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I want to play the theme music for this episode. OK, hold on one second. Here we go. And they don't know right from wrong. Give a little whistle. Song. If you let the Indian Government plant spies in your office, give a little whistle. If you have too many bots, you can come up with your own metric MDA use. FDU's. When you want to incent your staff to not look at the bots, give them bonuses based on Dows, based on Dows. Always let your bonus be your guide. When you're on the board and you see metrics that you don't like, turn a blind eye. Turn a blind eye. Sorry, sorry. I just got subpoenaed. The shower. Everybody's getting subpoenaed again. This is Jay Cal at his best. You gotta stop. We gotta make trouble. To let your winners ride Rain Man, David sat. We open sources to the fans and they've just gone crazy. Love you guys. This is going to be the story of 2022 for sure, right before I guess the big case between. Elon and Twitter is about to happen. I guess in October, at some point a Twitter whistleblower has come forward and dropped a nuke into the middle of. What was basically the story of the year in business, I think the former head of security hired by Jack himself and incredibly well respected Peter Mudge Zatko. He's referred to as Mudge, one of the most respected people in the security industry, again recruited by Jack in 2020 after a team of hackers. You may have remember took over all these verified accounts. Obama, Biden and and and Elon's account as well and he was head of security. Till January of this year, eight months ago. And he claims through explosive documents, so huge document dump that Twitter exact ignored these Twitter executives, ignored multiple security vulnerabilities. Now, why is this important? Well, obviously if Obama, Biden and other heads of State have their Twitter handles, they could say something that could cause an international incident. And that's actually happened with hacks before. He also says they were not following even the most basic security protocols, like safeguarding staff access to core software. Of course, all of this comes after there were Saudi. Infiltrator spies essentially inside of Twitter. I mean, the list of things here that he is alleging is truly colossal. He he dumped these documents to the Department of Justice, the SEC, Congress, and the Washington Post. He alleges that the vulnerabilities make Twitter extremely vulnerable to foreign spies, hacking and disinformation campaigns. And perhaps most importantly to the acquisition, the plan also adds that Twitter's policy towards fake accounts incentivized quote deliberate ignorance by undercounting spam accounts and giving bonuses to execs for increasing users but not finding bots. Sacks your thoughts. I mean on this. We talked about your subpoena. Or whatever that was. I don't. This is subpoena. I'm being dispositioned. It's you're having a deposition. Yeah, they want they wanna depot. Depot. Me too. Which is kind of amazing, but let's let's save that cause I think this is more more newsworthy. So you'll recall on a previous show we talked about this idea that if Twitter sues Elon to go after the kill fee or to go after damages, the question will very rapidly become about whether Twitter has a bot problem. And we'll discovery reveal documents that show that Twitter. Executives knew, or should have known, there was a problem. And so I said, you know, the question will very rapidly become what did Twitter executives know and when did they know it? Now, I couldn't have predicted that this whistleblower would come forward. But what he's basically saying is not only is there a bot problem, there is a cover up of the bot problem. He's accusing the company of positively Nixonian tactics here. So just to build on what you said, Jacal, he said that Twitter executives don't have the resources to fully understand the true number of bots in the platform, and their executives are disincentivized to count them. Properly because doing so would negatively affect their bonuses. So I didn't know that their bonuses were in any way tied to to this bot issue. So he's basically, he's making the Upton Sinclair argument that it's hard to get a man to understand a problem when his salary depends on not understanding it. So that's part of what he's saying. He's also saying that he's a he's accusing Twitter CEO Pragya Agarwal directly. Let's say these are allegations, right? These are not proven yet, but here's what he's saying. Basically, he's saying that Pirog and his lieutenants repeatedly discourage him from providing a full accounting of Twitter security problems to the company's board of directors. They basically prevented him from producing a written report. He also says that the company's executives ordered him to knowingly present Cherry picked and misrepresented data to create the false perception of progress on urgent cybersecurity issues. He also alleges that they went behind his back to have a third party consulting firm their report scrubbed. To hide the true extent of the company's problems. And as a result of this, he's basically saying that Twitter executives committed securities law violations by making material misrepresentations and omissions and SEC filings. And this is what got Elon to to sort of commemorate Zacky's revelations with one of his trademark memes, which was the meme of Jiminy Cricket singing give a little whistle from the film Pinocchio, which I think becomes the cold open here, which just became our cold open. So, yeah, look, these are. Very serious allegations. They're not proven yet. He's working with the same group who worked with Francis Haugen and. I certainly question some of the things she was saying, so I'm not going to automatically accept on faith everything he's saying. But I think by the same token, because he's working with groups that back Francis Hagen, who was very much not on the free speech side of this debate, I also think you can't just accuse this guy being an Elon stooge. This guy is a respected cybersecurity. Authority. He's one of these, like, White hat hackers. He's somebody who was an early happy, literally. If you were to ask before all of this, before he worked at Twitter, like, who would you want as your Chief security officer? You know, give me a short list. He'd be on it for any company. One of the most respected people who points out vulnerabilities, shamatha or freeberg. I have a question about corporate governance and what seems to be a dysfunctional relationship here. You have Jack hire somebody to solve the security problems. Then when presenting to the board, he's not allowed to tell the truth. And they the board has given incentives to the management team. He's a top five, top 7 member of the management team. So what's going on here with this? Dysfunction where he's hired to tell the truth, to fix the problems. The board is turning a blind eye to it. And maybe the management team is not giving the board the data they need to make better decisions. Who how do you game theory this. I'm not sure that it's you can come to all those conclusions. Yeah, I'm not coming to the conclusion. I'm just my mind is wandering of how this I read this function comes up I read parts of. Of his whistleblower, I can't claim to have read at all. It actually isn't super supportive of Elon's case. The most problematic thing that he points out. Is the following, and this is a quote from his complaint. He said Twitter quote already doing a decent job excluding spambots and other worthless accounts from its calculation of mcdow. At best, he's alleging that Twitter omitted details, not that it lied directly. So if you kind of take that, I think what he's really pointing his sights on are, as you said, disclosures that have nothing to do with the spam issue, but have a lot to do with security. And that is something that typically in a in a public company board filters up through the audit committee. Typically that gets a readout right once 1/4. From the Rep from the right, people who talk about here's our cybersecurity threats and vulnerabilities and then there is a readout from that committee chair to the board and then those are noted in your quarterly. In your quarterly reports that the Secretary. Writes down so. I think part of why this guy may not have had the audience is it was also written that he was a pretty terrible manager and there were hundreds of people in his organization who were just kind of running here and there. And so, you know, you guys have all been in this situation where we hire somebody who is an exceptional performer and then we miscast that person by putting them in a point of leadership and and being a team manager versus, you know, a a single kind of like product. We're engineering expert and it seems that there is a part of that at play as well which decayed the ability for management to actually have enough faith and trust in this guy to put him in front of the board. So and that's all that's just come out in the last few days. So I don't know my my reading of the whistleblower claim is really that. This is the kind of thing that companies like Facebook and Google and others have had issues with the FTC in the past. They typically settle those claims. They pay a fine snap. But those things take three to five years to play out. So I suspect that this body of content more leads to that outcome than is a smoking gun that really helps Elon. In fact, this the the fact that he's actually affirmatively stating that their calculation of mcdow is actually pretty decent actually hurts the claim that Elon is making. I don't know if I agree with that, actually. OK, go ahead. So I agree with with chamath that the claims. Is making are far broader than the Body Issue and far broader than the issues that Elon's race. So I agree with you about that jamath. However, I don't agree that what he's saying isn't specifically helpful to Elon's case. So what he said is so this is from a CNN business article he said Zach has disclosure argues that by reporting bots only as a percentage of M Dal rather than as a percentage of total number of accounts in the platform, Twitter obscures the true scale of fake and spam. Count on the service, a move zacho alleges is deliberately misleading, and then see what you're saying here. Sacks it. Just to do the math. The denominator matters here. If the denominator was all accounts, the percentage of bots would be much higher. If the denominator is monthly mdos, whatever they created, it would be a much lower denominator and the percentage would change. I think it's just my reporting. What CNN's reporting in terms of what Zach, who's alleging I just want to get on the table CNN broke the story along with. What other news? Washington