All-In PodcastE54: Spread trading big tech, capital allocation, Zillow's misfire, Progressives suffer losses
EVERY SPOKEN WORD
150 min read · 30,174 words- 0:00 – 7:53
Besties do a Microsoft-themed intro
- DFDavid Friedberg
My body is a wonderland.
- CPChamath Palihapitiya
If that wonderland is white, soft and mushy, sure.
- DFDavid Friedberg
And hairy too.
- CPChamath Palihapitiya
(laughs) You know, the worst thing about skin on skin sleeping with a newborn is that, you know, sometimes she roots and she goes after the ma- the male nip.
- DFDavid Friedberg
I know.
- CPChamath Palihapitiya
The problem is, my nipple's covered in hair. (laughs) It's really awkward for everybody. (laughs)
- DSDavid Sacks
Just start gagging.
- CPChamath Palihapitiya
I'll tell Tally that story when she's 18. Or at her wedding, it'll be even better.
- NANarrator
(instrumental music plays) We're going all in. Don't let your winners ride. Rainman, David Sacks. We're going all in. And I said- We open sourced it to the fans and they have just gone crazy with it. Love you, Vespa. Queen of Quinoa. Going all in.
- JCJason Calacanis
Hey, everybody, welcome to another episode of the All In podcast. I am wearing a blue shirt. I am a pasty white old Greek-
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
... man, uh, who's balding and obnoxious, and, uh, with me today is, uh-
- CPChamath Palihapitiya
No, no, no, no, you have to, you have to say your pronoun, bro.
- JCJason Calacanis
... M- oh, and my pronouns are, uh... Oh wait, what are my pronouns? My pronouns are beep, beep. And most people just call me a jerk. With me today, of course, is my Sri Lankan Urkel looking-
- CPChamath Palihapitiya
Hello, hello, hello.
- JCJason Calacanis
... wearing a furry sweater-
- CPChamath Palihapitiya
Hello, everybody. My name is Chamath. I have, uh, salt and pepper black hair, brown eyes. Uh, I am tall, uh, six foot two. I go by the pronouns we, king, and studmuffin.
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
And, uh, uh, I'm here to talk to you about, uh, internet security protocols. Wah, wah, wah, wah.
- JCJason Calacanis
(laughs) I look like Urkel. I think people should just come up and say which celebrity they look-
- CPChamath Palihapitiya
Whoa, I don't look like Urkel?
- JCJason Calacanis
... the closest like.
- CPChamath Palihapitiya
I don't, I don't look like Urkel.
- JCJason Calacanis
You look like a Bollywood movie star.
- CPChamath Palihapitiya
When you put your gla- Oh, bam. It's a...
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
You're kind of like the Sri Lankan Urkel to us.
- JCJason Calacanis
Welcome to the All In podcast. Two out of the four of us are canceled. Next up for cancellation, Sacks.
- DSDavid Sacks
Yes, I am coming to you here from the floor of the New York Stock Exchange, which was once land that belonged to the Mohegan, the Montauk-
- JCJason Calacanis
(laughs)
- 7:53 – 17:28
Spread trading big tech, amazing power of Google and Microsoft
- JCJason Calacanis
I actually, I- I-
- DFDavid Friedberg
Jemmat, do you think that the Google long, Netflix short play is the right play? See, someone's going on the internet too?
- CPChamath Palihapitiya
I think the best, I think the best trade on, the best trade on the internet, the most obvious, simple, money-making trade is long Microsoft, Google, short big tech, short the rest of big tech.
- DFDavid Friedberg
Short IBM, short Netflix. Short everything.
- CPChamath Palihapitiya
No- no- no- no, sh- short, no- no- no, meaning you can- you can c- very comfortably short Apple, Facebook, Amazon, Netflix and be long Microsoft, Google. So as a spread trade-
- DFDavid Friedberg
Right, right.
- CPChamath Palihapitiya
... it's the most, it's the best risk parity trade on the internet right now. I mean, period, in the markets.
- JCJason Calacanis
Can you expla- explain the spread sh- trade to me
- CPChamath Palihapitiya
Yes.
So look, look, I- I tweeted this a while ago but it's like, and- and again, the, I- I think like, well, let- let me be constructive and say the people on Twitter that respond to these threads are not totally stupid, although I think they're kind of idiotic.
