals to slash emissions of pollutants like nitrogen oxide and ammonia. They're targeting a 50% cut nationwide by 2030 livestock produces. These emissions of the plan will likely force Dutch farmers to cut their livestock herds or stop working altogether. Farmers protested. They put their tractors outside buildings. They dump fertilizer. 40,000 farmers gather last week in the Central Netherlands agricultural heartland to protest these plans and started shooting at them. Yeah, these tractors were doing some pretty gnarly things and stopping traffic. And I guess it got heated and there were some shots were fired. What were they? No, wait, the government fired shots. The protesters were unarmed. As far as what are unarmed? But supposedly they were doing some dangerous borders. Were they honking their horns? Is that why they're not? I think they were using it. Police to shoot working class protesters if they're honking their horns, running. The safety of this is the other side of the story, sacks. Listen, neither of us were there, but according to the sources, they were using the tractors to threaten the police like physical bodily harm, and that's why they unloaded. We don't know all the details. It'll come out, but that sounds proportionate. I mean, if you had a tractor coming at you to kill you and you're a police officer, I think it is proportionate to a load. Let me just so let's talk about the science of its science. Boy, let's go. Wait, is it like the scene in Austin Powers where there's a steamroller coming towards Austin? Exactly. I'm just looking at that. Jason's like, oh, they're using the tractor as a weapon. It's like, really just, I'm. I wasn't there. I was not there. I'm just telling you, what was reporting, reporting, reporting what's reported, and nobody knows if those reports are true. So I think, look, I think it's worth just highlighting because this is a really important this is the first time we've seen government action of this scale and and the resulting kind of rebound effect on something that's really important. Humans use roughly between 2 and 6% of our energy on Earth every year. Make ammonia. Ammonia is the primary fertilizer we use to fertilize our crops around the world, and if not for the invention of the Haber Bosch process, which you can read about in the book The Alchemy of Air and the creation of ammonia as a synthetic fertilizer. Humans would all have starved in the mid 20th century. It's an incredible technology breakthrough. What we've learned over the years, however, is that when ammonia sits on the ground for too long, it volatilizes and it basically binds with oxygen and turns into nitrous oxide and goes into the atmosphere. Nitrous oxide is 300 times more potent as a greenhouse gas than CO2. It lasts longer and it absorbs more heat. So there has long been concern about the overuse of fertilizer and the overproduction of ammonia. That just sits on the ground for too long that ultimately creates this incredible greenhouse gas effect. And so there has been talk in the United States under the Obama administration under multiple EPA's. There was a Supreme Court ruling a few weeks ago that started to touch on whether or not the EPA has regulatory authority here to actually regulate the use of ammonia. Farmers generally put a lot of ammonia on the ground because they get higher yields out of their crop. The problem is if that ammonia sits there for too long, it turns into a greenhouse gas and so regulating ammonia and regulating this nitrous oxide. Vision has been, you know, at the forefront of green, the green movement, at the forefront of climate change as one of the ways to manage and and and reduce the effects of global warming from human and industry. And now, you know, the Dutch Government has come out and started to do some of this regulation. It's a little bit off because it comes from cows and and we're seeing what happens chamath freeberg. Can we finally admit that it's the vegans fault now? Well, at this point actually, you know. No, no, the the ammonia production in the Netherlands is from the, from the Netherlands. Just you guys know the Netherlands is the war is the world's third largest dairy exporter. They export $3 billion a year of dare of milk to the rest of the world to other countries. And so they have all these cows that are like densely packed and they're peeing everywhere and that pee is ammonia and it's causing all of these problems. The other problem with ammonia, if you guys look at the United States Corn Farmers Farm in the Midwest, when it rains, the ammonia on their fields goes into the streams, goes into the Mississippi River. And goes into the Gulf of Mexico. In the Gulf of Mexico, there is a massive hypoxic zone. There are no fish. They're all dead because when ammonia ends up in the water, it kills life. And so there's this green algae and no fish and everything dies. And so that's what the Ducks are trying to regulate. And the EU generally has been trying to regulate is the removal of excess ammonia in ag production and and and. And again, I still hear though that if if if if we ate less vegetables, this wouldn't be a problem. Not correct, not correct. Most of the production of ammonia is used to make animal feed. If you have to feed animals to make beef, which is a terrible decision, you could feed it olives. As we know, olives