Nvidia's Historic Quarter, SaaS Comeback, Bessent vs Druck, America's Debt Crisis, Cancer Vaccine

0:00All right everybody welcome back to the number one podcast in the world your favorite podcast your podcast your favorite podcast yes it's the all in podcast the core four the fantastic four the original quartet is here David freeberg hot off of his deep state conspiracy interview with Eric Weinstein amazing you did a little run to DC great episode freeberg it was fun Eric is one of a kind I saw Kratzios too kind of two sides of the coin of science in America was the basis of those two interviews they were fun who is Eric Weinstein he's a scientist who works with Peter T.O. from Harvard has done some really he's a capital yeah and he um he had a podcast for a hot minute he is a heterodox thinker in science what is his heterodoxical thought about science there's all these things that everyone takes as fundamental premises and modern physics like the string theory as an example and he thought it was bullshit and called it out as bullshit so he's been kind of outcast

1:01in the scientific community is it is bullshit right and so he's made this case and he's proposed alternative theories that kind of created grand unification theory of physics and then he's been outcast by the scientific community and people say that he's a quack and he's moron and he's talked about UFOs and he's talked about Jeffrey Epstein and people kind of say well this guy's fringe or they use these different turns to chastise him and over time you know the point is similar to what Kratzios has said like so much of science has kind of followed this sheep like mentality where everyone has to line up agree to the same general theory or you get outcast you don't get grant funding you don't get tenure you don't get jobs you don't get invited to do lectures you have to follow the mainstream in science or your outcast and it used to be the science but that's true heterodoxy yeah I know but it's very rational to say until string theory is proved it's unproved and so if you want to use the adjective bullshit that's fine it'll probably offend some people but he's more right on the substance of what he's saying then he is wrong it's unproved right

2:06it's like Jay Bada Charya being like hey you know COVID may have come from a lab leak and when people were saying this they were they were told you were creating conspiracy theories you were pushing misinformation when there is no misinformation if there's no absolute truth that you're talking about it's theory everyone was starting with theory on where the COVID came from you're talking about a level of corruption in a very narrow specific realm of science which is the funding and grant approval apparatus that and getting kent and your and getting professor shits and so if you don't follow the voting the methods the theory right if you don't follow the mainstream you got to stay on cast by the way I buy that I don't I don't know why this is what has led to stagnation in science in America because if you're not part of the mainstream you get excluded and because everyone has to now think in the same way you don't have heterodox thinking you don't have outside of the scope thinking which means we're not pushing the envelope and discovering new things anymore and that's a very kind of pointed issue right now that's why I went and talked to Kratzeos and once said differently there's probably a lot of incrementalism in 2026 that didn't

3:06exist in 1926 totally exactly right we think about the general theory of relativity being published it was completely outlandish but people still studied it assess it they didn't discredit it and say oh you're an idiot and if you're thinking about this general theory of relativity is being real you're a moron that's what goes on today in science where if you say stuff that's too far outside of the realm of the standard approach to things you're you're chastised you're outcast you're excluded do you guys see the Olympics you see the robot Olympics sacks check this out I did see it yeah this is pretty crazy they had these Olympics in China and they copied how freeberg actually runs it look at this look at that yes that is definitely a freebergs print freebergs print doing the freebergs print look at this one he backs up and then boom that's not my sprint that's like knee skiing right there yeah look and there's Jason Koon setting records at 42 this is Jason Koon right here here's Jason Koon yeah with a shirt off at the

4:07poker game really great you're sure back on Koon you know I was thinking about the sacks you know what I realized I think you're a hundred percent right about the PR and I realized that the Chinese the CCP is brilliant at PR look what they did they got a bunch of Chinese people to fill a stadium and cheer for AI and robots they're cheering for it they're rooting for it and then we got Dario saying all jobs are over we're going to be the last company in the world and it's the end of days I can't find that I can't do it we're not talking about Dario this week we're not talking about Dario this week your grand unifying theory is that in a country of a billion people they couldn't find four thousand to show up to watch a bunch of robots run around a track are you really oh they've this is that's your grand unifying theory it is true that China is much more optimistic about AI than we are AI optimism in China is over 80 percent meaning they pull on the question do you think AI will be more beneficial and harmful over 80 percent of Chinese people say yes

5:08in the US that number is in like 30 percent so I've been saying for a while that the US ahead of China and every category except one which is optimism and that is the biggest risk to us winning this AI race against China is doing something that will shoot ourselves in the foot because we're so pessimistic about what AI might do I think it's all sions they making you feel you see that show this the robot blowing up at 16 seconds Nick this is all stage it's a sionps this is a sionps they make you feel bad for the robots you they make you cheer for them this is going to be like a major thing no it's the red robot the funniest thing was when the red robot lost his legs there was like couple tweets that I thought were hilarious like one guy was like oh my god he tore his HDMI his he he he he he he he he he he he he he he he he he he he he he he he he and then and then the second one which is not funny because I know Christian McCaffrey he's a great guy he's like Christian McCaffrey in week three and you just see the entire leg just snap off very very mean congratulations to the CCP by the way optimists have you got has have you guys seen

6:13latest optimist videos from Elon by chance so you showing any of you guys haven't seen it's not publishing publicly I saw the latest optimist it would win half of these things already I it you guys see it it's he's making sick progress he's not showing it publicly but I saw without the sparks coming out of its midsection no sparks but I saw a video that I said to him I said is this CGI or is this real and he said no this is real they just sent it to me this morning and it's like whoa optimist will be the best selling I think product yeah and you know the hard part as I understand it with these robots is you can train them to do a specific action like run in that race or jump or whatever but the hard part is when they encounter a condition that they weren't programmed to expect and specifically when they have to interact with something in the physical world that's when I guess tricky right can they do the whole folding laundry or pick something up without breaking it or dropping it or whatever and specifically something that they weren't taught to do you know that's where it gets tricky yeah the fidelity of the optimist is and it's

7:18ability to do novel things you kind of nailed it I don't want to say anymore you've been playing with Grockbot though right sex yeah oh yeah you got you got Grockbot shot it you've been Grockbot maxing I just reached my Grockbot uses limit and have to upgrade so 200 bucks I've been yeah it's been really interesting actually yeah what it's just that's what you tell us to do right like it just gets it down yeah what's great about Grockbot is that it's always on it's in the cloud you set up your agents and then they can keep working even when your computer is off or it goes to sleep the other you know agent harnesses that we're kind of doing this we're like open claw or hermys they were just on your desktop so if your computer went to sleep they would stop you have to do all these mac minis and also they were like very hard to use very powerful this is super complicated this is like by far the easiest it's still a lot of work to get it set up working right perfectly whatever but it's fun and it's the easiest it's ever been and you can really see where it's all going yeah it's it's pretty amazing I told him he should make it multiplayer mode so like you

8:20can put two agents in the same room but then being able to put two people from your team in the same room and then you know having humans in the loop it's gonna be yeah that will make this thing go so freaking viral yes if you can just add because then you know what's cool about the agents is you actually have an agent swarm you actually have lots of different agents performing different tasks and they get good at different things you know some people ask why don't you just have one agent it turns out that if you have multiple agents then the agents develop more context and expertise yeah so they get more specific but yeah you could then use each of those agents as a channel and invite people to it and then they participate in that and then they add another person yeah it's yeah then I could get very very viral yeah it's a great product all right let's get to work we got a lot going on in video just had a record setting earnings report I mean they blew the doors office and also we'll talk a little bit about sales force also coming back and the Saspocalypse ending stock was up in videos that is 9% on huge numbers and even huge guidance 96.2

9:27billion in revenue in the quarter of Chema up 106% year over year more than double Wall Street's expectation was 92 billion they guided for 70% growth next year that is well above what Wall Street was expecting at 45% so let that sink in the number of people are going crazy over 60 billion in net profit that is the most profitable core business quarter of any public company ever at Google in Amazon they've had higher one off quarters obviously here's your chart Nvidia net income and revenue quarterly just blowing the doors off of it stock is up it's good reaching its all time high again getting close heading into earnings Nvidia was only up 12% year to date on par with the S&P 500 but they were lagging the broader chip index I guess the headwind Chema up is that people believe there's competition coming we'll talk about that Nvidia is the world's most valuable company 5.5

10:28trillion polymarkets says 79% chance you should poly market our great partner poly markets 79% chance Nvidia ends the year as number one 6.3 million in volume in other news sales force up over 20% on Thursday after they also reported a big quarter revenue up 11.3 billion 11% year over year that was in line with expectations but they beaded their adjusted EPS by 80% 590 versus $3.27 since they got a big jump because they are major investors in Anthropic they raised the full year guns 46 billion you called it let's give Chema up this victory fat here he goes the victory fat the lap Chema on May 15th what's your take on this you've been pretty critical of the SaaS space in previous episodes I think the high end of the market where mark operates where the large monoliths operate is quite safe what people are finding is hey hold on a second this is a lot

