E64: Antitrust standards & enforcement, tech repricing, lab leak obfuscation, E63 reactions & more

1. 0:00 – 0:25

   Cold Open

   1. JCJason Calacanis0:00

      Is Chamath in a room with his PR crew right now like rehearsing and practicing and-

   2. CPChamath Palihapitiya0:05

      Ugh. This pod is ruined. (upbeat music) Let your winners ride.

   3. JCJason Calacanis0:11

      Rain Man David Sachs. And I said... We opened source to the fans, and they've just gone crazy with it. Love US 90. Queen of

   4. DFDavid Friedberg0:21

      Hey,

2. 0:25 – 21:50

   Besties react to last week’s All-In E63

   1. DFDavid Friedberg0:25

      everybody. So I just wanted to make sure based on last week's pod it was absolutely clear, I care about human rights. Um, many of you know my origin story, but for those of you that don't, I was born in a country that's no stranger to civil war and religious and political persecution. Growing up, my family and I felt those effects. It affected our safety. It's in part what led my family to file for refugee status and stay in Canada. So this is a real part of my lived experience. That said, you know, I realize that what I said last week lacked empathy, particularly towards others who are dealing with persecution, in this case, uh, the Uighurs. And based on what I read this week, I think what's happening to them in Western China is a terrible situation. Um, I also wanna talk about this idea about nobody caring. Look, if we take a step back and replace Uighur with other really important issues, like the conflict in Yemen, the potential war in the Ukraine, gun control, school shootings, healthcare equity, we're faced with horrible events every day. However, the unfortunate state of the world today is that we've also normalized this routine of being confronted with something tragic or horrible or unjust and being allowed to react with thoughts and prayers. And this was the real intent of what I was trying to get across. So when I talk about my line, it's not about whether something matters or not, it's about which issues, of all the important issues we face every day, where I have the expertise and I believe I have the ability to have a real impact, even if just by a little. For me, those areas happen to be climate change, life sciences, and deep tech. But just because this is where I spend my time, it's not to take away from any of the real work any of you are doing in other areas. And then lastly, I just wanted to explain to people who may be new to the pod because of last week, that this is a place where four of us, four friends, talk about a whole wide range of things. We explore our curiosities. We try to learn from each other. We challenge each other. But we've always done it in a really supportive space, and I hope you keep that in mind as you listen and watch going forward, um, and hopefully can, you can bring some of that to your own conversations. That's all I have to say.

   2. CPChamath Palihapitiya2:34

      Well said.

   3. JCJason Calacanis2:35

      Uh, Sachs, I mean, I know you have something to say. But I'll say, um, I got a lot of messages this past week after the show where, um, which, which I felt a little bit hurt by and mischaracterized, and maybe it was simply I said the wrong thing at the wrong time. Um, and so I- I wanna just be very clear about a couple of points if I can take a minute, if that's all right with you guys. Yeah, so I said, um, I, I just wanted to, I was gonna actually send this out on Twitter and I decided it was better just to address it on the pod. So to be clear, I strongly believe in and support absolute freedom of all people. And this means de facto, I strongly disagree with the suppression of free speech, denial of religious freedom, imprisonment, harm, capital punishment, slavery, and genocide. I thought this was obvious when we were having our conversation. I did not know I needed to be-

   4. CPChamath Palihapitiya3:25

      So to be clear, you're not in favor of genocide.

   5. JCJason Calacanis3:27

      I'm not in favor of genocide.

   6. CPChamath Palihapitiya3:28

      Okay.

