E86: Macro outlook: jobs, housing, inflation + Dutch farmers protests & EU climate missteps

1. 0:00 – 2:15

   Bestie open: Sacks' shopping spree

   1. CPChamath Palihapitiya0:00

      You're seeing now the, the fresh summer collection of Loro Piana. This, Jason-

   2. JCJason Calacanis0:04

      Oh, really?

   3. CPChamath Palihapitiya0:05

      ... is the thin summer gilet, okay?

   4. JCJason Calacanis0:08

      Really?

   5. CPChamath Palihapitiya0:08

      Beautiful cashmere.

   6. JCJason Calacanis0:09

      Continue.

   7. CPChamath Palihapitiya0:10

      Uh, it's called like the king's cashmere or something. And then this-

   8. JCJason Calacanis0:13

      Okay. Very summery.

   9. CPChamath Palihapitiya0:13

      ... is called a, uh, lovely yellow boating sweater. Anyways-

   10. JCJason Calacanis0:17

       Boating sweater.

   11. CPChamath Palihapitiya0:17

       ... I took sacks to my tailor and I took them to, uh, Loro Piana. And then at some point, I just fucking lost them and then I haven't seen them since, so... (laughs)

   12. JCJason Calacanis0:26

       You took them to your tailor and to Loro Piana? Okay.

   13. CPChamath Palihapitiya0:28

       And to Loro Piana, yeah.

   14. JCJason Calacanis0:29

       Okay. Right. Wow.

   15. CPChamath Palihapitiya0:29

       Anyways.

   16. JCJason Calacanis0:30

       Great that, um, the show remains accessible to the every man and woman-

   17. CPChamath Palihapitiya0:35

       Their socks.

   18. DSDavid Sacks0:37

       (laughs) Yeah.

   19. CPChamath Palihapitiya0:40

       (laughs)

   20. DSDavid Sacks0:42

       (laughs)

   21. JCJason Calacanis0:42

       Fuck yeah. (laughs)

   22. DSDavid Sacks0:43

       (laughs)

   23. JCJason Calacanis0:44

       Look at you two, it's like twins.

   24. CPChamath Palihapitiya0:46

       (laughs)

   25. DSDavid Sacks0:46

       Oh.

   26. JCJason Calacanis0:47

       Oh my God, it's so perfect.

   27. CPChamath Palihapitiya0:48

       (laughs)

   28. DSDavid Sacks0:49

       Italy, you and the Sri Lankans too. Wow. Oh my Lord. Oh my Lord.

   29. JCJason Calacanis0:53

       Oh my God. Do you guys have an announcement today? Is there an announcement? Good to see everybody is focused on what matters. Okay, everybody, welcome to All-In, episode 86, end of the world, except for these two douchebags.

   30. CPChamath Palihapitiya1:05

       We thought it'd be really funny to fi- to find the exact same outfit at Loro Piana and wear... (laughs)
2. 2:15 – 39:21

   Macro outlook: jobs, consumer sentiment, housing, inflation, finding a bottom

   1. DSDavid Sacks2:15

      night.

   2. JCJason Calacanis2:15

      All right, everybody. We got a lot of news to get through. Let's just parse through some of the data because data has been coming in, and the minutes from the June Fed are out. The key quote, uh, "Significant risk that elevated inflation could become entrenched if the public began to question the resolve of the Fed." So they went from transient to now fearing entrenched. Um, jobs have slipped a little bit. This is something we've been talking about, but just to give some context here, we're still at historic, uh, number of job openings. We peaked in March, 11.9 million. Uh, in May, we, uh, we dropped down to 11.3 and, uh, 11 million for six straight months. It's just extraordinary. If you look at this, uh, Fred chart, it, it's just astounding to think that this many jobs are available, two-for-one, in the United States. Uh, there are two jobs available for every one person who needs a job. And, um, this, they're just, uh, absolutely stunning if you look at the, um-

   3. CPChamath Palihapitiya3:11

      What do you think this is a precursor to?

   4. JCJason Calacanis3:14

      Uh, dropping down dramatically, um, in the white-collar sector is what the data is showing. What is also-

   5. CPChamath Palihapitiya3:21

      Or major wage, or major wage inflation. I mean...

   6. JCJason Calacanis3:24

      Yeah. Uh, this, we do have major wage-

   7. CPChamath Palihapitiya3:25

      That work, that work clearly has to be done and if you lay people off, the number of unemployment, u- unemployed will go up. But at the end of the day, the thing that we know here is we have a structural unemployment problem, as you said, two openings for every person, which means those openings aren't paying enough for people to leave the sidelines and get on the field.

