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Joe Rogan Experience #1735 - Peter Attia

Peter Attia is a physician focused on the applied science of longevity and the host of "The Drive" podcast. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Joe RoganhostPeter Attiaguest
Jun 27, 20243h 21mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:001:27

    Settling into Austin and a detour into corporate culture wars

    1. NA

      (drumming) Joe Rogan podcast, check it out. The Joe Rogan Experience. (rock music)

    2. JR

      Train by day, Joe Rogan podcast by night, all day. Hello, Peter.

    3. PA

      Hello, Joe.

    4. JR

      Good to see you.

    5. PA

      Likewise.

    6. JR

      (laughs) Um, we're fucking neighbors, man. How you liking the move?

    7. PA

      Loving it.

    8. JR

      Uh, you've been here a year now, right? A solid year?

    9. PA

      A little over, yeah.

    10. JR

      Yeah? Loving it?

    11. PA

      I don't know why it took so long.

    12. JR

      Yeah, it's a different world, right?

    13. PA

      Yeah.

    14. JR

      Like, when you live in a place that only has a million people, it's like, "Oh." Like, "Wow, this is, uh... You could do everything here." ...

    15. PA

      And if I, if I'd done this three years earlier, I could have paid half as much for my house too, that's the other thing that's like just-

    16. JR

      Right. (laughs)

    17. PA

      ... would have been so smart to have done this in 2017.

    18. JR

      Well, lucky you did it then and not now, 'cause now it's even harder.

    19. PA

      Oh.

    20. JR

      It's harder to find a house. It's almost impossible.

    21. PA

      Yeah, I mean, every person we introduce to our real estate agent says the same thing, which is like...

    22. JR

      You have to build.

    23. PA

      Yeah.

    24. JR

      Yeah, it's that, it's that wild, which is, uh, I guess, good. I don't know. You know? It's, uh, it's tricky, 'cause, you know, Google's building their... They have this gigantic sail-looking building-

    25. PA

      Yeah.

    26. JR

      ... near the river. Have you seen it?

    27. PA

      Oh, yeah, yeah.

    28. JR

      Yeah. So there, there's gonna be a bunch of wokesters running around from that place. They're gonna have to fill that building up, you know?

    29. PA

      (laughs)

    30. JR

      And then, you know, you got... Is there a more woke corporation than Google?

  2. 1:2710:31

    Microsoft’s land acknowledgments, pronoun introductions, and the logic debate

    1. PA

      Did you hear... Did you hear that thing Ben Shapiro who did with-

    2. JR

      No.

    3. PA

      Oh my god.

    4. JR

      I didn't hear it. What'd he do?

    5. PA

      He did... It's the fun... It's so funny that I went and listened to it again, recorded it on my phone off my computer just so I could text it to my friends.

    6. JR

      (laughs)

    7. PA

      So, they had this thing where, um...

    8. JR

      I saw the thing.

    9. PA

      Where they introduced, e- everyone introduced themselves.

    10. JR

      With their pronouns and they described themselves.

    11. PA

      You're right. So I would say, "Hi, my name is Peter Attia. I'm a light-skinned guy with a shaved head wearing a green shirt. I go by he/him." And then-

    12. JR

      Yeah, and you would say Caucasian probably or...

    13. PA

      Yes, yes, I would, I would, right.

    14. JR

      Yeah.

    15. PA

      And, um, and then... but then one of the women said, "Before we begin, I would just like to state that our land-"

    16. JR

      (laughs) Yes.

    17. PA

      "... the land that this building sits on was actually once owned by or, you know..."

    18. JR

      Yeah.

    19. PA

      And she rattled off 17 tribes.

    20. JR

      Yes.

    21. PA

      At which point, like, my brother was like, "Well, just show me the title deed. Like, is it yours or is it theirs?"

    22. JR

      (laughs)

    23. PA

      "'Cause if it's theirs, you really should give it back."

    24. JR

      What is happening?

    25. PA

      I-

    26. JR

      What's going on? But Microsoft, which is, uh, interesting, they were never like this. Like, what... All the sudden, they went full tilt. They just went from 0 to 11.

    27. PA

      (laughs)

    28. JR

      Right? They don't have a history of, like, ads that were woke.

