White House BTS, Google buys Wiz, Treasury vs Fed, Space Rescue

1. 0:00 – 3:23

   Welcoming Cyan Banister and David Sacks!

   1. CPChamath Palihapitiya0:00

      Friedberg had this great story. There's a machine there, I've never seen this machine in my life, but he knew the machine. There's a machine-

   2. JCJason Calacanis0:06

      It's a Coca-Cola Freestyle machine.

   3. CPChamath Palihapitiya0:08

      There's a machine that's right by the Navy mess where we had lunch in the situation room, which dispenses literally... I've never seen this before. Like, no-

   4. JCJason Calacanis0:16

      This is how out of touch you are. This is in every 7-Eleven, every movie theater-

   5. CPChamath Palihapitiya0:20

      90 different drinks. Are you serious?

   6. JCJason Calacanis0:22

      ... every McDonald's.

   7. CBCyan Banister0:23

      Every movie theater.

   8. JCJason Calacanis0:24

      Come on.

   9. CBCyan Banister0:24

      It's everywhere.

   10. JCJason Calacanis0:25

       This is everywhere.

   11. CBCyan Banister0:26

       Everywhere.

   12. JCJason Calacanis0:26

       You have not left-

   13. CPChamath Palihapitiya0:28

       I was blown away by this machine. All the Coca-Colas, all the Gatorades-

   14. JCJason Calacanis0:33

       Let me ask you a question-

   15. CBCyan Banister0:33

       It's the 777 Freestyle.

   16. JCJason Calacanis0:34

       ... what is that 3.75?

   17. DSDavid Sacks0:34

       Chamath, let me ask you a question. How much is a dozen eggs?

   18. CPChamath Palihapitiya0:38

       399.

   19. DSDavid Sacks0:39

       How much?

   20. JCJason Calacanis0:40

       Yeah, $399.

   21. CPChamath Palihapitiya0:41

       399.

   22. JCJason Calacanis0:41

       He got it. $399. That's right.

   23. CPChamath Palihapitiya0:43

       No, $3.99.

   24. DSDavid Sacks0:44

       Close, close. It depends.

   25. JCJason Calacanis0:46

       $3.99.

   26. DSDavid Sacks0:47

       It's pretty close.

   27. JCJason Calacanis0:47

       It depends. It's pretty much double that in the Bay Area at Whole Foods, but yeah, it's half that.

   28. CPChamath Palihapitiya0:50

       Ask me how much milk is.

   29. DSDavid Sacks0:52

       How much is milk?

   30. CPChamath Palihapitiya0:54

       8.99 to 11.99 depending on what you buy.
2. 3:23 – 33:00

   Behind the scenes of the Besties in DC: White House, cabinet interviews, and more

   1. JCJason Calacanis3:23

      All right, all right, let's get back to it. Let's get back to it. It was a triumphant week for our besties. There were like, uh, little school girls giggling on the group chat, "Oh my God, I'm in the White House. Oh my God, look, I'm getting closer to power." What was it like? Chamath, your dream has come true. You came here to America from Canada, you built all this from nothing, and you wound up at the White House. Give it to me.

   2. CPChamath Palihapitiya3:46

      It was probably the most intense three days that we had. Nate and I were there to see the President, but obviously we were there to see Sachs as well. But there was a bunch of other things that happened. Myself, Friedberg, New Money Sonny was there, our bestie Elon Musk, obviously we dropped in with him. So to recap, on Sunday we got in, it was just like raining cats and dogs, nothing to say there. Then on Monday what happened was we basically had some meetings in the morning and then David said, "Guys, let me just walk you around and just show you where I work."

   3. DSDavid Sacks4:22

      By the way, we camped out in Sachs's office for three days, which was awesome. So we, we had the passes to be at the West Wing and in the Eisenhower Building. That's Sachs's office. And so we all kind of worked from there, and then we went and did our meetings from Sachs's office, and Sachs's incredible Chief of Staff Tracy escorted us around any time we needed to go anywhere.

   4. CPChamath Palihapitiya4:44

      So then we, we started to walk through the West Wing. We dropped by-

   5. JCJason Calacanis4:48

      Look at Sachs's office for a second here. Sachs, I love what you've done with the place. Uh, were you allowed to put up a piece of art? And look at that desktop rig.