   8. JCJason Calacanis3:45

      Yeah. Or, uh...

   9. DSDavid Sacks3:46

      Or they've been incentivized to, to be on the sidelines.

   10. JCJason Calacanis3:50

       There you go.

   11. DSDavid Sacks3:50

       Exactly.

   12. CPChamath Palihapitiya3:51

       You count that as a pass. Obviously, yeah.

   13. JCJason Calacanis3:51

       Yeah.

   14. DSDavid Sacks3:51

       So, yeah. These, these job openings might actually be indicative of the opposite of what the Fed is telling us, right? The Fed wants us to believe that they can just keep jacking up rates and that we're not gonna go into a recession because we have all these open job recs. But what if we should see the labor market as really two separate markets? There's sort of white-collar professionals and you're seeing all of these tech companies that we're involved in slam on the brakes really quickly right now.

   15. JCJason Calacanis4:18

       Yup.

   16. DSDavid Sacks4:18

       So we're gonna see greater unemployment there. And then on the blue-collar side, um, you have this issue of record low labor participation.

   17. JCJason Calacanis4:28

       Yup.

   18. DSDavid Sacks4:29

       And so you still have inflation there 'cause they can't fill all the jobs because there's all these, like, warped incentives around that.

   19. JCJason Calacanis4:35

       There are, to just put a number on it, Sachs, we're, we're 10% off the peak in terms of participation. And if those folks would participate, it would really fill a lot of these jobs.

   20. DSDavid Sacks4:45

       That would increase the production of goods and services, and that might take some of the pressure off inflation.

   21. JCJason Calacanis4:49

       And it would also increase monetary velocity, right, Sachs? People would spend the money they make, which then would get us out of this mess possibly.

   22. DSDavid Sacks4:56

       I think part of the problem with the Fed's approach here is that it's assuming that if they just keep jacking up rates, that will, that will reduce demand and that will stop or slow down inflation. And there's some truth to that. However, I don't think this inflation is purely a problem of excess demand. I think there's also a supply problem, meaning that not enough goods and services are being produced, and the commodities, the inputs that we need to the production of goods and services, those prices are increased. They're, they've been inflated. And that started well before the Ukraine war, but I think the Ukraine war has now exacerbated this problem with respect to energy and food.

   23. JCJason Calacanis5:30

       If you had seven minutes for your over/under, uh, for Sachs to mention Ukraine, you took the under, you won.

   24. DSDavid Sacks5:35

       No, I'm just mentioning it as, as-

   25. JCJason Calacanis5:36

       Yes. Yeah.

   26. DSDavid Sacks5:37

       ... a exacerbator of the situation.

   27. JCJason Calacanis5:39

       It is an exacerbator. I think that's actually really good framing, um, that it's an exacerbator. Um, this is a really-

   28. DSDavid Sacks5:44

       Yeah, it didn't start with this.

   29. JCJason Calacanis5:45

       Yeah. So if you look at the, uh, quits, let me just give you the quits number, because this is really interesting. These are people who are obviously quitting jobs. It's still at a record high. So this concept of the Great Resignation, we're still having over four million people quit their jobs every month.... pre-pandemic, quits averaged under three million a month. And if you look at that chart, it's just staggering to think that in an economy that's going down, people are still quitting. Now, what is that indicative of? It's indicative of people believing that they can get another job. You don't quit your job if you don't think you can get another one. Or you have some savings available and you want to YOLO, uh, maybe, you know, um, you know, spend a little free time going on vacation.

   30. DFDavid Friedberg6:26

       Or there's a new economy emerging, right? I mean, one of the- the cases to be made is that the pandemic and the stimulus that followed created a staggering short shift in the types of jobs and the types of businesses that people, um, you know, use to make money. And, you know, a lot of people were able to shift to work from home, and when you shift to work from home, you have more flexibility and freedom to choose other jobs that you can now do from home. And people don't want to work in restaurants, they don't want to work in fast food, and if they can find another job, uh, a gig-like or services-like or on-demand type job where they can have more freedom and flexibility and more earnings in their life, they'll make that choice. And this happened so quickly because of the shutdown, the lockdowns, and then the stimulus, the trillion dollars or $2 trillion that poured in, it created all these new opportunities and all these new incentives for new types of work. And the fact that the old economy, the old businesses, all the- the fast food restaurants and the coffee shops, they're sitting with half employment and they can't fill the jobs because that's w- you know, that- that used to be a job that there was demand for-
3. 39:21 – 48:58

   Turkish government finds ~694 million mt of rare earth reserves & EU reclassifies nuclear & natural gas as "green"

   1. JCJason Calacanis39:21

      Turkish government claims it just discovered over 700 million metric tons of rare earth minerals. Uh, it's 15 times, uh, China's reserve if this is true. Uh, you guys probably know we use about 150, uh, thousand metric tons, uh, a year right now. That's gonna double by 2030. This is something like 4,000 years at the current demand, and this would put them far beyond anybody else's. Chamath, you've got investments in this space. Uh, I don't know if you've been tracking this news. Thoughts on another massive discovery of rare earths? What, did you guys just have dinner? Dinner was served? What are you guys-

   2. CPChamath Palihapitiya39:53

      No, Nat's the best. She brought, she brought us paninis.