11:33harder than we thought it's not like boot boot boot put in a prompt and beat that boot it all works it's not how it works I think we're a little oversold now I think this consolidation and the re-rating can happen in the opposite direction so what is the opposite trade the opposite trade is who has constructive net dollar retention who has negative churn that's been really predictable which is a way of saying who has the best relationships those guys I think are positioned to crush all right there you have it Chema your thoughts on Nvidia and sales force blowing the doors off of there quarterly earnings reports there's a lot there so maybe we'll start with sales force first and then I'll go to Nvidia because I think the Nvidia one is actually a good segue into talking about the national state of finance I don't know it was pretty obvious to me in May that sales force specifically was meaningfully oversold I think what I was trying to say there and maybe

12:33I can say more precisely now is we're getting to the end of this second phase of AI so if the first phase of AI were models and think of like a model as a brain the second phase of AI is harnesses right an agents which is the analogous equivalent of giving a brain a pair of eyes and hands and a notebook for memory and a keyboard to type things on so you're sort of taking this primordial object that was really good at Q&A and you're making it more useful almost like an autonomous being but we're starting this next phase soon at least I see it in the enterprises that I work with which is that that's still insufficient and what you now need to do is make that autonomous agent much more informed and give it context and allow it to do a job much more intelligently so meaning you take a brain you give it arms and legs and limbs and eyes and etc but then you have to train it

13:39to be a lawyer or be a customer service rep or be a sales agent or what have you and to do that next step you need a ton of contextual information and so the people that control that today the large systems of record what I said before and what I'll double down on now is that those guys hold an incredibly special place in the ecosystem if they do it right and I think what you're seeing is Mark is finding a way to play well with the models support harnesses but also build his own and now start to push into this next phase and I think that's why his net dollar retention is strong that's why his revenue is strong that's why he's guiding up and that's why the stock's ripped I think was like a 43% since I said it at bottom I mean it took a 20% today just on that and freeberg I think you were in were you on CNBC or you just on the quarterly call I went to many office for the earnings set up yesterday so Dario was there

14:44Dario and Mark did their CNBC bit they set up a studio for the earnings call on the 60th floor you know where we've all had dinner up there and then I did the earnings call with Mark because you know about a year ago I think I mentioned this to you Chimoff like we kind of over a weekend built a CRM tool internally using a cloud code and cursor and stuff and kind of split it together and and stood it up and we were using it and then it's like well you got to add this feature and you got to change this and then account and security and access and where's the data repository that makes it protected and there was a lot of kind of back and forth on all the features we ultimately needed to build to make it truly useful and scalable meanwhile we've got competing interests in our company on where we can build software that's unique to our company like plant breeding software which is what we do as kind of our unique advantage as a company is plant breeding so how do we build a better breeding technology platform how do we build software that gives the people in the lab and in the greenhouse and the breeders tools and so we started building

15:47all these internal tools and eventually you realize our time our efforts our energy is better spent building the workflows that are unique and create value for our organization uniquely versus recreating a bunch of software that other people have already made where's your best ROI your best return on time spend and your best return on dollar spent and it's not on rebuilding a communications tool like Slack or messaging tool like Gmail or a CRM tool like Salesforce and at the time Mark and I were talking on the phone he's like you know hey try Salesforce I'll set you up come on do it and I was like no no no and then he's like yes yes yes and he's so persistent you guys know Mark he's like so persistent yes but it's like best sales guy to text with me and kept texting every day are we up yet are we up yet are we up yet until the sales guy I said okay go to my office he goes to my office he gets set up and we're and then we're done and then we realized oh my god this is actually much better way for us to do this so Mark asked me to come and recount that story at the earnings call and talk a little bit about the view on this change so I do think and I've shared this in the past I think the horizontal platform companies these tools that are horizontal CRM works

16:52across many different verticals industry verticals and Gmail works across many industry verticals and Slack and so on Excel no one's going to go rebuild Excel the real values and the the software that's unique for your vertical that's where AI plays a role in building custom workflows and custom software and so I think that's kind of how I view this the real SaaS apocalypse it's more of a vertical SaaS apocalypse which is software that's designed for just one vertical 100% and that's where I think things get blown up I totally agree with you I totally agree with you I totally agree with you sex let's talk about Mark Benioff he is just an incredible salesperson who just fought through the SaaS apocalypse and then figured out a way out of being put in the bucket of SaaS and then just massively integrating AI into the platform maybe you you've known him for a long time maybe you could talk about him as an executive and what we can learn from what he just did in terms of

17:54going from in the market's mind road kill to leading the pack let's say in SaaS again well this narrative of the SaaS apocalypse was totally overdone I mean this whole SaaS's dead narrative is just getting shredded today with Salesforce being up over 20% you could go back and look at some of the clips I've been saying now for months I do not believe that core systems of record like CRM are going to get rip and replace with something vibe coded I've been saying that for a long time enterprises want certainty they have compliance they want professionally managed software that's been running and debugged for years I mean just think about all the bug reports have been filed against Salesforce for over 20 years right and that's the hard part to get right I mean when I play with all these agents and AI you're dealing with something that's probabilistic and there's so many edge cases when you're dealing with a core system of record you just want to know that it works and the expense of it is low enough that you just don't want to basically jeopardize one of your core systems by ripping it out replacing it with something built in-house in a kind of DIY way

18:58so I just think this whole SaaS apocalypse narrative was overplayed now at the same time to your point Jason I think Betty off is doing all the right things here and you could kind of say it's if you can't beat him join him type approach which is he made this deal with Anthropic what is that deal I mean first of all he's going to be offering Anthropics models inside of Salesforce more importantly I think this is really the critical thing he is integrating Salesforce into Claude he's willing to allow Claude to be the front end to have the sort of the primary user relationship and Claude is now going to access all the data in Salesforce and all the workflows all the actions that a user can take so in other words Betty off here is willing to risk dissent remediation in order to ride this AI wave because he knows it's what the customer ultimately wants you know you don't want to go into Salesforce or any SaaS application to write your agents you

19:59want to create agents in the AI program that you're using and you want those agents to be able to run across all of your SaaS platforms so he's willing to again to give up a big piece of user relationship in order to make himself more relevant now why is this ultimately good for his business and not bad is because like I said I still think that you need systems of record you need the AI agents to basically go to those systems get the data from a canonical source of truth you just don't want there to be any probabilistic variability around that and you want AI agents to be able to write back to those systems and you want to be able to write back to those workflows so what's happening here is that it's not a rip and replace their layers are getting built right you've got the database layer then you've got applications and workflows and then you've got agents and then you've kind of got the AI user interface and Betty office saying that the AI is now the user interface he's basically acknowledging that he's leaning into it now here's the thing I talked

21:03him this morning actually and a point he brought with me that I think is underestimated is that he says there's a lot of trap value in Salesforce meaning we know it's got this incredibly broad rich platform with tons of functionality the average users never going to find all those things but the agent will so think about all the cases where now the agent is going to go to the user and say hey I just saw that there are these actions you could take in Salesforce that seem to line up with what you're telling me to do do you want me to do this and the user is going to say yes you know and then they modify Salesforce as the system of record yes exactly because now think about the agent as a power user of Salesforce that knows how to use Salesforce perfectly you don't necessarily need to hire this like team of highly priced consultants to figure out Salesforce the agent knows how to do it so can unlock the full value of Salesforce and all these actions and then after you develop trust in your agent you the user are just going to click the always allow button and now the agent can

22:07basically tap the full capabilities of Salesforce so I mean that's where this is headed but now it raises the question okay so how do SaaS applications play into this AI and agent wave you have to have great APIs and you have to have a great CLI the command line interface which is how the agents are going to relate to the SaaS tools I think in the past the way that most SaaS products thought they spent a lot of time on their user interface and now they really got to think about the agent interface not just user interface you have to build the best agent interface and you've got to I think relax the idea that you're going to fully control the customer relationship you have to think of agents created by the AI companies as being an extension of your platform and not feel threatened that you're losing the customer relationship if you can do all those things and become a source of truth and a system of record then you've got a big opportunity I gotta say he's like one of the most underestimated and underappreciated product and sales executives in our industry because

23:09I was talking to him when we were at Davos sacks about slack and he was like tell me about what you're doing and I was like listen you have all my data I can't get my data my team wants to move off slack they want to use this open source product specifically so I can get all this information he again to your point freeberg putting on with the sales team and now I have complete God access to our slack and they built a product called slack today which they've been slowly rolling out and it does the promise of open claw and what Sam did by buying out the founder of open claw right after he bought open claws founder Peter and he started working at open AI just open claw just faded like no more innovation and I'm not trying to say this the say Sam did something nefarious or that open claws you know terrible or anything but they just lost their edge and now the version of slack today is like a seven out of 10 and it's getting like 10% better every couple of weeks I'm noticing so he's going to do a parallel link sacks he's going to have his own agents and he's going to let