   6. NANarrator4:56

      Not really.

   7. CPChamath Palihapitiya4:57

      I think the most iconic part of the West Wing is the portico, where you see that... Those very famous shots of all these very important people. In this case, it's just the four of us. (laughs) But you can see Nick, there's the shot of all of us.

   8. DSDavid Sacks5:10

      Well, the portico connects the West Wing to the President's residence. Tracy Sachs, his Chief of Staff, escorted us from the West Wing after we did an amazing tour of the West Wing over to the residence. I don't know if we were really supposed (laughs) to do it, but she, she has full access, so we were able to kind of go on the walk, and then we took a walk around the residence and saw all the rooms. But this is the entrance to the West Wing right here. So when you come in for, for meetings, administrators. So we walk in, Pam Bondi's on her way out. We got to meet Pam Bondi. I mean, it really is amazing, like, members of the Cabinet are coming in and out of this door, members that work in the West Wing-

   9. NANarrator5:44

      Foreign leaders coming in and out.

   10. DSDavid Sacks5:45

       Or leaders, yeah, and then we saw, like, leaders coming in.

   11. CPChamath Palihapitiya5:48

       One of the most iconic things we were allowed to do was see the press room. By the way, the people that work, and we'll get to it in a second because we met some incredible people that work in the White House, but some of the folks that don't necessarily get a lot of flowers, like folks that work in, like, the upper press room and the lower press room, some of the kindest people. And what they did was they're like, "Oh guys, why don't you come and see...... where they do the presidential briefings. And the one thing about the White House is everything is just, like, in a nook and cranny away. So this is where-

   12. DSDavid Sacks6:17

       Ooh.

   13. CPChamath Palihapitiya6:17

       ... obviously you see the presidential seal isn't there because the president is not there, but we were able to do that. We met some really-

   14. DSDavid Sacks6:23

       So you're in the press room here? This is the actual press room?

   15. CPChamath Palihapitiya6:26

       This is where, by the way-

   16. DSDavid Sacks6:26

       And it was, it was just like a little door-

   17. CPChamath Palihapitiya6:28

       ... it's so small.

   18. DSDavid Sacks6:29

       It's so small. It's a little door off the side. This- the whole West Wing is, like, disarmingly small. You can walk for 15 seconds between the Oval Office and pretty much everywhere else in the West Wing. It really is very tight. And Elon's got an office in there that we got to kind of drop in and say hi. The president, obviously Chamath went over to the Oval. Then there's the situation room. I mean, everything is within a couple of steps of everything and it really is... You're in these kind of historic moments as you walk through this. You just feel the resonance of everything that you've heard about and seen and all the history and legacy to every- everything, and it's just all right there compact in one space. You're just overwhelmed. It really was overwhelming for me emotionally, it was overwhelming intellectually. You just kind of walk around and, you know, it, it's just... You're, you're part of it and it was so... I was telling Chamath, it was so emotional for me at the end of the day to just be like, man, like, you come to this country, you come to America, you know, from wherever you came from and anyone can find their way into this historic space. That's the beauty of this country. And I... It never really hit me until we were in this moment.

   19. CPChamath Palihapitiya7:38

       So let me show you-

   20. DSDavid Sacks7:39

       That I, that I kind of really got it.

   21. CPChamath Palihapitiya7:40

       ... we met some really incredible people. Uh, Nick, you can find a picture of myself and Freeburg and Sunny and Sax. We're with Taylor Budewich.

   22. DSDavid Sacks7:48

       Who's that?

   23. CPChamath Palihapitiya7:49

       David, he's a deputy chief of staff, right?

   24. WOWhite House staffer (communications official)7:51

       He's the deputy chief of staff for-

   25. CPChamath Palihapitiya7:52

       Yeah.

   26. WOWhite House staffer (communications official)7:52

       ... communications in the White House. His office is, is well-placed because through that window behind us is the gaggle. There's this lawn out on the, the White House called Pebble Beach, and all the networks have tents there, and they'll do recordings with White House officials and the White House will be in the background. It's not like a green screen or an LED, it's the actual White House will be in the background. That's why it's all set up there and it's called Pebble Beach. And then there's an area, I think they call it, like, the sticks, which is basically just like a paved area where White House officials can go out there and they get swarmed by all the media asking them questions, and that's called the gaggle.