taste delicious when they're free. Because the issue here that is the issue here, that the regulators hit the brakes too hard on these farmers and they should have maybe had a more gradual landing for that is it's been talked about for a long time and in the US there's just no way a law is going to pass because the US Senate is controlled primarily by rural states, which are AG heavy. So you see a lot of, you don't see a lot of bills that hurt farmers get passed in the United States. Because the Senate is controlled by farmers that are elected, sorry, senators that are elected by farmers, by big farming communities and farming States and so, you know, it's been hard to get a regulation like this past where folks have tried to and talked about doing it around the world. However, in a place like the Netherlands and the EU, where, as I mentioned before, they're far more progressive and have this very kind of green hat on, they're starting to take this sort of climate change action, as they're calling it, and that climate change action. You know, does have the ramifications of destroying, by the way. One of the things they said is we expect and this will destroy the livelihoods of many dairy farmers in in the Netherlands. That was horrible, by the way. Look, all kidding aside, said that. They said that directly, by the way, and the dairy farmers are like, F you're not destroying our business for climate change. I have a specific question though, which is has there not been some efforts to engineer how these plants themselves absorb nitrogen or I have three businesses on. That's totally right. Technology is going to solve this problem. I'm super optimistic on that. There are microbes that are being used to coat seed. Those microbes can pull nitrogen out of the atmosphere directly. So you don't need ammonia, but you use far less ammonia. There's a couple companies that are doing this really effectively. They're growing like crazy. They're doing really well. There are other projects and there's very simple solutions. My last company we had a product called Nitrogen Advisor where we basically told farmers instead of dumping all the fertilizer at the start of the season, you pace it out so the fertilizer doesn't sit there and volatilize, there's all these solutions that technology. From software to bioengineering to these microbial solutions. And so we're definitely, I think, going to resolve this, but meanwhile these governments are in a frenzy to solve the climate change problem and, you know, we're going to start to pass these laws that really hurt the livelihoods of, of, you know, act producers. How do you guys think something like this happens? Because typically you would expect when a government is about to pass something like this. There's sort of like a pretty fulsome review and all sides are brought together and there's working groups and all of this stuff. And at some point you would talk to some scientists. At other points you would talk to economists. At other points, you talked to the people who be directly affected, like the farmers. Is it that the virtue signaling around sustainability and climate change is just so high that people just turn off their brains or, well, like, what is actually happening here? I think what's going on is you got a bunch of technocratic bureaucrats in Brussels who don't know anything about farming, or these people who live in the Netherlands who've been doing this for generations, and they sit there in Brussels and they make up these completely arbitrary guidelines and requirements 50% by 2030. Those are suspiciously. Found numbers, OK. And then some other, you know, authoritarian technocrat in the Netherlands then says, well, we gotta implement this and they passed some crazy law and they don't even think about the impact on these farmers. Why? Because they're deplorables. I mean, it's complete class bias. It's just like the Canadian truckers. They don't think about these people. They don't factor in their equation. They don't know how they live. And so that's what's going on here. And so you've got this global elite of of technocrats who are willing to use authoritarian tactics. They're appropriating their farms or taking them away. That's why they're up in arms. You see the rest of it, which you're not saying. It's not just technocrats, it's the actual global elite writ large have wrapped themselves around this sustainability blanket. And they believe that that word justifies all kinds of bad, unscientific, innumerate policies, right? And and by the way, they're they've just woken up on energy, right? They they had just banned. Energy production in Europe, they realize, oh, wait a second. This is making us dependent on Russia and authoritarians. Well, what what is the other big export of Ukraine? It's food. So they got smart on energy, and now they're about to repeat their same dumb mistake of basically prohibiting this area where they have an enormous natural advantage, which is food production. So, you know, it's like they just keep making the same mistake over and over again. And and by the way, me ask you a question, by the way. Yeah. Look, I'm not gonna question you on the science freeberg, but here's what I would say. Is. I think there's a tendency on the part of these technocrats to think that the science is a lot more bulletproof than