How good do I look I'm so
Sunkist how many how many buttons down are you? Oh my God. I have three buttons. Okay, Leslie
Vaughn's know like look like that.
Is there a button below that we can see? It's their opinion.
See,
are you free buttoning and free-balling it or just both happening or what?
Rain, man. Damn it sighs.
Hey everybody. Welcome back to be all I'm pod this week our hostess with the mostest Jake Al is out with covid getting treated spending the day in bed. We wish him. Well, we wish him a speedy recovery. We are going to plow forward.
Word like all championship teams do this week. I think we're going to kick it off with a conversation about the election update. Obviously Harris came out guns a-blazing in the media the Accolade seem to be flying and the polling data is starting to become more worrisome. It seems for the Republicans just this week Nate silver released his newest model update the silver bulletin. I think he's got it trademarked as nowadays.
And in the model he tries to estimate. What is the polling data show us with respect to the Electoral College and the popular vote in the upcoming presidential election. Harris currently has a forty two point five percent probability of winning the Electoral College Trump 56.9% Kennedy coming in at zero percent on the popular vote. Harris has a 57.1% probability of winning the popular vote 42.9%
percent probability for Trump. I guess I'll start it off with David Sachs x given the momentum coming out of the gate since the announcement of Harris as the Democratic nominee and this recent polling data. What's your read on the landscape today? What's your read on where we stand and what's ahead here? And what do you take away from these polls?
Well, look, I think what happened is that Biden dropped out of the race. He abdicated Harris took over and it created a sense of euphoria.
Yeah on the part of the left because they thought they had a short fire loser with Biden and they were divided and then once Harris replaced him they thought okay now we got a shot and we can fully unify and get behind this this new candidate. So what you've seen is over the past couple of weeks the mainstream media has gone all out on behalf of Kamala Harris. And yes, this has led to a rise in the polls, but I think that the highs at Trump we're at we're always a little bit artificial.
Well in the sense that if the Democrats could field a candidate who could campaign it was always going to be a close election. Biden was artificially depressed and the polling because he just couldn't campaign. He could barely read from a prompter he can do interviews. So I think you're seeing the race normalizing. This is going to be a close one. It's going to be a nail-biter, but I think the question about this honeymoon period that Paris has right now is whether it's sustainable.
She has not done any press interviews. She's not done any press conferences. She's not answered one question. She's not been asked one tough question by the media. She has only read from a teleprompter. She's only done scripted appearances and yet at the same time. She's basically been changing all of her policy positions in running from every position. She ever stood for so
For example, she said that she was in favor of single-payer. Now, she's against it. She said she was in favor of Court packing now. She's against it. She said she was against fracking now. She's in favor of It On the Border. She said that we should consider abolishing ice now all of a sudden. She's in favor of more funding for Border Patrol on crime. She used to take kind of the the BLM position that you know cops don't make us safer to now she's saying that she's a cop and prosecutor herself. She used to be in favor of federal gun buybacks. Now, she's
Oz them I just goes on and on I mean in the 2020 riots she raised money for the legal defense of riders now, she's distancing herself from those positions. My point is this is that after spending really your whole career staking out positions on the far left. She has now dropped all of these positions for political expediency. And the question is what does she stand for at all? It does she just kind of blow with the wind and say whatever helps her when whatever the next election is. I mean, I think that's
That's basically what's going on here. And normally what happens is the Press would ask you that question, but she's being a free pass because the mainstream media is basically been operating as a division of the DNC and they're not holding her to account in any way. They're not requiring her to answer any questions and as a result. Yes, you're seeing this this bounce in the polls, but I think the question is can she staying this for 100 days? Can she really get through the entire election without having gone through a primary without ever having to
explain her positions on issues and she just does the short scripted appearances. I just think that at some point over the next hundred days that approach is just going to fall apart. She's going to have to do a debate. It's going to answer questions at that point. I think the bloom will come off the rose a little bit here and you'll see the polls normalize.
Do you think that JD Vance has negatively affected the interest in prompt that he you know, there's a lot of media coverage about
Vance being potentially the wrong pic provides president and that he's creating more of a challenge for the president's campaign then a
boom. No, listen, anyone who Trump chose was going to be absolutely smeared by the other side and by the media if it had been Doug burgum, they would have been non-stop coverage of the six-week abortion bill that he signed right? You can go down the list. I mean, look what Democrats will say is we just want to see a moderate Republican, but when Mitt Romney ran they were calling him a fascist.
So the reality is that the mainstream media and the DNC but I repeat myself are going to smear anyone who's picked at the end of the day. I don't think that it matters. What matters is the top of the ticket
come off. What do you think about the Harris campaign how it's going and the momentum that is being projected in the media and the polling data is clearly demonstrating an improvement over Biden's standings in the polls. I mean, I think we had a situation where one candidate was not real.
And so sacks is right that a lot of the polling up until basically last week. It's not really reliable. Now you have this snap back effect, which is more about a lot of people that were coming around to this idea of voting for Trump because Biden was such a bad option now flip-flopping.
And so I think that's what explains the snapback.
But sacks is Right 100 days is a really long time and what Nate Silver's poll essentially shows is if she wants to win not the popular vote because at this point now three or four elections in a row that just doesn't matter anymore. If you want to win the electoral college and be the president, you got to go and win five states. And in order to do that. You have to be very precise on about four or five specific issues.
And in the absence of / defining herself on those four or five issues, she's not going to win she'll win the popular vote. But again when people win the popular vote and lose the Electoral College, we've now gone through that enough times where that's just at the complete inside of American electoral politics. So I think that the Trump campaign and the hair is campaign need to agree on some schedule of debates. I hope that they do too and ideally three and that they both get after it in front of
Each other so that those five states that are really going to decide this election has an opportunity to make a decision on behalf of the rest of the country. Yeah and make if you pull that chart back up again based on Nate Silver's model of poles where he takes all the polling data that's been collected by different third parties. He waits them based on the performance of those polls in terms of predictive power historically and he creates this kind of macro model. That's the Nate silver approach here. He's estimating that within the 80%
Bound every state on this list is up for grabs. As you can see with the gray lines shown there. There's a very slight margin on the average in Wisconsin for Trump in Michigan for Harris and Pennsylvania for Trump in Nevada for Trump in North Carolina for Trump in Virginia for Harris and so on but each of those margins is so slim that there's still quite a lot of decision-making ahead for voters so pretty clearly
Lee on point that this is still very much an open election, I'll give you guys my read I think that there's five camps of Voters.
Going into this when Biden was the candidate the first is anti Biden anything but by then the second is anything but Trump the third is provided the fourth is pro-trump. And then the fifth is the other and I think that that entire bucket of anything but by 10:00 just became available once Biden dropped out of the race and it was a pretty sizable bucket that there's a large number of Voters out there that felt pretty strongly that by ten poses such a significant risk for
up in this country because of the mental issues and the performance issues that we had seen that as much as people didn't love Trump they were willing to vote for him because he's not biting on now that camp has an option and that option is Harris is so some percentage of that camp and I would say probably a supermajority of that camp is now switching into the Harris bucket the pro-trump bucket doesn't move the pro Biden bucket probably doesn't move it sticks with Harris and the anything but Trump bucket doesn't move.