   27. CPChamath Palihapitiya8:28

       Yeah.

   28. WOWhite House staffer (communications official)8:28

       So he can keep an eye on everything that's happening with the media through that window in his office.

   29. DSDavid Sacks8:33

       Is that where Marine One lands and you see everybody yelling at the president and trying to, like, talk over the copters?

   30. CPChamath Palihapitiya8:38

       No, that's on the-
3. 33:00 – 49:09

   How M&A will be unleashed, Google buys Wiz for $32B, Tim Walz on Tesla

   1. JCJason Calacanis33:00

      Google has acquired Wiz for $32 billion in cash. If you don't know what Wiz is, just imagine you have cloud services like Microsoft's Azure, Amazon Web Services, Google's Cloud, Oracle's Cloud. You need to have security between these things. They help do that. It's the largest deal in Google's history. David was there, I think, for some of the other, um, big acquisitions. There haven't been a lot of acquisitions. Obviously, we know the wrath of Lina Khan was pretty acute for the last four years. But, uh, looking back in history, Salesforce buying Slack, which, uh, our bestie Chamath here was an early investor in for 27 billion. That occurred in 2020. And then we had a couple of things get blocked, HP and was it Juniper I believe for 14 billion last year got blocked. And so, and- Adobe Figma.

   2. CBCyan Banister33:51

      Mm-hmm.

   3. JCJason Calacanis33:51

      Adobe Figma got blocked.

   4. CPChamath Palihapitiya33:52

      Blocked in the, blocked in the UK. Blocked in the UK.

   5. JCJason Calacanis33:54

      Blocked in the UK, but they, you know, assumed it was gonna happen here. And this is-

   6. CPChamath Palihapitiya33:57

      Yeah.

   7. JCJason Calacanis33:57

      ... actually, we talked about this on episode 189, Chamath. Wiz turned down $23 billion from Google. They said at the time it was because they wanted to IPO, but now reporting is saying-

   8. CPChamath Palihapitiya34:07

      No, I mean, I think-

   9. JCJason Calacanis34:08

      ... it was because of the antitrust stuff under Biden-

   10. CPChamath Palihapitiya34:10

       Yeah.

   11. JCJason Calacanis34:10

       ... plus the UK, obviously. Go ahead, Chamath. You can take it from there.

   12. CPChamath Palihapitiya34:13

       I think this is the Trump premium. I mean, the problem when that deal was being looked at back then was there was still a chance that there could be a Democratic administration and it was very clear that they were anti-M&A-

   13. JCJason Calacanis34:28

       Hmm.

   14. CPChamath Palihapitiya34:30

       ... and anti-tech quite honestly.

   15. JCJason Calacanis34:32

       Hmm.

   16. CPChamath Palihapitiya34:32

       And when Trump won, I think it basically said, "Okay, we can now look at these deals." There's another important part of this though, and this was part of our interview with Howard Luttig. I'd love to just play this quick clip.

   17. TWTim Walz34:45

       What I'm doing is I'm saying, okay, I gotta collect tariffs, right? So I go to one of the great software companies of the Earth and I say, "I want you to give me, you're gonna build for me, for America, you're gonna build the greatest customs processing ever."

   18. CPChamath Palihapitiya35:02

       But what's incredible is you're convincing these companies to basically, like, do right for America and build this software for you. Do you think that's gonna be a movement throughout the government or is that-

   19. TWTim Walz35:11

       Here's the idea.

   20. CPChamath Palihapitiya35:12

       Yeah.

   21. TWTim Walz35:12

       I say, "Build it for me for free."

   22. CPChamath Palihapitiya35:14

       Yeah.

   23. TWTim Walz35:15

       I put it in for free. I don't know. What other countries in the world do you think are gonna buy now?

   24. CPChamath Palihapitiya35:21

       Right. If it works for us.

   25. CBCyan Banister35:22

       (laughs)

   26. TWTim Walz35:22

       Well, remember, you have to-

   27. CPChamath Palihapitiya35:24

       Hmm.

   28. TWTim Walz35:24

       ... you have to connect to me.