   3. JCJason Calacanis39:56

      What, you got a little pasta? Well, show me.

   4. CPChamath Palihapitiya39:57

      Th- there's an incredible restaurant here in Milan called De Santis, which makes the best paninis you've ever tasted.

   5. DSDavid Sacks40:03

      Is this a harbinger of the future? De Santis, what could be more perfect than that?

   6. JCJason Calacanis40:07

      Ah, the De Santis panini. (laughs) Here you go.

   7. DSDavid Sacks40:09

      This is the oracle.

   8. DFDavid Friedberg40:10

      Sacks with a subliminal influence.

   9. JCJason Calacanis40:12

      Absolutely.

   10. DFDavid Friedberg40:12

       So good.

   11. DSDavid Sacks40:13

       This is what's gonna get us out of this situation, De Santis.

   12. JCJason Calacanis40:16

       (laughs) All right, Chamath, just quickly on the rare earths. Uh, if this is actually true, what would this do? Uh, and have you been tracking the situation? 'Cause it does seem-

   13. CPChamath Palihapitiya40:25

       I have.

   14. JCJason Calacanis40:26

       ... there's some truth to it, yeah.

   15. CPChamath Palihapitiya40:27

       I think it's important to just take a step back and kind of look at this thing with not, like, complete skepticism, but just a- a- a little skepticism. It's-

   16. JCJason Calacanis40:35

       Okay.

   17. CPChamath Palihapitiya40:36

       ... not surprising that there's additional deposits all around the world, meaning we've always said rare earths are not particularly that rare. It's just the question is, you know, which of the 17 rare earth elements, at what grade, meaning at what percent concentration does it exist?

   18. JCJason Calacanis40:52

       Yeah.

   19. CPChamath Palihapitiya40:52

       And then, really importantly, at what cost to extract it economically?

   20. JCJason Calacanis40:57

       Yeah.

   21. CPChamath Palihapitiya40:57

       Right? So meaning there's a ton of underdeveloped rare earth assets in Canada, the US, Africa, Australia, Brazil- Brazil. They're just under- underdeveloped because when you put all of these factors together, it's really tough. So the government release says they're gonna process, like, 570,000 tons of ore. That'll produce around 10,000 kilotons per year of rare earths. That implies sort of a 1.75 to 2% grade. It's fine. So there's just a lot more work. I would just sort of say it's really directionally great. A lot more work needs to be done. And more importantly, they need to release enough of this detail so folks like us and others can actually diligence it to- to tell you more accurately, but the press release was exciting.

   22. JCJason Calacanis41:39

       Friedberg, this reminds me a little bit of the peak oil head fake we had, you know, 15 years ago. Everybody basically said, "We're not gonna find more oil. Here's what's left of oil." And then Norway is like, "Yeah, we just found more oil than existed previously and has been pulled out." And the whole concept that the world's gonna run out of oil is now gone. So Friedberg, what is happening in science that we just can't predict what resources are available?

   23. DFDavid Friedberg42:03

       We know very little about what's inside the cr... Below the, a certain depth of the crust of the Earth. So, um, you know, there are some estimates, but we're always surprised. And we know very little about the distribution of those elements in the crust of the Earth and below the crust of the Earth. You know, mining's an incredible industry. I- I don't know the state-of-the-art in engineering and mining very well, but, you know, from a pure geophysics point of view-By some estimates, we have 10 billion years of energy reserves below (laughs) the crust of the earth that we can access in the form of, um, nuclear reserves, uh, geothermal power, um, and that's excluding, you know, some of the, the, you know, the potential of some of these elements and what they can do, um, in building a more sustainable energy economy.

   24. JCJason Calacanis42:50

       So why are people so pessimistic when we keep surprising ourselves-

   25. DFDavid Friedberg42:54

       People have always been pessimistic.

   26. JCJason Calacanis42:54

       ... with more resources?