it actually is. That is certainly what we saw with COVID is we had these same sort of global elitists, these technocrats who claim for your health experts they made-up all these lockdown rules that we talked about the beginning of the show and what they do. They take they they. No, this isn't speculative, but but but what I what I will, I will agree with. You're willing to use, they're willing to use heavy-handed authoritarian tactics and I just don't believe that. The science of this, especially this 50% by 2030, why is that the guideline? Who can prove that those are the exact right numbers and they're willing to use any tactics necessary to to implement their crazy rules? Ask you a question, sacks. Let's assume that there is a technology transition possible, that there are solutions that could be used. I highlighted a few of them. They just cost money. They require some investment. And you know, creating this distortion in the market by saying you can't release 50% of the ammonia that you've been releasing forces. A technological shift that otherwise would have taken longer in the market. Do you agree that there may be a scenario here whereby you know governments can and should intervene? And I'm not making the case personally. I'm just trying to, you know, highlight for you that I think this is where folks are coming from. But there are alternative ways to make the dairy. There are alternative ways to feed the cows. There are or, you know, to produce this stuff. Here's where I think you're going with that wouldn't make sense. Which is OK. You're saying there is a pollution externality here being created by the farmers. Well, it's basically internalize the externality. And to capture the cost of that, So what you could do is gradually introduce some sort of permit system, you know, or tradable permit system, right, where that would incentivize the creation of these technologies you're talking about. You want to do it gradually so you don't destroy the livelihoods of these farmers who've been doing it for generations. So that would probably be the approach you'd want to take. I think that I think that is what is going to happen around the world is that that sort of CAP and trade or taxation system is going to get slowly rolled out for a lot of these externality costs in production and industry and agriculture, particularly because there are technological alternatives. And it will incentivize the switch to those alternatives because the alternatives will cost less than the taxes. Sacks based on what you're saying is one of the problems here that these technocrats, these professional politicians, they don't actually have great strategic, thoughtful, you know, real world. Experience to do planning. You know, looking at Germany, their inability to see the writing on the wall of what building a gas pipeline from Russia to Germany and shutting down nukes would do, it just seems like over and over, they're just really bad strategic thinkers combined with this future. Wrong. No, Jason, they are influenced by these cultural elites who they want to Curry favor group. Think it's a lot of groupthink going on. And yeah, behind the groupthink is a class bias, right? They only associate with other members of the professional. Class who have, you know, basically graduate degrees. They don't even interact with these farmers. Just like the just like the legislators making COVID rules, the health experts never interact with Canadian truckers. So there's a huge amount of class prejudice saying that these people just don't matter. We can force them to obey our rules, and if they don't like it, we'll confiscate their farms. And by the way, the rest of you, you're gonna have to learn to eat bugs or tofu or tempeh or recycled. Just remember, whatever. How is the DeSantis? What was your DeSantis? Was the DeSantis Brigitta? What did you have on that? Was it some mutral beef as a beautiful roast beef? Beautiful roast beef by DeSantis, brought to you by dissent. It's going to become a meme after this episode. I have. Prosciutto culture is the best market campaign ever. He's a lock for President, Jacob. I had prosciutto Cotto with Brie. White truffle, cream and lemon. I mean, did you have the white truffle on it? That's like A plus. What's that? Pro? This is EUR. No, it's like. Fearless 8 euros. Yeah. Yeah. Bring some back. Bring some back. Wait, I wanna. I wanna say something about this. Hope the Democrats embrace this agenda wholeheartedly. Because if we get all the voters who want to eat roast beef, I'm pretty sure that's a super majority in this country. The way to solve this freeburg is with the right economic incentives, there's no reason why the Dutch government had to go and basically put thousands of farmers out of business. Instead, what they could have done is actually created the tax incentive that allowed farmers to adopt some of these bleeding. Which technologies? When they were probably too expensive to make it economically equivalent that I mean by the way, that is not a new fangled idea. This is not genius talk here. So the reason why they don't do the obvious simple thing is class bias. It is exactly what David said. It is the influence of people who look hold on, who look down on these people, OK? And who believe that they are more virtuous because of their desire to defend climate change. There's