It sticks with Harris. So, you know the fact that there is probably such a sizable number of Voters in the anything but B in Camp is what's probably helping Harris at this point and creates a bit of a handicap for Trump going into this last stretch of the campaign. That's my review because I know I know a lot of people with that point of view that's interesting point of view and let me meet us respond to that for a second.
so one of our critiques of Biden not just in this election cycle by probably going back ear is that Biden had become basically a figurehead president almost a construct and he was fronting for a shadow cabinet or a group of powerful staffers who are really running the country basically because of his cognitive decline and we sort of joke that whoever the White House intern was who is running the social media accounts or the staffer who is running the teleprompter was basically the president because they
Could dictate what Biden said now, I think the question to ask is has anything changed Kamala Harris refuses to do any interviews. She doesn't want to do any unscripted appearances. She's abandoned all of our policy positions that have been long standing and where the reason why she ran for president the first place in 2020. So the question to ask is do we still have a construct as the president? I mean the Biden staffers who are running Biden are now just running Harris. We don't know what she
As for we don't have her appearing in unscripted natural appearances. We don't have her being challenged by the Press. She's not willing to do what Trump did Trump is walked into the lions den yet again at the nabj
social Association of black journalists
be right. Exactly. So Trump walks into a very hostile interview at nabj Harris was supposed to come and she didn't come she would have gotten a very softball interview. She's not
even willing to do that. I think that is substantive terms. I don't think that much has changed this election. The Biden staff is still running for president. I mean, that's what you're
voting for. I would disagree on this because I think in the last two weeks what I've seen is statement coming out of the Harris camp that clearly distinguish her and her campaign from Biden's policy positions and Biden's campaign rhetoric historically most most particularly sax is on Israel when Netanyahu came to visit the United States,
She put out a very pro-israel statement that we all know the Biden Camp has largely avoided doing because of the concern over the pro-palestinian rights movements reaction to the Biden camping Propel pro-israel and the Harris statement was pretty finely worded and pretty strongly worded that she is very much in favor of Israel defending itself. She acknowledged that there is a loss of Palestinian life that matters and we need to acknowledge and address it but she was very much in support of Israel, which is not a position.
We've seen the by the cam take and I think that we're starting to see what you know, what is a little bit more of a fracturing between Harris being allowed to be free and being allowed to have an opinion outside of the party line dictated by the bite and camp and I think we'll probably see more of that in the next couple of weeks and will probably see her starting to be a little bit more refined and what that what differentiates our from Biden because I do think that's what's going to allow her to win this election and he's going to stand up and say Here's why I am not Joe Biden and here's what makes me different from that in.
Rachel I respect him. I love him. He helped me but let me tell you why I'm dead why I'm different and why that should matter
she snubbed Netanyahu Freiburg. I don't know what you're talking about. She snubbed
Netanyahu. I think you're an example of the people that want to give her the benefit of the doubt. Okay, I think there's a large fraction of those people. That's not true. Don't know that's that's not a fair way to characterize me at all. I'm simply pointing out that she made a state. I'm pointing out that she made a statement that's different than what Biden said. That's it. That's all I'm saying.
Hold on a second, I think on Israel. So first of all,
She didn't write that statement the staff did. Okay. Now what is the staff trying to accomplish on Israel? They actually have a genuine Dilemma on the whole Israel Palestine issue because the Democrat Party is very much split on this the Democratic establishment is pro-israel, but the progressive base is very pro-palestine and even polling among youth shows significant support for Hamas even and a lot of these people are very much within the sort of Hardcore left-wing base the Democrat Party. So what the bite
Stration has been doing and what I think Harris is continuing is a process of talking out of both sides of their mouth bite in went to Israel bear hug be be basically supported his policy, but then gave some lip service to the idea that he would limit the weapons that Israel is able to use Harris pulls out this very pro-israel statement, but then snubs Netanyahu at that speech he gave before Congress. So look the Democrats are trying to have it both ways. They have a base that
it is fractured on this issue. And so they're trying to thread that needle now, you're right that lets us up a level and let's move off the Israel issue for a second. There's no question that Harris wants to run from her record as being Biden's vice president is a good reason for that. The Biden Harris Administration is historically unpopular what you have to ask though is whether it's credible Harris suddenly is in favor of more money for border patrol. Why didn't she advocate for that when she was?
Biden's borders are the media is fiercely scrubbing as websites to remove voices. Hold on. They're removing historical references from during the vitamin situation when she was openly called the borders. Are there trying to memory hole that so look I have no doubt that the Harris campaign wants to drop every substantive policy position. She's ever taken because they just want her to be a construct. They just want people to be excited
because I do think that what you're saying is exactly what she needs.
Has to answer to in public in the next couple of weeks to earn credibility on what is she different from the Biden Administration on in terms of policy? And why did she not make that clear when she was in the Biden Administration and she can say I didn't agree with it or she can say I've changed my mind and I think both of those might end up being where she needs to go to but you're right. She does need to answer to that. I don't think it's clear. She has to do any of that. You think she can just hide out and and Coast know right now that I've right now the calculation is to
It has many people to basically move into the not Trump voting stance and they're giving as much time as possible to measure that and see if it's a winning strategy. But again, and I think we just talked about this mathematically it can win the popular vote, but it will not win the electoral college. So she is going to have to appear and be in a position where she's confronted on about four or five key issues and that's where this presidency is going to get.
Decided 45 issues in 45 States and we'll all know where she stands on the border on the economy. By the way, the problem is and if you look at what's happening now, we are in a recessionary stance. There's going to be a lot of ink that gets spilled starting in September on the fact that X of a handful of companies were basically in a recession. So that's going to have to get put on the feet of the sitting president and the sitting vice president. So there's a whole set of complicated issues. I think it's smart.
Actually for her to strategically kind of stay quiet right now and just kind of see all the Goodwill that spent up to the not Trump candidate is going to flow her way, right? The problem is that that's not enough to sustain yourself for 100 days.
And so she's just going to have to take a point of view.
Well, it might be if the Press lesser got away with
it. No because I think David I think you're right because one when you go into a debate or when you go into these places people will want to know the answers to these questions. And if the media tries to memory hold this thing, I think the thing that they most don't want which is another Trump Victory will actually happen because of it because people will come in this kind of like ambivalent group of
folks that are or independent group of folks that are looking for very clear point of view on 45 issues. Maybe we'll come to a rally and instead of that bill here making the stallion and they'll Wonder themselves. Well, this is not what I came for. I came to know where you stand on these four or five issues. So the media actually in order to give her the best chance of getting elected and this is counter-intuitive to them which is why they probably won't do it. They'll have to confront her on these issues.
Yeah, I think that's fair and that's why I invite vice President Harrison to the island podcast and join us our conversation. I think we should all really enjoyed that and just to declare my position. I am in Camp 5 the other Camp. I am not pro or anti either of these candidates. I obviously have issues that I think are far more existential to the longevity of the United States and the Republic that need to be addressed that don't seem to be a priority for either candidate or either party as I've mentioned many times on the show. That's where I stand.