Post. Washington Post, yeah. Basically what happened is this guy got fired in January. It started working with these whistleblower lawyers. They put together a big report, and then that report got leaked to the Washington Post and CNN, as well as people on Capitol Hill. So that's kind of what happened here. So CNN goes on to say Zach go says he began asking about the prevalence of both accounts on Twitter in early 2021 and was told by Twitter's head of site integrity that the company didn't know how many total bots are on its platform. He alleges that he came away from conversations with the integrity team with the understanding that the company had quote, no appetite to properly measure the prevalence of bots, End Quote, in part because if the true number became public, it could harm the company's value and image. So this is again the Upton Sinclair problem that they're already getting minimum. David, you have to agree, this guy is basically speaking on both sides of his mouth. I mean, these are both direct quotes from his complaints. So his complaint at best is very confusing and a little schizophrenic. Well, it's also just coming out, so there'll be more data that that comes from. By the way, I don't, I'm, I'm not saying that I believe him or disbelieve him, but I'm saying if you, if you look at the quotes, the quotes aren't the smoking gun one would want if one was trying to look. I think we have to remember the the lawsuit has really nothing to do with this problem. The, the lawsuit really boils down to one very specific clause, which is the pinnacle. Question at hand, which is there is a specific performance? Clause that Elon signed up to. Right. Which, you know, his lawyers could have struck out and either chose not to or, you know, couldn't get the deal done without. And that specific performance clause says that Twitter can force him to close at 5420 a share. And I think the the issue at hand at the Delaware Business Court is going to be that because Twitter's going to point to all of these, you know, gotchas and disclaimers that they have around this Body Issue. As their cover story. And I think that really, you know, this kind of again builds more and more momentum in my mind that the most likely outcome here is a settlement where you have to pay the economic difference between where the stock is now and 5420, which is more than a billion dollars or you close at some number below $54.20 a share. And I think that that is like, you know, if you had to be a betting person, that's probably and if you look at the, the way the stock is traded and if you also look at the way the options market trades, that's what people are assuming that there's a 7 to $10 billion swing. And if you impute that into the stock price, you kind of get into the $51.00 a share kind of an acquisition price. Again, I'm not saying that that is right or should be right. That's just sort of what the market says, Friedberg. What's your take on this? You find this person credible, highly credible and how damaging do you think this is to Twitter independent of the deal to sell the company? I think there's two tests. One is the materiality of what they've reported. So and really that comes down to just the. They end out reported numbers, so if there really is some misstatement knowing this statement based on what he's saying. That's an issue. The other one is the the duty of care, responsibility of the board. Meaning did the information that he's providing actually find its way to the board? If it was blocked by management, you know, it's it's it's a judgment call on, you know, whether or not management was trying to deceive or whether they were trying to investigate and identify more. If the information was brought to the board and the board did not act, then there's an issue with the board's meeting their duty of care responsibility as fiduciaries. Of the company. And that's really what he did. Pitch the board at some point or explain this to the board, but not in writing. Yeah, if what he's claiming. Did not make its way to the board. Then it's hard to say that the board was in breach of their duty of care. If the CEO and if the if the CEO blocked it, then there's a question on what then the CEO can be fired, right. Then there's a good case for the CEO to be fired. I see. So I, I see. You know, probably one of three scenarios here. One is, you know, nothing happens 2 is that the board is actually violating their which I doubt knowing this board. I mean knowing who's on this board. It's probably more likely that the CEO or some executives that block this information from getting to the board. The board then has to act now that they have the information and they say, hey, you blocked this information from getting to us, we need to act and maybe they removed the the, the leadership that was responsible for that. Sacs in terms of board governance, how much of this has to do with the fact that nobody really owned on the board any significant equity in Twitter, is that true? Yeah, I mean I think I mean on the board was the highest, right, he owned 2 or 3%. Jack owned Silver Lake Egons on the board. I mean they're they're their owners on the board, right? Board? Yeah, we're low. To be clear, Zachary doesn't seem to be pointing his finger at the board. In fact, quite the contrary. He's saying he wasn't allowed to present to the board in the amount of detail that he wanted in written form like he wanted. So in a way, he seems to be exonerating the board. He is pointing the finger at Twitter executives, and the timeline here is instructive. Basically what happened is he was hired by Jack Dorsey back when Jack was CEO. This is in, I think, November of 2020. And at that time, Jack had Zach or report directly to him. He actually took responsibility away from these issues, away from Prague who was running engineering gave it to zacho. Zacho reported directly to him. Now Fast forward about a year later and Jack steps down, Prags becomes CEO. And then two months later, Prague fires Zacho and it's in that time period, that couple of months, whereas Sacco alleges that he's prevented. From providing a written report to the board that Twitter executives instruct him to cherry pick that they basically tried to amend this third party consulting firms report in order to make the situation look better in order to hire, hide the extent of the company's problem. So I think this is, I think the allegations as far as they go are mainly a problem for Twitter executives and and look, I, you know, I don't know the truth. These things are just allegations. I think this guy is a respected sort of white hat. Hacker and Cyber community at the same time? I don't know, maybe he is a bad manager or maybe there are other reasons for removing him. How is your threat? Yeah, and you can't ignore the fact that under whistleblower laws, if Twitter gets fined as a result of these allegations, he could get 30%. So listen, we we don't know the truth of it. However, I do think that this whole thing is a windfall for Elon's case. Because it does seem to provide substantiation for Elon's assertion that there's a bot problem at Twitter now and a cover up about it and a cover up about it. Exactly. And a cover up that would basically potentially invalidate the companies SEC disclosures on the subject. There's a question, there's a question of law and a question of fact with regard to Elon's case. So in other words, at the end of the day what they're going to be litigating in Delaware is a contract dispute. Is Elon contractually required to close and Elon's assertion is I'm not because this Body Issue. So there's a question of law where if everything Elon says about the boss is true, is he required to close? And I don't know what the legal ramifications that are, but I think with respect to the question of fact, which is, is Elon right about the Body Issue, there's no question that this is a bombshell that can only help his case. By the way, to your point, the, the, the, the stock was kind of pricing. And a 70% likelihood of this thing closing if you looked at just how all this stuff was trading and it went down to 60% once that whistleblower report came out and people had a chance to digest it. So to your point, it definitely moved the goal posts a little bit towards toward an Elon's favor. There is a, you know, an important thing to point out here which just touched on. There is a whistleblower program that was created in 2012 and by the SEC as part of Dodd Frank. I believe we're in part of the evolution of Dodd Frank and they've given out now over $1 billion in whistleblower awards. These awards come out of the SEC fine. So you often wonder like hey, give this huge SEC fine who got it? Well, it turns out whistleblowers now are massively incentive because if you're a whistleblower it's a career. And then potentially, Jason, you're not, you're not seeing the other part, which is when you go to these organizations to now help develop a whistleblower lawsuit, what has actually happened is you're not whistleblowing, moral or ethical breaches. Your whistleblowing things that can come back to an issue that the SEC and the FTC can make an issue of because that's where the financial fines come and that's where the remuneration and motivation. So for example, like you could have a company that's illegally, I don't know, killing dogs. Horrible. But you know, the whistleblower claim will be about, you know, their disclosures in a 10K of how many dogs they killed to the SEC, right. In this case, you know how many. What did they tell the. Yeah. And that's why he gave this to the SEC DOJ. The other interesting wrinkle here. And by the way, there's been 2, the whistleblower program. I did a bunch of reading on it this week. They also don't disclose who the whistleblowers are. So this isn't a case where you have to come out like Francis did or or Mudge did you. A lot of these awards are being given quietly. So there and there's been two rewards over $100 million, and they don't say what the award was based on, you know, who did, who, who the whistleblower is or who the company is. They've been doing this in a very stealthy way, and it seems to be highly effective. The big difference, I think, with Francis compared to this one is Francis is just a PM, you know, who was not a top five. 10 employee not even close to that. This is a top five top seven employee who had access to the board and was giving reports to the board at least orally. The final point on this I would like to get everybody's commentary on if it is true that they essentially. Forced Twitter was forced by the Indian government to put a government agent on the payroll. I think agent means spy. How explosive is that? And then how many other country? Me, that to me