E90: Twitter subpoenas, market overview, Pelosi's Taiwan visit & more

1. 0:00 – 2:07

   Bestie intros

   1. JCJason Calacanis0:00

      Just a couple questions before we kick off.

   2. DFDavid Friedberg0:02

      Okay.

   3. JCJason Calacanis0:02

      Look, uh, it's what I told you before, it's bad bitch o'clock, okay? It's 6:30. I've been through a lot, Sacks, right now, but I'm still flirty, okay?

   4. DSDavid Sacks0:10

      (laughs)

   5. JCJason Calacanis0:10

      Is everybody back up in the building, Sacks? It's been a minute. Tell me how you're healing.

   6. DFDavid Friedberg0:14

      (laughs)

   7. JCJason Calacanis0:15

      'Cause I'm about to get into my feelings. How you feeling, Sacks? How you feel right now?

   8. DSDavid Sacks0:19

      What language are you speaking right now?

   9. DFDavid Friedberg0:21

      (laughs)

   10. JCJason Calacanis0:21

       (laughs)

   11. DSDavid Sacks0:21

       I don't even know what you're talking about.

   12. DFDavid Friedberg0:22

       Is there a language called hip-hop, Sacks?

   13. DSDavid Sacks0:24

       (laughs)

   14. DFDavid Friedberg0:25

       You rec- remember when you had (beep) at your 50th?

   15. JCJason Calacanis0:29

       Oh, yeah, when you had beep. And she sang-

   16. DFDavid Friedberg0:32

       (beep)

   17. DSDavid Sacks0:32

       Yeah.

   18. JCJason Calacanis0:33

       And she sang beep, beep.

   19. DFDavid Friedberg0:35

       And your (beep) was dancing to beep. (laughs)

   20. DSDavid Sacks0:40

       Delete that.

   21. DFDavid Friedberg0:41

       Delete that. (laughs)

   22. JCJason Calacanis0:43

       Let's start executing the insta-strike with J Cal today. Why insta-strike? Well, when he says something that... We just insta-strike so we don't have to edit it later. Just insta-strike.

   23. DFDavid Friedberg0:50

       It's because, um, I am, uh, taking back my power. I was in therapy the other day and they told me I need to take back my power.

   24. JCJason Calacanis0:57

       Insta-strike.

   25. DSDavid Sacks0:58

       But he apparently reads the comments section because he knew, Friedberg, that you won the episode last week.

   26. DFDavid Friedberg1:02

       Oh, big time. It was- it was big-

   27. DSDavid Sacks1:04

       Which I agree with. I thought you did a great job.

   28. DFDavid Friedberg1:05

       I agree, too. It was big Friedberg energy, finally.

   29. JCJason Calacanis1:08

       I honestly do not like the competitive nature of the show. I think it makes us all hate each other, and it's not a good dynamic. We should just fucking do the show with each other.

   30. DFDavid Friedberg1:17

       I know, but the point is-
2. 2:07 – 16:03

   Twitter subpoenas the besties!

   1. DSDavid Sacks2:07

      in.

   2. DFDavid Friedberg2:08

      All right, everybody. Uh, welcome to the All In pod. Uh, with us again, uh, David Friedberg took a break from playing his stray video cat game. Uh, Sacks is here in his deposition apparently. Chamath is calling-

   3. DSDavid Sacks2:20

      By the way, do you guys wanna see this? Look at the size of this...

   4. JCJason Calacanis2:24

      J Cal's apparently playing no comment today on the-

   5. DFDavid Friedberg2:27

      I'm playing no comment. (laughs)

   6. JCJason Calacanis2:28

      ... subpoenas. So I will open the show-

   7. DSDavid Sacks2:30

      (laughs)

   8. JCJason Calacanis2:30

      I will open the show by asking David Sacks, would you like to tell us about what you're holding in your hand?

   9. DSDavid Sacks2:34

      Yeah. Okay. So I got this subpoena from Twitter. This is a non-party subpoena for-

   10. JCJason Calacanis2:40

       Didn't Twitter subpoena your tweets? (laughs)

   11. DSDavid Sacks2:43

       Yes. Let me get to that.