Let's move on sex. I'll just want to ask do you think that Trump is at risk of shooting himself in the foot by being too public too open and to engaging if we take a look at what happened this week, the National Association of black journalists had a convention on Wednesday. It's an interview requests to both President Trump and vice president Harris and Trump accepted in went in person. Here are said she couldn't do it in person or via zoom and according to the National Association of black journalists. Harris is in talks to do a Q&A session with them at some point September. There were two moments that are making a lot of news.
Choose one was the first question Nick. Can you play this? Where atc's Rachel Scott went after Trump? A lot of people did not think it was appropriate for you to be here today.
You have pushed false claims about some of your Rivals from Nikki Haley to former President Barack Obama saying that they were not born in the United States, which is not true. You have told for congresswoman when the color who were American citizens to go back to where they came from. You have used words like animal and rabbit to describe black.
Strict attorneys you attack black journalists calling them a loser saying the questions that they asked our quote stupid and racist
you've had dinner with a white supremacist at your Mar-A-Lago Resort. So my question sir now that you are asking black supporters to vote for you. Why should black voters trust you after you have used language like that. Well, first of all, I don't think I've ever been asked a question. So in such a horrible manner first question
don't even say hello. How are you? Are you with ABC because I think they're fake News Network a terrible, but I think it's disgraces the car that I came here in good spirit. I love the black population of this country. I've done so much for the black population of this country including employment including opportunity zones with Senator Tim, Scott of South Carolina.
Which is one of the greatest programs ever for black workers and black entrepreneurs doesn't so much
and you know, and I say this
historically black colleges and universities were out of money. They were stone called broke and I save them
and I gave them long-term
financing and nobody else was doing it. I think it's a very rude introduction. I don't know exactly why you would do something like that and let me go a step further. I was invited here.
Here and I was told my
opponent whether it was Biden or Kamala. I was told my
opponent was going to be here. It turned out my opponent isn't here you invited me under false
pretense and then you
said you can't do it with zoom. Well, you know where Zoom she's going to do it with zoom and she's not coming and then you were half an hour late just so we understand I have too much respect for you to be late. They couldn't get their equipment working or something
was wrong. I would like to think it's a very nasty question.
Answer the question
sax. Is he shooting himself in the foot by agreeing to show up? He showed up the Bitcoin conference which obviously went phenomenally well, but tax. Is he shooting himself in the foot by being too open and engaging too much and should he lay low?
No, I mean look, what kind of President do you want? I mean I want the president who is fearless and willing to walk into the lions den over and over again and answer tough questions. What you saw in that sound bite here is that Rachel Scott the interviewer that whatever she was doing is not journalism. This is supposed to be a journalism is
Association she turned that interview into an ambush. It was it was hostile what she did and right out of the gate. I mean the first question she's attacking him and he pushed back on it. I mean, I think you saw him push back on the media in a way that only Trump can do now you also heard there. I think a really key point that Harris basically passed on the opportunity to attend when she was originally supposed to that would have been a softball interview for her, but she is not willing to do any kind of interview right now. No questions. No one sir.
Disappearances. She just wants to read from a teleprompter that rallied she did not land up that had Megan the stallion perform. So as a free concert that Drew out a huge number of people then Harris book for 17 minutes and people were leaving five minutes in because they're just there for the concert. I guess the question that people need to ask. I understand why this is strategic for her. I mean obviously it's better for you. If you don't have to take any positions whatsoever and you can just abandon all of your previous position.
Missions without any explanation whatsoever. And the media gives you a free pass on that. I can understand why that strategic but I think that voters need to ask the question. Who do you want representing the United States right now in a world that's on fire. Who do you want to stand up to Putin or G or make peace with them? Who do you want to stand up to or be allies with Netanyahu? For example, the United States right now is in a very difficult situation. We can't have a teleprompter President. We need a strong president. I appreciate the
Fact that Trump is willing to take on all Challengers. I just think it's manifestly clear that these are the qualities and traits you want in a president United States.
Okay. So your opinion is Trump needs to continue to engage openly and publicly it shows strength and it shows a capacity to deal with adversity and conflict point taken. So let's pull up the next clip where Scott then asked Trump if Harris was a d EI candidate and here's his answer.
I've known her a long time.
Actually, not directly very
much and she was always
of Indian Heritage and she was only promoting Indian Heritage. I didn't know she was black until the number of years ago when she happened to turn black and now she wants to be known as black. So I don't know is she Indian or is she black is always the
Black Irish. I respect either one, but she obviously doesn't because he was
Indian all the way and then all of a sudden she made a turn and she went she became a black
A crispy clear, sir. Do you think somebody should look into that too? When you ask a continue in a very hostile nasty? Turn to Mark. Let me ask for your response. Did Trump shoot himself in the foot with that comment.
And maybe you can give us your read on how he's doing with respect to this, you know active engagement with obviously adverse. Let's call him, you know journalists and interviews and forums. Well, I'd like to I'd love to hear from the Caucasians. What do you guys think about that? Yeah. I'm not talk about the answer itself. I'm talking more about Trump getting out there and like engaging in this way. Yeah, here's what I will say. I think that
from now until the end of time.
with social media tools replacing traditional media
and then with a i tools that are going to create enormous amounts of very sophisticated misinformation and disinformation. I think the only strategy for politicians from here on out is to leave zero ambiguity between what you think and what you say
and so without judging the quality of the answer. I think the thing that is going to be the most critical for people is to know that the person that you're voting for is in charge and you get a great chance to vote this person up or down and the more content that that person puts out directly the less likely it is that this ambiguity exists that can then get exploited whether it's by internal people inside of a country or whether its foreign adversaries and so my perspective is
is
it's pretty Fearless of somebody to just constantly say what they think and again I'll just go back to where I what I said before with respect to the Harris campaign.
I think that Americans were smart enough and I think you did a good job of dissecting the electorate into five groups Americans were smart enough to basically say never Biden because of the risk it represented to not know what one was voting for irrespective of whatever your historic allegiances were. I think they're smart enough now to demand answers to the four or five questions that really matter and I think if Paris wants to really win this and give it a legitimate shot. She's going to have to take a point of view on these five.
Five things and she's going to have to step into the lions den and be asked very tough questions by a lot of different people and she's going to have to leave no ambiguity that can be then exploited by misinformation and disinformation between now and the election. So, you know, that's honestly my reaction Sachs final
word. Yeah. Look I would say that in that clip and other clips from that event. I think you should pay a lot of attention to the audience's reaction because what do they do in that moment when Trump was supposedly
Committing a faux pas or getting into dangerous territory. They laughed.
You know when Mitt Romney spoke to this group a number of years ago when he was running for president. He got booed Trump never got booed. He got a lot of laughter. There was a lot of appreciation why because Trump is always authentic. He's always who he is. Whereas Mitt Romney always appears to be scripted and frankly sort of patronising. So I think the audience appreciated from for who he is. I think that when Trump goes into these areas, there's always a grain of Truth to what he's saying. I think that Harris has leaned into
Front parts of her Heritage for different audiences, but I do think that this is ground. He should get off of and I think a much better line of attack is to talk about the fact that she has brought all of her left-wing policy positions and refuses to answer questions or do unscripted appearances without having a teleprompter in front of her. I think that's a much better. Well, I agree and I think that's what the campaign will be about from here. I you know, I don't I don't think we want this campaign to be about identity.