is the most important thing that is not getting nearly enough coverage. It's like you had a government come to a company that's based in America. And it's not, it's not the United States government that did it and basically said, we need you to place an agent of our intelligence services inside of your company. And it seems like they were like, OK, where do you want them to sit? Now Sachs, if that's true, I wonder if they would be required to tell the CIA and our government that their arms being twisted. Like this seems unprecedented to me. And if they didn't? I think that this is all alleged so, but if true sacks, I think the bigger. But no, Jason, you should also ask the next one which is if they did it to Twitter, which is kind of small. What about the big honeypots of users Google? Apple, Google, Facebook. Tick, tock, snap. And what about countries outside of just India? What about the United States? No, I mean, what about the United States? Well, yeah, we have access to this stuff, you know, through the courts. Supposed to be a process. They're supposed to be. The process is you go to court and you get a warrant. Not that it's a high bar, but a prosecutor has to go show probable cause and get a search warrant presented to the company. And then they turn over the data. This you're you're right. It's explosive. In the sense that what they're saying is that these government agents, this is what Zacco says. According to Time magazine, the purported agents had direct, unsupervised access to internal information, which I think means DM's when the accounts are created, who owned which account? The IP addresses. That's what I'm guessing. They had access to, which is you you do not want to trust. I'm guessing and guessing what? Don't put anything in your DMS, folks. I'm guessing what it doesn't mean is the Twitter menu in the cafeteria. Yeah, no. Not that. I mean, not that anybody's been to that cafeteria in three years anyway. I mean, there's literally $47 olives. They had direct, unsupervised access to the salad bar. I think I think you can basically I think you you have to make an assumption that if if what should governments are doing this to one company, they're doing it to all companies. Yeah. But you would think, right then you know Google would put up a fight or Apple would put up a fight, but who knows, you think they're real fight when they went into China, the opposite. Don't you think they do the opposite? Well, actually what they did was there's actually an even sneakier way to do it. What Apple did when they went there is they said we're not providing cloud services in China, but all the cloud services are provided by this third party company. So then they could have plausible. That's not what this is about. This is about being an example of how you. This is interesting, but I'm asking you a question. Do you think that foreign governments have put pressure on the largest American tech companies to place agents and do you think they exist in there? They've definitely put. So the first part they've definitely put pressure. We see that obviously. Then the question is would our would, would Apple or Google do this and not inform the government or not put up a fight? I don't know. Well, I think it's fair to say that the the Senate Intelligence Committee is going to halt Twitter and have like a closed door meeting. And then the question is, you know, will they haul everybody else in and it's just is I I think what what is what is an important question is, is this a dirty girl kind of business tactic at the highest levels of every company? And we just don't know it and are typically not read into it. And we would never know in the absence of this whistleblower thing. And my question is, do does our government know that our companies are acquiescing to these governments? Well, that's been a problem for a long time actually. So there was a op-ed by a Microsoft executive talking about this a number of months back where the argument was, well, the government has to go get a search warrant to get your data from these companies. But these companies don't put up a fight like they don't. It's they don't challenge the warrant at all. At why? Because they don't have an interest. They have an interest in being cooperative, right. The article is basically saying that if you're the subject of a search warrant, meaning they're going to Google to get information about Jason, the government have a duty to inform Jason so that your lawyers can go challenge it. And that was the legal change that needed to be made. We had this conversation, I think, last year. That is a change that should be made because in the old days when the government would present you with a search warrant, they'd have to go to you because all of your documents were in your possession. There would be at your office, they'd be at your house. So they would come knocking on your door, give you the search warrant. You could give it to your lawyer, they could challenge it. That doesn't happen anymore. Now the government is goes and gives a search warrant to a big tech company because your data is in the cloud. But their argument is you don't own that data. The big tech company does. The big tech company has no incentive to fight the government and they just get access to all of your data and you don't even know. You're being investigated. It's not an argument. You agree to that when you sign their terms of service. Yeah, the current situation is bad enough that essentially you have very little protection and rights over your data. But what's happening here, the, the allegation is even worse, which is that government operatives are working with the company in a way that provides them access without them even getting a search warrant. They spy on their ex-girlfriend, they're, you know, brother-in-law, whoever. They can just spy on a celebrity, do whatever they want. But always, I'd always assumed that. This was happening covertly. Meaning like, look, if you're a tech company and you know you have a very bright, I don't know, PhD on a visa and you hired that person to work in computer vision. I'm just making this up. How do you really know that that person is not an agent of another foreign country? And obviously the overwhelming majority are not, but once you have hundreds or thousands of people? You know that that you brought into your company. All it takes is one person. You know, for example, we just saw, I think, an apple. There were two people that were just recently arrested for stealing all of apples autonomous auto. Data and documents and design schematics and all of that stuff. And one of the guys was arrested right before he was trying to fly back to China. And so somehow they figured it out. They were able to get him. He was not a U.S. citizen, but then another guy that did it was a U.S. citizen, but both were of Chinese origin. It just goes to show you that the covert nature of industrial espionage is probably at an all time high, right? And I think that's that's a risk that every company has to manage and do the best that they can. But this is different. This is an overt risk. This is just a letter for sure and saying open the door, give us a badge, we're coming in and This is why I think you have to deal with this. This very delicately and in a different way, yeah. And for people who don't know, Google does what's called the transparency report. Twitter also has one. So they they do try to put out by category search warrants, subpoenas, etcetera, exactly how many warrants they're getting. And the the tech companies are at least trying to be transparent about it to the extent they can. But this is going to lead to a lot of people moving off of the cloud, I predict. We're seeing, and in fact Apple is now storing your data and a lot of your privacy information locally on your phone, and if it's encrypted, they can't hand it over as we saw with the. The terrorist shooting and it was at San Bernardino where they couldn't unlock the phone and they went to the Israeli spy company to do it so. You know, I think, I think the companies here, at least in the United States want to defend their users, but this is could be make people rethink the cloud. And I've seen a couple of pitches from start. I think you're confusing issues. Of course they're gonna try to defend their users in the United States. But what if you have, if you let somebody in to a different country and that it's not as if, it's not as if those servers are not accessible. Yeah, and I'm not confusing this. I'm just about the United States here for a minute. I do think you're going to see people buy mini servers to put or rent their own cloud services that are encrypted. An impossible to unlock and so look for that trend to come or more companies to encrypt it and say we don't have the keys Chimu O. Isn't it crazy that like you know, we spent the last 20 years pushing the cloud and the thing that may actually unwind the cloud is just the utter lack of privacy that we all have now. I've just had like we've just created these massive honeypots where you know, any state or non state actor can essentially just have an incredibly detailed understanding of who you are. And why? Because we weren't willing to pay 5 bucks a month for storage. Everything needed to be free isn't as part of? Isn't this part of the? A philosophy behind decentralized services that you know. Yeah, yeah, I mean I don't like using that term, but just decentralized services where the data doesn't sit on some centralized enterprise controlled servers, but the data is distributed either on a chain or in your phone or in some way. You know, your identity, your information, your content isn't isn't centrally controlled. And that that fundamental principle may actually come to kind of bear over the next couple of years and decades that you know, that model. Yeah, that that model is more appropriate for us, for me. And therefore, the services that are built that way are going to win in the market. The challenge is ultimately, how do you finance those? Because those services, right, I mean they they, they don't have as much of it. You have to pay, you have to pay for them, you know, if you're willing to pay 5 or $10.00 a month for your privacy, consumers are doing it for I I use the brave browser and VPN's. And these are becoming a major category. You hear it on podcast advertising all the time. DuckDuckGo. Brave VPNs are like VPNs aren't just for hackers anymore. They're like real like privacy. Well, something that I think that's really important, which is that, you know, over the last 20 years for all of us, we've been building these products on the Internet. We've actually done a little bit of a disservice because we've basically created these expectations of consumer