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
Um, I said, you know, "Here's how you can effectively..." you know, I- I said something about, you know, big tech and I said, "Oh, I can comfortably put my short on." And I'm kind of trolling people when I do that because I'm not telling them the full trade. The- the real trade, whenever you put anything on, in my opinion, is all about managing risk. And the best thing about the internet and the stock market is that, you know, when you're betting on internet stocks, you don't necessarily have to be naked long or naked short, which comes with a lot more risk than if you are long one security and short another against it. So for example, over the last 10 years, you would have made a lot of money by being long Amazon and short a basket of traditional commerce companies, offline commerce. I'm gonna make up a basket, but Macy's, JCPenney, you know, Kmart, Sears, right? So if you're short those and long Amazon, that's what's called a spread trade. You're- you're basically playing the gap between your longs and your shorts.
- DFDavid Friedberg
It's independent of where the market generally trades is- is one of the key points.
- CPChamath Palihapitiya
I- irrelevant of the market. You're- you're basically saying-
- JCJason Calacanis
Because those stocks could go up, but just not anywhere near Amazon.
- DFDavid Friedberg
But everything could go... Right. Yeah.
- CPChamath Palihapitiya
When you put that trade on, for example, it's, ah, I'm gonna bet that if everything goes up, Amazon will go up more than-
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
... Kmart, Walmart, Sears. And if the stock market goes down, Amazon won't go down that much, but these ones will go down a lot, and you pl- you're playing the spread. So to just ex- just to be-
- JCJason Calacanis
Got it. Yes.
- CPChamath Palihapitiya
... very explicit. You know, there is a very, and I talked about this last week, but, uh, I, that, this idea wasn't mine, it's a borrowed trade from somebody who's a very well-known hedge fund manager who put it on in massive size and, you know, to be honest, not knowing much of anything, I just copied it. But he's, his initial trade was long Google, short Facebook. And that trade basically was at parity, which meant that the long and the short canceled each other out for about the last four years. Until the last year, it completely blew out and it returned about 80%, 85%. So if you had put in $100 in, you would have made about 85, uh, 85 bucks on this trade by being long Google, short Facebook. The- the bigger trade at scale is actually long Google and Microsoft and short the rest of big tech. And there's a lot of vagueries why that this idea makes a lot of sense. But basic-
- JCJason Calacanis
What you're saying is they'll outperform the other basket of tech stocks.
- CPChamath Palihapitiya
On a relative basis.
- JCJason Calacanis
On a relative basis.
- CPChamath Palihapitiya
On a...
- JCJason Calacanis
So- so it's not like you're saying-
- DFDavid Friedberg
You know-
- JCJason Calacanis
... Airbnb can't go up or Facebook can't go up. It could, it's not gonna go as up as much as those other two.
- DFDavid Friedberg
Well, he's saying big, he's saying big two. He's- he's saying that the- the- the trillion dollar market cap companies.
- CPChamath Palihapitiya
Yeah. And- and-
- 17:28 – 30:36
Sacks speaks about Bird going public from the NYSE, understanding distributions and evergreen funds, why Friedberg went the startup studio route
- CPChamath Palihapitiya
- JCJason Calacanis
All right, speaking of the stock market, uh, Sacks, um, you've got the background of the New York Stock Exchange as your Zoom background today. What's that about?
- DSDavid Sacks
Yeah, so Bird listed on the New York Stock Exchange today. This is a company that I've been involved in pretty much since the beginning. We led the Series A round back in 2017. It was actually the first check I wrote as a VC to lead a round, uh, at Craft and four years later, public company on the New York Stock Exchange. Pretty amazing.
- JCJason Calacanis
And so you're literally at the New York Stock Exchange-
- DSDavid Sacks
Yes.
- JCJason Calacanis
... as we speak.
- DSDavid Sacks
I am in-
- JCJason Calacanis
So he's a first remote bestie.
- DSDavid Sacks
Yes. And you can see behind me, um, that is the floor of the New York Stock Exchange. It's not like, you know, if you've seen the movie Trading Places, it's not like that anymore. There are no stock brokers. There's no, like, paper flying around.
- JCJason Calacanis
Got it.
- DSDavid Sacks
I'm not really sure what the purpose of all those monitors are down there. It feels to me a little bit like a movie set.You know? (laughs)
- JCJason Calacanis
It is like a movie set, yes. It's-
- DSDavid Sacks
Yeah. And so people like us-
- JCJason Calacanis
So they're setting up.