   29. CPChamath Palihapitiya35:25

       Yeah.

   30. TWTim Walz35:26

       So every country's gonna buy.
4. 49:09 – 1:00:28

   Deep dive on Google/Wiz: breakup fee, impact on VC, ROIC, cloud advantage

   1. JCJason Calacanis49:09

      All right, so looking at this, the deal got sweetened massively over the year between when the first offer was made for $23 billion and then went up to $32 billion. The revenue roughly doubled since the time of the first offer. And then there's some really interesting things in the details. There is a huge breakup fee. We saw the breakup fee with Adobe and Figma. This one is tremendous, it's 10% of the deal size, $3.2 billion in cash. They don't get an investment. If this deal doesn't go through, Google has to give Wiz $3.2 billion in cash. Let that sink in. This company is massively high growth, zero to 100 million in their, in 18 months, uh, when they started, and, uh, last year, they passed $500 million in ARR. You know, that puts the deal at roughly 60 times their run rate, and that is a high price. However, they're supposed to hit, uh, a billion in ARR this year, which would put it at 30 times forward-looking, or 32 times, which isn't outrageous because Google probably has, Freyberg, some concept, or Alphabet rather, some concept of how they could increase the velocity of that, uh, of that revenue, yeah? Or that it would be a defensive position, one of those two, yeah?

   2. DSDavid Sacks50:24

      Yeah, I mean, just to put it in context, right, Google's cloud revenue is about 40 billion a year, and Microsoft and A- and Amazons are both kind of plus or minus a little bit around 100 billion a year. And so Google has kind of been, as we know, lagging a little bit in the cloud market. The, the thing about kind of enterprise sales is there's a common strategy, which is you kinda land with a beachhead and then you kind of expand from there with additional products and services. This has been the reason so many enterprise software companies over time, from Oracle to Salesforce to Microsoft, have been acquisitive and can make acquisitions very synergistic. What that means is you can acquire a new product or a new service and then sell it into your install base, or acquire the customers and then cross-sell your existing products or services into their install base. And so you can increase the overall revenue by putting the two together and combining sales teams and being able to offer a combined offering. And so the theory here, and I think this is something I don't understand well enough, is that security has become such a kinda top requirement and, and product category that it now effectively enables a beachhead-type model to be successful, meaning you can cross-sell the security into all of your existing customers, or there's enough new customers that Google might be acquiring from the Wiz acquisition that they can now bring new GCP services to and, and cross-sell into. Now, to figure out how this actually has to make sense, so Google's ROIC is about 30%. That means that when they make an investment, a CapEx investment or a capital investment, they expect to see about 30% of incremental profit per year come back at some point from that capital investment. The capital investment they're making here, again, this doesn't hit their income statement, goes on their balance sheet. It gets marked mostly as goodwill. So Google's gonna have a $32 billion move from cash down to goodwill. So now they've got this asset on their balance sheet and they've gotta make an incremental $10 billion a year profit. So you kinda gotta do the math, $10 billion a year of incremental profit against $40 billion of cloud revenue and against $1 billion of Wiz revenue. There's a lot to be kind of built here to make this make financial sense. So then it becomes, okay, well, that's a really hard one to kind of think that they're gonna get there very soon, but remember, Google's made some investments like-

   3. CPChamath Palihapitiya52:55

      I think it's more, I think it's a very tricky... You said it earlier actually, it's a Trojan horse into the other clouds. The reason-, you know, the reason Wiz exists, and Jason mentioned this upfront, is because of the value that it creates in a multi-cloud, multi-tenant environment across Azure and GCP and, and AWS. And when the deal was done, one of the things that Wiz said is, "Hey, don't worry, we're not gonna prefer GCP." And it was interesting because I thought, wait, people actually thought that they would just prefer GCP? No, it's the exact opposite of why Google would want this, because now what you have are your tentacles. Like, think of any other service that any cloud provider provides where most of your revenue is coming from the other clouds. Can you name one? Well, it didn't exist until now. And so I think the strategic rationale is quite clever, which is you start to gain customer traction and workloads in all of these other environments, and I suspect that TK is smart enough to try to pull these workloads back into GCP. So that, that's like, I think, probably like-

   4. JCJason Calacanis53:59

      Because they were, you're saying, Jamat, they would have the data, they would be able to see-

   5. CPChamath Palihapitiya54:03

      Of course.