24:12you come in with your agents his agents might be a little bit behind but you're also going to get those agents for free inside of sales force it's like a two ways to win you know I mean look I think I think that SaaS products can offer their own agents and they can offer their own AI and co pilots and all that but I think the reality is is that most of the action with agents is going to happen outside those products and simply want to interact with those products and basically get the data from them use them as the system of record as the source of truth and then write actions back to them when appropriate and I just think that founders should lean into that trend instead of fighting it because if you fight to stay in control and say that only our agents are the way to interact with our system then people will just move to the leaf so are you are you long vertical SaaS or are you short it like free burgundy or I think it's specific to the company and what its modes are and how good a system of record is. Okay, so I can't. Well, I don't think vertical SaaS has a system of record I don't think that's what they do I think they're workflows

25:14this is the key point where these horizontal monolithic companies like sales force are just unique workday oracle with respect to their GL it's just very difficult SAP IFS it's very difficult to see a path where you can replicate these businesses and they become the repository and the single source of truth as you said but vertical SaaS is workflows and it's a process and I just wonder what survives. Well, I look I think it's a it's a good question and I think it's case by case but look just a few months ago everyone was saying that horizontal SaaS wasn't going to survive and one of Leopold's major positions in that fund was to short all these SaaS products including sales force and what we've seen is that has turned out to be wrong or so to be fair I don't know that he understood the difference between vertical and horizontal SaaS because that was a funding short problem meaning he had to go to the big stocks in order to be able to short enough to be able to get the leverage that he wanted so I think he may have just worked backwards from his own mental narrative to make it all sound correct but I suspect it was

26:20a leverage trap where he's like I need to be really massively net long these other names and his prime broker is like well you got to find shorts liquid shorts and he's like okay adobe and sales force well but look I mean to be fair I think that was the dominant narrative as of just a few months ago with SaaS apocalypse and Benny Alvstock was getting hammered by the market I mean down 50% now it's up back 20 so I think a lot of people were just indiscriminately selling all SaaS and I think that if I had to say there's like one takeaway from the news today is that I think simple extrapolations of the future based on these trends don't work out right the simple extrapolation here was AI agents can code therefore all software is going to zero that was the simplistic extrapolation now what we're seeing is no actually there are certain systems of record that are extremely compatible and complimentary to AI agents and if they are positioned right by their founders they can lean into this trend and by the way I think the job loss narrative is another one

27:23of those simplistic extrapolations what is the job loss narrative is now AI can do knowledge work therefore knowledge workers are all going to lose their jobs it completely ignores the fact that there's ways for knowledge workers to take advantage of the tools and lean into it so the same way that Benny off is taking advantage of the agent trend knowledge workers are taking advantage of it and they're going to be able to lean into it there's a lot of technology you survive if you don't you die exactly pretty straight forward I just wanted to also point out within videos incredible results two things that happened very quietly and Jensen is clearly open source maxing now he bought hugging face for 12 billion and he did like one of these aquahire deals with poolside for six billion total about 20 billion in in 20 billion in acquisitions which is far less than 1% of the market cap of Nvidia and thank god you can do M&A again in this country but he's now owning the distribution layer for open source if you don't know poolside they make the

28:26coding model laguna so now Nvidia has the place where developers and hackers go to figure out which open source I don't I don't think that's what went over my understanding is that the because Jason Warner tweeted this morning about a new model drop I was confused by this because there could be two things that they're buying the hundred engineers that are going over to Nvidia they could be working on what poolside has which is effectively a version of cursor and clot code that runs you know on-prem that runs in a open source open weight no then they also have a model what I'm saying is they have a model and then they also have this agent harness that that you can direct a coding so I don't it wasn't clear to me in the announcement I didn't read it carefully yeah what did they bought I think we're kind of bearing the lead here by the way it's like look they're reportedly doing these deals with poolside and hugging face and those are big open source acquisitions if the reporting is true but look here is the lead today I think is that first of all

29:28Nvidia had a blowout quarter doing over a hundred percent year over a year a billion a day in revenue now yeah almost a hundred billion in revenue just for the quarter sixty billion dollars of profit 75 percent gross margins I mean excluding one-off items this was the most profit ever generated by a company yes in history jake out let me just underscore what you said in the intro yeah which is really I think the reason why the stock is up 8% today is not just the great quarter but the fact that they guided to 70% growth next year whereas the street was only expecting around 45 percent so that's pretty amazing and that 70% number would have been higher but they said they were supply constraint yes so you know what what is the takeaway I think for the larger market here it is that the AI boom is continuing the other narrative that's going shredded today is that this AI cap X is a bubble it's basically gonna end very soon and what Nvidia is basically saying with its numbers and forecasts is actually this AI cap X is going to continue well into the future

30:33it's got real legs and the amazing thing is that after these numbers even despite the 8% bump Nvidia is only trading at 12 times earnings yes and that reason is people think that competition obviously cerebrus and the point I was going to make earlier I think jensen is going all in on open source based on these two acquisitions hugging face and pool side and I think Sam Altman poked the tiger if you look at what he did he had done that huge hundred billion dollar deal with Nvidia back in 2025 and then he announced the AMD deal and jensen was clearly not pleased about that and he talked about right after Sam kind of did this announcement that he's going to make his own inference chips jalapeno and that he was going to do the deal with AMD then jensen came out was like well by the way we don't actually have to do these investments in open AI and I think he's speedrunning open source and you're going to be able to buy from Nvidia next year just your

31:34entire stack he is going for he is going to own open source and that is a really interesting moment in time for us to look at because we were sitting here six months ago 12 months ago all open source would never catch up he's doing an open source self-driving project and now he owns hugging face the leading open source indexer where everybody goes to try the new models I think this is a this is actually the huge story I think the generalized takeaway should be that you're going to see all of these businesses converge and they're all going to be competing with each other in every which way possible so this idea that you have this very delineated separation of customer and supplier I think is melting away and video still relies meaningfully on the hyperscalers for their revenue I think it was 24 billion dollars in the quarter but they now have built up a neocloud business that was equivalent which is incredible right yes and I think what you're going to see is as more people try to compete with them so now your customers the

32:38hyperscalers are saying we're going to spin our own silicon it's completely appropriate for Nvidia to say well we're going to spin our own models they do that and then you're going to see them go up the stack and host the model then you're going to see them supply APIs and supply inference and they're going to be a cloud provider and so to your point Jason I think the right way to think about it is in business 1.0 it's like you used to be like a capex business right and people would say okay what's your return on investment or you'd be a software business and you're like okay what's your op-ex right and what's your return on investment it's all melting together every company is going to do everything you're going to look at these big companies in five years they're all going to have their own cloud they're all going to have their own models they're all going to have their own silicon they're all going to have their own data centers soup to nuts they're going to go top to bottom and then it's going to be about which is better and that I think is actually better for the broader ecosystem is better for all of us absolutely all right let's keep moving through the docket best since new bond strategy got criticized by his mentor Stan drunken Miller last week

33:3930 year treasury hit a 19 year high 5.3 percent you've been talking about this a whole bunch freeberg so I'm interested to get your take on it I in respond best and double the treasury departments long dated bond buybacks from two billion to four billion on august 19th cmbc reported best and is considering ramping up bond buying and uh Fox business that he wants to put the fear of God into traders that are shorting long dated bond so a lot of intervention is him going on here at Stan drunken Miller best and former mentor published an op-ed in the Wall Street journal opposing his plan his main point was best and is wrong for trying to manipulate prices rather than fixing the core reason yields arising america has a spending problem we've talked about it over and over here 40 trillion dollars no more doge no more cutting costs and obviously we got a war that's quite expensive every five months freeberg I think you said last episode we had a trillion so we're adding 2.5 trillion a year we'll add 10 trillion during this second uh Trump term your

34:41thoughts on what's going on here freeberg in terms of the bond market and best and and drunken Miller going back and forth to mouth you and i can also talk about using a i to write pieces right your life pieces yeah i'll start with the relationship as you highlighted best and and drunken Miller worked closely together and are close in respect each other and Kevin warge in a similar position he was working with drunken Miller the last number of years in his office every day they're extremely close this is a triumvirate that i don't think in history you've had three people who are so close in these positions one leading in kind of market activity with drunken one running treasury and the other one running the fed it's it's pretty unprecedented to have this sort of closeness in those positions and you know i think that what's that yeah right i call it a triumvirate the triumvirate who sees her who's pompy and who's crosses i'm going to leave that to