- DSDavid Sacks
... come here to record things but, um, a- as we all know, the, all the trades are really happening inside giant machines.
- JCJason Calacanis
Can you turn around and just start yelling, "Booya?"
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Just, just yell, "Booya," and let's see if security comes and removes you from the go-
- DSDavid Sacks
No, I'm, um, I'm, I'm in, I'm, I'm elevated above the floor. No one can really hear me here. I'm in, like, this, uh, sort of broadcast booth.
- JCJason Calacanis
Uh, so take us behind the decision to go public as a four-year-old company. We were expecting, you know, uh, Airbnb, Ubers, and Lyfts took over 10 years to go public. Now, here we are sitting on a four-year-old public company. I- is that a good thing, a bad thing, something in between? And how does the, the board and the management team make that decision to go public?
- DSDavid Sacks
I think it's a good thing, um, uh, because the company-
- JCJason Calacanis
Why?
- DSDavid Sacks
Well, the company wanted to. I think it had the opportunity to. It, um, it grew very, very quickly before COVID. Then you had COVID was, like, sort of a huge setback. They, I mean, basically, the scooter industry just stopped for at least six months because of lockdowns. But then coming out of COVID, they bounced back really strongly. They kind of pivoted their model to, uh, what's called a fleet manager model, where basically they're putting a business in a box for a local operator or local entrepreneur-
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
... to buy the scooters with financing and manage it, the fleet themselves. So it's a much more highly virtualized model. Uh, and so as a result of that, in Q2, they just did 60 million in revenue in the last quarter. And I think, um, you know, it was a gross profit of something like 27% and, uh, it was, had a, a loss of, like, 12 million. So they're very, very close to getting to profitability. And, uh, you know, the company's only four years old. You know, it took Uber 12 years or whatever to get to be public. So it's been pretty, it's been a pretty amazing ride. There have been a lot of big ups and downs but, uh, so it's kind of this pretty sweet event that they've gotten to be a public-
- JCJason Calacanis
What is it trading under now? I know it was Switchback was, like, the SPAC name.
- DSDavid Sacks
Right, so it, today was the first day it started trading under the ticker symbol BRDS. I guess all birds took BIRD, so we took BRDS. And, um, you know, there's a, a total number of shares outstanding of I want to say roughly 300 million. So it's about a $2.4 billion market cap, you know, as it stands right now. Which, you know-
- JCJason Calacanis
Hey.
- DSDavid Sacks
... for a Series A investor's pretty great.
- CPChamath Palihapitiya
Really happy for you at Sexa.
- 30:36 – 35:24
How DAOs fit in to the capital allocation landscape, the balance of consumer-facing products and infrastructure solutions for web 3.0
- JCJason Calacanis
So, what we're getting at here, Sacks, is decision-making by capital allocators-... and on behalf of their LPs or letting the LPs make those decisions, inevitably the crypto world says, "Well, why aren't you just doing this in a Dow and, you know, having some decentralized authority make the decisions?" I had Vini Ling ... I've had a conversation with our friend Vini Lingam, uh, after the Solana stuff and, and, and, uh, Multicoin Capital and we were talking about Dow's for earl- early stage investing or syndicates and just brainstorming, "Hey, is there a way to do this?" And the problem I came to every time was, should a bunch of folks be making decisions who are not meeting with the companies or meeting with 2,000 companies a year? What are your thoughts on a Dow, um, representing sort of what we collectively do, but we all do it obvi- obviously in different flavors?
Does this actually exist yet?
Well, there have been-
(laughs)
... Dow's that have existed to vote on-
Right.
... buying NFTs. So yes, for collectables.
I mean, I kind of feel like I'll let you know when it actually gets here.
So open minded to it, but who knows?
Yeah. But I mean, we talk about these things as if they already are here and they're not quite here. I mean, technically, I know they, they exist, but people haven't really figured out how to use them to, you know, to be a fund manager, for example.