    29. PA

      I don't know. It's, it's, it has provided-

    30. JR

      Like give me some volume on this 'cause it's so stupid. (laughs)

  3. 10:3114:41

    From words to policies: “don’t say penis” and the ‘point of privilege’ phenomenon

    1. PA

      But even outs- even outside of that, um, m- my, my roommate from med school who's a urologist called me yesterday because he couldn't wait to tell me this ridiculous story. So, uh, a colleague of his, this female urologist who's badass surgeon was giving a lecture to the medical school, uh, which is common, right? You'll always have the surgeon will come in or the doctor will come in. And before she got up to give her lecture, the dean said to her, I'm not making this up, this is a urologist giving a lecture to a group of medical students, said, um, "I would appreciate it if you would not use the word penis during this lecture." 'Cause-

    2. JR

      He said it before the lecture?

    3. PA

      Yeah. She said, "It's an anatomic term. I'm a urologist. What would you like me to say?" And what, what ... He came up with some idiotic ... Oh, uh, (laughs) he said, um, "Maybe you could call it, uh, male erectile tissue." And she was like, "Well ..." She's now fucking with him. She's like, "But what if it's flaccid? What, wouldn't the use of male also be kind of triggering in that sense?"

    4. JR

      Mm, good point.

    5. PA

      I mean, yeah. I mean, and she basically told him to piss off. And she's-

    6. JR

      And what did this, this guy was the dean?

    7. PA

      The dean of the medical school.

    8. JR

      (sighs) And he, uh, I, assume he's a doctor as well?

    9. PA

      He should be. Yeah, yeah. If he's the dean of a medical school, he would be an MD.

    10. JR

      What in the fuck is wrong with people?

    11. PA

      I don't know.

    12. JR

      One of my favorite videos is, uh, there's a communist meeting, a meeting of these, uh, student communists and, uh, their, uh-... they're, they're, like, criticizing each other for various things. And one of 'em gets up and tells everybody that, "Please keep the chatter to a minimum and be respectful for people that are easily distracted." And then another one gets up and they, they yell out to stop using gendered language because l- like, he said, "Guys, can you guys please do this?"

    13. PA

      (laughs)

    14. JR

      And so he gets up and says, "Can you stop using gendered language?" And it's just like, you guys are like LARPers. You know, it's like live action role playing. Like, you're playing like you're in a different dimen-

    15. PA

      (laughs)

    16. JR

      Wanna hear it? Here, it's-

    17. PA

      All right.

    18. JR

      It's hilarious. Take-

    19. NA

      And to win socialism. Thank you so much.

    20. PA

      Great. Right. On to-

    21. NA

      Uh, quick point of privilege.

    22. PA

      Um-

    23. NA

      Quick point of personal privilege.

    24. PA

      Yes.

    25. NA

      Um, guys, uh, m- first of all, James Jackson, Sacramento. He/him. I-

    26. JR

      (laughs)

    27. NA

      ... just wanna say, can we please keep the chatter to a minimum? I'm one of the people who's very, very prone to sensory overload. There's a lot of whispering and chatter going on. It's making it very difficult for me to focus. Please, can we just... I know it's r- we're all fresh and ready to go, but can we please just keep the chatter to a minimum? It's affecting my ability to focus. Thank you.

    28. Thank you, comrade.

    29. PA

      (laughs) Love it.

    30. NA

      Okay. Is there a speaker against named Chapter Pronouns-

  4. 14:4119:37

    Hypocrisy and supply chains: social justice via devices made with exploitative labor

    1. JR

      I don't think they will. I don't think they'll go that far. I mean, they're pretty woke. But they're a li- they seem a little bit more reasonable. The craziest thing is that all of this is coming through devices that are made by slave labor. Like, that's d- at the end of the day, it's so hypocritical that all these people tweeting about social justice and, you know, all the wrongs of the world. You're doing it on a fucking device that's made by child slaves.

    2. PA

      (laughs)

    3. JR

      Like, sorry. You wanna buy an iPhone? You gotta get something that's essentially made by people that are getting slave wages. They're working 16 hours a day in a building that has nets around it to keep suicide people from jumping off the roof.

    4. PA

      Mm.

    5. JR

      That's Foxconn. That's where they make 'em.