   6. JCJason Calacanis54:03

      ... from Wiz, like, "Hey, look-"

   7. CPChamath Palihapitiya54:05

      Of course.

   8. JCJason Calacanis54:05

      "... 90% of this, this type of job is-"

   9. CPChamath Palihapitiya54:07

      Why wouldn't you do it?

   10. JCJason Calacanis54:07

       "... existing on Oracle or it's over here on AWS or Azure."

   11. CPChamath Palihapitiya54:10

       All three of you would do that if you were running Google Cloud-

   12. JCJason Calacanis54:12

       Of course, of course.

   13. CPChamath Palihapitiya54:13

       ... and Thomas Kurian is smart enough and they're not gonna pay-

   14. JCJason Calacanis54:15

       Yeah.

   15. CPChamath Palihapitiya54:15

       And David, by the way, the other thing that I would say is I think this is where bankers get this totally wrong as the observer watching a deal like this, is it's never about the rate of change when you're trying to do a deal. It's always about the rate of change of the rate of change. And the most incredible thing that Wiz had going for itself was that they were basically doubling in months. So the time-

   16. JCJason Calacanis54:38

       Hm.

   17. CPChamath Palihapitiya54:38

       ... to double at that scale, you can do any kind of fantastical model with that kind of raw input, because when that boundary condition is true (laughs) and you're trying to, you know, deescalate or-

   18. JCJason Calacanis54:49

       Yes.

   19. CPChamath Palihapitiya54:49

       ... scale down or weigh down a model, you're still gonna get crazy gargantuan numbers that when you discount them back, gets them to this price. So, I mean, congrats to these guys. I don't, I, you know, I would love to find out...How does Wiz- 'cause this, I mean, I'm sure you guys have this question too. How do you build a sales infrastructure that can scale that productively that quickly? That's an incredible thing, you know?

   20. JCJason Calacanis55:12

       Yeah, I wonder-

   21. CPChamath Palihapitiya55:13

       How do you, if-

   22. JCJason Calacanis55:13

       ... a lot of people are s-

   23. CPChamath Palihapitiya55:15

       How do you do that?

   24. JCJason Calacanis55:15

       I wonder if it's a lot of self-service-

   25. CBCyan Banister55:16

       It's gotta be self-service.

   26. JCJason Calacanis55:16

       ... people just sign up and use it. It's gotta be, yeah, some percentage of it.

   27. CPChamath Palihapitiya55:20

       But I mean, I'll tell you our experiences. We had a guy that had to come in and sell it into us, and we had a little bit of a bake-off. And I don't know, maybe we were unique, and there's a simpler lower-scale product that's just more... PayGo?

   28. JCJason Calacanis55:31

       C- consumption, yeah.

   29. CPChamath Palihapitiya55:32

       Yeah.

   30. JCJason Calacanis55:33

       Who knows? Sayean, looking at this, I'm curious of your take on big VC because the, uh, series A, $100 million round, we don't have the valuation for it. The B was at 1.7 billion a year later, so maybe we assume it was, uh, $500 million dollar valuation for 20%, something like that, I would guess, maybe a 600 million post. Sequoia, Insight, Index, CyberStarts all did that series A. When you look at the B, C, D, and E, those same players all participated. This is another example of sometimes your best next investment as a VC firm is the highest growth outlier in your existing portfolio. Your thoughts on what this means-
5. 1:00:28 – 1:12:57

   Treasury vs Fed tension, Bond markets, consumers, deregulation

   1. JCJason Calacanis1:00:28

      All right, the Fed held rates steady on Wednesday. Markets have been d- digesting this, uh, pretty flat. The second consecutive meeting, of course, where the Fed held rates steady. This is after the two consecutive cuts in September, 50 basis points, uh, in September and then obviously 25 in December. And we had this high hopes that there would be, you know, four or five of these cuts this year, and there are apparently none right now. Trump posted on Truth Social (laughs) that he urged the Fed to cut rates to create a smoother transition for his tariffs. The tariffs are taking place, I believe, on April 2nd is that date. That's gonna change the history of the United States forever.And so, uh, there were some other interesting takeaways. They lowered expectations on rate cuts. Uh, they expect two quarter point cuts for the rest of 2025, this would take us down to about 4%. Your thoughts, Chamath?