- CPChamath Palihapitiya
I think David's right. I think the ... Look, I, I ... There, there are these three immutable features of Web 3.0 that we're gonna have to figure out over the next few years, so the obvious ones are decentralization, right, if that makes sense. The second obvious one th- is the level of composability, which means that you're plug and play with everything. Um, but the third one is this idea of democratization and governance, right? And that's where Dow's come in. And David's right, we don't really know what the boundaries of that feature is. Um, I think it exists in some small level scale, um, but we need to have many iterations of companies get built to figure out what it'll mean. So I don't know, I'm taking a pretty traditional approach, Jason, which is that, you know, it's kind of like a crawl, walk, run strategy. Right now I'm in the crawling phase and I'm kind of saying how did Web 1.0 and Web 2.0 develop? And I'm try- just copying it. So, you know, in Web 1.0 and 2.0 you needed companies like Sun Microsystems and Cisco and, you know, all of the plumbers.
- JCJason Calacanis
Foundational stuff.
- CPChamath Palihapitiya
To, to build plumbing for the internet to allow the thousand flowers to bloom at the application level. And, you know, we had a very good reference model, by the way, for Web 1.0 for most people if you want to look at it, it's called the OSI reference stack. And if you actually look at that OSI stack, you can translate that to all kinds of value creation over the first, you know, two arcs of the internet. Over 20 years trillions of dollars was created by just following each of those substrates. Um, and in those transitional layers was where these great, beautiful companies were built. Um, and I think similarly we're gonna do that again, but we need a different stack to represent what Web 3.0 is. So, yeah, you know, this week we did something which was pretty straightforward which was this idea that if you're gonna build all these apps, you're gonna need, uh, a distributed compute infrastructure, which means you're gonna need very simple building blocks like remote procedure calls, RPC, that exists in Web 2.0. It's kind of a n- something you don't really think about, but in Web 3.0 it doesn't exist, and so it's all this AWS, you know, GCP-like infrastructure that has to get built and that's what Syndica does and-
- JCJason Calacanis
I al-
- CPChamath Palihapitiya
... that's cool. We'll see.
- JCJason Calacanis
I think that's, um, a really very interesting, uh, observation there because everybody is trying to go to the application level and talk about the consumer experience, but before you even have the ability, you know ... We're talking about cars before we've even made a transmission or, uh, you know, an engine.
- CPChamath Palihapitiya
That's exactly right.
- JCJason Calacanis
This is why crypto comes across as so delusional and strange sometimes. They wrote 3,000 ICO papers, none of them were about infrastructure. They were all about some sort of end game.
- CPChamath Palihapitiya
The, the thing is, it's a very delicate balancing act, right? You need a handful of companies that capture consumer imagination-
- JCJason Calacanis
Right.
- CPChamath Palihapitiya
... that then incentivize all of the plumbing companies to come in and build underneath it, right? So it's a-
- JCJason Calacanis
They have a customer.
- CPChamath Palihapitiya
It's a very delicate balancing act, right? So you needed CompuServe in order to enable a bunch of companies. Then you needed AOL in order to enable another set. Then you needed Yahoo. Then you needed Google. And in all of that what happened was people were pulled through, right? You needed Amazon Commerce to justify AWS. So we're in that world where it's going to be a little back and forth where the pendulum will swing back and forth between consumer experiences that capture imagination, get to some level of scale, that then create incentives for the developer ecosystem and the technology infrastructure to catch up.
- 35:24 – 46:05
Zillow's iBuying implosion
- JCJason Calacanis
Uh, Zillow, uh, which we talked about previously became an iBuyer. What's an iBuyer? That means you buy a bunch of single family homes in all likelihood like Opendoor and Redfin have been doing, and then you hope to flip them, uh, maybe improve them and, uh, maybe lower costs to the consumers by taking out real estate brokers. This has created a lot of bad feelings amongst real estate brokers. A TikTok video trended a couple of months ago where a broker said or accused Zillow, uh, of buying up these homes in order to do price fixing and to corner the market on homes. Well, uh, it turns out that Zillow, which has an incredible CEO, uh, in Rich Barton, and has done tremendously over the decades, according... Ahead of their earnings call this week Bloomberg reported Zillow is trying to offload 7,000, 7,000 homes for 2.8 billion, that's about a 400K average per home, and, uh, Zillow shares dropped 37% this week alone from 100 to 66. Their market cap has dropped nine billion throughout the week. Uh, and they're down 70% from a peak valuation of 48 billion just in February about six months ago. Uh, Zillow is gonna reduce its workforce by 25% over the next few months. I'm assuming that's all those iBuyers. Anecdotally, a lot of what I'm hearing is they bought homes indiscriminately. The anecdotal stories that are breaking on Twitter and other forums with real estate brokers are-... they would look at a home, they didn't know that it had a noisy neighbor or where it was near power lines or whatever, the people who came in bought them indiscriminately, maybe too fast. Whereas some other companies, maybe Opendoor or Redfin, were more considered. I actually had Glenn from Redfin on the pod not long ago and he said, "It's a very hard operational business, you have to be very careful on what you buy and your entry price." That seems to have turned out to be true. What do you think, Friedberg?