I do think that the rise of the authentic politician and the rise of the authentic CEO. / typically Founder The Rise of the authentic celebrity is definitely the trend that we're seeing which is that authenticity counts for more than anything regardless of one's position and you know, obviously having trust in in the individual it's rooted in the authentic capacity of the individual rather than the teleprompter CEO or the teleprompter politician.
Or the teleprompter or buttoned up or image manage celebrity and that's definitely been a trend that's been building over the last 10 years culminating in a lot of these changes, but we're now seeing
I mean look just think about this thing. I was going to happen over the next four years of Harris is elected. I mean, you're going to have a prompter president. I mean, she's just never going to be off prompter. It's going to be like buying at least try to go off prompt or whatever. He did. It was a disaster. But at least he tried
this is one of the criticisms of a lot of higher.
Large Enterprise CEOs is that they come in they have their all their words written for them by our media team. They have all of their Communications scripted managed. Every press interview is with the right journalists said in the right way and the CEO's that seemed to build the greatest value are those who are typically Founders because they're willing and able to be authentic because they weren't hired by the board. It's their business locally built. And so they're willing to be authentic and thus the CEOs
those who operate at scale with authenticity build the greatest market value. I
agree with you that whether you're a CEO or you're a politician authenticity counts, but I think this election is going to be a test of what people want in their present. I mean, do you think the president needs to be a chief executive who some levels calling the shots or do you think it's good enough for the presidency to essentially be a construct and to be a manifestation of the staff, right? And it
t many people I mean I think voters
Good policy sacks and they look at character and with respect to character. There's a certain value that they ascribe to this authenticity component, which is typically lacking in most politicians and prompt delivers that authentic component in how he talks and how he's off the cuff and so on. He's got other character issues, which I think hurt him and on the policy side it people really kind of look at those objectively those points. What's your what's your policy? And you know, do I trust you is your character?
Right, but see I think it's more than that because I think any large organization needs a chief executive what happens when you don't have a chief executive or you don't have a strong chief executive you get drift the organization strategically
drifts not represent. Yeah, even from the bottom instead of from the
top. Yeah, the decisions that get made are the result of bureaucracy and political infighting staff exactly. You need someone to control that and I think it's really interesting that when Biden was still the candidate, but everyone could tell that he was sort of impaired that the
Arguments you started hearing from Democrat partisans. And the media is that well, you're voting for a team. You're not just voting for a president, right? You're voting for a shadow cabinet the exactly the thing that we criticize on the spot for the last year. My point is that you're still voting for a shadow cabinet. Unless Harris is going to get out there and answer questions and be unscripted. You're just voting for a staff and I don't think that's good enough. I don't when we're in a world where we're in a proxy war with with Russia, and we could be in a war with China and
These problems in the Middle East. I want a decider. I want to know that the buck stops here. Not the buck stops, wherever
let's shift topics. I'd like to talk about what's been. I think a lot of chatter amongst friends of ours who are active in the market that at a policy meeting on Wednesday the FED held rates steady. Your old pal said quote a reduction in our policy rate could be on the table in September if inflation continues to fall. He said we're
Getting closer to the point at which it will be appropriate to reduce our policy rate, but we're not quite at that point. The next said meeting where this racetrack could happen is September 17th and 18th. And if you look at the the Futures markets today, the market is now estimating a 20 percent probability of a 50 bit rate cut in the September meeting 80% probability of a 25 bit rate cut and basically
No probability of no rate cut anymore in September to moth is that your read on where we're at and you know is the Fed kind of appropriately reading the economic tea leaves given the recessionary indicators that you just mentioned earlier and what else we're seeing that the feds mandate obviously is meant to support both monetary policy, but also employment in this country. I think we're in a recession and I think the problem with a recession is even as
ation
diminishes if you're purchasing power is shrinking faster than prices fall. It still feels like prices are going up. I don't know if you guys have been reading the Wall Street Journal but like the last couple of days they've been doing a whole series on people that have been left behind by inflation.
And I was really surprised as I read those articles just the sheer quantity of impact in terms of the number of people. It's touching independent of salary. And so
my takeaway kind of just reinforced the fact that we've sort of like looked past the problem because of the stock market going up for the last few quarters because of Seven companies, and now that people are sobering up to the reality that even they don't have an answer for all the money. They're spending.
The stock market's down next to those seven businesses and I think that you're going to start to see some real pain in the fall. So Jerome Powell is probably going to cut 25 and and he and and I think that if they get to him he'll try to cut 50, but the problem is it won't solve the problem and I think if this is again where Kamala Harris has to be she's gonna have to make a very difficult calculation here, which is she's going to have to throw Joe Biden and the economic team in the White House under the bus here and say that was them. Yes, they
rude it up. It was against my wishes and here's my vision for how we fix this because otherwise the Republicans will be all over it. And I think if you have a bad economy, like what it looks like going into November it's going to be very difficult for the Democrats to win the White House. Well without bringing it back to politics sex economy good or bad and is Jerome Powell going to cut rates 25 B 50 B you agree with what the markets forecasting?
I guess what I would say about the economy, is that in nominal terms?
Not in a recession according to the data that's come out the Q2 GDP was roughly 2% GDP growth. However, I think there's a couple of problems one. Is that what we've seen over the past year or so is that the economic data that comes out keeps getting read forecast down so they put out a provisional number or an estimate and then when they finalize the number three months or six months later, it always seems to go in One Direction. We've seen this over and over again with new jobs being re forecast down.
Out and we saw this with the q1 GDP where initially reporting things like a 1.8 percent number and then I got restated down to one point three percent. So the Q2 GDP number was around 2 percent it was good. But again, it's a provisional number and let's see where it actually ends up. The bigger problem is government spending. The deficit is running at 6% of GDP. Whereas economic growth is at let's call it charitably 2% Well government spending is included in
In GDP, so if you were to to balance the budget, let's say that you were to make government live within its means and not have a deficit. We would have negative four percent GDP growth. So the only reason why we're in positive GDP growth territory is because of massive government spending that we know is not sustainable and at some point the bill is going to come due for that.
So I have to say that.
You asked me is this a good economy. I mean, it's not the worse but there's definitely unsustainable things propping it up. And I do think that the bill will come due at some point for this.
It's not just fully supported. It's overly supported by the federal government in the United States. And I mentioned this last week federal government spending is over 2 x the sum of all state spending federal government spending into next year with the bite and budget proposal seven point three trillion dollars. That's like 30
ENT of GDP and I think you guys may remember this analysis. I pulled together a couple months ago where I estimate something close to thirty percent of us employment is either direct government employment or indirect government employment through government payments to third parties that are employing those individuals. So the government is becoming an integral part of maintaining the flow of dollars in the economy because they are such an integral buyer.