35:44them to debate but if you pull up the yield curve from uh covid era i think it's worth just taking a look at the treasury yield curve so this shows depending on the duration is it a one month or a 30 year treasury bond so across that whole time duration what's the yield you know how much does the federal government have to pay an interest to get people to loan them money for that duration and so this is uh right around covid era kind of 2020 you can see that because interest rates were low and the inflationary effects of stimulus that came about during covid had not yet hit the market we were looking at sub half a percent sub a quarter percent all the way out to the three year and five and then a slight climb up where you could actually get 30 year treasuries at 1.7 percent again going back in history it's always easy to rewrite history the federal government should have rolled all of its debt into 30 years at this point but the debt is balanced across this treasury curve so let's look at where the treasury yield curve is today so this is what is the market charging the federal government to loan it money to pay its bills and on the low end of the treasury

36:48you're looking at just under 4 percent so for the federal government to borrow money for one month they have to pay a 3.8 percent big uh to the lenders for that money and if you go out the 30 year is now at 5.2 percent so it is very expensive now to borrow money if you're the US federal government and the reason is persistent inflation i would argue because of excess government spending on social programs and other things and the big problem at this point is the federal government is spending so much that if the federal government were to cut spending aggressively the argument and the concern is it would hit unemployment and it would cause a recession because the federal government is such an intricate part of the economy now that's the argument but it's causing inflation and it is causing deficit spending so this year the deficit will be roughly call it two trillion dollars and as a result the market is saying we are worried about the US fiscal solvency over the long run or there's a higher risk as a result we're going to charge you a higher interest 5.2

37:52percent on the 30 year now what does this mean for the federal government well today the federal government's average cost of debt is 3.4 percent that's what we're paying on interest on average on the 40 trillion dollars of debt that the federal government has outstanding for every one percent change in the interest rate the US government has to pay 1.25 percent of GDP in excess interest each year 1.25 percent of GDP in interest each year for that 1 percent change in the interest rate and we're now looking at a 30 year at 5.2 and a short term rate over four so the federal government has a problem because over the next 12 months they have to refinance 10 trillion dollars of debt that debt is coming due those bonds are now due they have to pay the principal back to the bond holders and they got to go back to the treasury market and sell more treasuries to borrow more money to refinance so the borrowing cost now is going to climb up and when that borrowing cost climbs up the federal government's burn goes up and the fiscal deficit goes up so my theory and my argument on

38:59this is there is no action that bests and can take that's actually going to have a meaningful effect on the long end of the curve we have fundamental fiscal spending problem with the federal government right now and i think that the note that drug wrote whether a i wrote it or he wrote it it doesn't matter the point of the note is correct and the note is meant to provide cover to besson he is saying it is not bessons fault or bessons responsibility to solve the yield curve problem it is congress's responsibility is the president's responsibility it is the responsibility of the holders of the budget and the accounts that should stand up and say we are going to cut spending because if we don't cut spending there is going to be a spiral which we are now going to face over the next 12 months as we have to refinance 10 trillion dollars of debt so bessons doing his job as treasury secretary he's saying i'm going to market i'm going to buy treasuries i'm going to try and lower it but he only has maximum maximum maximum maximum a trillion dollars he could use to buy debt he still got to go sell 10 trillion dollars of treasuries in the next 12 months 10 trillion he's got to sell so even if he maxed out his

40:03buying authority in the near term that's only a trillion of buying and then he's got to turn around and sell 10 is the market is the market is and so drugs drugs note is coverage for besson and it's pointing responsibility back to congress back to the president to say guys we have to solve this deficit problem so is this like kf a performative between the two of them and they're kind of like supporting each other I don't think they're allowed to talk I don't think they do talk I don't think that drugs allowed to talk to Kevin or I don't think any of them are allowed to talk to each of it so i don't think that's happening but i think that drug is sending his signal to the market and saying guys this is not bessons responsibility got it the burden's not on his shoulder he can't be atlas he can't lift this earth he can't solve this problem you guys have to act it's not the coverage for besson got it okay that's what i that's what i'm sort of getting that trim off your take here on what's going to happen going forward you know we're past five percent does this break what does it do to interest rate cuts and how bad could this get if we can't get it under control the tactical answer to your the question that you asked before is why is he in the market

41:06buying bonds it's called yield curve suppression meaning when you buy bonds you bid up the prices and the implied yields go down which allows scott to then finance at a lower borrowing cost because then if yields are 5.1 versus 5.3 and then now you're issuing bonds they're marked against that 5.1 print versus 5.3 so if the yield suppression is trying to help what freeberg talked about which is just this refinancing tsunami that is coming okay but look just just take a step back for a second i think the very big issue is that congress is ultimately responsible for spending congress is completely unable to do anything to get these budget deficits under control it is consistent it's not a democrat nor a republican problem it is a congressional problem meaning both sides consistently spend way more than they should so you have the debt growing at

42:107 percent and you have gdp between you know 2 and 4 percent so that's a recipe for disaster what drux said in that note is you have to cut entitlements he's probably right the question is when and who will force the united states to confront this issue who will force the united states congress to confront the issue and what he is saying is the bond market is going to start to do this because that single price is the true reflection of the good faith and trust in the united states and as that yield goes up the very simple rubric is trust is going down yield goes up trust goes down the other thing that i would say is this is happening at an incredibly awkward moment which is that we are supposed to be in the middle of an enormous financial buildout to support ai and if you go all the way back like 100 years you know the industrial revolution the grand bargain all of this stuff the united states

43:14government was the balance sheet right they are the ones that were able to step it and unfortunately because if it's financial situation the u.s. government is not able to do that that's why thank god we have companies like in video and google and microsoft and meta and amazon who take on that burden and so i just wanted to type to this other thing because there's so much chirping by the way on the internet about the balance sheet of in video and blah blah blah and i think people completely missed that these guys are putting the entire us economy on their back a hundred years ago it would have been the us government that did this but the us government is not in a position to do it because congress cannot get their act together on spending the president actually has done something pretty incredible which is on the tail end of those trade deals if you guys remember he was able to find two trillion dollars to pump into the us economy to support this build up but the practical reality is that two trillion comes from other nation states and their processes are long and meandering so you have the situation where all this

44:19money has to be invested it shouldn't be backstopped by the u.s. government it's not in a financial situation to do so the president has done some magic to try to relieve it in the short term but it's only a short term bandit the real solution as freebrook says is congress needs to come to together and realize that they must now fix this problem because if you see yields if you see the 30 year at 6% it is the beginning of a death spiral it's not going to be immediate okay so don't freak out but it is the beginning of some extreme pain and that pain will last years and the only thing that solves it now is getting the budget under control which is a congressional act it must happen whether it's this year or the next year it just has to happen sex the president was quite vocal about cutting costs early on in the presidency but we haven't heard much from the commander in chief about this is the issue that no politician can touch cutting spending it's just too toxic because

45:21Trump's in his final term he's lame duck by definition right it's the second and only term hopefully unless he just has to take a third um but he hasn't been vocal about this and is it just too radioactive for anybody in politics and you got to spend a little time you dip your toe there in in DC is it just too toxic for anybody to take on spending cuts he sent Elon in there that was you know pretty spicy and it's obviously um not occurring now we're not cutting things massively and in fact the the debt's going faster than it had started a year ago so what you're thought here sex give maybe you can move it out from just Trump yeah look part of it is it is a tragedy the commons meaning you've got 435 members of the house 100 senators and they all get a vote and then you've got the president and no one of them controls the spending in fact the spending the power of the purse originates in the house and then goes from there so it is very very hard to control spending when you have so many people weighing in if it was just you know a couple

46:22of people getting together in a room and storing this out they probably could do it but when so many people have an incentive to basically protect their programs it gets very very hard so that's the tragedy the commons part of it and the reality is the president doesn't have a line item veto it'd be great if he did he doesn't have the powers constitutionally to completely rein this in and despite what the resistance liberals say he's not a king I mean he doesn't have those kinds of powers that's basically the heart of the problem and you're right he did back doge to the hilt he's the only president to ever back something like that and what happened Elon got to the point of cutting one agency or one sub agency and the hysteria was so great that they accused him of killing millions of children it was total nonsense but Tesla dealerships were getting fireballed and that's the other piece of this is how do you make reform how do you reform spending how do you reign it in when the media isn't on your side and is not willing to report this stuff accurately that's the worst part of it

47:24I mean the media they don't have an incentive politically to engage in log rolling but they do absolutely nothing to report the story accurately I mean just think about how the media was reacting to all of that so it's really a difficult problem when you start off with the fact that no one person controls it you know it really is this tragedy the commons and then you don't have the media basically doing a good job reporting this accurately so I you know I don't know how we get reform on this and then let me just say that if if the republicans lose control of congress I don't think that's going to make it better because you see now that the political energy in the democrat party is all towards these massive new spending programs that the dsa wants so you know if you vote for quote unquote change by voting the democrats in that's not going to help either because again they just want more more spending so I don't know what the solution to this is freeberg give us a timeline here obviously the republicans love to cut taxes and the democrats love to increase spending