   12. DFDavid Friedberg2:45

       Wait.

   13. DSDavid Sacks2:45

       This is a subpoena-

   14. DFDavid Friedberg2:46

       I thought they're public.

   15. DSDavid Sacks2:48

       They are.

   16. DFDavid Friedberg2:48

       (laughs)

   17. JCJason Calacanis2:50

       (laughs)

   18. DSDavid Sacks2:50

       These nitwits have Wachtell, Lipton billing them probably $2,000 an hour to subpoena tweets that are public.

   19. DFDavid Friedberg2:56

       (laughs)

   20. JCJason Calacanis2:56

       (laughs)

   21. DSDavid Sacks2:56

       I mean, brilliant, brilliant strategy. But this is called a subpoena for production of business records in an action pending outside California. So I'm not a party to the laws. At least they're not suing me 'cause I have no involvement in this thing. But they sent me the broadest ever subpoena. It's like 30 pages of requests.

   22. DFDavid Friedberg3:15

       (laughs)

   23. DSDavid Sacks3:15

       And now I gotta hire a lawyer to go quash this thing 'cause they basically want any of my communications with any of my friends over the last six months. It's insane.

   24. JCJason Calacanis3:24

       Sacks, can you just explain to the audience and to us, like, is... This is a court-sanctioned subpoena. The court is basically allowing the lawyers to demand that you hand over these communications. Is that right?

   25. DSDavid Sacks3:36

       Y- yeah, but I haven't had a chance to fight it yet. So now, at my own expense, I gotta hire a lawyer and go send them to fight it because this is a ridiculous, over-broad subpoena. And by the way, I'm not even involved in this thing. I'm just a commenter on Twitter. Um, I don't have any... Let me just save Wachtell, Lipton a lot of time right now. I'm not in possession of non-public information about this. And, you know, the craziest thing is, yeah, like you mentioned, they cite my tweets as, uh, as an exhibit here. And they say they want all documents and communications concerning your statement in a tweet dated April 16th that the, quote, new Twitter CEO checklist includes eliminate all bots and fire useless employees.

   26. DFDavid Friedberg4:22

       (laughs)

   27. DSDavid Sacks4:22

       50% question mark. So obviously they didn't like that.

   28. DFDavid Friedberg4:25

       (laughs)

   29. DSDavid Sacks4:26

       Uh, your statement in a tweet dated April 25th, crazy thought, what if Jack masterminded this whole thing? Your statement in a tweet dated July 18th that, quote, randomly sampling 100 accounts a day is not a serious effort, uh, and/or your statements in any other tweet concerning the merger, blah, blah. Let me just save them time right now. I don't have documents and communications concerning my tweets. Now I know to a lawyer at Wachtell Lipton that looking at my tweets and how brilliant they are, you may think-

   30. JCJason Calacanis4:58

       (laughs)
3. 16:03 – 34:10

   Markets overview: dead cat bounce or have we hit the bottom?

   1. JCJason Calacanis16:03

      Uh, all right, let's talk about markets since that's what everybody, um, really comes here for. Uh, looks like inflation is, uh, finally maybe, uh, getting a little pushback. Gas and oil is way down, a big win for Americans and obviously the administration. There clearly is an upper bound to how much people (laughs) will pay for a gallon of gasoline. Consumption is actually going down, which is interesting. Humans pretty adaptable there. Uh, jobs, and we've talked about this every month as we watch it, uh, finally dipped under 11 million, as Sax, uh, predicted. You know, we're gonna shed 300,000 or 400,000 jobs, it seems, every month, uh, which should take this, uh, you know, 10, 11 million number over the next year down to maybe five or six, which would still be, uh, an unbelievable number and would still put us at very robust full employment, which has been a big question.

   2. DSDavid Sacks16:50

      Well, and also, there, there's a number of, of open job, the, the number-

   3. JCJason Calacanis16:54

      Yeah.