also a pragmatic piece of this. This reminds me the cold debates we had. There are 62,000 coal miners in this country. Like this is a small number of people who are impacted. We could just, you know, basically give them severance or and a soft landing instead of the, you know, this crazy or or let them continue to do their job and egress off. Naturally. The economic free market will manage it, will manage it on its own and instead what you could do is actually green light nuclear subsidize some of these more adventurous ways in which you can extract and refine. But my point is, this is where it's it's a real head scratcher why politicians don't do this. And I think the only thing that I can come up with is that they are overly influenced by these cultural elites with their perspectives that do judge very harshly what they believe to be right and what they believe to be wrong. Can we take a victory lap here in the United States that were energy independent and that were food independent? Can we take that victory or how much longer, Jason? No. Well, I think we now need to think instead of just being independent. I think our mission should be surplus, Jason. Our President, you know, cancelled the Keystone Pipeline. He cancelled a bunch of exploration permits in the Gulf. You know, again, it's we are one bad winter away from all of a sudden being in the same situation as everybody else. So it's not as what's all that bad. We're not one Freiburg. Where are we in terms of our independence, Jacob? We are the number one egg exporter in the world. And by the way, under under a different president just a couple of years ago, we were the number one energy exporter in the world. The fact of the matter is when we take. When it comes to food and energy, we have the greatest natural resources and we should be developing that. We should be moving, but no sex. My point is, what if the United States took a philosophy of not just being an independent, but being even like a stronger surplus to the point of like you know, the building nukes. We are, we're working it out, the markets working it out and we're taking, you know, we're we just need to feels like we could do better. It feels like we do have the issue with nuclear power as you know, is the regulatory. Off so you know it's $10 billion in 30 years to get a little to the Lightning round we already. No, I just want to show you guys the Monmouth poll, which I think is worth highlighting. OK, we didn't talk about it, but the Monmouth poll that was published a few days ago, which is a June 2022 poll, the number one concern that America the number one thing Americans are concerned about. Nick, you could put the chart the table in the in the the the show notes 33% care about inflation, 2015% care about gas prices, 9% care about the economy, 6% care about everyday bills and groceries. You know, you add that up. That's the vast majority of what people are concerned about. And all the way down at the bottom of the table is climate change at 1%. Yeah, absolutely. So I think it just speaks to the point about, you know, there there is. And by the way, I'm not advocating that this is the right position, but I will say that there is a huge distinction or discrepancy between what the average American is worried about and, you know, where political leaders are trying to carry us forward. I'm not sure what the right answer is. But there's definitely a disconnect and I think it's it's being played out in the Netherlands situation right now. One point for you on that as well Nick, I put this article in the in the chat, but the the top PESG fund manager in Europe of the of 2022, they released their results and the guy was up like almost 16% and he disclosed what he owns and he turns out that he owns Conoco Valero and Exxon and according to the. ESG rules that these folks have passed. This qualifies as an ESG fund because he doesn't own weapons, **** and oil sands. But it allows all these people to walk around thinking that they're investments are tied up in things that are actually clean. So it's not true. So the point is that there are, there are these structural lies that have been baked into the system that they are supported by very shoddy accounting or rules or science. And if we're really going to fix this problem, I think you have to go and inspect these things and call them out. But like all of this ESG investing which perpetuates, by the way, perhaps you know why these governments just have no clue what's going on, sit on top of all of these lies. There's nothing, EG about Conoco and Exxon per se. It's ridiculous. Just call it for what it is. This guy's a good fund manager. It's a he's a good fund manager. He did well in a in a period where everybody else was down. Let's just celebrate that and not tell all these. It had a good marketing spin. For a while. So you know, no, but it's not just marketing. It allows people to believe that there's a solution that is being affected. That is not true. That's the part about it that's super nefarious. Yeah. OK, listen, we move science up because science got a short shrift last week. What is a lightning round? What is that? I just wanted to things that were small, that weren't like full segments. I my concept here was to just put things at the end of the show that we missed. But what I did this time was give you a