   2. CPChamath Palihapitiya1:01:21

      Let's add some color from Scott Bessent. One of the biggest mistakes that I think Janet Yellen effected was this continued issuance of money on the short end of the curve to finance these deficits, which gives you, you inherit an incredibly difficult challenge, I think, over the next nine months. I think there's like nine or 10 trillion that has to get refinanced. Do you wanna talk about that and...

   3. DFDavid Friedberg1:01:47

      Yeah. Look, I, I, I thought that it, that when rates were low, you're supposed to turn out rates.

   4. CPChamath Palihapitiya1:01:53

      Exactly.

   5. DFDavid Friedberg1:01:54

      And in- instead, the, the Treasury for the past few years has pulled rates in, and I think part of that was to keep rates lower, uh, that they, they changed the issuance schedule when rates moved back up towards 5%. Uh, I, um, have maintained that policy, but I'm maintaining it because, let's go to back to David's question, uh, when, when are you going... When are we gonna see the results from this, the, uh, getting the government spending under control? And I don't think the markets recognize it yet.

   6. JCJason Calacanis1:02:33

      Okay. Translate it for us, Chamath. Yeah.

   7. CPChamath Palihapitiya1:02:36

      So he's saying a couple things. He, he, he has inherited a problem that he hasn't quite yet changed. What is that problem? That problem is that when rates are low, you wanna borrow for as long as possible, right? You don't wanna borrow for the shortest amount of time. And now that rates are high, you're in this difficult position where you have to refinance all of it at a much higher rate. That's effectively the net of it. What I took away, and you can see more and understand more when you watch his whole interview with Friedberg and I, but I think that there has been a fundamental disconnect and break from the Fed and the rest of Treasury and the government. And I think that Scott was very clear, like, he views that as an independent organization and it should continue that way, but it was very clear to me that they are singing from their own hymn book, and it just doesn't seem to me that Powell really understands the gravity of this situation, and I don't think that he's really willing to play ball. So he's probably on the margins. Again, this is my total interpretation of this, would rather wait longer than necessary because I think it's, it's almost like a political gambit, and I think that that's very dangerous. That's, again, just my own-

   8. JCJason Calacanis1:03:53

      Well...

   9. CPChamath Palihapitiya1:03:53

      ... interpretation. I just do not think that Powell, A, has the data to make a very clear decision, and B, will act unless it's totally necessary. So I think this, there's an overcorrection here that's happening-

   10. JCJason Calacanis1:04:08

       Hm.

   11. CPChamath Palihapitiya1:04:08

       ... which I think is dangerous, and I think it's gonna slow down the pace of cuts, which I think will then create a lot of other pressure in the economy.

   12. JCJason Calacanis1:04:20

       Well, Dave, uh, I'll drop it, drop it to you. The Fed's mandate as an independent organization is, uh, full employment an, and that 2% target, which we talked about before here, was just a number that was picked by, uh, an economist in New Zealand of all places. It's, it's not like it's, uh, some specific dosage that is perfect, but it is their mandate. They're not supposed to be a political organization. So what are your thoughts on this situation, uh, and these high rates which we have to pay for our debt?

   13. DSDavid Sacks1:04:52

       We've never been in a situation where in 100 days a federal government is setting out to cut their spending by a trillion dollars, which has a significant effect, a recessionary effect on the economy because there's less federal dollars flowing out which goes as revenue into various businesses and income for a lot of people that are employed as contractors or directly by federal government agencies, coupled with, for the first time in 100 years, a significant change in the policy for tariffs for goods flowing into the United States and whether that will reduce spending by consumers or drive up the cost of products by consumers. And we talked extensively about both of these issues with Bessent and Lutnick in DC this week. And if I'm the Fed, I don't really have a great proxy historically for saying when this was done in the past, here's what the effect would be on GDP, here's what the effect would be on inflation, here's what the effect is going to be on, uh, employment. In fact, folks like Lutnick are making the case that the current measure of GDP is probably not even correct.

   14. CPChamath Palihapitiya1:06:10

       That's right. That's right.