   7. JCJason Calacanis3:28

      I'm not in favor of slavery or capital punishment or suppression of religious freedom. I thought this was obvious. The conversation I tried to have was the wrong conversation at the wrong time, which was to try to talk about the broader China v US narrative, uh, that is swelling and will continue to swell this decade. I think that the primary function of civilized society or any advanced social system is to take care of and protect those that cannot take care of or protect themselves. And this is usually done by government. But when government fails and government is in fact the oppressor, I think it is the responsibility of other governments and other peoples to step in and have a voice and to take action. And so that is, um, that is kind of my moral framework. I think it's important. I don't deny any of the harm being done to the Uighur population in China. I don't agree with it on a principled basis, and I don't think that what the Chinese government is doing is right. Um, and the point that I was trying to make during our conversation was a very different one that I think got completely lost in the moment, uh, which was really just about what's going on with the China-US narrative right now. I'm not pro-China, I'm also not anti-China. I am particularly interested in understanding the broader China-US dynamic and what it means for the world over the coming decade and decades. I think it's really important for us when we evaluate these things and to understand them, to not just take sides, but to understand the context in the broadest way possible. And that's why I am trying to get both sides and understand the mindset of the peoples that are involved in running these governments and the way that this, uh, this world is gonna evolve as this economic tension continues to mount. Um, and so that, that's where I was trying to go. Um, and I was just trying to highlight where I think everything is headed over the next decade or two, independent of what are obvious human rights issues going on. So let me just stop there and say thanks for letting me say that, but that was important for me to just be really clear on, 'cause clearly I wasn't clear last week (laughs) . So...

   8. CPChamath Palihapitiya5:26

      Yeah, well, and I, I, I'll, I'll just add to what you said, that I also thought it was implied that you care about these things and that you're not in favor of them. I, I didn't think that needed to be spoken.

   9. JCJason Calacanis5:35

      Yeah.

   10. CPChamath Palihapitiya5:35

       So I think it's, it's nice that you're clarifying it, but I think any reasonable person would understand that if you care deeply as a vegan about factory farming, that you also care about humans and, you know, genocide and, and torture or, or whatever issue. So I, I think it's like an, uh, uh, your statement is so obvious that I, I wonder if you even had to have made it, but I'm glad you did. Sachs? Okay, so, uh, I guess first I, I, I should say that, um...

   11. DSDavid Sacks6:05

       You know, what's happening to the Uighurs in China is indefensible. You've got reports of upwards of a million, you know, of these people being held in detention camps. There's reports of mass sterilization and rape. It's like ethnic cleansing over there. So, that's absolutely wrong and it's one of a growing list of issues that we have serious problems with China on, uh, which include theft of our intellectual property, cyber espionage, the bullying of their neighbors, uh, their crackdown on dissidents. The list goes on and on. I mean, I think we have to be clear-eyed about the challenge and the threat that China represents, and we've discussed that on this pod many times. That being said, you know, what I think we saw this week, uh, was really about cancel culture, right? You had, in response to last week's pod, you have this online mob form and, uh, they wanna take what Chamath said and interpret it in the worst possible light so they can turn the outrage meter up to 11. And everyone gets to basically go on Twitter and virtue signal and say what great people they are e- because Chamath is a bad person. Um, and I just wanna speak to that issue. I mean, th- there is a huge amount of hypocrisy going on in that, because how many of the people who are tweeting their outrage and their denunciation of Chamath are doing it from a device made by forced labor in China, wearing their Nikes, made by forced labor in China, on their way to Target to buy cheap goods made in China? How many of those people have actually lifted a finger in the real world to help the Uighurs? How many of them have sacrificed an economic benefit, uh, in any way? And so when Chamath said nobody cares, I thought it was a really startling statement by him. But if you define caring as doing something more than just virtue signaling and expressing your feelings, as actually making a sacrifice or taking a risk in the r- real world, I thought he was frankly telling us a very uncomfortable truth. We haven't really, most of us, done anything. And in that sense, I think the reason why his comments hit such a nerve, I don't think you get the kind of pile-on that we got unless he's saying something that's hitting a nerve. And I think the nerve, the thing that he exposed, is that we're not really doing more than virtue signaling on this issue. And then came all the, you know, all the hypocrites. You've got the NBA denouncing him, issuing a statement, when what have they done? I mean, when Daryl Morey spoke up, uh, on behalf of the protesters in Hong Kong, the NBA shut down and sanctioned him. And, uh, you know, LeBron James said he was uneducated. Actually, I think Daryl Morey was pretty educated about what was going on. So you've got those hypocrites. You've got the White House issuing a statement disavowing Chamath, but Hunter Biden went over to China to manage billions of dollars for them and profited by his business dealings over there. So there are a bunch of hypocrites, and the list goes on and on. And so, you know, I think that if, i- in order for the mob to summon the outrage that it summons, it requires them to, I would say, first put the worst possible light on what Chamath is saying and to ignore, I'd say, the fundamental truth of it, and second, to engage in this massive hypocrisy. And that is the way that cancel culture operates, and I don't think we should buy into it. Um, so I appreciate what, what Chamath said. I think he's clarifying his remarks. He's showing that he does care and he does have empathy, as we all should, but I think there was a fundamental truth in what Chamath said last week, and that is what people are so uncomfortable with.