   4. DSDavid Sacks16:54

      ... of job recs. It went down by something like half a million in one month.

   5. JCJason Calacanis16:57

      Yeah, and it's been going down 300 or 400, so it's, it's kind of been pretty consistent, but there's clearly something going on here. And the stock market, interestingly, um, we've started to see a little bump here. Even crypto, um, which the most speculative of all assets, I guess, Bitcoin bounced as well, you know, hitting 22, 23 now, so. What do you think, Chamath, about markets? We, you, you may have called the bottom, uh, here on the program a couple of months ago, and, uh, I started day trading three weeks ago based on our discussions here, thinking we're bouncing along the bottom. Is it ahead fake right now?

   6. CPChamath Palihapitiya17:38

      I think at the time, initially I think I said, you know, it rallies to around 4,000. I was a little off. Rallies-

   7. JCJason Calacanis17:47

      What rallies to 4,000?

   8. CPChamath Palihapitiya17:49

      The S&P.

   9. JCJason Calacanis17:50

      Yeah.

   10. CPChamath Palihapitiya17:52

       Probably gets to 4200, 4300. Look, it's always important, from my perspective-

   11. JCJason Calacanis17:58

       Trading at 4150 today, just so people know. Yeah.

   12. CPChamath Palihapitiya18:01

       Yeah, it's always important, from my perspective, to just take the other side and just intellectually debate with oneself why the other side could be right. So in, at this point right now, what people would say is, "Okay, the Fed's gonna capitulate."... at the beginning part of 2023. We have a pretty clear forecast for all the rate increases that have to happen. Everybody's doing the work that's necessary, either raising prices, cutting costs, or doing both, letting people go, et cetera, et cetera. So maybe we're, we're there. Okay, so what's the other side of that? Well, I think, again, as I've stated before, the other side starts with energy, and the reason why I think it's important is that it really is the conflation of an economic system and a political system using an instrument. And if you look inside of what's happening in Europe, there's a lot of complexities here that I think need to get unpacked. So for example, a couple of days ago, the French government basically said that they're going to start producing less nuclear energy, and you'd say, "Well, why would they do that?" Well, it turns out because, you know, the temperatures are so high, you cannot use the water to cool these nuclear reactors because the, the exiting water is then so hot that it would actually destroy the ecosystem of the lakes and rivers that they use to feed natural freshwater in to cool the nuclear reactor. Second, because it's so hot, all the rivers are below their natural level. Barges that carry coal and that gas are getting stuck on the Danube. The Po, which is the longest river in Italy that feeds all the fields, actually can't, is below the level where it can actually off, you know, offload the water, so farmers can't basically do what they need to do to produce a food supply. So if you play all of that out, you start to see an issue where by, you know, October, November of this year, we're back into the same complexity where energy is the tip of the spear around which everybody starts to debate all of the national security issues that we have to deal with, the Ukraine war, et cetera, et cetera. So I don't know. I mean, you know, you've made a lot of money this year by basically doing the following, which is the exact opposite of everybody else. When everybody else was freaking out, had you bought, you would've made a ton of money. Now, everybody's like, "It's over," and you can tell that by looking at the VIX, which is the volatility index. We're about to get into the high teens. You have systematically, it has been true that when th- the VIX is in the teens, you tend to basically buy volatility, which is essentially you get short stocks. And when the VIX is in the 30s, you tend to basically sell volatility and you buy equities 'cause we've hit the bottom. If you've been doing that for the last year, you've made a ton of money. So there you have it. I really don't know what's gonna happen from here, but, um, I tend to think things still have to get a lot worse to flush everything through the system.

   13. JCJason Calacanis21:03

       And for people who don't know, the VIX is the ticker symbol that you can look up yourself, uh, for the CBOE's Volatility Index, which measures the stock market's expectation of volatility based on the S&P index's options trading. If you look at oil, Sax, um, we are now down to, uh, 87 bucks for a barrel, uh, haven't been here since, uh, gosh, looks like, yeah, February maybe. And so, and gas prices plummeting. Something going well in this regard? What are your thoughts?