   15. DSDavid Sacks1:06:10

       The way we measure it, the way we count it, and so the traditional economist's point of view on making rate adjustments as a function of economic contraction or growth may be wrong. So I think there are quite a lot of these kind of confounding factors that the Fed is in a very wait and see mode. What I would look to is the bond market which also seems to be in a kinda wait and see mode. So remember right before the election, the bond market traded the tenure up so that rates went down to about 3.65%. About a month ago, the tenure was at 4.5% and today it's at 4.22%. And so in the last month, we've seen rates on the tenure decline by about a quarter point or about, uh, 30 basis points. And so the bond market is giving some kind of opening to the Fed saying, "Look, we expect that this is gonna be deflationary, this is gonna be recessionary. We are expecting you to cut rates to the Fed."And so that's what the bond market is saying. And now, I think we're gonna start to wait for the reports that are gonna start to come out that are gonna show the impact. I don't think we're gonna know immediately, so I think the first 100 days of this presidency and this administration's actions are gonna be pretty telling on what's gonna happen going forward, in terms of the effect on employment, on inflation and on GDP, uh, contraction or growth. And then I think the market will know how to handicap those numbers in the future based on actions by the administration. Right now, we're still in a, like, I don't know how, when you put all these things together what it does. And it's a lot happening real fast. And so wait and see.

   16. JCJason Calacanis1:07:57

       Yeah. Sayan, I'm not sure if the Fed and, you know, the people in the administration can't communicate the strategy perfectly well and the Fed can't interpret it, I don't know that we're gonna solve it here, but any- any thoughts on this?

   17. DSDavid Sacks1:08:09

       Well, the-

   18. JCJason Calacanis1:08:10

       Yeah.

   19. DSDavid Sacks1:08:10

       I don't know if they're not communicating it well. Besant did that. It's the effect that it will have ultimately on the economy and over what timescale, that's what's uncertain right now. Sorry, go ahead, Sayan.

   20. JCJason Calacanis1:08:17

       Well, specifically, the tariffs. I mean, y- you know, if they're on, they're off, to what extent. You know, I don't ... it doesn't feel like the entire administration is on the same page. That's just, you know, based on everybody I've talked to.

   21. CPChamath Palihapitiya1:08:29

       The Fed is not part of the administration.

   22. JCJason Calacanis1:08:31

       Of course not, yes. They're independent. Yeah, absolutely. Yeah.

   23. CPChamath Palihapitiya1:08:33

       And the quote today in the Wall Street Journal, Nick, you can look for it, is Powell's statement basically blamed rising inflation in the short-term period on exogenous factors. He said, "Our job was getting the job done," and now there's exogenous inflation. And I think what he's pointing to are these potential tariffs or something.

   24. DSDavid Sacks1:08:49

       Yes.

   25. CPChamath Palihapitiya1:08:49

       So I think it's- it's less that they're not coordinated. I think that they are on very different pages, and I don't think the Fed wants to play ball. Sorry, Sayan. And then I have a story at the end.

   26. CBCyan Banister1:08:58

       Oh, no. Just quickly-

   27. DSDavid Sacks1:08:58

       Okay.

   28. CBCyan Banister1:08:58

       ... you know, one of the things that really concerns me is how we've been so high on cheap supply for so long. Like, if you look at Shein and Temu before this, uh, podcast, I went and looked up that their prices are up by 27% or something like that. And so when you used to be able to get a garment for $18, you're now paying $37, and Zara is like 75 for an equivalent.

   29. CPChamath Palihapitiya1:09:18

       Yeah.

   30. CBCyan Banister1:09:18

       And I think people really liked getting packages in the mail and feeling like their dollar went further, and it's not going far. And so when you have a bunch of people who can't buy anything, and consumerism is a big part of our, unfortunately in some ways, our culture, you know, what does that do to our country? You know, if- if you're looking around, there's urban blight everywhere in retail and, you know, we can't fill our malls. We don't have brick and mortar stores. They're shutting down. Forever 21 just shut down. You know, the- these are the types of things that, you know, people really care about, is whether y- especially in a time where, you know, you- you do have a recession, uh, people want to buy a tube of lipstick or- or a dress to feel better about their life. And right now, they can't even do that.

Episode duration: 1:30:42