surplus and we've never given people true sets of tradeoffs. We've always said, oh, you'll get more and it's essentially free because we're back into an advertising model that that supports us being able to give you more and more for free. But it turns out that it has some real consequences and I do think that not enough. Plus, actually understand why privacy is important. But when you start to hear these examples and it'll be important to see what what the true details of this Twitter situation are. I think that the pendulum starts to swing in the other direction where we say, OK, you know what? I'll eat out at Chipotle one night a week less and instead I'm going to reallocate that money to making sure that I have, you know, some amount of privacy. You can do it for 25 bucks a month, you know, two or 300 bucks a year, which is a big number for, you know, maybe the average Joe, but it's it's it's it's being packaged and bundled right now so that you're seeing the VPN's, the anonymous search engines. In the browsers all starting to bundle, they're bundling a set a suite of services and so I think this is upon us now and consumers get it and they want to protect their privacy. So and Apple has said this is going to be our reason for you to choose our cloud is that we're going to put the local settings, we're going to put your data on your phone, encrypt it. We don't have access to it, use, use Apple for this reason. Of course they're also building a multi billion dollar ad business at the same time in Apple News and their App Store, so. There's that. I guess we should move on here. We'll see what happens with this, the other big news story. That people are talking about this week and we talked about, I guess last year was student loan debt relief, interestingly, about 85 days before the midterms. Joe Biden has decided to unilaterally give 10 to 20 K of debt relief to people who have student loans. You have to have under 125K in yearly income as an individual, 250 as a household. And the student loan Pause program, which happened during COVID has been extended to the end of this year. I'm not sure why. No, that's about they they explained why. Apparently it takes four months for them to turn on their COBOL written software that runs these loan servicing. Change takes more. That's gonna take it's gonna take four months to restart the software that calculates your loan balance and is able to print the bill. We're so incompetent. OK, anyway, you have to apply for this. And as we know, student loan is student loan debt is 1.7. 5 trillion. This is going to cost us another 300 billion. Can't imagine what's gonna happen with this 1020 K people buying NFT's and stocks and. Housing and we're going to hit the, I guess we're going for Bloomberg report that said that. Look, we we we passed the Inflation Reduction Act. We talked about it last week, but one of the key pillars of that is that there's a 300 billion of expected revenues coming in, and we essentially turned around and just gave that back to a very, very small segment of the American population. Bloomberg's analysis was that it's going to create somewhere between .1 and .3% extra inflation on top of all of that. And so, you know, you really have to ask yourself, like, what? What was the White House trying to accomplish? I think #1, they made a campaign promise. And so, you know, I think Biden needed to make sure that he fulfilled that. But nobody was really happy, right? The Progressives wanted something extreme. Everybody else said, you know, this is not really the right thing to do. Because it doesn't really solve the the the the root cause of what we're dealing with. You know if it would have been much better if you had said, hey listen you know we're going to make this stuff expunge able on bankruptcy. That would have been really useful. What happens if you actually tried to, I don't know. You were from the inner city and you worked your *** off. You became a doctor you have 300,000 in debt but now you're a, you know, a resident and you make 126,000. Well now you're, you know you're kind of ESOL here. So there's a lot of folks that they probably want it, want it to help. That they didn't help. Then there's all the blue collar folks who are like, why, why this give away only to these folks? Then there are the people that paid off their loans thinking, why did I pay my loans off? Then there's the incentives that it creates for colleges, which is, well, I'm just going to keep jacking up tuition because if they did it once, they may do it again. So all of these things I think are sort of a little bit of. You know, it's a little bit of a head scratcher. And then the last thing which we can talk about at the end is I don't think this is what gets people out to vote. And I don't think it's what people care about ultimately at the polls, which if there was a political calculation to make, that's important and specifically. When you look at what happened last night in a bunch of these districts, every progressive candidate got absolutely shellacked. They lost across the board. And so the progressive talking points around this stuff fundamentally, when push comes to shove, doesn't work for Democratic voters. And then second is there was a really hotly contested seat which was a Democrat versus a a Republican. I think it's Pat Ryan versus this guy. Mark Molinaro, the Republican, he was leading the entire way, and then this guy won 5149. And this is a very centrist down the Middle DEM. So all the signs are like, this may not have been the smartest thing to do, but I don't think Joe Biden had a choice because he made the promise and he had to live up to it. Freeberg. Is this a fair thing to do, a smart thing to do, a cynical thing to do, to buy votes? Where, where do you fold down on this issue? This is absolutely moronic. I think that the fact that. 8,000,000 households are eligible for this relief. And 10 to $20,000 is relief is provided to a minority of Americans. Is exactly what Chamat said, which is kind of distorted politics at its worst. There, this is a $300 billion bill to the US taxpayer and the ultimate beneficiary of that bill, while we all might want to say it's the people that are getting debt relief that have taken out these student loans, that money was transferred to somewhere and you know where it was transferred to university endowments and the profit and the and the pockets of for profit educational institutions. If there were a free market for education in the United States and the government was not involved in the process of. Funding and supporting the educational infrastructure in this country, individual citizens would have the right and the obligation to make decisions about whether or not the money that they're spending on tuition actually has a positive ROI for them. By spending 10,000 or $100,000, am I going to make more than that much money back when I graduate? And unfortunately, we've lulled our citizenry. We've lulled our country into complacency where that decision and that calculus is no longer required because Uncle Sam is there to give you all the money you want to go to college. And the hungry, money hungry institutions that are there to educate you are taking that money, putting it in their endowments or in the pockets of their shareholders. And at the end of the day, it turns out that that decision may not have been the best decision. And we're no longer holding ourselves individually to take responsibility for the decisions that we've made. And we're creating Miss Incentives because of the government programs that have been created by telling people you need to get a higher education, the government is going to pay for it, for you. And it doesn't matter if it does or doesn't work because at the end of the day if it doesn't work. We're just going to pay it back for you anyway. We'll bail you out. And then and there. And there's a middle class in the United States of America that is gonna end up paying the tax bill primarily because that's where most tax dollars come from. For the minority of people that made a bad decision. And it's not necessarily their fault they made that decision because the infrastructure in the system was set up to tell they were duped. Go to college, get a good degree. It always works. Having a good life, you'll make more money and the and the reality is that they aren't and that they don't. The ROI. Many of these degrees have been negative. You make less money than you would have if you were actually in the workforce earning an on the ground experience and progressing your career. You do not need a degree in philosophy or history or German studies to be able to go and be effective in the technology workforce or in the services workforce. And I think that we're seeing that play out. The biggest challenge now is if we're going to provide this loan relief and not reform the educational infrastructure and the and the requirements for whether or not an educational system. Is eligible for support from the federal loan program. We are not actually solving the fundamental problem. We are keeping this gravy train running, and we're not actually getting to the root cause of where this money is flowing. And this is exactly what happens. I will rehash my point that I've made 100 times. At the end of empires. Everyone sees that the money train is leaving the station and everyone jumps and grabs what they can, and that's exactly what's going on. We think that we're a rich nation, but we're becoming complacent, and this is unfortunate and it's a really sad sign. I think we need to fix this educational infrastructure. We need to make eligibility requirements for whether or not loans are actually going to have a positive ROI for students and then individuals ultimately need to be educated on that and made held accountable to whether or not they're making the right decisions for themselves. Sach, should each American pay $1000 to let these 8 million people off the hook because that's what this is going to cost? No, of course not. I mean, I agree with everything people say. I don't like you. I just gave you the softball, softball. This is an issue where all four of us are on the same page. I agree with everything that kamasa and what Freeberg said. I mean, this bill is unfair or it rewards. Relatively well off college grads, over working class people. It's going to add through a billion to the deficit. I mean, Joe Manchin should feel like a sucker right now because they just spent the 300 billion of supposed savings that he just agreed to. I just to add, it's it's unconstitutional. I mean the the Constitution expressly says no money shall be drawn from the treasury but in consequence of appropriations made by law. So I don't understand how Biden can even do this