    6. PA

      Yeah.

    7. JR

      They don't make 'em here. They're, they're not making 'em in Ohio with, you know, folks that are in a union that get paid, you know, great wages and benefits, and can take care of their families. Uh-uh. No. No, we wanna try to keep the bottom line nice and low.

    8. PA

      Yeah.

    9. JR

      So, in order for you to tweet about social justice, you have to do it on a device that's made by people that are not much better than slaves.

    10. PA

      Oh.

    11. NA

      (laughs)

    12. JR

      Not, not much well o- not more well off. They're really not. It's fucked. It's crazy that there's no outrage to that.

    13. PA

      Well, the outrage is silent. That's the problem. I mean, we're all, you know... I, I guess I should be more vocal about it. You should be more vocal about it. Everybody should be more vocal about it, 'cause I... There's no way the majority of people are looking at this and thinking it's reasonable.

    14. JR

      No, they're not. But th- it's just convenient.

    15. PA

      But we're d- we're not doing enough about it.

    16. JR

      But we're not doing anything about it.

    17. PA

      Yeah. Th- yeah.

    18. JR

      Like, what... There's no one, no one has made a push to make a phone in America. Unless there's something I don't know about. Is there a phone made in America? Let's see if there is a phone made in America. I bet there is not one. I'm willing to bet there's not one. And if it is, it's a piece of shit.

    19. PA

      (laughs)

    20. JR

      I heard Elon's thinking of making a phone. There was a, there's some talk of a Tesla phone. If that happens, he might be, like, the only one. If Tesla does that, they might be the only ones that could sway people from iPhones.

    21. PA

      Yeah. (laughs) I think you're right. Yeah.

    22. JR

      Right? If anybody can... 'Cause it's hard. Like, Samsung has some amazing phones. Their cameras are incredible, but people look at that green text coming in, they're like, not doing it. You know? But if, like, someone like Elon convinced people to switch over to Signal, which is probably better for everybody anyway, to have some peer-to-peer e- encrypted application. Librem 5 USA. Is this a... This is a, um, this is a Linux phone, isn't it?

    23. PA

      Yes.

    24. JR

      Made in the USA. E- electronics with a secure supply chain. That's r- what does that mean?

    25. PA

      Mm-hmm.

    26. JR

      Made with a secure supply chain. What does that mean?

    27. NA

      You want a smartphone built outside China and the walled gardens of Google and Apple, this may be for you, according to The Register.

    28. JR

      So, it's real?

    29. PA

      Yeah, I just Googled... There's a-

    30. JR

      32 gigabytes? Get the fuck outta here.

  5. 19:3727:21

    Manual transmissions, chip shortages, and enthusiast economics (cars & watches)

    1. NA

      There's a chip shortage too, right?

    2. JR

      Yeah.

    3. NA

      Whatever that mean. I don't-

    4. JR

      Yeah.

    5. NA

      ... know exactly what that means, but-

    6. JR

      It means it's hard-

    7. NA

      ... affects everything.

    8. JR

      ... to get a car.

    9. NA

      Yeah.

    10. JR

      Yeah, I had a friend who was trying to buy a Ford Raptor, he couldn't get one. Like-

    11. PA

      Oh, yeah.

    12. JR

      Yeah.

    13. PA

      It's like ... I, I ordered my pickup truck. I, I wanted to get one in a manual, so I had an old Tacoma, gave it to my brother-in-law.

    14. JR

      You wanted to get a pickup truck and a manual transmission?

    15. PA

      There's only two that are still made.

    16. JR

      Who makes it?

    17. PA

      Tacoma makes a limited edition Pro Sport.

    18. JR

      Really?

    19. PA

      And the Jeep pickup truck comes in a manual.

    20. JR

      Oh. Well, well the Jeep kind of makes sense. I can't believe Tacoma still does that. That's ... Why do you want a manual pickup truck?

    21. PA

      Um, I want my daughter to be able to drive manual.

    22. JR

      Oh.

    23. PA

      And, um, I just miss driving manual.

    24. JR

      Really?

    25. PA

      I, I've al- ... I was ... Grew up driving manual and about, you know, six years ago when all cars went to dual clutch, like when sports cars went to dual clutch, I basically gave it up. So, I still drive manual on the track, but-

    26. JR

      Mm-hmm.