48:25and here we are this has not gotten better through three or four presidents the last person who did this was I guess Clinton balanced the budget but this has been getting worse and worse at some point we're all in agreement this is going to come to do and we're going to have to have some austerity measures when does that hit in your mind is there a breaking point in terms of interest to GDP maybe the people on the other side just saying hey I want 12% you guys have bad debt I want 12 percent on it and we just say we can't pay 12% and we just have to go into a full on austerity measures is there a breaking point if so when well the question is what is it break to we as a democracy have this recursive solution which is as the people feel some sort of pain they react with a vote this goes back to this point about do we break for socialism because what ends up

49:30happening post the midterms so I think sometime between 26 and the election cycle in 28 the inflation problem and remember the inflation problem is fundamentally rooted in government spending so deficit spending is correlated very nicely with the cost of housing with the cost of health care with the cost of education and with the cost of everything else so the more the government is spending on various things the more expensive things get and so inflation is persistent because what we thought were temporary emergency stimulus measures during covid very quickly got normalized and became persistent spending cycles you know if we went back to 2019 we would actually have a budget surplus right now as a country our economy has grown so much since 2019 that if we had the same spending levels as we had in 2019 our federal government would be making a profit paying down the debt and the reality is we've taken this emergency spending and made it a permanent spending we did

50:34the same thing by the way after the global financial crisis in 2008 there were some crazy stimulus things that happened and we persisted that spending and so the question jaykel is really like what happens next so if the inflation remains high people's affordability continues to go low they're going to vote for something that's going to give them a solution and i don't see a political message winning that says the federal government will now spend less we're going to cut a bunch of stuff so i worry that the one way solution here is something that is very damaging to individual liberties to a lot of the rights a lot of the things that make a free market work and that is some of these more kind of socialist principles and socialist candidates assets that's kind of the breaking point so i think it's it's more of like a you know spectrum and then the reaction during that kind of transition phase 26 to 28 can be negative then the next big thing is going to happen around 2030 to 2032 and that's really where social security doesn't have any money to pay anymore

51:34i think during that era is also when a lot of the states are going to become bankrupt or not going to be able to pay their obligations and when the states can't pay their obligations around 2030 to 2032 you're going to have both the social security bailout and restructuring as well as the state bailouts and restructuring and that might be the time that all of this stuff breaks wow and we so you're saying we'll see munis uh yeah and people will default on their debt in the states that would be cataclysmic to have to bail out something like california because the obligations on the unfunded pensions in the states are so significant and not to mention just the debts i mean look california's got tens of billions of dollars it's spent on this stupid real way that goes nowhere where there's no fucking tracks and they're talking about the quality even stop that it'd be the easiest cut in the world like just think about the idiocy like no one is saying we shouldn't do this why is no one saying we shouldn't do this that's the same about the media they don't of dollars of saying anybody who was in favor of a railway to nowhere should just be shamed out of existence like it's just for a train from san francisco to fresno that costs more than an

52:38airline ticket is so idiotic it's like the movie don't look up like look up this thing is absolutely ridiculous turn this thing off why is no one even just saying turn it off it tells you everything you need to know private company built a bright line in florida and they seem to figure out how to do it at a fraction of the price so like what are we even talking about here like private industry if this was a good idea would have built it yes free bird private industry would see an opportunity and they would have built it there is no opportunity across the board these government programs cause more harm than good when the government intervenes in underwriting student loans and gives everyone a loan administrative costs one up by six x and tuition skyrocketed eight percent a year compounding for thirty years because the government said we'll underwrite any student loan the same with housing and now no young people can afford a house the same with healthcare where they said we'll pay people to stay home and not work to take care of people

53:39and we won't check on whether or not they're actually taking care of people and the cost of healthcare skyrocketed you go across every one of these government programs and every one of them has the adverse effect of driving up costs and inflating everything in the root of inflation in this country the core root of it is government spending and the reason we are going to end up becoming a socialist country is because we aren't raining in the government spending and looking it in the mirror and saying guys this is idiotic what are we doing we need to now the markets to Jamal's point are telling us this is idiotic we are not going to underwrite this bullshit anymore and we need to have to your point about media sacks a hundred and surely 60 minutes whoever it is to just say hey this spending this fraud is not acceptable and we need to send people in to go recapture that money this is like we're burning money that we don't the fraud is a layer one there's like 18 layers to this layer one is fraud yes of course you know and given given the

54:39tragedy the commons the structural nature of it that there's no one person who's in control of it you need massive public pressure to control it and there's none of that and there's no effort to create that public pressure by the mainstream media so it's like how do you even get out of this and i don't think it happens that way it has to be an acute moment yeah you're saying that's be a crisis and then people react but then to freeberg's point we may get socialism because people may not connect with the real causes of the crisis are no that's my question for you is socialism is much more likely when you know a hundred years ago when these things are less interconnected america can't decide to do that you understand why because all of our debt is interconnected to domestic actors international actors it's not a decision there is no button you can push to do that and the reason is you would go bankrupt overnight so i think the reality is that we will hit some kind of a fiscal wall something will get terribly broken and like in covid or like in gfc

55:40or like in 9-11 those are the only moments where you can have structural changes in expectations the structural changes that have had the most impact on our lives happened in these acute moments in 9-11 in gfc and in covid yeah and every one of them ended up becoming a never-letter crisis go to waste moment where it always argued in favor of some big power by the government with your question for me okay so you think about like affordability of houses right that depends on mortgage rates 30 or mortgage right now i'm looking at the average is 6.73 percent low under 7 percent it's about 150 basis points above the 30-year treasury right so do you think the average person can connect the dots here that higher spending means higher treasury rates which means higher mortgage rates and that leads you to not be able to afford the same level of house that you would because your monthly payments much higher i mean do people

56:43connect those dots about what's happening no no the people want to blame someone every time there's a crisis this group even us when we get together on a podcast something bad happens we always have this question who is to blame it's the first thing a human does exactly that's the human brother i mean that's the human brain that's how it works it's like there is some problem who do we blame that's the first thing you that you don't think you don't think objectively what's the solution to the problem you think who do i blame that's the first thing you want to do and then the question is when mortgage rates go up who do you blame the current president my congressman blah blah blah reelect someone that's the response and the person that shows up and says i'm gonna give you free housing i'm gonna give you a free bus i'm gonna give you free mortgages i'm gonna take away the land from the landlord and give it to you you vote for that so i do worry that them the kind of mechanistic response to what you're describing sacks which is a very problematic situation for people is the lack of affordability of being able to get a home

57:47is give the keys of the kingdom over to someone that's gonna put more fuel on the fire and the fire is government spending and the fuel is more government spending to try and quote solve a problem that's caused by the fire and i think that's really where i worry about this so i think i know how we can blame doria okay here's the thing our only hope is a i right because only a i can create the exponential growth necessary yes to make our economy grow big enough that we can grow out of the problem yes and if we hold back a i by creating some new regulatory apparatus yes that takes years to approve new model releases then we're cooked i blame gario and canada and pooh those should that those are the three people who are watching i'm just i'm just kidding it's not the dead is not serious fault but i come to all right i'm gonna keep going no seriously come to all in summit listen i want to just but now i mean hey people we are kind of counting on a i as the deus ex machina

58:50to grow away out of this thing and we really need i mean we need more quarters like in video and sales force just posted like we need that to happen for like 10 years this takes to grow away out of this thing one of the things that is a great silver lining is that we're seeing people migrate around the country or to other countries as a way to vote against out of control spending i lived in new york was angeles and san francisco and i did not appreciate how evil the socialist and limousine liberals were until i got to texas after a couple of years in texas i have seen what having affordable homes does to a family and individual you have people in those cities who are so miserable because they can't afford a home they're paying exhortary rents and these people who already own their you know victorian homes etc in san francisco refuse to bill and then in the great state of texas if you look at this chart housing prices since the 2022 peak in austin

59:54are down down not up sacks down 27 percent since march of 2020 25 percent it can be done you need to have leadership that says housing is a priority therefore we're going to let you build more houses it's being done in texas in florida those conservative let the free market work environments let them build the bright line they have high speed trains going 125 mother f***ing hours miles per hour because they let and they got out of the way and let private industry figure out how to build high speed trains this is a distinct issue in certain groups where they want to stop progress they are decaling the creation of homes and when you get homes people feel great about their lives people in texas are f***ing happy that they have a home for 250,000 dollars they're everywhere these things can be solved it just takes leadership and that's what we