shout. You're doing a great job moderating today, by the way. Thank you. Put a couple extra hours in. By the way. I think Freeberg made a really interesting point. A minute ago, about me being a great moderator. No, not that. OK. About the about the polling, the mom of polling, where if you look at what voters care about and what the elites and the elected politicians care about, there's a huge divergences. Clearly what happened in Holland, right? You got these Dutch farmers. Their livelihoods are being taken away by people in Brussels who don't even understand what they do. I mean, people want to make a living. But, but but This is why you're seeing populist, nationalist uprisings in all these countries is you've got a crowd of people who go to Davos and make policy and they're completely disconnected. They're completely disconnected from the real concern. Look at bojo. Bojo just got booted today. Why? Ultimately, at the root causes, he was throwing COVID parties when he was telling the same thing that everybody nailed. Gavin Newsom for this guy just got booted out as Prime Minister of the United State. They're hypocrites and they're incompetent at their jobs. Let's call what it is the association is you try and do what you believe. Would be best for everyone, but it's not. It's not what's best for you. You know, and I think that that that's the point. Like climate fixing, climate change stopping COVID. I got to do XY and Z for everyone, but I still want to fly in a private jet, and I still want to go to a COVID party. You know, to to a dinner party. Exactly. Super spreader. This is why I think Biden is very unpopular. I mean, look, he's. Hold on. Hold on. Let me get it up for you. Hold on. Let me see. OK, so we gonna tie it up here? Hold on. Keep up. OK, well, let me just. Let's explain it. It's a lot easier if I do that. Hold on, let me hold on. Here comes the alley. Oop, I don't need the. 22 sentences. It's two sentences. Please have a good joke. Just let me do it. Alright, so all of the freeberg stands were breaking my chops. That chamath was cackling and laughing during his science segment and we rushed him. So I moved science up. So to the Friedberg stands, please stand down. Now we go to Biden Derangement Syndrome segment at the end of the show. Joe Biden's cognitive decline is becoming the topic sacks have at it. Well, listen if if you call this Biden Derangement syndrome 62% of the country. Biden Derangements in them because like we all did for Trump, Biden poll numbers are down to something like 38%. It's historic low for this point in time of the Presidency. But look what the point I was trying to make was. I think that Biden's problems flow from this dynamic we're talking about, which is he campaigned as Scranton Joe. He was a working class hero who is going to give us a return to normalcy and what has he done? He's basically implemented every wacky idea of the progressive Left he basically is representing. That part of the party that is completely disconnected from the ordinary desires of the working class. And what are people concerned about right now? Food and energy prices. What does Biden concerned? Well, first of all, he's blaming it on mom and pop gas stations. Even even Jeff Bezos had to tweet was insane. Yeah, so just to keep the tweet, my message is Biden sweet. My message to the companies running gas stations and selling and setting prices at the pump is simple. This is a time of war and global peril. Bring down the price. The price you are charging at the pump to reflect the cost you're paying for the product and do it now and then almost all small business franchises, which is absurd. And that's just not how the economy works. Do you think that they look at a Chevron and think it's owned by Chevron or they cannot be? Who's tweeting for why some some millennial, some millennial with a couple of masters degrees and and 400,000 of debt is rage tweeting from the White House strategy to make him look incompetent? I mean, I am forever thankful for Joe Biden to getting Trump out before he took a third or fourth. It would take. An 8 second Google search to know that less than 10% of the gas stations in America are owned by these corporates. Well, here's basis queen. These are mom and pop businesses. This is insanity. A lot of immigrants, it's a lot of South Asians. This is why it's very sensitive to be these gas stations. They are mom and pop owned. A lot of them are owned by immigrants. And this is their small. It's very true. So the American Dream and Biden comes along and he's saying you're doing too well. I mean, these people, they're profit margins like 2%, two percent, 2%, nothing. My buddy's family, by the way, owns a bunch of gas stations in the Bay Area. And he told me they make no money on gas. They make all their money selling cigarettes and soda. That's it. That's the whole business. Of course, it's a way to get people into a convenience store. Here's my thought. I think I'm going to state it right here. Bezos is going to run for president in 2024. This is why he retired. What? This is why he's giving money away. I will bet anything against, though, OK? You know you don't need the headache. 