    27. PA

      ... I kind of miss it on the road. And I, and I just ... I do want my daughter to drive a manual. I, I feel-

    28. JR

      Just so she can know?

    29. PA

      ... it'll keep her ... Well, also, it'll like ... You'll be texting less and screwing around less. You'll-

    30. JR

      I hope.

  6. 27:2130:07

    What time even is? From pocket watches to atomic clocks and living “off the clock”

    1. JR

      When was the first pocket watch?

    2. PA

      Hmm, that's a good question. Um-

    3. JR

      Let's take a guess before we Google it. Jamie, what do you think? First pocket watch.

    4. NA

      With mechanics that worked like that?

    5. JR

      Yeah, yeah. Wind up. They were all wind-up ones.

    6. NA

      I'm gonna go old, 15... No, let's say before that so, like, 1450-ish.

    7. JR

      Really?

    8. NA

      They had to use something like that probably for maneuvering the oceans, I'm guessing.

    9. JR

      But how... What...

    10. NA

      I don't know.

    11. JR

      How would they even agree to what time it was?

    12. NA

      I don't have any idea. I'm just guessing. (laughs)

    13. JR

      See, 'cause, like, before they agreed to what time it was, no one had a fucking clue, right? Like, there was a time-

    14. PA

      They're using sundials and things like that.

    15. JR

      Yeah. There was a time in history where no one agreed what time it was. (laughs)

    16. NA

      Well, like, hell with Big Ben. Like, that's probably the first one with agreement 'cause they're like-

    17. JR

      That's a good point.

    18. NA

      ... "Okay, that's the fucking time right there."

    19. JR

      Right, that's a good point. Big Ben. I'm gonna guess Big Ben is from 1800.

    20. NA

      All right, I was not-

    21. PA

      I'm, I'm gonna go a little earlier.

    22. NA

      ... too far off.

    23. JR

      Really?

    24. NA

      Yeah.

    25. JR

      Okay, hit me with it.

    26. NA

      1510.

    27. JR

      1510 is the first watch?

    28. NA

      German watchmaker, Peter Heinlein, Henlein.

    29. JR

      So he's like, "This is the time."

    30. NA

      By utilizing-

  7. 30:0751:46

    Predators, self-defense, and hunting ethics: mountain lions, guns, and real risk

    1. JR

      Did I tell you about the mountain lion I saw?

    2. PA

      No. (laughs)

    3. JR

      I didn't tell you. When we were in Utah, I saw a giant mountain lion, fucking giant. Like, as big as me. It was huge.

    4. PA

      What?

    5. JR

      It was huge.

    6. PA

      How far from you?

    7. JR

      We, we were in a truck, luckily, and it was about 30 yards away.

    8. PA

      ... my friend, Colton, spotted it. Uh, we were driving and he hits the brakes, he goes, "That fucking mountain lion!" And I'm like, "Where?" And then I see its eyes 'cause it was starting to get dark out, but it was still light and its eyes were glowing. And, uh, I put up the binoculars to take a look at it, like closer through the windshield. And I was like, "Holy fuck!" It was huge. I did not know they got that big.

    9. JR

      Oh, they get to 200 pounds.

    10. PA

      Oh.

    11. JR

      (clears throat) The one that I saw previously, I saw one in Santa Barbara and it was probably like 70 pounds, 60 pounds. It was pretty small. And then I saw another one in Colorado, but it was so brief, it was, it was hard to tell and that one seemed the same size. Seemed like a smaller juvenile one. This was not a juvenile. This was a 100% full grown tom with a big old pumpkin head and huge paws and the forearms were wild. Like that was the weirdest thing, like looking at his f- his forearms were as big as my thighs. I was like, "Fuck, look at this fucking thing."

    12. PA

      Elk killer.

    13. JR

      And it was just looking at us, you know, and it was under a tree. A- and, you know, we, uh, opened up the car door and tried to like get film of it and look at it closer and it took off and it was so big. 'Cause I was thinking like, if I was out there on my own, you know, 'cause people do that all the time, they hunt solo and they don't carry a weapon, you know? Like Colton didn't have a weapon. I only had a bow and arrow. And here's this giant-ass fucking cat. Like, if we zigged when we should have zagged and all of a sudden we're on top of this thing and it decides to pounce on us, fuck.