And seller within the economy and an integral employer within the economy. And so to reverse that trend is what I worry about more than anything as I've shared many times which is why I question whether either political candidate actually solves this problem for us and we're almost like, you know arguing over which marbles I get while the Titanic is sinking that there is a real fundamental issue with how this economy structured. I will tell you anecdotally. I have a lot of conversations with folks that work in the agriculture industry and the food industry in the industrial industry many of these
Trees that have a very different Capital flow cycle than we all deal with typically in Silicon Valley and software and many of them are struggling. I mean, these are businesses where some folks have told me orders completely fell off a cliff in Capital Equipment. That's some small business owners that sell whatever piece of equipment you want to come up with. They are not getting orders. There's no Revenue. There are massive oversupply and under purchasing happening in the food and Agri markets and yet folks are still trying to push up prices in order to make the debt payments that they have to make on there.
And just get now and that creates a crippling condition for them across the economy. I think there's the Haves and the Have Nots as is indicated in this article that was just pulled up where there are some parts of the economy where you have low debt high margin businesses that can continue to scale and continue to raise pricing have a lot of elasticity in pricing and then there are the others that operate on, you know, 1% interest rate charges the changes Drive their profit or loss for the year in a pretty meaningful way and
That's the part of the economy. That's really suffering. And unfortunately the action that will be taken to resolve. This isn't necessarily a free market action. It's going to end up being some sort of government Intervention which furthers the government's involvement in the economy and furthers the tentacles that make it much harder to ultimately pull out of the Spiral in this problem. That's my rant on this whole point. But you know, I agree with that. I agree with all that I've seen some reports that a crazy percentage of the job creation over the past year has have been government jobs.
Of it and more than 100 percent. So basically there has been a net loss in private Market Jobs net of the effect of government employment or government spending on companies that then use those dollars to go hire people. Let's talk about the impact on markets. So, you know as a result of this this rate cut announcement or this rate cut indication markets have rallied a little bit but you know to trim off some point there are definitely, you know, the Haves and the Have Nots AMD beat they were up four percent after hours on, you know, improved AI chips a
Al's the revenue was 5.8 billion dollars up nine percent year over year Microsoft had so so results in video jump 12% on some comments made by Mehta and Microsoft that both said that there's increased a I demand and are going to continue to build a capacity. So to me if I know you've talked a lot about this in the past, maybe you can give us your read on the comments that were made this week. You've historically said that a lot of this build out is well ahead and there's no real Roi yet.
But clearly some of the buyers of this Capital Equipment or saying Hey There is Roi we're going to continue to build aggressively. So maybe you can share a little bit on its anything different or we just kind of seeing folks justify with the decision statement. I mean sadly this is another case of sell the news.
These things rallied Phantom when the after-hours and if you look at them, they've all just given back every dollar of gains.
So I think that people know that that we are sort of at the tail end of the of the hype cycle in Ai and every chance every time these things Spike people take an opportunity to just massively celimene invidious turned over 308 million shares today. That's crazy. It's litterally adjustability beginning of the day. It's creating like a penny stock going straight down like a lead balloon. Yeah matter rally. They've basically given up all
Of their gains. It's gone kind of straight down today, but the point isn't that these companies are going to zero that's not the case. It's just the point is that right? Now people are optimizing their selling every chance they get to kind of book the prophets and I think that that's there because you know at some point nobody knows when all of this Phantom money is going to show up right. So this is independent of what we would call the economy independent of the recessionary conversation and the right conversation, which that look I mean, I'm in the middle of this, right
Now with 80 90, it's been one of the joys of my career to actually start a company in the middle of what I think is the most important wave that I've ever seen professionally since social networking and I jumped into the middle of that wave and I kind of try to ride the best wave I could there I'm doing it here, but my honest take away after being in this thing now for you know, seven months intensely and I'll be in to it for as many years as it takes to build a successful company.
Why is that Ki is massively deflationary? It takes not that much money and the results are really meaningful in terms of the amount of efficiency that you can capture and the costs that you can save and the right business people IE startups that are starting from scratch like myself and my co-founder is 80 90. We will pass that on to our customers because it allows us to differentially price versus incumbent Solutions.
And so I don't see a path where all of a sudden a multiple of the money that's been spent shows up. I don't sing. I do see a path where companies find tremendous. It's like think about it this way if you looked in the 1980s and said what is the most profitable operational company that existed in the 80s? I don't know what that company was. But I suspect that their ebitda margins were roughly in the 30 or 40 percent range and it was
Probably incredible if you fast-forward now 40 years the most efficient company is probably sort of 50 or 60% ibadah margins. The reality is that the best way I enabled company will probably have margins that are 70 and 80 percent in the next 15 or 20 years. Now, that's an incredible thing. That's a big production. But that will against per the principle law of capitalism that everybody keeps forgetting which is you compete out.
SS return and so while you will have many companies that have you know, 60-plus percent operating margins, they'll be in much smaller markets and they'll be thousands and thousands and thousands of them. So I suspect what happens is that the overall Market grows, but the number of companies Grows by in even order a larger order of magnitude and in all of that the reality is that it's going to be very hard for these big folks to sort of see this value capture tip that makes any of this investment worthwhile, so,
I think that you're going to have to have some sort of reset in terms of the capex that's happened here. I want to switch gears yet again and talk about the assassination of Ismael honey yet. I hope I pronounced that right honey. Yeah, you'd killed by a bomb while staying in a guest house in Tehran according to the New York Times earlier reports indicated that he was in fact killed by a missile strike from Israel, but just this morning the New York Times reported that the guest house where he stayed is run and
protected by the Islamic revolutionary guard Corps and is part of a large compound known as Nash at in an upscale neighborhood of Northern Tehran and the article in the New York Times goes on to report that according to several Middle Eastern sources.
A bomb remotely detonated bomb was actually planted in this guest house over two months ago in anticipation of the Hamas leaders stay in this guest house and it was then set off once. He actually stayed in the guest house this obviously represents kind of an incredible feat in operational capacity and intelligence. I think we've known and talked a lot about in the media is kind of covered quite a bit about the capacity of the Mossad, but I just want to kind of get your
The reaction to this I think that there's a bigger and important story here about the strength of Israel's intelligence and Military capacity in the region and what that could mean for their posturing and their demands and their activity in the region in the months and years ahead particularly with Netanyahu still in charge so sacks, maybe you can kick us off with your thoughts on this article and massages role in the assassination of this Hamas leader.
Well, there's no question that the Mossad establish or re-establish.
Published its reputation for extreme competence here being able to infiltrate Iran in order to assassinate the top political leader of Hamas while had Nia was a guest of her on I mean that's deeply humiliating to Iran. I think he was there a Nia was for the swearing in of the new president of Iran. So for them to be able to Target him while he was there and set the bomb months in advance. I mean that shows extraordinary planning and
And so a huge failure on the part of Iran, I think in terms of the the larger significance of this, you know in the wake of October 7th on this pod. I said that I hope that Israel did not go off half-cocked responding the way that the United States did after 9/11 and when they started bombing Gaza I said this is going to backfire and you know, boy was an understatement in terms of the reaction of world opinion. I mean Israel went into
Gaza basically leveled the place and has alienated practically the entire world the only country that's all lie with Israel anymore as the United States and even within the United States roughly half the people are now against Israel. And I think what I said at the time was that Israel could pursue or should pursue a more targeted strategy the way that it did after the Munich Olympics this assassination within Iran shows that the Munich Olympics strategy. I mean they basically showing that it's sick.