   12. CPChamath Palihapitiya9:38

       Okay. Well said. Um, I have feelings. Um, and most of all, I'm, I'm thankful we had the discussion. The goal of this pod, I think what makes it special and why y'all who are listening come here every week is because you know we're gonna be honest with you and we're gonna tackle these hard discussions. And I think Friedberg's, uh, comments and Sax's comments, uh, really, uh, explain that and what our intent here is. And is, human rights is one of the hardest issues to discuss. That's why you don't hear it being discussed, and there are not easy answers. And I think, you know, I was challenged, uh, by my besties on the episode and their questions and their challenges were absolutely critical. Y- yes, how can we care about one group of people when the people in our backyard we're not caring about? How, are we going to invade countries? These are very nuanced, difficult questions, but we must have this discussion. And if we try to cancel people with a 20-second clip that looks completely different if you look at the two-minute clip or you take the time to have a 40-minute listen of the, the whole segment, you get a totally different picture. And I, I think it's very important to raise awareness about human rights, and it is an issue that I have been passionate about my whole life. Uh, and I'm not trying to virtue signal or score any points here, but I know firsthand that raising awareness and having the discussions reduces the violations, because dictators, despots, and people doing this kinda stuff do not want the heat of what happened this past week. And what happened this past week is that more awareness was raised about the Uighurs and the situation that they're going through, I think than, you know, as somebody who's monitored the situation, than I've seen in the last couple of years. Perhaps this was a tipping point, uh, and that is something good that can come out of that discussion. Now, on a personal basis, I have, uh, had some feelings of guilt, um, because I, it was very hard for me to watch what happened to Chamath this week and to watch people dunking on him. Um, and then, let's face it, I brought the topic up and I dug in with my feelings and it got a little heated and, and I'm suddenly being portrayed as, you know, like a hero in this discussion now. Th- that was not the intent, and there's, there's no hero or villain in this. There is a hard discussion in this, and I am extremely proud of my friendship with each of you, especially you, Chamath. I'm extremely proud of your candidness and tackling these issues and making people think about them-... and, you know, I- I'm just so proud to be friends with each of you. And I'm so proud of the work we hear- we do here every week. And I think it's important work, um, and I feel like I get smarter every week, and- and I hope the audience does too. And I hope we can keep having these discussions, um, and, uh-

   13. JCJason Calacanis12:23

       Can we now make fun of each other?

   14. CPChamath Palihapitiya12:24

       Yeah, now let's-

   15. DSDavid Sacks12:25

       Yeah.

   16. CPChamath Palihapitiya12:25

       ... make fun of each other. I mean, I don't know if we're allowed to laugh. This is like, so serious and heavy, but-

   17. DSDavid Sacks12:31

       So what you're saying is, thank you, Chamath.

   18. JCJason Calacanis12:34

       (laughs)

   19. DSDavid Sacks12:34

       (laughs)

   20. CPChamath Palihapitiya12:34

       That to- now that's gonna be clipped for 20 seconds. I'm gonna get canceled this week.