- DFDavid Friedberg
Rich Barton, who runs Zillow, is considered a legend in Silicon Valley. You know, he, um, uh, has been involved in some of the most successful internet companies, um, and you know, when he stepped back in as the founder of Zillow, stepped back in to, to run the business a few years ago, it was viewed as kind of a second, you know, resurrection of this business and he was gonna take it into new areas. And then three and a half years ago, he announced this iBuyer program which everyone thought was such a, a, you know, incredibly strong move, and obviously chased Opendoor, which Chamath is, is, uh, involved in and I'm sure will share more on. Um, but it was such an obvious opportunity that if you could add liquidity to the real estate market, the com- the residential real estate market, there's an incredible amount of value to be had. Now, the way that they wrote about it, when they talked about it initially and then the way that they've kind of talked about it in their earnings report this week was that they were trying to be a, quote, "market maker" in the business. And it turned out that what they were really doing was being more of a speculator, right? A market maker looks at bids and asks and the spread and then tries to, to, to create a gap in that spread and make, and take some share of it. And, and by adding that liquidity, the idea is the spreads can narrow and they can make money. In this case, they were looking at the historical velocity of selling prices of homes and using that as a way (laughs) to kind of project what was gonna happen, which makes them much more of a speculator than a market maker. Um, and they clearly got this wrong and their kind of quote/unquote models on, you know, where a price is headed ended up getting them in trouble. There's also the inherent conflict where they are now competing in a way with the brokers that generate a lot of revenue for them and are a big part of their core business, and they were clearly, um, you know, cannibalizing their own business where the Zestimate and some of the other scoring that they provide as a data and analytics platform to both sides of the existing market starts to get blown up, because they're coming in and saying, "We're gonna put our, you know, our, our foot down and say this is what the value is." And it inevitably kind of cannibalizes the core product that they provide to, to, to both sides of the market. So, you know, one could argue this was flawed from the beginning. The execution clearly was way off and it, it begs the question, you know, where was leadership in kind of tracking what was going on here as these guys were buying homes at market prices that are well above what they were actually selling for in the market? No one was actually doing on-the-ground work. They were all doing kind of speculative models and saying, "This is what we think will happen." And then they woke up way too late and, um, lost way too much money. I think they lost $300 million in the quarter. So, um, you know, really a lot of questions and, and a lot of challenges on this. Um, I'm sure Chamath has a point of view on, you know, what makes Opendoor distinct from, from Zillow, um, but th- there's a really important kind of, you know, um, underlying here, you know, the, the, the ma-
- JCJason Calacanis
That they were maturing.
- DFDavid Friedberg
... the, yeah, the maturity of a Silicon Valley, uh, entrepreneur who's crushed it so many times, uh, doesn't mean that they're perfect and (laughs) you know-
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
... this was a big miss.
- JCJason Calacanis
Y- you can go really too fast into a turn here and clearly they flipped the car. Chamath, I, I, I don't know how comfortable you are talking about this since you have a very-
- CPChamath Palihapitiya
Oh, I'm very comfortable.
- JCJason Calacanis
Oh, okay, well then here we go.
- CPChamath Palihapitiya
Number one, you know, I'm not on the board, um...
- JCJason Calacanis
Of Opendoor.
- CPChamath Palihapitiya
Of Opendoor.
- DFDavid Friedberg
Maybe tell us about your history with Opendoor, Chamath, would be super, yeah.
- CPChamath Palihapitiya
Well, look, I, look, I, I am one of the largest individual shareholders of that company. I think somewhere between 3 and 4% of the business I own. We, you know, I came to own those shares with a large investment, uh, as well as through the transaction, uh, where we merged one of our SPACs into it and took it publicly.
- JCJason Calacanis
Was that IPOB?