Well, they've been able to do it. I wish they had limited their response in this more targeted way because I think that the destruction of Gaza has created tremendous humanitarian suffering and it's alienated just about the whole world and what is accomplished. I don't think they've gotten rid of a moss. They have not been able to kill the military leader of Hamas which is sin war-- who was the actual military planner of the October 7th attack and they have
Alized what you know, whatever part of the Palestinian population was not radicalized has been radicalized and they've turned so much of the Middle East in the world against them in such a strong way that again. I wish that they had pursued the the more measured strategy still a tough strategy. I mean, let me put you in Netanyahu seat you are leading Israel Hamas comes into your country attacks killed. Lots of people. What is your measured response?
To that attacks from Hamas given the capacity you have the Israeli Air Force by the way is second only to the United States just to give you some statistics. These really Air Force has 90,000 active and Reserve personnel and 614 aircraft. Israel is reported to have up to 400 nuclear weapons and they have this extraordinary technical capacity with Mossad and operational capacity. That is kind of unrivaled pretty much anywhere in the world. It seems what
do you do if you're sitting in Netanyahu said that that provides a more kind of measured response and how do you kind of you know lead your
nation? Well, first of all, I'm not obviously saying that seat I don't live in Israel and I don't have skin in the game that way so I think the first thing that they would say is, you know, you're not us you're not sitting here dealing with all of our enemies in the region and they would have a point but what I advocated I think months ago was to take a more targeted measured strategy that I think the assassination of hernia shows that they
could have executed and I understand why they wanted to Gaza and why they felt they needed to go into Gaza. But I just this is not an anti-israel statement. It's just a question of the strategy. I just don't see that. It's produced much good. I don't think they've solved their Hamas problem. They have not gone soon war and they've lost a meaningful amount of global support. Yeah, Timothy the read I think that it was in hindsight a pretty big miscalculation by Netanyahu to pursue the strategy that they did.
And I would have much preferred what you're seeing now, which is a very targeted approach. I think it preserves and it would have preserved not just world political support, but just individual people support where instead of going into Gaza leveling the place creating all of this death and destruction and amplifying and confusing.
People where they now all of a sudden had to make a decision between these two groups and and now get confused with anti-semitic sentiment that should never have happened.
It's clear that Mossad is incredibly competent and Incredibly capable.
I do believe that Sovereign countries have the right to defend themselves, but then there was a bridge too far and I think the Israeli government has crossed it.
In hindsight and I think I told you the story and I may have related this in confidence, but I'll just say it again on October the 8th what was offered and I'm not going to say by who was sort of the meeting of the right political leadership from the Middle East Israel and the United States where they were all willing to sort of come and the idea would have been to extend some sort of structure.
Solution for the Palestinian people now that would have been so unintuitive and unexpected. I think everybody would have been a little bit on their heels, but I think what it would have done is it would have passed Netanyahu in an incredible light. It would have passed Israel in an incredible night. They would have still preserve the ability to go and kill the individual leaders that they wanted to.
But it was rejected and I think that when we look back these are the kinds of decisions that hopefully history documents accurately. So that folks who are in the seat to your point rebirth the next time around can make a different calculation. I do I see you see the pictures and there's just no way that you can turn them off.
You know what? I mean? I think Israel's biggest asset is probably also their biggest liability which is their military and intelligence strength and it involved in to them in a way that they can be more aggressive than perhaps. They need to be with respect to maintaining the security of the state but perhaps being vengeful and vindictive and I know that that's a very controversial statement to be made. I want to underscore distract of this military and its intelligence.
Guys remember that stucks next stuxnet worm from a number of years ago. Yeah, that story was incredible. Then you're the New York Times broke this story in 2012 stuxnet was a malicious computer worm, and I'm reading off of Wikipedia because there's a lot of reporting that has different opinions on this that was first to cover uncovered in 2010 and was thought to have been in development since at least 2005. Now this computer worm was supposedly developed by Mossad and the NSA and it was a malicious computer worm that ultimately allowed
Intrusion into the control systems of the centrifuges of Iran's uranium refining systems and they basically were then able to make those centrifuges go haywire and destroyed themselves and they did this over and over for several years and Iranians could not figure out what was going on or why they kept it completely secret ultimately. It was revealed that there was this operation organized by the United States called operation Olympic games. That was a sign for disruption operation and that Mossad had a critical role in by the way dirt.
There are two other stories that build on top of this there that are tangential but related one is that there was a nuclear engineer that Israel felt.
should be unlit and the way that they did it was via some like remote control machine gun that they planted off of like a highway where the car egressed off the highway and then all of a sudden the thing was shot up a different example was there's a story about how they figured out that Yasser Arafat was sick because they were able to collect a stool sample from a pipe that left his home and they were able to kind of diagnose that eight who was his stool and then be he had some
chronic illness my point I think in all of this is kind of where you're going, which is that when you have such capability in such Precision to go to the other end of the spectrum, you really have to be sure that you're right and you know as sack said I think we're looking back and it's clear that the support around the world just isn't there for that kind of mass casualty in that kind of
like if Israel could actually destroy Hamas and achieve its military objective and Gaza, that'd be one thing.
I think we've seen that that's impossible. I mean, I mas basically bleeds in with the population. It's indistinguishable and the leadership is hidden deep underground and the Israelis have not been able to root them out against Anwar has not been found and so you've destroyed Gaza, but you have not achieved your objective of eliminating Hamas and in the process, you've deeply alienated.
I mean, it's just the one
hand and
the Russians and the Americans trying to chase the
The Taliban and Afghanistan forever. This is not a group of individuals that once they're gone. Everything is
fixed. Everything's just worse. I mean you still have the same problem. In fact now the entire Palestinian population is radicalized. In fact the whole Arab Muslim population in the Middle East is more radicalized against you than they were before. I mean, I know there is a ready a significant amount of hatred but now it's worse and you haven't younger fundamentally solve the underlying issue. I think the 911 analogy is apt I mean
We went off after 9/11 half talked into all these wars in the Middle East. I think that going into Afghanistan. I think you could that was justified because they were harboring Al-Qaeda, but then we went into Iraq because really members of the Bush Administration had a pre-existing agenda and then they lied us into it saying that Saddam was connected somehow to 9/11 and we began a 20 year process of just plunging ourselves into all these wars it only made everything worse.
Worse, you know one of the reasons why Iran is in such a strong position today in the Middle East is because we took out Iraq, we basically created a power vacuum in the Middle East that they ended up
filling. I recently heard that after Israel struck the embassy in Damascus a few months ago. You may remember this Iran launched a
a counter-attack and you remember there were all these like drones that they send hundreds of them into Israel, but there was supposedly a forewarning that these drones were on the way there was notice given it was like this is it this is our proportional response and we're done that's right. That's right. What I heard was that Netanyahu did not want to stop he wanted to escalate after that response when they're on
Now that coupled with what's going on in the West Bank right now where there is a restricted movement of Palestinians within the West Bank and continued development of Jewish settlements. I think really represents a major risk to the region the middle east region that we could see an escalation beyond the response that may be mandated or necessary to secure the state that makes things much much worse in the region and
And could isolate Israel even further and ultimately draw a lot of power to that region to try and figure out what side are you on and how do we resolve this? And that could lead to something much bigger and much nastier. So I think while we all observe this and watch this the the behavior of the targeted attack and Hamas for me, it's not the issue as much as indicating the capacity of this military this intelligence. That means that they probably feel highly emboldened to take whatever steps.