   27. DFDavid Friedberg42:56

       Anyone wants a great book? Uh, I've... none of you guys were at the dinner I did a few weeks ago where we had Steven Pinker come for dinner.

   28. JCJason Calacanis43:02

       Yeah.

   29. DFDavid Friedberg43:02

       Uh, read his book, Enlightenment Now.

   30. JCJason Calacanis43:04

       Yeah, of course.
4. 48:58 – 1:09:39

   Dutch farmers protests: root causes, how to move forward with smarter legislation

   1. JCJason Calacanis48:58

      so Dutch farmers are in revolt, uh, after a new proposed law to cut emissions. Uh, on Tuesday, Dutch lawmakers voted on proposals to slash emissions of pollutants, uh, like nitrogen oxide and ammonia. They're targeting a 50% cut nationwide by 2030. Livestock produces these emissions, so the plan will likely force Dutch farmers to cut their livestock herds or stop working altogether. Farmers protested. Uh, they put their tractors outside buildings. They dumped fertilizer. Uh, 40,000 farmers gathered last week in the central Netherlands agricultural heartland to protest these plans. Um, and this caused-

   2. DFDavid Friedberg49:35

      The government started shooting at them.

   3. JCJason Calacanis49:37

      Uh, yeah.

   4. DFDavid Friedberg49:37

      They got shot.

   5. JCJason Calacanis49:37

      Yeah. Th- these, uh, tractors were doing some, uh, pretty gnarly things (laughs) , uh, and stopping traffic, and I guess it got heated-

   6. DSDavid Sacks49:44

      No, they're honking their horns.

   7. JCJason Calacanis49:46

      Um, and there were... Some shots were fired.

   8. DSDavid Sacks49:47

      Wait, wait, wait, wait, wait. What, what were they? No. Wait. The government fired shots?

   9. JCJason Calacanis49:50

      There, there was-

   10. DSDavid Sacks49:50

       The protestors were unarmed as far as what I read.

   11. JCJason Calacanis49:53

       Yes, they were unarmed, but supposedly they were doing some dangerous maneuvers-

   12. DSDavid Sacks49:56

       Were they honking their horns? Were they honking their horns?

   13. DFDavid Friedberg49:57

       (laughs) .

   14. DSDavid Sacks49:58

       Is that why they got shot at?

   15. JCJason Calacanis49:58

       No, no, no, no. I think they were using the-

   16. DSDavid Sacks50:00

       That's okay.

   17. DFDavid Friedberg50:01

       (laughs) .

   18. JCJason Calacanis50:01

       No, no. fact-

   19. DSDavid Sacks50:01

       It's okay for the police to shoot working class protestors-

   20. JCJason Calacanis50:04

       I'm not approving anybody.

   21. DSDavid Sacks50:04

       ... if they're honking their horns, right?

   22. JCJason Calacanis50:06

       I think they were threatening the safety of...

   23. DFDavid Friedberg50:08

       (laughs) .

   24. JCJason Calacanis50:08

       This is the other side of the story, Sax. Um, listen, neither of us were there, but according to the sources, they were using the tractors to threaten the police, (laughs) like physical, bodily harm, and that's why they unloaded. We don't know all the details. It'll come out, but, um-

   25. DSDavid Sacks50:20

       That sounds proportionate.

   26. JCJason Calacanis50:22

       I've... I mean, if you had a tractor coming at you to kill you and you're a police officer, I think it is proportionate to unload.

   27. DSDavid Sacks50:27

       A tractor's pretty slow.

   28. DFDavid Friedberg50:27

       Let me just talk about the science of it.

   29. JCJason Calacanis50:29

       Okay, let's talk about the science of it, Science Boy. Let's go.

   30. CPChamath Palihapitiya50:31

       Wait. Is it like the scene in Austin Powers where there's a steamroller coming towards Austin? He's like, "No!"
5. 1:09:39 – 1:09:49

   Biden's decline, Bezos responds to Biden's tweet on bringing gas prices down

   1. JCJason Calacanis1:09:39

   2. DSDavid Sacks1:09:39

      This is why I think Biden is very unpopular. I mean, look, he's at-

   3. JCJason Calacanis1:09:42

      Hold on, hold on. Let me tee it up for you, Sa- Hold on. Let me see it for a second. Okay, so we move... I'm going to tee it up for you.

   4. DSDavid Sacks1:09:46

      I don't need it tee up.

   5. JCJason Calacanis1:09:46

      Okay, well let me just say, can I just-

   6. DFDavid Friedberg1:09:48

      (laughs)

   7. DSDavid Sacks1:09:49

      No, let me just explain it.

Episode duration: 1:23:32