- CPChamath Palihapitiya
Yes. Couple things to say. The first is about the CEO and founder of Opendoor. Eric Wu is special, special, special. So, let me just leave it at that, uh, on that topic. The second is I think that Rich Barton is very special, but it speaks to two big mistakes that Zillow made. The first is that catching a wave of disruption is very difficult when you have an old line business that is fundamentally competitive with a new line of business. And Zillow, as David said, had this thing called Zestimate whose entire job was to directionally drive drop top of funnel traffic into the rest of their media business. Now, imagine you go to a website to look up your house value or somebody else's house value. Accuracy is a bug. The feature that makes this estimate work is a highly inflated house price, right? Like if you go and you see a crazy house price number, that's interesting.
- JCJason Calacanis
Hm.
- CPChamath Palihapitiya
That's more, um, click-worthy than if you go in there and it shows some depressed value, you'd think the site sucks. That's the unfortunate psychological reaction. So I think whether we believe it or not or whether Zillow knew it or not, Zestimate over time basically calcified this idea of, of price inflation. So the accuracy was never a goal. So then if you take that business and then you try to orient it towards home buying and you use probably Zestimate or some version of it to underpin how you buy and take risk, it creates a lot of risk and I think this is essentially what played out, where they were over-buying homes and they didn't know how to price the stuff accurately. So you know, my partner Ravi tweeted this out, but you know, uh, the Opendoor margin on average is about 10%. The Zillow margin on average was 3%. So they had a much more razor thin margin of safety here, which again speaks to pricing. And then it speaks to this third thing, which is that if you start doing one thing and do it really well with software...... the gains over years really compound. And so when somebody else shows up and tries to pivot their business to try to copy it, it's very, very difficult. The classic example is Google versus Yahoo. Yahoo had a beautiful directory-driven business, but when Larry and Sergey, really Larry, invented PageRank and then invented that first version of a Google search index, as we saw it play out over the next 10 or 15 years, it was impossible for Yahoo to really invest the technolo- the, the technical capital necessary to catch up with Google. And every day and every week and every year, as Friedberg talked about last week, those technical gains compound and compound, and now Google is completely unassailable with respect to search. I suspect we will look back and the ability to accurately forecast price and volatility and the ability to sell these assets at a defined margin of safety in a predictable way is something software can solve, and it seems that Opendoor is the first. It doesn't necessarily mean it'll be the only one, but it has an enormous headstart now. And as long as they can keep iterating, those gains will compound. Um, so th- that's what I think, I just think this is a wonderful business run by an incredible CEO.
- JCJason Calacanis
To wrap up this, uh, Zillow story, Sacks, uh, any thoughts on, you know, Chamath's point here, you know, you're the rating agency and you had this business and the business, uh, might be orthogonal to the existing money printing machine. On a strategic basis, what do you think, any lessons or mistakes here, uh, in terms of when you handicapped Zillow or do you wanna just move on and talk politics?
- DSDavid Sacks
I mean, look, I'm a, I was a seed investor in Opendoor because Raboy invited me into the seed round, so, you know, I'm, I'm a little biased here, but I think it's pretty obvious what happened. Uh, Zillow tried to copy them. The business is much more operationally complicated than they realized. It's a low business, low margin business with a t- which requires a ton of capital. So if you're off a little bit, the losses can be huge. And Zillow couldn't figure it out. They underestimated the difficulty. That's what frequently happens when a big company tries to copy a smaller sort of upstart company. So, I mean, that to me is what happened in a nutshell. Quite frankly, we're an hour into this pod and we haven't discussed issues, any issue that I think is broadly relevant to most Americans. I think this is one of our worst episodes and we're going to bore everyone to tears.
- JCJason Calacanis
(laughs)
- DSDavid Sacks
I frankly don't understand what the (beep) you're doing. I don't even know why we have a topic list when you start pulling (beep) out of your ass like Dows and I don't know what the (beep) else.
- JCJason Calacanis
All right. All right. Fine, we'll talk about politics.
- CPChamath Palihapitiya
Yeah, I thought the Dow question sucked.
- JCJason Calacanis
All right, I'm just giving you the opportunity-
- DSDavid Sacks
That we shouldn't even be talking about.
- JCJason Calacanis
Cut it out on this show. Cut it out.
- DSDavid Sacks
This whole episode should be cut. I-
- JCJason Calacanis
Jesus Christ, you guys.