    14. PA

      (laughs) That better be a good tripan.

    15. JR

      Yeah. Did you see that video of the guy who shot the, uh, mountain lion in the face?

    16. PA

      No.

    17. JR

      Jamie.

    18. PA

      (laughs) It's, uh- (laughs)

    19. JR

      (laughs) He's hunting too and, uh, he's got a Glock out and he's telling this mountain lion, "Hey, back up, back up." And it's not even... It's a smaller one, like a 90-pound one, but he- he's saying to it, "Hey, fuck off, like get outta here." And then it- it makes a move on him and, you know, he drops his phone, you hear crack, crack. You hear m- l- like one shot. One shot. Um, and then you see the thing twitching on the ground and it's got a bullet hole in its face.

    20. PA

      Wow.

    21. JR

      Yeah. But doesn't have that gun, he's fucked, because occasionally they will jump on people and that's the situation th- this guy was in. Like look at this. Give me some volume. Rewind it and give me the volume 'cause when it's looking at its face.

    22. PA

      G- g- g- g- g- get back.

    23. JR

      Look at that.

    24. PA

      G- get back. You get back. You get back.

    25. JR

      Look at that fucking thing.

    26. PA

      Back. Ah, ah, ah. No. No. (gunshot) Motherfucker.

    27. NA

      (sighs) I just had to shoot this mountain lion. It fucking pounced at me and I popped it in the fucking face. (sighs) Holy shit.

    28. JR

      Holy shit.

    29. PA

      Wow.

    30. JR

      That is wild, right?

  8. 51:4658:02

    Archery tech rabbit hole: rangefinders, arrow arc, and compound bow history

    1. JR

      Um, you have the best backyard range I've ever seen ever.

    2. PA

      Dude, it just got better, too.

    3. JR

      How did it get better?

    4. PA

      Um, I just bought more.

    5. JR

      Peter has this range in his backyard 'cause Peter's an archery nut like me, and he has... He basically has, like, a professional archery range in your backyard. It's like you have hundreds of yards to shoot.

    6. PA

      Well, we just bought the lot next to us.

    7. JR

      (laughs)

    8. PA

      So now it's like we could literally set up a tack.

    9. JR

      Oh, wow.

    10. PA

      Yeah.

    11. JR

      That's cool.

    12. PA

      And, and so what I've done now is I got now elk in the woods. That's what makes it better, so. So now when I was preparing for the elk hunt this year, I was doing... Most of my shooting was in between trees.

    13. JR

      Oh.

    14. PA

      So I'm trying to, trying to make s- build my confidence at... If you wanna shoot something 50 yards away, but you got two trees like this and a branch going like this-

    15. JR

      Right.

    16. PA

      ... now you gotta... You have to judge, like, "Well, can I make that shot because of the arc of the arrow?"

    17. JR

      Do you have a FullDraw 4?

    18. PA

      I do.

    19. JR

      You do?

    20. PA

      Yeah.

    21. JR

      Those are the shit.

    22. PA

      Yeah.

    23. JR

      Leupold has... For people that don't know what we're talking about, Leupold has a rangefinder that you put in the weight of your arrow, the weight of the bow, the length of your-

    24. PA

      Your draw length and everything, yeah.

    25. JR

      ... peep sight. Everything. You have to put in everything. Is there a peep sight? Is that calculated in?

    26. PA

      I think it's peak height elevation, yep.

    27. JR

      Yeah?

    28. PA

      Yep.

    29. JR

      Okay. So you calculate all those things, and it will literally show you how high your arrow will be at the peak. So if you range something, is which is what you do, and you dial it in on your site, it'll show you if you're gonna hit a branch or not.

    30. PA

      Yeah, it's-

  9. 58:021:01:24

    Attia’s pivot to longevity medicine: why he left surgery and what brought him back

    1. JR

      We can talk about anything. I don't give a fuck. It doesn't, doesn't bother me. Um, is there any, uh, new information in the world of longevity and the world of health or anything that you know of that is exciting?

    2. PA

      I mean, there're two extremes, right? I think on the one end-

    3. JR

      Tell everybody what kind of medicine you practice, just so they know.