   21. JCJason Calacanis12:38

       Jason of Ark.

   22. CPChamath Palihapitiya12:39

       Jason Calacanis, thanks for this (angelic music plays)

   23. JCJason Calacanis12:43

       But Sacks' point about... I mean, look, we've talked about cancel culture a lot on this show. And w- you know, we've always been, I think, generally able to be third party observers to what's happened, and it was really interesting to go through the cycle this week, where, um, you know, there was just kind of a- an- an echoing narrative, uh, on one thing that was said with one direction. There were a few pieces, though, Chamath, right? I mean, wasn't there a piece from The Atlantic and some other pieces that kind of highlighted that things that you said were things that a lot of people won't say, and that's what was really so shocking for so many people-

   24. DSDavid Sacks13:17

       What's the-

   25. JCJason Calacanis13:17

       ... and, you know-

   26. DSDavid Sacks13:17

       ... what's the Peter Thiel comment on this whole- on all of this stuff?

   27. JCJason Calacanis13:21

       Yeah. He said there's- if- if no one's saying it, it's probably true.

   28. DSDavid Sacks13:24

       Or if you're not allowed to say it, it's probably true.

   29. JCJason Calacanis13:27

       Yep. If you're not allowed to say it, yeah. But, um, yeah, it was, uh, it was really-

   30. DSDavid Sacks13:32

       Well, you would think based on the- the mob that formed, and, you know, it's already kind of blown over, and that's the way this kind of cancel culture starts. But for that sort of, uh, that white hot, really intense day or two, you would think that, like, Chamath had practiced genocide himself. You know, it-
3. 21:50 – 42:21

   Implications of FTC Chair Lina Khan’s approach to enforcing antitrust

   1. CPChamath Palihapitiya21:50

      Uh, so first up, I think we should start with, um, a- a- a duo of stories that relate to each other. Microsoft announced it's buying Activision Blizzard for $68 billion of cash. Microsoft's got a lot of cash. Um, and I- I think we all understand like why this is a great idea for Microsoft with Xbox. And obviously, Activision owns Call of Duty, which has 120 million or so monthly active users. They also own a bunch of nerd stuff, uh, from Blizzard, like Diablo, World of Warcraft, my favorite, StarCraft. A- and those have upwards of 40 million. They also had bought King, if you remember that. They make Candy Crush and those kinda casual games, which have a quarter billion users. Uh, but even with all these, uh, it's a highly fragmented market. But in related news, uh, Lina Khan, the, I believe, 32-year-old head of the FTC, uh, who has written a bunch of pieces, we talked about this on All-In episode 36, sat down with Kara Swisher and Andrew Ross Sorkin for an interview and, uh, basically, we're moving, or she intends to move the goalpost on antitrust. I wanna play three clips and have you each react to them. Here's the first one. Uh, and this is her take on changing the antitrust from consumer harm to, uh, now shift to, does this deal... And we'll take the Activision deal here as, uh, but one example, but you could take the Instagram and the YouTube deals as well. Uh, do these deals substantially reduce competition in the future? Let's watch the first clip.

   2. LKLina Khan23:20

      In certain cases, maybe too much success. And so the question is, when is the regulator supposed to say, "Hmm, this could work, and if it works, it's actually worked too well?"

   3. It's an interesting question, and I think, you know, for enforcers, the- the real question is, is this a deal that could lessen competition? And in hindsight-

   4. But don't all deals to some d-

   5. JCJason Calacanis23:42

      (laughs)

   6. LKLina Khan23:42

      All deals to some degree are gonna lessen competition.

   7. DFDavid Friedberg23:45

      Yes, yes.

   8. LKLina Khan23:45

      ... uh, substantially lessen competition or tend to create a monopoly.

   9. DFDavid Friedberg23:48

      Mm-hmm.

   10. LKLina Khan23:48

       Um, and there's also indication that Congress wanted enforcers not just to act when, you know, the third and fourth companies are merging or the first and second, but actually in the incipiency, when you said... see trends towards concentration, that those can also be important moments for enforcers to jump in.