1:00:55don't have is leaders saying enough already we're just going to let people build more houses all right let's keep moving through the docket i love a good jcal polemical i'm just f*** pissed off about it because you know she wins a total non-sequitor to it is a non-sequitor in some ways but you know we're dancing around here who's going to be the leader who will say did you practice that before no i didn't practice it i'm just just came to you at the top of your head this is just extensive it's just an upper-aneous yeah well actually i i heard sacks is writer jdus some punch actually me putting on the side it is obviously a leadership issue that's too expensive sure i'm gonna watch let's do a little cyclist here what did you think of drunken miller writing his piece with a i and getting busted and then the wall street journal saying hey it's totally fine i thought that it was the left that virtue signaled but i i actually think it's a class of people that virtue signal okay here we go and they judge and they're judge mental and they can't see the force from the trees and this is probably they're like the loudest troopers in the pita

1:01:59gallery um stand drunken miller is the most incredible investor of our generation maybe sorry maybe like top four he's up there yeah and so just shut the fuck up and read what he says and you have an opinion and you're like oh my god he has an m dash oh my god he used the a i flourish it's like you're missing the script he's telling you what's about to happen sacks you agree you think that the opinion piece is in the wall street journal new york time should be written by a i not the person who puts their name on it's still written by him he didn't say it was written by him he's he admitted it's a hundred percent he prompts he prompts it he shapes it he guides it yeah a more precise way of putting it is the take is his and then he uses the a i to help him write it look i don't get all the pearl clutching about this i mean you got to be pretty dumb these days not to use a i to help you write and he's definitely not dumb this is his opinion it's his take it's consistent with everything he's been saying in the past for decades and in fact the piece sites

1:03:00that many times yeah that he's right yeah the piece mentions that many times in the past he's weighted it on this i think that this clearly came from his mind and he uses the i to help him write it the morons on x should be like wait a minute how does this affect my company how does it affect my portfolio how will affect my 401k what will it do to my parents retirements how should i think about hedging this instead of that conversation all of you people were like oh my god he had he was they i i think you know do you have a problem with this are you one of you as a problem i do think it's kind of the lip syncing of uh writing as a writer i find it offensive to like let the system give your entire opinion as opposed to using it for research which is totally fine use it for proofreading totally fine but to me it feels like i went to see a del and she's lip syncing i really want to hear him don't use excel only go to the guys that use do hand come on no no no here's the thing i would rather say he said the del i said excel don't use them excel spread you i don't trust those guys that only do the

1:04:01spreadsheet calculate that but if you were going to give your opinion and it's not written by you to me that is disappointing that it's not disclosed i think it's a much higher standard to say i'm gonna write this in my own voice sure i could have somebody who's a ghost writer help me polish it i could check my grammar with it i could do research with those are all the value uses but i don't like this idea that you're gonna write something in a i and then i read it and i don't know that to me feels icky and it feels insincere i would prefer people just say upfront i didn't write this but these are i'm kind of in agreement with what the a i magic guessing word box said i find it personally offense yeah interesting opinion i respond sure i was trying to get you go ahead yeah go ahead what do you think is the difference between that concept and having artists be required to disclose whether or not they used Adobe Photoshop and the very specific filters that they used in Photoshop or DJs that use specific software to use create electronic

1:05:02music as opposed to doing analog recordings of the music by hand with guitars or people that for example are using Microsoft excel to create spreadsheets as opposed to writing it all down do i have to disclose that i used excel or that i use the calculator or that i used a synthesizer or that i used a Photoshop as opposed to doing it in an analog way at the end of the day digital tools for creativity and creative output are done in parallel with the human ingenuity and the human craft and the human creativity is expressed magnified and in many cases improved with digital tools and the definition of is someone quote using a i is as nebulous as the rest of those which is am i using quote a i to improve my spelling to improve my grammar to create novel sentences from scratch to create novel paragraphs from scratch at the end of the day if i give the a i a whole bunch of inputs take the outputs and edit that output am i quote using a i this is i think one of the fundamental issues is we treat a i as the standalone simple kind of intelligence replacement system

1:06:05and the heuristic is not accurate with respect to how humans actually use it and how it is like all other tools a magnification of human creativity ingenuity and potential go ahead the reason is the expectation of the reader the reader has a high expectation and this is an important issue and the reason why people were so disappointed in this in a very large way was not because their virtue segment is because they actually care about stands opinion and they want to consume his opinion and make sure it's not the a i swap opinion that's why people felt betrayed by what he did now this is a new they i think they did yes because they also felt the Wall Street Journal betrayed them because the Wall Street Journal should be checking that anything submitted is not a i slot the same way professors should be looking at students work and making sure their papers are not a i slot because we want them to have learned something and they want the same thing when a teacher is teaching that people don't want to pay for a teacher who uses a i slot either and so we as a

1:07:05society have to decide when do we need it to come from the human and understand it's a hundred percent human or sixty percent human and when do we think we trust the aion it i want to hear his actual opinion i have questions many questions a question number one are you suggesting that stand didn't read this thing that was generated or do you think sure he did read it yes okay so it when he read it before you hold on to the question did he okay i think he well he defended it yes he read i hope he did okay so you do you have an issue with the fact that he read it he thought yeah this is what i think boom and hit the send button that's a betrayal to you i think not disclosing it is the betray if you want to rights if you want to give me your opinion as interpreted for the a i magic guessing word box you need to tell me i think i just want to understand now i just want to understand i'm a disclosure i'd like to make but what is this standing disclosure for all future

1:08:06publications that i put out including tweets is that i try not to publish anything without running it through a i first to fact check it to line edit it and to help me make the best argument i can so this is a standing disclosure that if i've written something i published it it's probably been through a i i totally fine with moving and i have more like proofing to be clear proofing fact checking great uses of a i grammar checker great use of a now you're debating the slider of how much he proof checks really different things i understand you don't understand this concept because you're not trained journalist like you don't look but i can tell you there's a distinct difference between being proofread and having somebody plagiarize or write some sh** for you and that's what this is and that's why people object question is stand drunken miller his next op ed is he allowed to use a computer of course of course okay okay okay let me keep going is he allowed to use a word processor or is it just like the no pen i mean you obviously understand he can use any of those tools okay what about grammarly he should disclose it that's what what about grammarly is he allowed to

1:09:10use grammarly for a group of you's drama and a shared holding ground with him grammarly jika what do you think his process was on this post do you think that it was simply delivered to him fully baked and then he just said go with that what the AI detection software said is that this is like that's not what it says 90 percent written by AI i'd be surprised if that was his process i might here's like no and that's just a guess because i don't know this is just a guess i don't know my guess is he had the take and he probably told the AI the take either in writing or just speaking to it or you know essentially speaking to his assistant who basically dictated and put it in the AI and then he probably got an output and he probably made corrections and edits to it and that was probably something like his process i don't really believe this thing was just but out as a i slop and then he'd have said i didn't print it jika this is jika's image of what happened he's sitting in his office in new york he gets in front of a browser he opens chat gpt and he writes yields up bad gets a whole thing prison out and emails emails the op-ed

1:10:20if you can't appreciate the test thinking must have come from him if you can't if you can't appreciate the lip syncing analogy it would be if you had a lip sync okay here's the problem with the lip sync analogy is he's criticizing something that just happened it was this best in buyback policy right he's criticizing his former colleague about something very specific okay that the secretary of the treasury just did what's the lip syncing a lip sync is when you have a song has been performed a thousand times there this is novel and new even more even more evidence of why he should write it himself it's really about the most of the audits he should respect the audience and i'm saying yes to take the time to write it yourself not let the I think I think I think I was part of the audience I'm particularly you can have a different audience that's a lot I I was like oh this is a useful data point for me about totally fine totally a reminder of some people the difficulties of yields but wait can I ask you did you read the article and have an opinion about the substance of it yes there was well I mean I wanted

1:11:22to know if they were coordinated and this was some sort of like no no that's not the sub-sense did you know did you know did you know as a generated before someone printed that on the timeline that well no it came up in my time I know I read it and did not first hold on yes me question let me just answer it came up first I saw the plagiarism the AI slop whatever it's not a plagiarism that's how that's that's how let me tell you I read it hold on I read it when it first came out I didn't see the stuff in the timeline about the software supposedly detecting it it sounded completely consistent with the many other times I have heard drucumular speak about the debt problem okay on podcasts and written versions or whatever I didn't know so if he's plagiarizing from someone he's plagiarizing himself yeah I mean this is plagiarism is he plagiarized right analogy here it's not perfect because this is a new thing but it is so it's

1:12:22not plagiarized it's not let's take hold on the definition he's taking credit for what the AI wrote and I would prefer him to take the time to respect the audience to write it himself because I have respect for him and I want to understand his true opinion not as interpreted through AI just like when I hear somebody sing a song I would like to know that they don't auto tune it and they haven't post-produced it to the point of absurdity that's me I believe the artist should give you their actual art giving you their actual position without using the eye that's just my opinion even the top performing even the top performing artists use auto tune and like all these other tools to basically make themselves sound the best and in a similar way here we know that AI gives people superpowers drucumular said I'm not the greatest writer what makes him interesting is he's a thinker he has a take it's a long held position that he's had and he's willing to even criticize his former colleague and I assume friend because it violates you know his view of the