    4. PA

      Oh, so I, I mean, my practice is basically trying to figure out how to help people live, um, with a greater lifespan. So how do you add 10, 15 years to how long a person's gonna live, and then how do you improve health span? So how do you improve especially-

    5. JR

      And your degree is in what kind of medicine?

    6. PA

      Um, so I did surgical oncology. I did general surgery and oncology. Um, but I left medicine in 2006 and went, you know, did finance and other stuff and completely went away from it until I kind of came back to it about 10 years ago.

    7. JR

      Why did you leave it?

    8. PA

      Um, I mean, truthfully, I was super frustrated. Um, in, in cancer surgery you're doing kind of like very, like, heroic operations. I mean, the most technically challenging types of operations. But, you know, half the people still die, right?

    9. JR

      Hmm.

    10. PA

      So 50% of people who are going to have surgery, and in some cases more. If you're talking about pancreatic cancer, 80% of the people whose pancreas gets removed for cancer are gonna be dead in five years.

    11. JR

      Wow.

    12. PA

      So, um, y- you know, I just, I just felt like in all, in all regards, I just felt like there wasn't enough in the way of prevention. Um, and in some ways that is necessary. I mean, we, because I trained at Hopkins, which is in the inner city, it's a lot of trauma surgery. So every third night for five years, you're taking care of gunshot wounds. And-

    13. JR

      Ugh.

    14. PA

      We had so many, I mean, Baltimore averaged, at, at Hopkins we averaged, at the time, I don't know what it's like today. At the time, it was 16 penetrating traumas a day. So 16 gunshot wounds or stab wounds a day. So as a, as a trainee, that's amazing, right? Like that's, that's what you're there for. That's why I went specifically to that program, was to be able to learn to operate on people who are shot or stabbed. Um, but, you know, it, it does take its toll on you, right? You just feel like there's no end to this. Like, um-

    15. JR

      Right.

    16. PA

      I mean, it's a war zone out there and y- y- yeah. I mean, there were... I remember there were times when, you know, you'd, you'd be a part of, like, a heroic rescue of somebody and they go out the door and they come back a week later with a gunshot wound to the head and they're dead.

    17. JR

      Wow. God.

    18. PA

      And you're like, "Ugh." I mean, come on. Um, so yeah, I was, I was just frustrated by, with everything in medicine when I left. I was super pissed. My wife was like, "You know, you bitch and moan about this so much. I think you have two choices. You should either fix it or leave." And I was like, "Well, I can't fix it, so I'm leaving." Um, so I left and joined a company called McKinsey and was recruited there to do healthcare, but ended up, because my background's in math, doing credit risk. And this was right as, this was like the two years building up to the mortgage meltdown.So that became my day job and my night job. I mean, that was all-consuming for two years. Um-

    19. JR

      What was your night job?

    20. PA

      No. Meaning like we worked 24/7.

    21. JR

      Oh. Oh.

    22. PA

      Like I, we, I would run a team of analysts in India during the night and then a team in San Francisco during the day. And all day, all night, we were kind of trying to basically figure out how bad this thing was going to be.

  10. 1:01:241:23:01

    Inside the 2008 crisis: mortgage ‘vintage curves,’ mispricing risk, and TARP debates

    1. JR

      So you saw it coming?

    2. PA

      Oh. Yeah.

    3. JR

      How far out?

    4. PA

      Um, so by August of 2007, it was clear that the prime market was going to implode. Uh, and I still remember the day, Thursday, November 15th, uh, 2007 is when I had a sense of what the magnitude was going to be. The thing I didn't know was when. I couldn't... I knew it was gonna be the next 18 months, but I... It wasn't like I could say in September, which is when it ended up happening, right? It was 10 months later. I couldn't say in September the bottom's gonna fall out.