   11. CPChamath Palihapitiya24:04

       So, uh, what do we think, uh, Friedberg, about this sort of new rubric? Not consumer harm, 'cause obviously if Microsoft buys Activision and makes those part of Game Pass and you get Call of Duty for free with your Game Pass and the Candy Crush games and Blizzard games, that's good for consumers. They get a whole bunch of more games. It would be like Disney buying Star Wars, you get all the Star Wars stuff in Disney+ for the same low price.

   12. JCJason Calacanis24:27

       Yeah. Look, Sax is our legal eagle here.

   13. DFDavid Friedberg24:30

       I think ...

   14. JCJason Calacanis24:31

       But, uh, but I'll just say, um, before, uh, you know, he probably speaks better informed than, than me, um, if it's not about consumer harm and it's about decreasing competition in this broadly, I would argue, subjective sense, then, um, what's scary is that there are going to be decisions made by interpreters of what is and isn't competitive. And ultimately, if they're not trying to keep in mind the best interests of the consumer, then it is in fact ca- going to cause consumer harm at some point.

   15. DFDavid Friedberg24:58

       That's a good point.

   16. JCJason Calacanis24:58

       Not necessarily in all deals that they block, but there will be deals that they may block that may have benefited consumers, meaning prices go down. Imagine having all of your products integrated in one streaming service instead of having to pay for three streaming services. So instead of paying $70 across HBO Max and Disney+ and Netflix, you get everything in one. But today, the regulators would not let those businesses merge because that would be anti-competitive under this context. And so this is gonna be a touchy debate and it's gonna be difficult, I think, ultimately, to rationalize this if there is gonna be a point in the future where we can actually show that consumer harm would be caused by decreasing competition in a marketplace. And so I would be nervous about that subjectivity and the slippery slope it enables.

   17. DFDavid Friedberg25:40

       I think it's a great point. Think about it. If you had to pay... Instead of for Disney+, you paid for Pixar+, Disney+, Marvel+, and Star Wars+, it'd be chaos in your household to manage all those accounts. It's a much better offering.

   18. JCJason Calacanis25:51

       Better consumer experience, yeah.

   19. DFDavid Friedberg25:52

       Much better consumer experience and, and cheaper. And sax, what do you think?

   20. JCJason Calacanis25:54

       And this is why, by the way, I said... Sorry, I'll say it. This is why I said in the past, it's... We use the term monopoly as if it's de facto evil and bad. But not all monopolies or businesses that have very big moats, is another way to kind of describe them-

   21. DFDavid Friedberg26:06

       Yeah.

   22. JCJason Calacanis26:06

       ... are necessarily bad for the customer.

   23. DFDavid Friedberg26:08

       Right.

   24. JCJason Calacanis26:08

       You get cheaper products, you get better products, you get more of an advantage. They may ultimately be yielded to be anti-competitive in a harmful way.

   25. DFDavid Friedberg26:16

       Let me, let me, let me just-

   26. JCJason Calacanis26:16

       But not necessarily always.