   14. DSDavid Sacks21:39

       Yeah, I mean, the, it's, uh, tha- that particular commodity is coming down. I still think we have a big inflation problem. Um, look in terms of-

   15. JCJason Calacanis21:45

       Why do you think it's going down?

   16. DSDavid Sacks21:47

       I, I guess production is stepping up. I mean, in response to higher prices, uh, people increase production and, um, and the price comes down, so.

   17. CPChamath Palihapitiya21:53

       No, no, no, no, no. There's less demand. The, the, the crazy sad thing about this whole thing with Biden was that OPEC came back and they basically said, "We can increase by 600,000 barrels a day," but the only two countries that are able to do it were, I think, Kuwait and Saudi. And the total number of barrels is about 100,000. So with all the bluster-

   18. DSDavid Sacks22:11

       Yeah, you're right.

   19. CPChamath Palihapitiya22:11

       ... and all of this stuff-

   20. DSDavid Sacks22:12

       You're, you're right, actually. It's-

   21. CPChamath Palihapitiya22:13

       ... there's no supply.

   22. DSDavid Sacks22:13

       It's beca- it's because the interest rate increases are actually having an effect.

   23. CPChamath Palihapitiya22:17

       Correct.

   24. DSDavid Sacks22:17

       You know, these rate increases are like chemotherapy, you know? It's, um, o- on the economy. It, it does-

   25. CPChamath Palihapitiya22:22

       The gas demand is lower than the summer of 2020 in the middle of the pandemic-

   26. DSDavid Sacks22:27

       Yeah, and so-

   27. CPChamath Palihapitiya22:27

       ... in the United States.

   28. DSDavid Sacks22:28

       Yeah, you're right. So the, the commodity prices are reflecting expectations that the economy is slowing down and, and, you know, may be in a recession.

   29. CPChamath Palihapitiya22:35

       So supply-

   30. DSDavid Sacks22:36

       So I think that there's-
4. 34:10 – 50:51

   De-globalization trends, Pelosi's Taiwan visit

   1. CPChamath Palihapitiya34:10

      to normal.

   2. There's also, by the way, a, a really important trend, Chamath, unlike... That I think is playing out and will play out for the next decade on de-globalization. So as the US tries to build its own semiconductor manufacturing capacity, as China loses key trade partners, as all of these markets stop trading with each other and start to build redundancy, there is a massive longer range economic effect of de-globalization. Globalization enables efficient pricing. It enables labor and energy and everything to be done, you know, w- to go to the cheapest source. That's the way globalization has benefited us. Uh, we've been able to get cheap energy and cheap labor in overseas markets to do work for us. And as a result, we've gotten access to cheap products. So when you de-globalize, you end up having to pay more for labor, more for energy. You have to build infrastructure, and the price for everything goes up.

   3. We've said this on the pod for two years now. That era of cheaper, faster, better is over, and what comes with that is better national security. But the cost of that better national security is higher prices. And there's nothing-

   4. Higher prices, less growth. Yeah.

   5. And there's nothing that we can do to avoid that. I'm not sure I agree with the less growth. I actually think that there's enough excess slack to be absorbed by all of this free money that I think you can still have sustained growth, but it will come with higher interest rates and higher inflation and higher input costs. Everybody will have to do their part to absorb some of this, but that's what's gonna happen, and I think we should just deal with the medicine as quickly as possible. This is why the people that actually think that the Fed should just be very aggressive and get this over with quickly, I suspect on the margins are right. The problem is they don't want to look at the historical artifact because the historical artifact would say, "Wait, I need to raise interest rates by another 250 basis points." That's just way too disruptive for what the world is ready to, to hear right now. So we're going to incrementally plod along." And I think what Friedberg says is right, which is that there's going to be a whack-a-mole that emerges. That's going to tilt the markets. Then the consumer credit thing will implode. That's going to tilt the markets. Then Jair Bolsonaro will try to take over Brazil. That'll tilt the markets, and we'll go back to this...... you know, inflationary, fragmented, de-globalized view of the world that just, frankly, takes higher interest rates to normalize.