by an executive order. I expect this will be challenged and taken to the Supreme Court and I think there's a very good chance that it'll end up like Biden's other executive orders that were ruled unconstitutional member, there was the vaccine mandate that he tried to do and there was the eviction moratorium that he tried to do and they were both ruled unconstitutional. I think there's a good chance that this will also be ruled unconstitutional. It's like, like you guys mentioned, it's inflationary. I mean these are basically stemmy checks, which we don't need right now. And it's going to make tuition go up because the more government subsidizes something, the more that those providers have an incentive to raise the cost. So this is just a jump the shark moment, I think, for policy making. The question is why are they doing it? And I think it really speaks to the nature of the Democratic Party today, which is the Democratic Party has shifted from being a blue collar sort of more economically. Populist party, economically left party to being a professional class that is college educated, culturally left more woke party. And this is the ultimate example of that where the Democratic Party is basically passing this payoff and giveaway to their sort of woke college graduates at the expense of their blue collar, the blue collar part of their coalition. And you know, a democratic political scientist that I like to read, Roy Tashera, just today he had a blog post called the Democrats shifting. Coalition, where he pointed out that if you look at polling, if you look at the generic ballot among white college graduates, they favor Democrats by 12 points, whereas the white working class, which is, say non college voters, they favor Republicans by 25 points. So one of the biggest gaps in the electorate is college versus non college. That is the fundamental gap. It's bigger than even, you know, than any other gap than racial gaps or anything like that. This is really the key gap in the electorate. And this is a payoff to the basically to the foot, the new foot soldiers of the Democratic Party. If you think about it, the old stereotype of a foot soldier of the Democratic Party would be a union representative. They were the ones getting out the vote. That person's been replaced with sort of a woke college graduate who joins the Democratic Socialists of America. And they go out and they're the ones pounding the pavement and and doing the ballot harvesting. So there's been a real change in what this party is about, and I think that's the explanation for why they're passing this. Phase inflation chamath and then we'll go to your word. The MFA's from Sarah Lawrence College have taken over the Democratic Party. Well, let me ask you, let me ask you guys a question. Yeah, when you guys graduated, everyone went to undergrad. You went to undergrad in Canada, right? I have no grad degree right now, but when you guys graduated college, what do you think the ratio 8020901050 fifty Zero 100 was the first two years of experience you guys had in the workforce? Versus the education and knowledge you you garnered in college, how important was 90% workforce? 90% workforce? First time I went to school at night so I was working while I was at school right? I would say at school 100 and zero. I I went to school University of Waterloo that has a program called Coop where you have to alternate school and work. It takes an extra year to graduate but you end up getting 24 months of full time work experience the same and you graduate with a lot less debt. I graduated with. Off the debt I would have otherwise. Sex, I mean, do you feel the same? I mean, you wouldn't got a law degree that's different. I mean, look, I think that it used to be the case that people would go get these degrees and they would take out these loans because there is a perceived ROI of getting this education. And I think one of the deeper issues we have today is it's very unclear what the ROI is. I mean what is the return on getting a degree in, you know, social studies or art history or frankly some woke studies at one of these prestigious universities, they're graduates go out or they're not especially qualified for a higher paying job. And actually, I think one of the really revealing parts of of this executive order is not just the forgiveness part we haven't really touched on. There's another provision that caps repayment levels. So basically it says that the monthly payments on undergraduate loans be limited to 5% of monthly income. Now who is that? The payoff to that is the payoff to the art history major from Amherst who ends up being a barista at Starbucks, you know, or the Democratic political operative who works for the DSA gathering votes? I mean that is who this is or the. Well, let me give the, let me give the counter argument to you, sacks, and I want to hear your response to this. So the the counter argument is, hey, listen, the airlines got bailed out for a trillion dollars, you know, cumulatively. 2008 financial crisis, 700 billion or something to that number I'm going to reset. There is a caveat to that, which is we actually made money on that bill. I'm going to respond to this. Yeah, OK, great. And then #3 hold on and #3 me too. Airlines, banks and then the Trump tax break 1.5 billion. So why can't a bunch of students get but 300 billion? That is the counter argument everybody. We we don't complain when, you know, the rich people get bailouts and the rich corporations and airlines do. But now we're suddenly complaining about this little pittance. What's your best response to that freeberg? I'm not saying that's my position. Not Summers, former Treasury Secretary of the United States, had a a tweet storm about this. And he said, you know, the student loan issue arises, arouses passion. Here are some observations and some responses. There is no analogy with bank bailouts, student loans or grants that cost the government money. The bank bailouts were loans at premium interest in which the government actually turned a profit. And it's important to think about all government. Services being infrastructure funding where you are funding some underlying tubing or mechanism that allows society and the economy to progress versus making up for the dollar mistakes or decisions that were made in the past. I also have issues not just with this, but with the issues of people buying homes in coastal cities that they get bailed out at the price of that home at the fair market price when a hurricane hits because they paid a premium taking on the risk of a hurricane or a flooding event hitting their home. Why should the US government and the US taxpayer come in and say, you know what? I'm going to reimburse you for the full value of your home, which frankly should have been 50% of what you paid for it because it's sitting on a coastline. And that's a big problem that we generally have is we try and use the government as a system for providing bailouts to make up for past investment mistakes made by individuals and businesses. And I think that there's a very clear distinction that you can make when you decide whether or not A and we use the term bailout anytime we're spending money, but the reality is if you're making an investment. That has some payoff for economic growth and for people and for this country to progress in some measurable way. That is a good way to assess whether or not that is a reasonable investment versus saying, you know what, I'm covering someone else's liability. And when you do that, we're actually burning money and we're putting ourselves deeper in a hole as a nation and making it harder to do the former, to make the infrastructure investments and make the investments that allow us to move forward. And I think that that's a really good way to clarify these things and frankly, the list of things that people say. This is fair, this, this is not fair. Yadda, yadda. Go down that list and ask yourself that question. Is it a positive ROI to progress our country forward, or is it a bailout for people that had some liability they took on that they can't cover? And I think for all those things that are unfair, a really important point, we cannot get caught up in the endless cycle of making up for other people's unfair benefits that they got from this, from this government. Because at the end of the day, that's a road to nowhere. We will burn through everything we have. And everyone will scramble for money. And that's the state that we're in right now, where everyone's raising their hand and they're seeing $800 billion bills, $600 billion bills, COVID relief, Pandemic Relief, PPP loan relief. And everyone says, well, what about me? And at the end of the day, everyone's what about me is going to drive us into an infinite black hole that we will never get out of. And we have to change our mindset and take individual responsibility and recognize that the dollars that we're spending have to have an ROI for progression of us as a whole. And this is a really dangerous. Place that we're in right now so I think if the if the education comments OK can I make sure you make then ask question to 6:00 AM I'm on 2 monologue today. I feel like I'm very passion. No you're doing great I mean half the fact that you have passionate about something you wanna straight no video game. Yeah that almond milk gave you a little those cash maybe 4 cashews going forward maybe fairly bug guys this stuff really bugs me. I'll be honest. Take it easy on the dates. Yeah I'm like dude like this stuff just makes me feel like what are we doing it's just did you did you put chia seeds in your yeah that's it. Was it good? Was it the goji berries? The goji Berry? Go easy on. The goji berries. Do. That's a super food right there. If you, if you have, if you have chia seeds in the morning, this is a huge BM that's about to hit. It's just you're just waiting for the wave to hit. Yeah. Yeah. Step mean for sure, you're gonna have two comments. Comment. Number one is, I think the thing that shows that this could have been better is that it was completely silent on the ability to expunge your student loans in bankruptcy, the ability to discharge. That is the single biggest change you could make. The system, to be fair to everybody and introduce a better ROI risk scoring calculation mechanism. Why? OK, so great. So this is an agreement, but go ahead and I'll explain it. OK. In all debt markets, right, whenever you lend money, there is an assumption of risk that you're taking and that fits on a curve of highly likely to default 0 likelihood of default. And that manifests in a risk scoring, so FICO score, but in the debt markets, right. And there's these companies that provide that. Moodys and S&P. They say you're an investment grade debt. You know