   27. DFDavid Friedberg26:17

       But let me explain to you where she's coming from. Like, there's a fundamental pillar of capitalism that says that excess returns must get competed away. So if a capitalist system is to be efficient, if a company has profit margins of 99%, competitors emerge pushing those profit margins down to something reasonable where you get to some sort of equilibrium. And the whole principle of what she's saying is, in, in the absence of competition, we don't really know what the equilibrium return really looks like. And she's not saying that, but that is the implicitness of what she's saying. And so in the... If you allow all of this stuff to aggregate, maybe Google shouldn't have 45% EBITDA margins. Maybe in a really competitive society they would only have 18%, and that's actually better net net for the system. The problem is that counterfactual, to your point, Freidberg, is impossible to measure. How do you know and how much value do you need to take away of the panoply of things that Google does to figure that out? And that's, I think, where the problem with it. But, you know, let's be clear. Uh, I... In 2019, I wrote in my annual letter, there's a section called The, The Tightening of the Regulatory Noose, and meaning it was a framework for how to basically dismantle big tech, and element number one of that was a changing regulatory landscape. And it's really incredible to see it in front of our eyes. We got a bill that just left judiciary, right, that was effectively voted across the aisle, that's now gonna go to the floor of the Senate, which is gonna rewrite some of these anti-competitiveness bills. It was like 75/25, and it was a 50/50 committee of Democrats and Republicans, so clearly across the aisle. Clearly across the aisle. Uh, and, I mean, the funny thing about that was Feinstein and Padilla, the two Democratic senators from California where most of these companies are, in, in the Wall Street Journal article that I read, railed against it, but still voted for it to go to the floor. So it's... I think some version of that is gonna pass. She's gonna go and scrutinize these companies. I still think this Microsoft-Activision deal, on balance, gets done, because if you take the absolute values away from it, the reality is that it's an adjacent part of Microsoft's core business and there's nothing fundamentally monopolistic about what would happen if you let Microsoft and Activision come together. Could it reduce competition in the future, I think would be her new lens. And if Xbox has Call of Duty and Sony PlayStation doesn't or the next console doesn't, maybe it does, uh, you could make the argument. Sax, what are your takes on this very hard to apply standard of reducing future competition? Because as-

   28. DSDavid Sacks28:47

       Yeah.

   29. DFDavid Friedberg28:47

       ... Aaron Ross Sorkin said very clearly, all of these reduced competition, it's now we gotta get into what does the word substantially mean in this context.

   30. DSDavid Sacks28:56

       Yeah. So m- my take on, on Lina Khan is that she's got some worthwhile observations on the problems posed by these big tech monopolies, but I don't think she's got the right remedies. So on the observations, I think she's correct, broadly speaking, that these big tech companies, the FAANGs, they have way too much power in the marketplace. There are now gatekeepers over the internet that control all these powerful platforms. And broadly speaking, it is time, I think, to, uh, to basically have some limits on those powers, make sure they don't abuse it. I think she's also right that the traditional standard of consumer harm doesn't really capture that sort of concept of market power for these free ad-based services, right, because there is no pricing. Um, and furthermore, I think she's got a point when she says that, you know, a deal-
4. 42:21 – 1:11:04

   “Superbubble,” Multiple compression, Fed interest rates, Peloton & Netflix valuations

   1. DSDavid Sacks42:21

      say, I'm, I'm starting to get pretty worried here that... You know, we had Jeremy Grantham, who's sort of a-

   2. CPChamath Palihapitiya42:26

      Old school?

   3. DSDavid Sacks42:27

      Yeah, old school, kind of bearish type market commentator. He had this expression that the... Yeah. I mean, it's one of these stopped clock, right twice a day things, but-

   4. DFDavid Friedberg42:36

      Jeremy Grantham has never found a market he didn't name.

   5. DSDavid Sacks42:39

      Yeah. Yeah, exactly. But, but, but his stopped clock can be right twice a day. And, um, the, the line he had today is that we're seeing the popping of a super bubble.And you know, we've been talking about-

   6. DFDavid Friedberg42:48

      Super bubble.

   7. DSDavid Sacks42:49

      Yeah. Exactly. Basically-

   8. DFDavid Friedberg42:50

      But that's not, that's not true, but, I mean, it's good (overlapping 00:09:52) . Yes, well- It's evocative.

   9. DSDavid Sacks42:53

      Well, the, the sense in which it's, it might be true-

   10. DFDavid Friedberg42:56

       Super bubble.