1:13:23world and he's saying he uses AI to basically make his writing better I don't get it I don't I don't have a problem this is very precious to me I just don't like the idea that it wrote it in full which is what the claim is now we don't know we'll talk to Stanwax at the event we can I will tell you I prefer listening to a band like Mark Knoffler where he actually can write the song play the guitar riffs I prefer that in my art or in an opinion or in a novel to being written by AI that's my preference and that was the expectation of the audience but this is a new now that you know druc will continue to use AI because he said it will you just ignore what he has to say no but I will not think as highly of him and I don't think it's respecting so this so you're saying the substance of what he says will now longer matter to you or you're going to discount the substance less no you just said that I think you're going to I think it's helpful for me I will wonder I will wonder what is his actual opinion

1:14:24but what you're saying the AI contract the grade which will come out okay personally you're going to trust the greatest macro trader in the world less tomorrow than today because he used the tool to write it we're beating it I will wonder if it's actually his opinion and how much work he did and I feel as disrespectful that he didn't do it himself that's how I feel I will wonder it will make me wonder if that is actually his perfect opinion and crisply his because I think he's phoning it in and I just don't like people phoning it in it's only 800 words write it yourself work with a proof reader it's totally fine to do your research that way listen we're going to agree to disagree on this one see I director made an unannounced visit to Moscow John Rackliffe made a surprise visit on Tuesday and flew back the same day first visit by sitting CIA director since November 2021 that was when Bill Burns went to warn Putin not to invade Ukraine he invaded three months later obviously well Sir General reporting Rackliffe was there to warn Russia should not attack a NATO country new US intel reportedly shows Putin could be planning to test

1:15:28NATO's resolve with a limited assault in the next few years and cyber attacks small land incursion etc polymarket says only 21% chance we get a Russian Ukraine ceasefire by the end of the year freeberg you were on fire in the group chat about this what's going on here there's wild speculation Wall Street Journal and others have reported that the message that was delivered was don't invade NATO and don't use nukes on Ukraine so there's been this kind of wild speculation about what this means it just seemed like there's something meaningful going on but to sacks is point in our group chat this is speculation there's no evidence or Putin's made no statement more than that the president I think called into a show to basically say that that story was not true and the contact was routine and then the Russian readout said roughly the same so the truth is we don't know what the meeting was about but you know quite your matter I think

1:16:31it's all speculation I know what it was about oh here we go drugs AI infused memo of the Wall Street Journal the most he was warning he was warning Putin to not use AI to write his next Putin warning his next essay maybe AI we flew over there to deliver a very strict message which is we expect non-AI tool usage because we are journalists at our core yeah I think it's possible Jake how that the trained journalist got this one wrong and we're engaging in wild speculation and hyperbole without actually knowing what the meeting was about I mean while speculations what we do here it's a podcast is the whole point of the show is to speculate what the hell is going on here first of all both the American and the Russian side have denied these dramatic speculative claims that somehow Rackliffe was there to warn the Russians not to invade Europe I actually believe those denials because it wouldn't make sense for the Russians to invade NATO countries this is

1:17:32the same kind of threat inflation that we've heard for years from Neocons about Russia's supposedly imperial ambitions to conquer all of Europe there's simply no basis for believing it and frankly the war is not going badly for the Russians it's certainly taken a lot longer than anyone thought and Russia has paid heavy price and casualties I don't know that the numbers are what you said freeberg but I think if you look at most of the sources now covering the war what they're saying is the Russians are making slow bit study progress and it's Ukraine who is suffering the most first of all the Russians have air superiority the Ukrainians are basically out of air defense so Kiev is getting bombed on a routine basis the Russians are able to pretty much destroy whatever they want at will so the Ukrainian infrastructure is paying a heavy toll and this is coming on the eve of what is expected to be you know a pretty cold winter and Ukrainian power is getting taken out more over Odessa and the Black Sea ports of Ukraine have been bombed and basically

1:18:37shut down so their economy is paying this incredibly heavy price right now they're not able to export grain so their economy is basically getting destroyed and they're running out of money Zelensky is running around saying that he needs another 35 billion dollars or they're going to be out of money the US is not funding that but he's trying to get that from the Europeans and then their casualties although we don't know the numbers are also huge and now there's been stories about them potentially drafting women because they're so low on soldiers keep in mind Russia has four or five times the population of Ukraine so they're able to sustain much greater armies so things do not look great for Ukraine and frankly Zelensky should have listened when President Trump told him you don't have the cards in this war you should make a deal Zelensky didn't want to do that he didn't want to make a deal he still doesn't want to make a deal he should make a deal and frankly I don't think Ukraine's going to come out on top on this thing. Chipotle everybody think you want to add there thanks to meta for solving my biggest problem which is imposing limits on Instagram

1:19:44yeah okay we need to get to that story I'm about to play guacamole with my kids and I can't do it and they have fake accounts and secret accounts and this and that and yeah please thank you should have done it sooner but I'm glad you did yeah I will give them some amount of credit for yeah they got to add kicking screaming to do the right thing but I know the right thing is to I hope tick talking you to do the same thing and it's really it'll make it'll make the life of a parent much simpler it'll allow us to actually parent versus just policing device usage I'd love to see Android and it's exhausting being a part of a child with a device it's exhausting and it's terrible for young women to be on these Instagrams we we held the line to 16 years old but 17 we lost the battle where did you hold the line chip up the kids for social media no my kids aren't allowed until they're 16 but it's that's not the point it's just that look we've talked about this I've been very consistent about this this could have happened a lot sooner

1:20:46I'm glad that it happened I applaud meta for doing what they did I hope that tick talking YouTube do the same thing these limitations are are coming around in Australia and Canada and the UK they'll probably appear in other places it's physiologically and psychologically really helpful for kids to have these limits so yeah these parental control apps aren't that great they do a decent job they don't do a great job so we're always on our I'm always on my back foot as a parent and it's frustrating and I would rather just spend time with my kids on other things other than screaming at the ticket author phone yeah it's a the tools are hard to implement hey freeberg what's going on the summit how we deliver the summit well I'm excited to share with you the be all in summit it's just two weeks away this year we've got some incredible sponsors helping us bring some big ideas to life iron is back as the presenting sponsor of the old summit big thank you to our friends at iron make sure you visit the iron house at summit always great time make sure you visit

1:21:49the iron house at summit that's the onsite lounge where you can kick back relax and hang out between sessions and you this year new you guys remember it for the gifting boutique brought to you by merch calm every attendee fills a bag with all in merch plus special offers from sponsors you walk in you walk out you got a bag full of goods you're going to be very happy oracle is back they're bringing an f1 racing simulator to the summit if you've ever wanted to know what it feels like to take a corner at 180 miles an hour sort of like being in a debate with jcow here on the all in hot without ending up in the hospital this is your chance and e-y is taking care of business bringing their meeting pods which is a quiet space for folks to step out take a call close a deal do meetings which by the way happens a lot at the summit people are doing deals just the tip of the iceberg we've got other major stuff happening to our amazing sponsors and just the tip we are keeping everything else under wraps more fun stuff coming we're excited we will see you all

1:22:49at the all in summit it's going to be a great party hey for a purpose going on with this cancer vaccine and the stock that tripled in the last two weeks we didn't get to it last week but I know I want to hear about it and I'm sure the audience does yeah modernist I think is what you're talking about right yes I think they went from like a 20 billion market cap to 60 billion market cap on the positive readouts from this thing that's being called a cancer vaccine and I think it's worth highlighting how this cancer therapy system works this goes back to the 90s where there was this idea that you could create what are called neo antigens these are small peptides or proteins that mimic a peptide or protein that's unique to a cancer in your body and so that antigen which means that your immune system sees it as an invader causes your immune system to start to make cells that destroy that protein and so by putting that protein in your body

1:23:50your immune system gets activated and it gets turned on to go and find that protein in other parts of your body and destroy that protein so the objective is figure out what is the protein that is unique to a particular cancer make that protein stick it in your body and your immune system will go and destroy the cancer that's in your body and so this immunotherapy the system of basically using an antigen that's designed for a cancer in your body to go and attack it has been around since called the late 90s and there was this big revolution in DNA sequencing where we identified that we could take samples of cancer put them in a DNA sequencer and look at the sequence of the genes the proteins that are made because they're made from genes that are unique to that particular cancer and therefore make a personalized neo antigen that's personalized to the unique cancer that's in your body because all these cancers mutate and they're different and no two cancers are identical how do they get that key for me personally versus you how do you get that