Individuals feel are necessary to secure the stage for the long run which could mean an increased escalation in conflict. And that's I think a real a real kind of point of concern and that's the one of the Black Swan events. I think that still have standing right now because if that does happen if there is for example an unraveling of the West Bank you could see
One of these sorts of events that everyone gets brought like a magnet to the Middle East and you end up with a major global conflict that becomes a problem for markets. It becomes a problem for the world and and that could be the catalyzing event that I don't think any of us want to see to use your logic from before.
The thing that may plunge the world into having to have a point of view on this may actually be a political calculus that Netanyahu has to engage in which is around keeping small factions of his coalition government in place, which may not actually represent the full view of the Israeli people. That's what's even more tragic. So it's not obviously the Palestinians don't want it but many Israelis may not want to die there and there may be no Avenue if he wants to remain in power and that's what's so scary.
Look, I think there's no question that we're on a path here where we could have a
Cold war in the Middle East remember that after Israel hit the Iranian General in Lebanon, the Iranians responded two weeks later with that massive drone and missile attack. Most of the missiles were intercepted by Iron Dome and I think America participated in that as well. I think one or two of them got through and then Israel launched kind of a week missile attack on Iran. And that was kind of the final word on it there were people
In netanyahu's cabinet like smotrich and been a sort of the more Hardline radical right-wingers who I think publicly tweeted that they thought Israel's final word on it was weak and they clearly wanted to do more. So I think the point is just that when we had this last exchange between Israel and Iran, it felt like it was on the verge of tipping over into a regional War but I think partly due to the efforts the United States.
We were able to help Tamp that down. I think now Iran's promising revenge for what just happened in Tehran and this could set that that escalatory spiral off again. Totally if you were to place odds on on this I'd say it's at least 50/50 that things escalate into a
regional movements of a blissful. Yeah. And by the way, there's no such thing as a regional war in the Middle East because every one of those countries had significant allies in Russia in the United States in China,
What is Saudi Arabia going to do you know Jordan is going to end up in a situation where they may end up having to defend the Palestinians in the West Bank which puts them across the shooting field from the Israelis. And the United States is an Allied to both Israel and Jordan. What are we going to end up doing? And this is what this whole this is. That's why this whole situation is not just about a regional conflict. It actually draws the whole world back to the Middle East and this is what kind of escalators this is why the counterfactual of what could have happened on October?
It's important because that would have been UAE United States Saudi Qatar was involved in Israel.
No, just those four and let's put Qatar in the mix as well. But my point is like my gosh like that. It could have Rewritten world history in such a profound way. It would have just taken some restraint and proportionality trying to cheat the other way kind of
yeah, it would require a credible forbearance on the part of a population that just been
attacked with a cat attacked and
mass atrocities on
civilians, but not just not just this attack like under attack for
nations in a region that has been all about conflict and secularity and all of the kind of you know, identity drivers that make this so deeply personal and rooted in history not just in a moment or an event.
Look what happened to us on 9/11. We lashed out, you know, yeah exactly but the results were not good.
Yeah. Well, look, let's move on. I'm not I'm not trying to judge anyone's behavior. I'm just trying to shine a light on the strength of Israel's capacity and what that may mean for their proclivity for
ettore Behavior, which is really scary given that this is not just a regional issue becomes a global issue when it does happen. So I go ahead so that I thought you were going somewhere else with it, which is I was just going to say in any in any other simulation. The capability of the Mossad is fodder for Incredible movies like it's out of a movie.
Right, you read these articles and they just don't seem like they're real. I thought it was like what do you mean you smuggle the bomb into V Safe House in Iran where all the VIPs stay here months ago too much two months ago. How does that happen? What does it mean that you act like develop and sit tight? What does it mean that you developed a virus that you were able to get into the actual working computers of the arrangement roll. You knew by the way the caudal units the control board.
Which we tweet of the day was that made by Siemens of the equipment made by same as a ship to Iran. Yeah, it's not that's not like you tell me that into something. You know what I mean? Like that means that there was a person physically there that then found a way to essentially get this firmware implanted and it's like no this is what happened. I remember the story. They actually did not what happened was they let the virus circulate in the world for years before someone randomly had it on a USB drive that didn't know they had
it randomly plug it into a computer in the center of each facility then infected sent out a notice. I'm in here and then after years it was finally in there through the random movement virus that no one is that impossible. Anyway, that's a great. Yeah. That's let's wrap up with the Bill Ackman story.
Sorry before you do that. Yeah hate to make this political but I just have to observe. I mean look at this situation the world. I mean the Middle East is on the verge of regional War we could be in a war there. I should say there could be a regional War there.
By January 20th when the next president is sworn in you've got the United States in a proxy war with Ukraine. You have major tensions with China in East Asia. I mean, is this really the time where you want to put in place an experience president whose policy positions are unclear who's untested was never even tested by a primary with the media refuses to test now.
There's basically a media construct this seems to me like a really bad idea.
All right, so political pitch in or from Davis ex. We don't have Jake out here to give the other side but let's keep going. So Bill ackman's withdrawn his plans to IPO Pershing Square, you know tomorrow if you want to just give us kind of the background on what he was trying to do and obviously this was an attempted 25 billion dollar raised as an IPO. He recently reduced the Rays Target 22 billion and when the order book came in, I believe it less than a billion.
He scrapped the plans entirely and just announced yesterday that he's pulling the IPO. So can you just explain a little bit about what this IPO was and then we'll talk a little bit about why we think it fell apart. I can only repeat what I read, but I'll try to kind of like translated into non Wall Street speak. So basically he has a company but what that company does is it gets investors to give
It's / him money and then they invested in all kinds of things that they deem worthwhile could be bonds. It could be stocks. It could be currencies. It could be derivatives. They generate a return and then they give those returns back to their investors. So that is a hedge fund. The Holy Grail has always been trying to figure out how can an organization that is that those funds are raised and distributed back. Right? I mean, I think you should it's exactly what I mean. I grew up. But yeah, but let's go ahead and put the Holy Grail
well for someone who runs those businesses is when they realized while listen I get paid a great profit share.
From those funds when I'm successful. I'm also allowed to take a 2% per year management fee, but I believe I'm building equity and can I get somebody else to recognize the fact that I'm building equity and that's no different than a start-up. Right? So, you know, Freiburg your building or Halo you believe that you're building all kinds of really interesting things rooted in science and you want other people to judge the value of that as measured by your Equity right independent of your revenues and profits.
Is today they want to project into the future. The problem is that hedge funds have not found a very elegant way to demonstrate that they have any Equity value.
And if there's only been a few and the formula has been the same so companies like Blackstone companies, like kick a are companies like Apollo what have they proven? They've proven that they can raise enormous amounts of money. So most of these organizations now are approaching a trillion dollars of capital raised.