   11. DSDavid Sacks42:57

       ... is that, I mean, we talked about this last few months, is that you had the Fed and the, the, the federal government pump a 10 trillion of liquidity into the market over the past two years because of COVID. Now, they're starting to pull that back and there was, I think, a general asset inflation across asset classes-

   12. DFDavid Friedberg43:16

       You think? (laughs)

   13. DSDavid Sacks43:16

       Certain types of assets clearly got more inflated than others. We've seen a huge correction in growth stocks. We've seen a huge correction in, uh, in crypto. Basically, anything long dated as the fear of interest rates increasing has gone up, they've massively corrected. But... So the concern is that, you know, with the losses we're seeing, and I mean, every day, it just keeps, I keep seeing more red, that this could turn into a recession. You know, popping of bubbles is usually followed by, uh, by recessions or... So I think, you know, the fortunes of the economy could turn really quickly here, and, uh-

   14. DFDavid Friedberg43:52

       That is, that is the marginal risk. The marginal risk is actually for a recession. We, we, we talked about this before. By the way, just to your point, you're right that we pumped in $10 trillion, but over the last three weeks, and really over the last two and a half months, we have actually eviscerated $10 trillion of value as well. So if you wanna measure it, we put 10 trillion of excess capital in, but we've now destroyed $10 trillion of equity across the board. Destroyed it by lowering the prices or repricing stuff. Across all markets. Yeah, yeah, equity- We've repriced everything. I mean, crypto, I mean, crypto, in the last couple of days has just been shellacked. Smoked. Yeah. Uh, growth stocks have been shellacked. Um, biotech stocks have been just absolutely smoked. Meme stocks. Everything is getting crushed. But the- Uh, COVID stocks. But David is saying something really important. The risk, in my opinion, is not of runaway inflation anymore. And the reason was what happened this weekend was incredibly important. And we have seen this happen just a few years ago. So this weekend, uh, China cut interest rates. Hm. Now, as we know, we are dealing in the United States with this issue of whether we should raise rates and by how much, because we're worried about inflation. Well, if you're cutting rates, it's because you're worried about the other problem, which is that the economy has basically turned over and you need to become more accommodating, right? You need to incentivize businesses to spend by lowering- By turned over, you mean it, it slowed down. People are not building, companies not doing- Yeah. ... new projects. So you wanna insight... You wanna give them an incentive or, or maybe some catalyst to start some new company or start some new project because- Yeah, so by the way- ... all the real estate projects have wound down. In 2018, here's exactly what happened. The setup was the Fed... We were, everybody was worried about what the Fed was going to do on interest rates. The Fed was looking at China as the canary in the coal mine, the leading indicator of what we should do. And at the end of 2018, uh, Jerome Powell decided to raise rates, and we raised rates. And then enter 2019, and, uh, the Chinese economy turned over. And, uh, we realized that their economy was not nearly as strong as we thought it would be. Mm. And so our reaction was disproportionate to what the actual data on the ground said. We entered a recession in 2019. That's when you guys probably saw Trump going crazy, blaming Powell. Hm. I mean, most of us ignored it because, you know, we were all dealing with, you know, Trump derangement syndrome. But the underlying thing of what he was saying was, "Hey, hold on a second. Uh, you just caused a recession in America by raising too quickly." The Fed is now in this really delicate situation where China cut rates last week. We have an FOMC meeting, the Open Markets Committee that sets rates on Wednesday, I think, of this coming week. What is he supposed to do? You know, Bill Ackman two weeks ago was advocating for a 50 basis point raise in this meeting. So that's way beyond what people even thought is supposed to happen.

   15. DSDavid Sacks46:45

       We, we should just remember that Bill Ackman has bets, macroeconomic bets in the market. If he's calling for a 50 point raise, I guarantee you, he would bet-

   16. DFDavid Friedberg46:52

       He's gonna make a lot of money.

   17. DSDavid Sacks46:53

       ... he'll make a lot of money if there is a 50 point raise.

   18. DFDavid Friedberg46:54

       Yeah. No, no conflict, no interest. Yeah.

   19. DSDavid Sacks46:56

       Yeah, exactly.