1:24:54they would take a sample of your tumor or cancer cells so when you take your let's say you have you know melanoma and the reason that melanoma is one of the kind of biggest targets for this immunotherapy is that melanomas have very kind of unique DNA mutations because of UV light hitting the skin and so the particular cancer that you'll get in a melanoma that you have is going to be very unique with respect to the rest of your body it's going to be a very unique mutation so they take the little bit of the melanoma they get the DNA out of it and when you do DNA sequencing you multiply the DNA by millions or billions of times you put all that DNA in a DNA sequencer it's chopped up and read and then the sequence data comes back and it says this is what makes this cancer unique it's this little sequence of the DNA and that sequence of the DNA causes that cancer to make a unique protein that is basically like a key or an idea or a fingerprint of that cancer they then take that DNA and make protein from it put that protein in your body and now your immune system

1:26:00goes crazy and starts attacking that protein because it's like oh antigen antigen I got to go get it now that those cells are activated those immune cells are activated to that protein they'll eventually go destroy that cancer so this has been successful there been hundreds of trials with this neo antigen based therapy for many different types of cancer and there's all these trials that have tried to figure out what's the right technique for delivering the neo antigen do we make the protein and then stick it in your body or in this case with what Moderna did make mRNA and stick it in your body and the mRNA causes your own cells to now make that protein and spit it out ends up in your blood and now your immune cells got activated so rather than making the protein X vivo which means outside of your body you're making the protein in your body in vivo and now your body's making the protein so the the idea with the mRNA concept is you can get one shot that shot goes into your body and now your body's making that protein just like we made the COVID vaccine yes and your cells would make a particular protein segment that would activate your

1:27:01immune system and it will go kill that cancer there's other questions around what are the other adjuvants what types of cancer can you use this system for and then combination therapies are there other cancer drugs that you can do this in combination with and the all the trials that have been going on are all about this delivery mechanism the technique that's used the types of cancer the dosing and getting all of that stuff right now what's interesting about this is it is much more of a technique than a drug in the traditional process of it's a process right so the process customized per person so there's some cost to doing it per person that's right but the cost because I do DNA sequencing on my company all day long getting that sample very cheap getting the DNA data very cheap actually doing a lot of the upfront work very cheap now theoretically making the mRNA or making the protein should also be pretty cheap but it's human trials and human safety and so there's a lot of questions around how do you make sure that everything's safe and what's

1:28:04the right combinations that people don't get over reacted immune systems or that people don't have adverse side effects so that's all of the tuning of this but I think what frustrates me the most about all of this and everyone's kind of lauding this is some unique breakthrough and special and powerful and it's not because a lot of people are going to places like Montana and they are getting peptides printed for their particular cancer sequence and they are making their own neoantigens putting it into their body and getting cured of their cancer you can pay someone 50,000 dollars to do this for you today there's a lot of clinics that'll do it and it's not a special FDA approved drug to your point jackel it's a process the process is take the DNA sequence from my cancer make a protein put it back in my body my immune system goes into stories to cancer in my body great idea so why is Moderna saying that they're going to charge 500,000 dollars for this and that's what I think frustrates me about all this everyone's lauding this and everyone's very happy about this but I'm actually pretty sad and frustrated and disappointed by this I don't think that this technique

1:29:06which has been largely developed through several decades of iteration research and development which was largely funded by NIH and other public funding dollars that has led to this incredible concept of neoantigen immunotherapy for cancer which can eradicate or theoretically eliminate many different types of cancer should now be patented FDA approved and charged half a million dollars for people to get treated for this yeah and so what I don't like about this story is that a private pharmaceutical company has seen their market cap go from 20 billion to 60 billion because they went through this regulatory process to create what in my mind is a form of regulatory capture and making the case that it's all about safety and prials and we've got patents and all this other stuff when fundamentally there's an underlying technique that was funded by a lot of public research dollars that I think should be more open-sourced more ubiquitous and every hospital should be trained on how to do this process to treat cancer patients do you think should become much more of a ubiquitous thing do you think that people I have two questions that we can end it

1:30:09on that but do you think they're going to be able to successfully defend this patent in the United States and then also globally because there's obviously a global world here and people do travel for treatments now medical tourism is a thing so if it's a half million dollars here can it be done for 50k in South Korea Japan other places yeah I mean then second he's whatever happened with mRNA and the COVID vaccine and a lot of the concerns people had we never got an update on that but obviously this podcast started during all of that and that was the first rollout at scale correct for mRNA yes the technology for you're a museum yeah for you're about Moderna was working towards this mRNA based cancer we're calling it a vaccine but it's a really immunotherapy because a vaccine means you prevent yourself from getting something whereas in this case you're actually getting rid of something you already have so I don't like the word vaccine but Moderna worked on this for years and they never really kind of got to market with it and then COVID came about and they pivoted very quickly and got this COVID vaccine out Moderna has a whole

1:31:12bunch of patents on the techniques and tools that they use to make mRNA and to make sure that it's not integrated into the human genome and it doesn't actually use a traditional kind of replicating system so you can't actually replicate that mRNA which means it won't start propagating in your body because your cells typically might start making copies of RNA if it ends up in your cells so there was a lot of stuff that Moderna developed that made their particular mRNA technology patented and safer and so on so I think that they do have strong patent coverage on their particular set of tools for mRNA but when I described earlier so if I take the sequence of your cancer cell and I look at the DNA of it and I'm like I found what makes it unique there's this little sequence and now I take that sequence of DNA and I can stick it in a bacterial cell E. coli in a little tank by what's called a bioreactor and that bacterial cell will now start to make that protein because I've taken the DNA and put it in the E. coli cell so now the E. coli cell is

1:32:15holding that DNA into RNA into proteins because that's the sequence right DNA turns into RNA turns into proteins so that E. coli cell there's billions of copies of those cells they make billions of copies of the protein you isolate the protein out of the bioreactor and you can inject it into your body and when you inject that protein into your body and now your immune system gets activated so you don't necessarily need mRNA as my point and mRNA is a really effective way of doing this it's super cheap because you don't have to go make all the protein outside the body you can literally just print the mRNA and get one shot and you're done but that end-to-end system the real cost of doing that is very low and so this is one of those things where we have a very big fundamental question that we should all be asking which is like should we be giving the monopoly on cancer to this company that went through this FDA process and filed a bunch of patents on certain techniques but the general theory the general thesis the general therapeutic process is well described well understood generally understood and should be available everywhere and I think over

1:33:16the next couple of years we are going to see this cancer immunotherapy based system start to proliferate and you will see this happening overseas very cheap it is very efficacious and we actually have a friend in common who's kind of standing up a business to do this in a very cheap way up in Montana where you have a right to try and they can make this stuff so we are going to see I think more of this come to work but it is for certain types of cancer very efficacious very safe very effective so I'm excited by this news just for people who are listening who are normies all of this cancer treatment requires early detection and that's something that people have been working on with the blood test the gallery I believe it's called so getting to the cancer and getting regularly tested is a critical part of this yes so you're talking about a gallery test by Grail the blood test yeah the blood test yeah just early testing is the key piece for all of us to keep in mind get tested early and often for cancer yeah and and remember there's a bunch of these new what are called modalities new modes of therapy therapeutic modalities that are being

1:34:21used to destroy cancer one was carti therapy where you take t cells out of your body and you use crisper or some other system to reprogram those t cells to go after remember that protein I described so you actually program the t cells to go find a specific protein in your body and destroy it so they go find the protein that's unique to a specific type of cancer cell and the t cells get put back in your body and they destroy it carti therapy carti therapy costs a million dollars and for people with blood cancers where the cancer cells aren't clumped together in a tumor but blood cancers the cancer cells float around individually in the blood and so by putting t cells in your blood it's very easy or it's much easier for the t cells to find the the cancer cell grab them and destroy them and so for blood cancers like multiple myeloma the efficacy is incredible with carti therapies now so that's a new type of modality this is a new type of modality this uh anti-arony or neo-antigen therapy so there's all these new techniques that are being used to

1:35:23destroy cancer and I think in aggregate we should be very excited and optimistic about where this is headed wow thanks for sharing and let's hope for the best with implementing this and I love this right to try that seems to be something we should talk about in a future episode we'll see you all next time on the All I'm Pocket bye bye i'm going to and it said we open source it to the fans and they've just got crazy with it i'm going to be west and i'll be queen of kinwa i'm going to leave what what your winter's like oh my god my besties are gone i'm going through that that's my dog taking it away she's driving away she's sitting next to me oh my god my hamlet is actually a meaty athlete so we should all just get a room and just have one big hug or two because they're all it's like this like sexual tension that we just need to release it out what your that be what your

1:36:23your be be what good good we need to get besties aren't that i'm going all in i'm going all in