And they tell investors while look don't worry about the returns any more worried about the two percent because that's like our revenue and we're generating 20 billion dollars a year of Revenue that will grow at some rateable proportion will manage the teams will compensate them well, but they'll be lots of profitability and people have bought that story. So I think a lot of smaller organizations who aspire to be like a black stone or an Apollo have tried to get people to buy into this story.
And I think what Bill Ackman was trying to do was some version of that which is to say I'm going to build an Enterprise here Pershing Square is going to be a standalone business. It's going to have Enterprise Value and you're going to measure that based on the assets that I manage and it's going to be much greater than what I managed today. And I think he manages roughly 10 billion today, but he thought he was going to raise another 25 in this IPO and then in very short order be at 50 billion and so
He got people to invest in that business on that premise and I think folks put in around a billion dollars and they valued that entity at 10 billion. And so he tried to go and raise his fund. He thought it was going to be 25 and it turned out I thought it was too but Freiburg you just said, it's less than 1 I didn't I did I guess or around one. I just heard that I'm just hearing that from you for the first time. So I guess what is the takeaway like him up real quick, you know, you do this. This was a this was a closed-end fund. He was trying to raise no, but
He's I think he's also said that Pershing Square eventually has a path to go public. That's how he sold the billion of equity of ten billion in the master LP. Yeah, but this IPO was just for fun. It was generally there was there it was the IPO the fund and then they were planning afterwards the IPO planning afterwards. Yeah. Yes what she didn't do. My only point was that that the fund was basically it's launching a fun and then they'll goal is not the fund itself. The goal is to buttress the the underlying logic to take the whole thing public the manager. Okay, and that's what I mean by
Taking a company public in finance is next to Impossible. Yeah. So the whole point is like what are these businesses in the business of doing they're in the business of making bets the problem is that those bets are short-term anomalous events. Sometimes they work sometimes they don't work and the problem with that is that investors who are trying to underwrite 20 or 30 years of returns don't know how that's predictable over that period of time like for example, you're genetically engineering
All kinds of produce that we are going to ingest if that stuff works at scale. You will have built an Enterprise that theoretically has the potential unless it's disrupted by something else to make revenue for 20 or 30 years. So people can underwrite that Google makes a search engine. It's going to last for 20 or 30 years Facebook makes a social network it can last for 20 or 30 years. The business of making bets is typically something that can only be measured in days or weeks maybe months at best. And so I think what
he ran into was that realization. It's very hard to get people to Value an institution in this way.
And so the thing did not work he'll go back and he'll retool the thing that I give Bill Ackman an enormous amount of credit for is he is one of the most resilient individuals I've ever seen in High Finance, but generally as a business person this guy has he served some really big waves. He's landed some really good sets. He's also gotten crushed a few times and the guy just keeps coming back and he seems to be getting more and more refined and capable.
As a business person so, you know, he'll probably figure out a way this is not the first time he's publicly dealt with things that have not worked.
But I think it just goes to show you that in finance these entities that try to sell a piece of the quote-unquote general partner has a company. I just think that it's a frankly that it doesn't work. And this is just, you know, an example yet another example that there's not a lot of equity value in these businesses.
sex
Some reports indicate that investors pulled out of the Pershing Square IPO because of the current market conditions that a lot of market indices have stormed higher and that there is now less outside and it's not a great time to be entering the equity markets other reports indicate that investors lost interest in documents fund because of his activity on X or Twitter. Have you do have a point of view? Do you think that
If folks pulled out investors have pulled out your obviously a fund manager who is very active and opinionated on exim your advice loader like what you know, do you think has this affected your relationship with with raising Capital if you're willing to talk about it or maybe just comment on the Ackman, you know issue that he ran into why did this fail?
I just don't know. I honestly have him followed his his IPO process at all. Okay. Um, I would say that the market we have right now. It's not the best has been but it's also not the worst so I'm always
Reluctant to blame macro conditions without any more specific explanation
give a point of view on investors having an issue with that comment because of his outspokenness on various social and political issues
over I can imagine. No,
I don't think so investors care about making money and Bill ackman's a moneymaker like that's undeniable the guy
Take some losses, but his wins are way bigger than his losses and he is a proven moneymaker. The problem is that I think the way in which he was trying to monetize. The business is just a hard thing to do you have to have an organization of hundreds approaching thousands of people that are raising all manner of funds and those funds just deliver very consistent returns not great, but they never lose money and that's how you get towards a trillion dollars and that's how you make it a company and not
A great hedge fund
really also just say I think you're very thoughtful on Twitter, you know, I've gotten into some disagreements with him on Twitter other things I've agreed with but overall, I think he makes a strong case for himself. I haven't heard him say anything out of bounds on Twitter whether you agree with it or not. So I can't imagine that's a problem.
Some people would disagree. They think he's had a lot of comments on what gives them as he would call it and D IDE. I topics and
Trauma that I
The vast majority of the country agrees that woke has jumped the shark.
Yeah, but I think some people
highlight if woke is so great. Why is Kamala Harris trying to distance herself from every previous comment? She's ever made about whoa Chasm or DEA.
The point is more about like what we talked about earlier, which is kind of having an authentic voice and speaking what you believe and speaking what your opinion is versus remaining buttoned up and not speaking what you believe and toeing the line. He's in the only industry where his
Performance is measurable everyday in Precision. Right? So what I would say is it's irrelevant what he says on Twitter meaning the quality of this decisions are independent of what he says because they're measurable and they are not something you can gain. And the reality is that over the last few years particularly starting in covid. He has gotten better and better and he's played a very good hand. I think he's an exceptional risk manager and he's timed it.
And so the people that say that to you to be very honest, there's some what they're they're portraying their lack of financial
sophistication. Yeah, actually can I go further and I actually think that ackman's presence on Twitter acts as a huge positive for him. It's an asset because he has a gigantic followership and he's able to speak directly to his audience in the way that we do and I think the reason why people say these things is because they don't have a direct strategy and so they want to basically be
Adam out people who do but again, if you don't go direct to your audience, then you have to go through the media and then they get to Define
you and it creates ambiguity.
Exactly. So I think the fact that he's got what like a million plus followers and you know, everything he puts out gets tens of thousands of likes it's a huge positive
huge positive and I think that the part of his business that he hasn't gone back to which if he does in this chapter of his career with the following that he has
Is the activism part and I think there are two people who I think are incredible at this and we're both the written and the spoken word. They have such a Mastery of Ackman is one Dan Loeb is the other and I think that you know in this world where you have the ability to go Direct in a way that you've never had before is actually the realm of a different form of activism that I think could be
extremely economically rewarding and valuable in society. All right. Gentlemen, this has been a great episode of the own pod. We missed our comedian and residents Jason. Calacanis Master Kan nostril anus, we miss him. We wish him. Well speedy recovery. This has been an episode without the usual humor and flamboyancy that we've all come to know and love but I think it was great to chat this afternoon, and we will see you all next.
We
buy every boys but I gotcha what your winners ride brain man gave its eyes open source it to the fans and they've just gone crazy with love you as ice queen of King besties are back.