   20. DFDavid Friedberg46:56

       But my, my, my only point is the setup is a very complicated one for the Fed coming into this week, and the risk is to a recession, because if we overcorrect- Yes. ... and the leading indicators all around the world tell us that their economies are weak, then inflation may have actually been much more transitory than we thought. And right now, we have to decide because if we overcorrect, we're gonna plunge the United States economy into a recession. This is why, uh, I think, Friedberg, when you look at this, when you have so many different things happening at once and you're trying to pilot a plane or a car (laughs) , you know, in rain, on ice, going really fast, maybe there's something wrong with the brakes, I mean, you gotta be very delicate with, you know, how you steer into this. What is the right strategy here on a policy basis coming out of Omicron? Um, should we just take a pause on raising rates? What, what, what do you think the right situation here? Obviously, putting a bunch of regulation on top of big, you know, mergers and acquisitions, uh, and that's gonna create headwinds. I, I don't know how many different variables we wanna add to the mix of an economy that feels like we're in a perfect storm. I don't know. Look, a lot of us kind of talk about the valuation of things in markets as being the economy, but it's not. The economy is the productivity of businesses that are valued in the market. And as long as the productivity of the businesses in the market continues to improve, that businesses continue to grow, that there's stability to pricing that's not run away or, or declining, neither inflationary or too deflationary, um, you know, I think those are the, the indicators that matter most. Now, the reality is, over the last couple of years, we've had trillions of dollars that have flowed into these markets for free, and those trillions of dollars have created lots of mini asset bubbles. Lots of little new markets have emerged, NFTs-

   21. JCJason Calacanis48:47

       ... random cryptocurrencies that don't actually do anything. The collectibles market, the art market, there are lots of-

   22. CPChamath Palihapitiya48:53

       Peloton (laughs) .

   23. JCJason Calacanis48:53

       Pele- I mean, there are... And, and lots of examples of these speculative early stage businesses that have gone public, and, uh, people backed them. And they, they said, "Look, when there's this much money around, I'm gonna start making more risky bets. I'm gonna make more speculative bets." And, uh, regardless, the money's coming out of the markets, the money's gonna come out in one way or another. And as it starts to come out, these little bubbles are the first that are gonna pop. And that doesn't necessarily mean that the economy is at risk. It means that there are valuation bubbles that are gonna burst, they're gonna decline. And no interest rate policy is gonna change that because the inevitable growth in the underlying economy, the inevitable end to the pandemic, is what's ultimately gonna drive capital out of these markets and back into, ultimately, more productive assets and less speculative assets. And so this is a transition that I'm not sure you can really, kind of manage, I think, underlying businesses and the growth of the economy and the ability for people to get jobs. There's an incredible number of open jobs that are in the US right now. 3 million open job listings, go apply for a job.

   24. CPChamath Palihapitiya49:53

       No, 11 million. 11 million.

   25. JCJason Calacanis49:54

       11 million, whatever it is, go, go, go sign up for a new job.

   26. CPChamath Palihapitiya49:56

       11 million, three point... What is it, Sax? 3.7 million-

   27. JCJason Calacanis49:59

       There are, there are very-

   28. CPChamath Palihapitiya49:59

       ... 3.7% are unemployed?

   29. JCJason Calacanis50:00

       There are not a lot of people-

   30. DSDavid Sacks50:01

       3.9%
5. 1:11:04 – 1:32:01

   Sacks explains the NIH’s coordinated effort to downplay the lab leak hypothesis

   1. CPChamath Palihapitiya1:11:04

      go next?

   2. DSDavid Sacks1:11:04

      Guys.

   3. CPChamath Palihapitiya1:11:05

      Big wild flames?

   4. DSDavid Sacks1:11:05

      Because I have COVID, uh, I want to.

   5. CPChamath Palihapitiya1:11:07

      Are you dying?

   6. DSDavid Sacks1:11:08

      I want Sachs to, to talk to me about his. What, what's going on with Fauci? Oh my gosh. This is quite a story. This really is. Um-

Episode duration: 1:37:13