   6. JCJason Calacanis36:29

      All right. And Sax, I'll bring you in on this, I mean, counter to Friedberg's point, the, the counter, obviously, would be, hey, we, we will have less dependency on dictators like Putin, Xi Jinping, MBS, et cetera, and that would be great for humanity and we'd have resiliency in our supply chain. Uh, and, you know, the West now becoming unified, say what you will about the NATO membership and the timing of it, it's probably, uh, a great thing that the West is saying, "Hey, we're going to get together as a group..." I think you would agree, "... and stand against dictators invading other countries. And if everybody pays their fair share to be part of NATO, which is an important point-"

   7. CPChamath Palihapitiya37:07

      Well, that's not, that's not what they said. That's not what they said.

   8. JCJason Calacanis37:09

      Well, it is a fair point. Well, I mean- Okay.

   9. CPChamath Palihapitiya37:10

      No, that is not.

   10. JCJason Calacanis37:11

       Go ahead.

   11. CPChamath Palihapitiya37:11

       But look, be intellectually honest.

   12. JCJason Calacanis37:12

       Uh, uh, uh... I'm trying to think here.

   13. CPChamath Palihapitiya37:13

       They, every, they, we all said the first part and-

   14. JCJason Calacanis37:15

       Which is?

   15. CPChamath Palihapitiya37:15

       ... ev- nobody talked about that second part. And the only person-

   16. JCJason Calacanis37:19

       Which is?

   17. CPChamath Palihapitiya37:19

       ... who, you know, which is Josh Hawley, who's, you know, not exactly my favorite person in the world, but maybe Sax wants to comment, was the only one that actually said, which is probably the fair thing, which, Jason, you are saying is part of the deal, it is not part of the deal.

   18. JCJason Calacanis37:31

       No, no, should be part of the deal. I'm saying it should be part of the deal. And for people who have missed what we said there, United States spends 3.5% of our GDP on, uh, military. Other places in NATO might be spending 1% or 2%, and we're trying to get them all to 2% to be a little closer to us. And then this, obviously, trip to Taiwan, strengthening our relationship with that country, but at what cost and why are we doing it now, uh, all come into play here. So...

   19. CPChamath Palihapitiya37:56

       Do you actually think that this trip to Taiwan actually strengthened our relationship with Taiwan?

   20. JCJason Calacanis37:59

       Well, clearly it strengthened... No.

   21. CPChamath Palihapitiya37:59

       Did we come out with a deal for chips that-

   22. JCJason Calacanis38:02

       I- it will strengthen, yes.

   23. CPChamath Palihapitiya38:02

       ... TSMC all of a sudden stay... In what way? I'm curious.

   24. JCJason Calacanis38:06

       Well, because they are... I mean, did you not see their statements and giving Pelosi awards and they-

   25. CPChamath Palihapitiya38:12

       (laughs)

   26. JCJason Calacanis38:12

       Taiwan very much wants to strengthen their relationship with the West. That, that is their goal. They want to strengthen the West. They want the protection of the West. So yes, it strengthens our-

   27. CPChamath Palihapitiya38:20

       Do you think that this was coordinated-

   28. JCJason Calacanis38:22

       Hold on. Hold on. Let me finish. It does strengthen our relationship with Taiwan. The question is, does it provoke China? And was it necessary at this point in time in history, when the world does feel like, uh, it's a little bit of a powder keg?

   29. CPChamath Palihapitiya38:32

       No, but so, so six months from now when all the fruits and vegetables that have been embargoed and not sent to Taiwan, and then the sand that allows them to make chips continues to now flow, do you think that they'll still be positive about the trip?

   30. JCJason Calacanis38:44

       We'll see. I mean, I, I, I... Let's go to Sax. He likes to comment on these things, so...

Episode duration: 50:51