    5. JR

      Was there anything that could have been done that would have mitigated the impact on the economy and society and, you know, repossessions, and-

    6. PA

      Yeah. I mean, that's, that's a really good question because at the time, in November of '07, we... And, and I want to also be clear, the reason we knew with such clarity how bad this was is we were work... We had a client, our client was the largest u.... I guess I could s... Probably the largest US home lender in prime real estate and we had all the data. So we're able to see stuff that's not publicly available, but they didn't see it. But when we went back and looked at the analysis, we were... We figured out that every... That starting in 2004, starting in the second quarter of 2004, every loan that was being originated was behaving differently than in the entire history of mortgages. So this is a, a really interesting analysis. It's called the vintage analysis. Um, if you bundle mortgages together and look at how they behave, for all of time, they behave in a certain way. For about the first 18 months, none of them default. So 18 months after a person buys a house, historically, there's no chance of default. Then defaults start to rise, and they rise for about the next two to three years, and then they never default again. So the vintage curve looks like this. This is cumulative loss rate.

    7. JR

      Mm-hmm.

    8. PA

      So what's the reason for that? So the reason nobody defaults in the first 18 months is because historically, you really make sure that the person who you're selling a house to or giving a loan to can afford it. You do a really extensive background check on them. And if something's gonna go wrong, it's unlikely to go wrong in that first 18 months because of how much you've documented their income and employment and stuff like that. Then you get into an area where some people are gonna default. And then the reason three, four years out, there's no more defaulting is because by that point, people have enough equity in their home that if they run into trouble, they can always sell the home and the bank gets their money back. So again, you go back in time, every vintage curve for every single mortgage looked like this. Really boring. We went back and plotted all the vintage curves going back to the year 2000, and they all looked... And then in Q2 2004, so you plot these in three-month vintages, they started doing this.

    9. JR

      Explain to people that are just listening.

    10. PA

      Uh, meaning they started to... Instead of going up and then flat again, they just kept going up and up and up and up and up, but they actually did it at an exponential rate. So they didn't just go up straight, they would go up exponentially.

    11. JR

      Mm-hmm.

    12. PA

      In other words, there was no end in sight to the explosion of losses. So the losses started happening immediately and they never slowed down. They accelerated with time. So this is looking at a chain reaction. And this was one of five models that we built to try to understand what was going on. And they all pointed in the same direction, which was catastrophic outcomes basically for loans that became originated after 2004. So by the time we're in 2007, when we show all this data to them, obviously they didn't believe it, right? They said... Well, 'cause the punchline was horrible. The punchline was, "You're gonna lose more in the next 18 months than you've made in the last 10 years." And that was like, you know, they were like, "That's not possible." Um, and the, the rea- I had to be the one to tell the, the, the head of the bank, right? Because... And even though I was only like... There's a hierarchy at McKinsey, there's like senior partners, junior partners, and I was just like a lowly manager who ran the analysts. And the senior partner would normally be the one to present such an outrageous finding to the board of a bank. But he was like, "You should present this." And I said, "Why?" And he goes, "Well, you, you understand the technical details of the model better. And also you used to be a cancer surgeon, so you're used to giving bad news."

    13. JR

      (laughs)

    14. PA

      "I think this is not gonna go very well. So-"

    15. JR

      Oh my God.

    16. PA

      "... you, you do this." And it did not go well. It was not well received. Um, in re- they could have done something. Yes, they absolutely could have done something. It wouldn't have stopped all the damage, but it would've minimized the damage, because remember, there was still another 10 months of horrible loans being originated, horrible loans being securitized. Um, and they were mispriced. I mean, ultimately that's the problem with this, is it was just a mispricing game. They didn't know how to price the risk of the loans they were making.

    17. JR

      And how many people were predicting this the way you were?

    18. PA

      Well, look, a lot of people way smarter than me were predicting it. Remember, I was an idiot. All I knew was how bad this was. I had no clue how one could make money off this 'cause I wasn't thinking about it through that lens.

    19. JR

      Oh, I see.

    20. PA

      Remember-

    21. JR

      But some folks were. There was-

    22. PA

      Yeah. If you saw The Big Short. Did you ever see that movie?

    23. JR

      No, I did not.

    24. PA

      Oh. So, um, I think it's called The Big Short, right? It was, uh... Is that it, Jamie? Yeah. Great movie 'cause it was actually very accurate.

    25. JR

      Who's in that movie?

    26. PA

      Um...

    27. NA

      Christian Bale plays the guy, the main...

    28. PA

      That's right.

    29. JR

      Mm.

    30. NA

      ... kind of found the stuff, um-

Episode duration: 3:21:48

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