15 to one. OK, well, you'll see. That look? He's playing legacy games. No. Why else would he become a **** poster on Twitter? Ouch. Inflation is far too. That wasn't even a shitpost well, anyway, he's he's got to run a company anymore. He's Bezos after dark. That wasn't even a shitpost. That was kind of like he was outraged by the financial illiteracy, the sheer stupidity. What is the lack of economic understanding take on the President? There's no upside there. He's starting a fight, Jake out. It's just calling out something that on its face, that tweet, it was not written by Joe Biden, so let's not pin the blame on him. But that office and that strategy is clearly broken because it is run by someone at a minimum, who's enumerate and who's clearly financially illiterate, who doesn't know how to Google anything because that's the only way you could write something that insipid Biden should fire whoever it is that wrote that. 100% Biden is looking for scapegoats. OK? His popularity is at historic lows. The the right track, wrong track numbers are at historic lows. He's looking for anyone to blame and he's been going through a whole sequence. And the Putin tricycle wasn't working. He couldn't even say it right. So now they're looking for anyone else. Remember, Elizabeth Warren did something similar when they had food inflation? They started blaming the meat, the meat packing industry or whatever. Look, this is not how these industries work, but they are looking for someone to blame for their own mismanagement of the economy. And Biden baked this cake last year. We've discussed this before. He canceled on energy independence his first day in office. And then moreover, look on this Ukraine situation, if you knew you were going to take this tough with Putin approach, Jason, that I know you support, OK? But if you knew a proxy war was coming or you're willing to let 1 happen, you would want to basically create an energy glut, not an energy shortage. You would want to basically maximize the amount of American production, and you would not want to alienate the Saudis. So what is Biden doing now? He's going over Saudi Arabia. Had in hand. Totally humiliating to beg for forgiveness for last year, ostracizing them and calling them pariahs. So let me just try that. No, hold on a second. They had no grand strategy. If they wanted to pursue a tough on Russia strategy, they should have maximized energy production. Instead. They even think about it. They didn't even think about it. And now we've got energy inflation. I'm agree with you there. It also I will say is notable. I think the Democrats are actually now. I think they're quietly pushing the Joe Biden cognitive decline so that they can put it. They can feel that. What do you mean quietly? How do you allow a governor, a sitting governor, to run ads in a different state against the the presumed Republican nominee unless it's ordained? Well, I'm saying the cognitive decline thing, I think they're not going to come out. And so, Jason, I don't think this is happening surreptitiously. OK, here's the tweet from Bezos just so people hear it. Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It's either straight ahead misdirection or a deep misunderstanding of basic market dynamics. This is a very strong statement, and the the point I'm trying to make before is why would Bezos? Why would Bezos? At this time, why would he take on the administration? I think it's important for Biden to take control of his communication strategy and to reclaim more of the center going into the midterms. I think a lot of this content, the naming, the shaming, the blaming tends to be more of the playbook from the far progressive left. And I think that there's probably too many people that have infiltrated the White House from those ranks. And I think he needs to close ranks a little bit more and so. I don't think he wrote this, OK? And I don't think he would have wrote it if he was given the chance. So it's clearly something is breaking between what is being discussed as a team and then what is being executed on the ground. Sex. Look, Biden staff, the wrong claims, been with him for years. They reflect his desires. I think this is classic Biden. If you look at his career in the Senate, he's a grandstander. He always like to basically scapegoat and demonize. This is, this is a playbook. He may not have written the tweet, but he certainly endorsed it. And he's given speeches now where he's calling out this scapegoat and that scapegoat for basically the energy prices, which are totally his fault. He could add a better strategy around the Santis versus Bezos. You heard of your first on on the Bezos thing? Hold on a second, Jason. You're not taking into account this is actually the second time that Bezos has tweeted about inflation to account. Yeah, OK. That was back in May. He called out the administration. So yes, it's on this particular issue. I think he feels strongly about this issue, and I think he's looking at what the administration is doing and just saying this is a level. Of political stupidity and financial illiteracy that I just cannot stand. And by the way, who is Jeff Bezos? Bezos is a very liberal guy. He was an outspoken critic of Trump, and he owns a very liberal media house at the Washington Post. So I think this is a reflection that Biden has even lost that Jeff Bezos of the world, and he's trying to spin it as a good thing, as if we don't need these billionaires. But if you're losing Jeff Bezos, you're losing a lot of people in the