you're a AAA plus, you're a junk debt so that you're, you know, you're a triple B minus or whatever, and depending on where you are, you pay different rates. This is the same in car insurance. It's the same in home insurance. It's the same in health insurance. But in all of those cases, if you go upside down, you can declare bankruptcy and you can discharge those debts. Here, we don't have that idea. So if you go bankrupt for whatever reason, this debt will stay with you forever, which is deeply unfair. Second is if you actually flipped it and you could allow it to be discharged. Then the companies that provided these loans would be forced to risk score you. And the reason why that would be so powerful is that that would then create the forcing function for universities to actually deliver what they promise. And so who do you think is really against the ability to discharge in bankruptcy? It's the universities and the university endowments. So, you know, if I were progressives, the thing that I would have pushed more than a handout to a few people. Which by the way, didn't even, you know, really scratch the surface of the debt that they had anyways and it also served to **** *** everybody else. I would have focused on this bankruptcy issue because that is a meaningful lasting change. And the 2nd is why don't you go and actually get a large portion of this money from all these university endowments? Because the longer that these folks run what is effectively a multi trillion dollar asset management business. They're always going to treat education and the ROI that comes from it as a second class citizen. OK, and that is what I think is wrong and if you were to just fix this one thing. And then even the threat of actually confiscating some of the $50 billion that Harvard has or the $49 billion that utimco has, you would start or the UT system has. You would start to see the seeds of change where administrators would think to themselves, I have to deliver something of value because these kids are getting loans, they're going to be risk scored and I don't want to be the person that's like a low end borrower, right? I'm not serving junk paper to the market. I want to serve. People that are going to go and really drive a huge ROI. So then sacks, you'd have an alignment between the people giving the loan and perhaps the value of the degree. And so you could say, hey, we'll give loans to stem degrees at a different rate or a different number of them or a different amount of cash or a different interest rate than we would for, I don't know, you getting a degree in philosophy or like I did psychology. Right. Just give a different one based on the outcome that makes total sense to you. Yes. I I've said for a long time that we should be allowing student debt to be discharged in bankruptcy just like any other type of debt, just like credit card debt, just like other types of debt, mama's right. That would create some risk to the underwriter so that they would have to actually assess whether this person getting that degree would be able to repay the debt. But you have to ask the question, is it a bug or a feature that they're trying to remove market forces? And I would argue that this is deliberate, that progressives in the Democratic Party. Don't want there to be accountability for what you learn in college. Why? Because, as I mentioned, it's these colleges that are putting out the foot soldiers of the Democratic Party. I mean, listen, there's a 37 point gap in party preference just based on one variable, which is whether you are professional class or working class, meaning college degree or no college degree. And that spans across different racial groups and other party lines. So the fact of the matter is that if you go. To college and get a degree, you are much, much more likely to become progressive now. Why is that? I think it's because a lot of these colleges have basically become reeducation camps. I mean, these are the woke madrassas of of cultural, cultural leftism. Great quote, Wow, awoke madrassa. Kind of like Harvard has, like al Qaeda. Who wrote that one for you? I see that, yeah. Yeah, in fairness, came up with that line, yes. But look, these places are working madrassas and what do they do? They graduate these people. Clerics of our woke theocracy, these people go on, then they go building forcers, become suicide bombers. Yes, that's exactly right. It's not, it's not like violent like that. But listen, we we look down on some of these theocratic societies and we don't realize how like them we are. I mean, look, these kids who graduate from these women dresses, they go off and become the speech police. I mean, they go in force, community moderation at social networks, they become the foot soldiers. Alright, let me just make up. This is the best. Let me say one thing. That's true, right? How do you explain that 37 point gap? OK, so if you're the Democratic Party, let's listen. If you're the Democratic Party, which is run by woke progressive political operatives, why would you want to defund the factories that are brainwashing more young students to basically join your ranks? Say two things. I want to say two things. One is I think that the the university and the college degree has been used as a heuristic. For progression out of blue collar to white collar, it says if you get a hollow and jakal you. I know you can speak to this because you know you come from a family. That that works blue collar and, you know, you got a college degree. But I think there is this, you know, kind of. Assertion in the United States and and and it has now become, one could argue, a meme that if you get a college degree, you're no longer blue collar, you're now white collar. And the reality is that the quality of that degree varies greatly based on where you go, the major and the experience. You get to a company that degree. And as a result, you may not necessarily transfer from blue collar to white collar, but you have the degree, you say you're not white collar, and then you're working a blue collar job with $120,000 of debt. And so that's that. That heuristic isn't true. And what we need to examine is why that heuristic is no longer true and what we can do about it. Yeah, I mean, it's pretty. Secondly, secondly, I do want to make a defense for college. I think that there there is a incredible benefit to broadening individuals exposure to topics, research and areas that they may not have naturally been interested in or that they will not necessarily get trained in. And there is an important role that that educational infrastructure has in allowing us to be a more enlightened populace, meaning we can understand. History. We can understand philosophy. We can understand the things that shaped our our world and our livelihoods and what makes us who we are today. And we can understand the sciences and the maps that affect us so we can better understand the world and the people around us. So there is a role, but the real question is how do you integrate that educational role into a technical training program or into a real world development program? Skills that that that basically make an educational system more than just a check box that doesn't actually do anything for you, but gives you that exposure. Accompanied by and maybe that's the requirement with, you know, with federal loans is that there should be some skill or some. I think, I think the minute, I think the minute I don't want to lose the important breadth of exposure that college is meant to bring to people's college is meant to, yes. And then that's valid. Go ahead and then I'll wrap up my final cut. No, I was just going to say I I really think people do not understand how, how meaningful of a change it would be if if you were able to discharge your student debt in bankruptcy. It is the most powerful market function we could. Create to make these universities more accountable. And I think if you guys look at my annual letter, I put a chart in there. But you know, part of the problem that we have in these universities, these leading universities, is that these have become graveyards. OK? There is a gerontocracy that runs these things with an iron fist and as these folks have stayed in these jobs for enormous amounts of time now 4050 plus years, the average person is in their mid to late 70s now who are? Who are the administrators of our leading institutions? They are focused on running up endowments and they are focused on the power and the influence that comes with their position. So I I implore anybody who has any ability to to actually achieve this change. There should not be a single logical person that should not support the ability to discharge student debt and bankruptcy. And you will identify the insider establishment by those that try to stop you. You will expose them 100%. And I I just want to put a closing thing here for the people listening who have young people making these decisions. When we all went to college as Gen Xers, College was nine, ten, $11,000 a year in tuition. And if you came out with 10 or 20K and you had an average job or a salary of double or triple that when you graduated, it seemed like a good deal. The ROI broke. Now market forces are at work here. I just want to point out two of them. Number one, there is a website grow with Google you can just look up right now they're allowing people to get professional certificates and this is free and if you could pull up, grow with Google they've identified. Five different paths to jobs. One of them's digital marketing and ecommerce ones. IT support data analytics, project management, and UX design. They have essentially looked at what's needed in the world and aligned A3 to six months online course for ******* free. That'll get you a job and you, if you have executive function, the ability to sit down, shut up and learn can do this first before you make the decision to go $100,000 in debt and then get a $50,000 a year job. Here are these jobs average you know 607080 KA year and you can do it for free. The next piece that the private market is doing. You and I looked into this chamath actually together ISA's income sharing agreements. We were lucky enough to invest in a company called Meritas. They are providing ISA's for a college, Colorado Mountain College for nursing. What this means is they will give you your tuition for free. It's educate now pay later you if you go to one of these colleges for nursing, you get educated and then you pay it. Back and you're capta paying back like 2 times whatever the loan is, 1 1/2 whatever the college decides. But they take the risk as opposed to Harvard with 40 billion. That takes no ******* risk. And so the free market, I think can also solve this, but you have to sit down with your kids and