- CPChamath Palihapitiya
I actually, I actually-
- 46:05 – 1:14:57
Wokelash: Progressive democrats take huge hit on election day 2021, what are American voters looking for?
- JCJason Calacanis
- DSDavid Sacks
Okay. I'll just rattle off some of the key results here. From blue states, we have a woke lash going on all across the country.
- JCJason Calacanis
(laughs)
- DSDavid Sacks
That's the important thing.
- JCJason Calacanis
What? (bleep)
- DSDavid Sacks
In Virginia-
- JCJason Calacanis
Here we go.
- DSDavid Sacks
... a state that Biden won by 10.
- JCJason Calacanis
He's cranky.
- DSDavid Sacks
Huge upset. Republican Glenn Youngkin beat Terry McAuliffe, the former governor there. He was... This was a huge upset. McAuliffe was supposed to win. Youngkin won 51-48, so that's a 13 point swing, uh, versus where Biden was, uh, just a year ago. In New Jersey, a state that Biden won by 16 points, the Democrat held onto it, but only by 1.5 points. And I bet you anything the RNC is kicking itself they didn't give any money to Ciattarelli, who is the challenger, who I think almost... who came very, very close. And there were down ticket seats that went Republican. So the, the, um... Thi- this is really interesting. In South Jersey, which is a blue collar bastion for Democrats historically-
- CPChamath Palihapitiya
Sweeney, Sweeney versus Burr.
- DSDavid Sacks
That's right. The Democratic State Senate leader, Steve Sweeney, lost to a truck driver named Ed Derr, who spent a grand total of $153 on his campaign. Okay? So those were some... And then we had some other-
- JCJason Calacanis
And was he a write-in? Like he was printing out cards-
- DSDavid Sacks
I don't know if it was-
- JCJason Calacanis
... to say, "Write me in," I think.
- DSDavid Sacks
I don't think it was a write-in. But, but any event, so, so implications for 2022, Dave Wasman of Cook Political Report calculates somewhere between a 44 and 51 seat gain from the GOP. They only need five seats to win the majority, so it's looking very bleak for the Democrats in 2022. And then y- I think you also had some very interesting local elections. In Minneapolis, voters rejected a proposal to defund the police with 56% of the vote. Uh, they... There was a ballot proposition to change the police department into some sort of larger public safety group. Voters were having none of it. In Seattle, which is a very liberal city, they voted for a literal Republican as city attorney, which is the office that prosecutes misdemeanors. So ba- a- against a police abolitionist who said she would stop prosecuting misdemeanors.
- CPChamath Palihapitiya
You're forgetting that in Virginia, it wasn't just Glenn Youngkin that won, but basically it was Terry McAuliffe and then a lieutenant governor who was some milk toast individual and an attorney general candidate who was caught in blackface. Which, by the way, there is no more racist thing you can do, just to pu- let you guys, let (laughs) everybody-
- JCJason Calacanis
Shout out Justin Trudeau.
- CPChamath Palihapitiya
All the non-coloreds. Okay, that are... Guys, please don't do blackface or brownface.
- JCJason Calacanis
Yeah, I know.
- CPChamath Palihapitiya
It's such a bad... It's just not... It's not the best.
- DSDavid Sacks
No, you're right, it was a sweep. So, so the lieutenant-
- CPChamath Palihapitiya
And, and, and Youngkin, and it was a, it was a Black female lieutenant governor and a Latino attorney general.
- DSDavid Sacks
That's right.
- CPChamath Palihapitiya
And they swept, right? So-
- DSDavid Sacks
That's right. That's right. So the lieutenant governor was Winsome Sears. Uh, she's uh, uh, a Black woman Republican. If you've seen the photo of her, she's frequently photographed with a giant assault rifle in her hands.... uh, that's her, and then, uh, a Hispanic attorney general, Jason M- Miyares, uh, won as well. So yeah, it was a huge sweep. And then, you know, in Long Island and Staten Island, which again, are blue counties, you had two Republican prosecutors beat the local sort of, uh, incumbent Democrat decarcerationist DAs.
- JCJason Calacanis
Staten Island bit red just-
- CPChamath Palihapitiya
I think, I think this is very clear.
- JCJason Calacanis
... for the clarification. Yeah.
- CPChamath Palihapitiya
Which is, um, Trump was behaviorally extreme and after four years, people were sick of it.
Episode duration: 1:30:04
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