center, probably the entire follow the bread crumbs. He bought the Washington Post, he bought the largest. House in DC and now he's taking on the administration. I think it's a clear path that he wants to run. You can, you can, you could mention me on Twitter. If you disagree. I'll tell you a funny story to end after. After the sale of the Warriors completed and I tweeted this thing out. It was really beautiful. Dre sent a beautiful text to me. So did David Lee. And then I got one text message from Phil Hellmuth saying I dispute how much credit you've given me. I expected more. Wow. So 7 seconds to fill. Again, it only took 7 seconds. And then. And then he called, I showed, I showed sacks that text, right. It's it's an unbelievable text. Straight sacks. Sacks can testify to it. And then he's lost his mind again. He lost his mind. He said basically like, you know, he he he took the credit that I gave him one to throw out the window. He thought I really tried to **** him over. And then he said, I, I'm going to block you for a week, but then changed his mind. I'll just tell him you'll buy him in to the to the big game or something. And he's no, he didn't. He just wanted more credit. More credit. But you wanted more credit. Tell him you'll stake. Because he did, he did introduce you to the correct story, billion dollars, and he states it. Is it true? Is it true that he that Phil introduced you to the deal, yes or no? He introduced me to Joe Lakam got it. So if not for fail, you probably would not have made that trade. I don't know. It's unclear. Because they have. Maybe they. No, they had bankers, and I was, you know, I was using Allen and company. So, I mean, do you? There's not a lot of people running around in that moment trying to write the 10% you tickets he deserve any credit for. You buying your stake in the Warriors, in fact. And I thought I gave him an appropriate amount of credit. Yeah. Chamath tweet stormed. It was like it was Phil Peter Thiel and like one other. Oh, and then Jacob Lacob. Yeah. And it's like, better company. He couldn't find himself in. Like it's the best he's ever been. Except when he was with Michael Jordan and Jay-Z. But other than that, this was the best films ever done. I mean, you know, when I get did you see he made it to the second. When I get my 4th ring, I'm going to take a picture like Michael with the four rings. But. But, Samantha, in the interest of peace, maybe you should just think Phil right now have a great idea to tell Phil three. Look at Freebirds laughing. He's the only one that got that joke. Did you get that joke? I was wondering if I should tell you to cut it or not. I don't know. I think it's good. Here's a great one. You know how they don't cut that part? I think it's a funny joke. You know how Phil gives his bracelets away as like, a recognition you don't have to do this, but pretend that you're giving, since you have four rings, that you wanted to thank the other three bessies on the show, and that you're keeping one ring for yourself. Giving us the other three rings. Oh my God. Thank you for all the support we've given you. All the support for the Warriors? Yeah, for the warriors that we gave you and all the Council we gave you over the years. This will put him on medication that he should have. One of the four rings. It's the greatest. April Fools reminds me Phil's next ring is going to me, so I can't say anything. Critical bracelet. Yeah, bracelet is next. Bracelets going to me so I gotta. I can't say anything critical. You know what you're gonna do? You take that. Brexit. Whenever I said the critical, I guarantee you sax takes the bracelet and loses it in the first three days and never wears it. It doesn't get it right in the garbage. Never talks about it again. Alright, everybody, we're back. The team is playing professional crisp ball again. Point guard is back. We'll see you on. Episode 87. We're gonna make it to 100. I feel like we can make it to 100. Yes, we're gonna make it that the vibe is back. The vibe. Love you guys. Miss you in the text, but it's great here. We gotta say I love. I love hanging. I love hanging out with sexy poop. Like live in physical. He's a ******* little. He's very. You just want to take him. I love him. He's good life. He's good life. He's great. He's really he's so good. Live. He's really good. He's really, really good. Life contract. He's an *******. Last time I hung out, live with him. He had an IV hooked up and he was recovering from the night before. Zacks on an IV. Basically on an IV now. That's how bad it's gotten for him. It's actually looked terrible. Can you please get some sun and just maybe eat one less sandwich? He's losing weight since he looks good. I had two. No, but you could afford to. You're in great shape. I mean, sacks, maybe half the DeSantis. Maybe you should have 1/2 as DeSantis. I think I'm gonna put you on half distance. We'll see you all next time on the all. Love you guys. Bye. Bye. Bye. Bye. Bye. Bye. Let your winners ride Rain Man. David said that. We open sources to the fans and they've just gone crazy with it. Besties are. My dog in your driveway? Ohh man. We should all just get a room and just have one big huge **** because they're always useless. It's like this, like sexual tension that they just need to release somehow. Let your feet. We need to get merchants on that.