say, let's have an ROI calculation. AT20K in debt, you know. OK, fine. You got a philosophy degree by the way side off Sax final, final question for you. I posted this thing in the group chat, but what do you guys think about this? You know, Republican tidal wave becoming a Republican ripple, that's what. No, that's that's what that's it was a, it was an odd set of outcomes, don't you think? For question. I mean Biden. Look, Biden has had a good run over the last few weeks. There's sorry my my audio cut out one more time, Saskia said again, I'll say, I'll say it again. The political report says that the red wave looks more like a red ripple. No, I think I think it's right. Well, look, I I think a couple of things happen. So first, Biden has got some wins legislatively. I don't think it's good policy. I don't think this executive order is good policy. I don't think the 750 billion. Of a climate that pretends to be an inflation reduction act. I don't think that's good policy, but nonetheless, he has delivered some goodies for his his base, for his donors, and that has basically ameliorated the story in the press that Democrats are in disarray. So you're not hearing that. In addition, I think Biden's got two things going for him, Dobbs and Jobs. I mean Dobbs. There's no question Dobbs has helped the Democrats quite a bit. Certainly has motivated their base and then the jobs report has been stronger. Look, I think overall the economic data is mixed. Real wages are not keeping up with inflation, but jobs have so far been strong. So yeah, there's no question that Democrats are in a materially better position. They were in June when it looked like a tsunami. That being said, the election still 10 weeks away and I think we'll have to see what happens. And I think the economy is still in a pretty fragile state. So 10 weeks is still a long time. But yes, you're right that so things are looking right now. Things are a lot better for Biden. And by the way, I do think the Republicans have some issues with candidate quality. And so there's a couple of races that, you know, should have been more slam dunks than that are not. But first word you used there. You said Dobbs in jobs. What was the first job? Jobs? Abortion? The Dobbs case? Yeah, got it, got it. OK, OK. I just didn't hear it perfectly. Weren't a lot of these wins for Biden bipartisan? Well, no. The Inflation Reduction Act was passed on straight party lines. This, this college loan forgiveness is something they can't even get through the Senate. It's being done as a as an executive order. The the things that were bipartisan, hold on, the things that were bipartisan, there was that Chips act where they got some votes and and then there was the guns Bill. So, yeah, look, he did get some bipartisan wins. There's no question about it. I think they're Republicans. I think they're Republicans. Got hoodwinked, basically the Republicans foolishly. Went along with infrastructure and with the Chips Act. They should have forced Biden to use up reconciliation on one of those bills and then they wouldn't be able to get through the 750 billion Inflation Reduction Act. So Republicans, you know, as much of a sort of master strategist as McConnell is reputed to be, they really got snowed on this one. If it's possible for somebody to masturbate themselves from the inside out, Jason's doing it right now. There's a there's a reason why we do this from the chest up, OK. I think what's likely to happen in November is still that the Republicans win one of the chambers, probably the house. I think the Senate is still up for grabs. I don't think it's over. I think that'll be important because Biden won't be able to pass some of this legislation that's I think destructive from a deficit standpoint, from an economic standpoint. And we've talked about on this pod, and I don't think you guys are too excited about most of the legislation he's passing. So quite frankly, I'm just hoping for gridlock. I'd like to get back to this. Situation of gridlock, less spending would be certainly great at this point. I mean, we're trying to find inflation here while we keep spending money over here. It's challenging. Yeah. If you want to get back to fiscal responsibility, you you got to vote for gridlock or hopefully moderates come. All right, well, let's sacks go anyway. We're going to go to science anyway. And Zacks checks his e-mail during that segment. So by the way, there's, there's an article now, you know, when we talked about quiet quitting, it's now become this huge thing that everybody's talking about. Yes, and and what's so funny about quiet quitting is just yet another example of Gen Z again Co opting something we've already done. When we used to do it, it was called coasting, and you just feel rested and coasting, rest, invest. But now it's called quiet quitting. Yeah, they're all up in their feelings. Do we want to talk about the gut Biome? I want to hear about the gut Biome. So there was a there was a paper published. In the journal Cell. The paper was done by a research team out of Herzelia, so I'll I'll take a step back. The human body is made-up of roughly 10 trillion cells. And there are also somewhere between 10 and 40 trillion bacterial cells that live in your body, primarily in your small intestine and your and what people call the gut Biome. And so this is a population of microbes, bacteria that are basically chemical factories. They eat stuff up and they spit out chemicals and those chemicals end up in our body. And it turns out that the gut Biome, the bacteria in our gut can actually regulate our health in a very significant way. And this was the basis of our company. Unique. You guys can bleep that out if you want, which is now called super Gut. And Jake, I know you've tried the product, which is awesome. Thank you sent me. I bought me unique. That helped me with my weight loss, and then I just got super gut bars, which are delicious. Principle of that business is that there is a known product, a molecule, amylose, that you can feed the gut Biome. It doesn't get absorbed by the human body, it sits in the gut Biome and the bacteria in your gut, certain types of bacteria will eat it, their population will grow, and other population of bad bacteria will shrink. And the good bacteria release chemicals called short chain fatty acids that go into your blood and reduce your blood sugar and have a profound effect on on your metabolism. And there are also known gut bacteria that can regulate your sleep, your mood, your anxiety, your energy levels and your glycemic control the control of blood sugar. So it's it's an incredibly telling me, are you telling me that Cialis is a natural compound? Is it bacteria? Look, are you are you saying we have to cancel our Cialis prescriptions? Oh no. So guys, there's, there's a known, there's a known principle that's really deeply studied now in neurology, in neuroscience. Called the gut brain axis, that you can actually profoundly affect disease and the condition of the brain and neural conditions by changing the gut Biome. And so this is, this is something that's just being studied. The reason it's it's all coming to light in the last few years is because of the cost of DNA sequencing. We used to be very, very expensive to sequence the DNA from your gut Biome, which you do by looking at your poop and then, you know, looking at all the DNA that's in the poop. And that tells you what your gut by what bacteria in your gut. That used to cost 1000 bucks. Now it costs 5 bucks. And so in the last couple of years, there is this absolute explosion in research into the gut microbiome and more importantly, how the gut microbiome affects human health. So this particular paper looked at the effect that eating artificial sweeteners had on the gut Biome and on human health. And So what these researchers did is they they took 120 people. They gave them nothing, or gave them sugar or gave them saccharin or sucralose. Aspartame or stevia, the four most popular artificial sweeteners. And then they looked at how their gut Biome changed and importantly they looked at how their glycemic control or ability to control blood glucose changed blood glucose. As you guys may recall, you know you always have glucose in your blood. The more if you have over, you know, a level of 100, you know and and it persists, you can actually have really bad health effects and it causes high A1C over time, which is diabetes and so high stores more fat when you're spiking and so you get fat. But when when you have high blood glucose, it's actually damaging to organs, it's damaging to cells and overtime it can cause very significant deleterious effects to the human body. That's what the the disease of diabetes is and does is it's about high blood blood, high blood sugar, blood glucose. So what these guys did is they gave people saccharin, sucralose, aspartame and stevia and then measured their blood glucose and their ability to convert sugar in the blood and absorb it and use it. And that's called glycemic control. The way you guys, you guys have probably done this in the doctor, you take it to glycemic control. Just you drink a bunch of sugar water and they measure your blood sugar every couple of minutes, and then they show the curve on how effectively your body can metabolize that glucose. And if it cannot metabolize that glucose, well, you have bad glycemic control and ultimately that is diabetes. And what they found was that if you eat saccharin and sucralose, which we always assumed were better than sugar, they actually adversely affect your ability to control blood glucose, saccharin, and sucralose. In particular, drive up your blood glucose and makes it harder for your body to metabolize glucose out of your blood. Aspartame and stevia were relatively benign. Oh, really? Because that's what's in Coke 0. That's what I drink. There you go. And so, so, so that was kind of the realization. And then they went deep and they actually analyzed the microbiome and they showed that they were profound differences in how these compounds affected the microbiome. It turns out that sucralose, for example, is more likely. Not being absorbed by your intestines. So it's sitting in the intestinal walls and the bad bacteria are eating it. And the the good bacteria that are supposed to be making short chain fatty acids and all these chemicals that regulate blood sugar have a lower population. And so we actually see a profoundly negative effect from eating certain compounds. Have you shipped your poop to test these? Like, yeah, we just did a clinical trial at supercut, by the way we found and we published it. So it's it's it's public. But wait, just the audience doesn't even know this stuff exists. In all likelihood that you basically take a poop and you put it in a vial and you send it and they analyze your poop. I don't mean to be graphic here, but have you done this before? How does this work? I I do it every I've done it. Yeah. And and and I think it's. Look, here's, here's the issue, Jason, think, and I want to, I want to say two things that I think are really important to say. Number one is. We know very little about what bacteria do what in your gut, how which we're starting to understand which ones are beneficial, which ones make good chemicals that your body use and regulate yourself and regulate your health. And and remember, we have a symbiotic relationship with the bacteria in our gut. They're making chemicals and they're eating chemicals. The chemicals they make affect ourselves, the chemicals they eat affect our body. So the way that we evolve our health is actually profoundly affected by our gut Biome. So we're, we don't know enough yet to say definitively. This bacteria is good. This bacteria is bad. We're starting to have a good sense of that the 2nd way, just just so, you know, just to double down on this, like, there's a form of therapy. It's experimental, but it's called fecal microbiome transplantation. FMT heard about this. But, you know, we are finding now that you can take feces from healthy individuals that have good, you know, gut Biome and good bacterial counts. And if you put it, you know, inject it into people that are suffering from a bunch of different diseases, it actually is looking like it's curative. So Parkinson's, Ms IBS, colitis. So it just goes to show you that this that somebody could cut by, there's there's bacteria really understood into another person's intestines. Where do you put the poop? Through the bum? Can do it there, or you can take a pill. So there's a little take a pill and it's got the the fecal stuff in it and you swallow it and it and it. Now I wanna see somebody else's poop. You, I said. I said it in a way so that we could see his reaction to in the bum. And Jason was like this. But wait, how does this impact your ****? That's what the audience wants to know. Freeberg Uranus, impact. Here's the other point I wanted to make, which ties to what Trump said. This is really important. Jake. Out. So the gut Biome is an ecosystem, like a rainforest. There are trees that grow. Monkeys climb the trees. They poop. There's Jaguars. Jaguars eat the monkeys, the trees grow. Cause of the monkey poop. This is a whole ecosystem. All these organisms, all these microbes regulate one another and feed one another. And This is why probiotics do not work. Probiotics are single microbes, single bacterial strains or fungal strains that we put into a pill and we swallow it. And justice because that microbe happens to have some beneficial effect, you know, on its own in a in a Petri dish. It does not survive in your gut Biome because it's like putting a house cat in a rainforest. The Jaguar will eat the house cat, the house cat has nothing to eat, etcetera. It doesn't inoculate. Inoculate means that it survives, thrives, and the population grows. So when we take probiotics, it's just passing right through our gut. It doesn't stay there and doesn't change scanning. And it turns out that the reason fecal microbiome fecal transplants work is because you're taking the whole microbiome from someone else's gut, and you're putting it in your gut, the whole rainforest, the whole rainforest. And so all the organisms that are needed that self, that regulate one another, all of the small molecules that that regulate that cross, regulate each other, they all go in your gut. And then they actually change your entire gut, and your gut becomes the rainforest of someone else's gut. And so someone else has a healthy gut. Meaning minus my **** can be your **** Jason. So we put our anuses together and then a monkey goes between them and then the rainforest is well, let me ask you questions. The FDA has not approved any of this yet. When will the FDA be approving these treatments? Except there are a lot of, there are a lot of clinical trials going on for fecal transplant. UCSF has a huge clinical trial for Ms as Chamath pointed out right now, where they are actually doing fecal transplants on patients without Ms into people with MS and significant, you know, the early data of these sorts of. Treatments as indicated that there can be a very profound effect on the frequency of lesions appearing on the brain which is one of the primary symptoms of of an Ms and so these organisms we don't yet know why, but some of them will when will we understand this is it a 5 year, 10 year kind of startups there's billions of dollars invested when we know when will we know and have like a game plan. So it's already coming out. There's no, it's not like a binary switch. We're discovering new things there's a there's a set of companies that are discovering what are called small molecules. So they're finding what are the. Little chemicals that those good bacteria are making in your gut. And what and can we turn those chemicals into drugs? And so they're trying to turn those into drugs. Other companies are saying, you know what? This is a set of good bacteria. Let's just put them in your body and figure out a way to get them to inoculate and stay. Other companies are saying, let's do fecal transplants, and other companies are basically just saying, let's change. This is what we do at super gut. Let's just change the feedstock for your gut Biome. And you can actually evolve the rainforest into a different state by changing what you're feeding the bacteria in your gut. And there's certain molecules you can feed the gut bacteria and then the populations will change into a more beneficial state. Why are people saying like eating, drinking, kombucha and fermented vegetables, Pickles, whatever apples are like, great at fixing your Biome and then taking sugar out is good for your Biome. This is another thing I keep hearing like keep your fermented foods. People are are are making single point claims like that because they have invested in a lifestyle and they want to defend their choices. It's not. That's the reason. It's not to say that those things are bad, those are all good. But I think what we know and the fecal transplantation is the most simple way of of pointing this out is that it's a broad scale, holistic approach that gets the best results. So as you know, like if you, if you had, if you've had a kid that's had, you know, diarrhea, for example, right. You know, sometimes what we'll do now is instead of giving the kid some sort of diuretic suppressant, what you actually give them is a probiotic, right. And what you're trying to do is to reintroduce. Healthy bacteria into that child's stomach in a way that allows them to self manage and self heal while the bad, you know diarrhea causing stuff kind of gets washed away as an example. So, well, one thing be a cure all for you. No, I think that you should be very skeptical of those claims. That's why everybody says a healthy well balanced diet is really important because we do not know conclusively. This is why you know I I tend to believe that the broad. Holistic diet works the best in moderation. Yeah, because you just don't know what you're not getting. We don't know that. You know, we don't know. You can't say conclusively that there isn't a form of bacteria that is created specifically when you consume animal protein that is extremely helpful to you. We don't know that that's not true. Not now. We don't know that that is true either. Right. And there's a ton of research going on to try and figure that out right now. Have we figured out any of it, though? Like, yeah, yeah, this whole turmeric ginger movement. We could do 12 episodes on this. There is so much amazing discovery happening. This is a good paper to highlight that which is like, hey, maybe avoid products that have saccharin and sucralose in them. But my, my, my big thing is there is no diet. Whether it's keto, whether it's the South Beach Diet, whether it's specific vegetarianism, whether it's veganism. Nothing is a cure all for what ails you. There is nothing. And by the way, one important point in this paper, one of the points that these guys highlighted, which we see all the time in microbiome research. Is that there are what are called responders and non responders that within a population. It's not like everyone that eats sucralose has the same negative effect. Some people have a really negative effect and some people have a mild to moderate to neutral effect. And so there's a range of your particular Physiology, your particular gut Biome that will respond differently to different inputs into your body. And that's the most important thing to figure out because people need to spend time. Eating and sampling to understand what makes you feel better or worse. This is why I I I have an issue with you know the broad based claims of this path will solve all your problems. It's just not true. You have to solve it for yourself and it's it's through iteration and then the the the yeah anyways it does seem like non processed foods, Whole Foods, things that exist in nature that seems to me directionally correct as the way to go and then the fake stuff and the process stuff may be less good for you. Agree with that? Well this is This is why I think that there there is a little bit of a scam. Being run on people who want to be healthy. Like for example, have you guys looked at the ingredient list on Oatley? You know everybody loves oat milk, but have you looked at the ingredient list? Are you really telling me conclusively that that is healthier than milk? It's insane. I mean, I could, I could argue both ways, but yeah, I mean, look at the chemicals. Look at the chemicals in a box of oatly. I mean, just drink water. I guess I can also tell you the chemical name for every chemical that's in milk, which is all chemical, like all everything around us is chemicals. So, you know, I understand, I understand natural chemicals, but you understand synthetically made man made chemicals that are explicit that have to be put on an ingredient list because of its danger in high quantities should be treated slightly differently in my opinion. All these just gave us 3 subpoenas. We're all ******. We're being deposed by Olly now. Alright everybody, we'll see you next time on the all in pot. Love you boys. I love you. Bye bye. Let your winners ride Rain Man David Sassoon. We open sources to the fans and they've just gone crazy with it. Besties? My dog taking your driveway. Ohh man. We should all just get a room and just have one big huge order because they're always useless. It's like this, like sexual tension that they just need to release stuff out there. The beat, beat. See what we need to get merchants? I'm going.