Markets turn Trump, Long rates spike, Election home stretch, Influencer mania, Saving Starbucks

Jason do you want to go up to the bedroom knock on the door and wake jamat up where is he you're in his house go get him let's go he's at the office he went to the office he's not here oh you went to the office we're trying to find jamath at the moment oh here's jamat okay are you wearing my goddamn sweater what is what is is that my you're in my house is that my no I am so tilted where is my wife what the what don't worry about your wife no oh my

God this port is great where is hold on I'm calling take off my okay don't touch my wife oh my Lord oh my Lord Sheed so tilted tted don't you worry am you know your cashmir sweater it's so so soft is so tiled get out of my house but we'll be done at 1 o' so I'll see you then please let me know you have lunch in the garden yes please lunch in the garden wear's something simple don't don't get something simp great is that the cashmere sweater with the Rhino horn buttons it is you

know what though I did some shopping while I was here I did a little shopping so I just I filled up you know I just these uh these asops are great because I don't have these at my house I have Ivory soap so I got a couple of these froming but you know what I agree this sweater is not so great I think I'm going to Swit don't touch that sweater Jason this one's incred I cannot him J don't put it on I won't put it I won't put it on but you know what this

port I'm not so sure Sean Sean yes um's great but um any other options we do have a delicious ice wine for you come around here let's present let's present you're not on my chef Sean um SE so this is it looks like a deep pull 19 86 Chateau CET uh BAC what I mean this looks like it's worth opening I mean it it's it was in the rack that said don't open right Sean yes sir all right so and yeah let's just but you know what pour half out because I like the bottom half

the texture so just pour half into the garden here the um the spinach and then I'll take the bottom half thank you please take off my sweater oh my God this is so brutal let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with [Music] it did you have a good night's sleep at chim's house how did you sleep last night I slept so good let me tell you something I'm I will compare I sleep here tonight the lady of uh sax Manor just texted me

and she would like me to stay there tonight so you know when I'm in the valley I get a lot of different invites I have to spread the wealth so I'll be dining with with the saxes tonight and I may be staying at saxes so that willare away sax hide the asop soap from the bathroom I'm hoping he doesn't have ASAP I'm hoping this is like when he stole the papy vanwinkle from my plane remember that that was good yeah I mean it was it was three qus of a bottle it's just sitting there I

mean when are you gonna drink it SX how do you prepare for jcal coming over to your house to visit and spend the night I mean what do you do think anything that's not bolted down is basically it's like a a gift it's like a freebie how do you think I got that love seat in my kitchen I got that love seat off the kitchen that came from Sax's designer yeah yeah I just had two guys my brother Josh came we took it out the back it was fun we took it out the back if

I'm a guest I'm leaving with something why don't you want to moderate today you're on fire just moderate the show well no I was just I was going to be traveling and I wanted to do a good job and I you know I thought maybe you you would love to get your chance at moderation so lead us off here Fearless uh J freeberg so that is the announcement to start the show Jason taking a week off for moderating yes gonna be a besti guesty gonna be a participant on the panel this week and we took

this off so I'll be moderating this week we're going to do a couple housekeeping points first off very excited to announce that we are doing another live event after the success of the summit during September we had great content we had great parties everyone had a great time but a lot of people said They wish they could have been a part of it so we are going to try and do more Live Events so we have pulled one together very last minute but we are going to make it incredible Saturday December 7th in San Francisco

around 5:00 pm we are going to do the all-in Holiday Spectacular at the Palace of Fine Arts in San Francisco it's going to be incredible tickets are going on sale today at allin.com events not going to want to miss it there's going to be a really fun show on stage with us and some guests followed by open bar food trucks DJ Casino party it should be a really great time a real fun Winter Wonderland after party after the stage show and so we're really excited to have folks come and join us um at the Palace

of Fine Arts on December 7th it's gonna be awesome you guys excited yeah excited yeah all right so I have a question yeah is our attendance required at this thing I knew that was coming I have no desire to this you don't want to be called a party everybody in the world wants to do something except SX I thought I was signing up for a podcast I don't know why I need to do all these events this is literally a two-minute drive from your house in San Francisco we are going to load you in a

van Jal and his brothers are gonna come and grab you throw you in the back drag you down there we're gonna prop you up on stage for a couple hours and then we'll put you back in the van and you can go home the good news is we might uh drink some Tequila sex we might have something to kill us so we got something to look forward to and you get to see your friends you get to see your friends that's worth it right say yes David now this is where you say yes no comment

he says no com for those of you listening I'm happy seeing you guys through Zoom you know we don't we we can minimize the pic was his favorite holiday of all time what's your favorite holiday SX pandemic can we have that back pandemic he celebrates the pandemic for six months every year it's part of his new ritual to not see anybody for six months bring back the pandemic Sox are you serving Wu tonight I mean that's possible I'm gonna tell him not do anything that nice though for jcal keep it simple burgers and dogs you

put your order J J what did you put your order in well you know I talked to that I talked to Chef and um he said morel's not in season but we we are on the tail end of black ruffle so we have that locked in but we're too early for Morales obviously that's a spring let let's give feedback about last night's dinner Sean's I mean let's be honest a picana is an underrated cut of meat it's a very people say it's like a serviceable meat but when cooked properly with proper technique it will stand

right up there with a riye or a New York strip it's the best but people don't P never even heard of that but it's like it's like it's the Brazilian word for it but it's like a specific cut of meat Sean did it last night honestly David I'm telling you it's better than any other cut of meat you could get if it's properly made Sean crushed it yesterday but it is bananas it's so good steak than ribey I like it more than ribey 100% I like it more than the New York strip that's terrible filet

terrible no fat it's it's um it's got a a a fat cap on it which you know sometimes be a little overwhelming for people but Sean did a great job of kind of meeting us halfway so it wasn't so fatty just a nice layer of fat crisped perfectly cooked to Perfection carrots were great um was great I could I had no notes you know I talked to Sean after I had no notes so okay what the app part was ridiculous too oh my burn sugar apple burnt sugar apple tart what you're a New York state

guy I'm a New York state guy well done yeah what oh oh oh that's dis are savages I think you just lost like I think you just left three swing States you want if you're gonna do something I would go to the New York I'm fine to deal with the New York in and opava but well done David SS that is unacceptable shout out to Raul's and uh balazar two best steo pavs in Manhattan in my estimation let's get started welcome to why don't we call an audible tonight and go for Ste oav yeah just

throw out the uh the misot and the wagu and let's just redo it boys welcome to the all-in Pod this is episode 201 and we're gonna kick it off by talking about what's going on in markets which is one of the kind of most interesting challenging enigmas of the day or or maybe it's not maybe it's pretty simple but there seems to be a diversion in assets that is pretty un ual that hasn't been seen in in some time and a lot of Market commentators analysts economists are kind of trying to figure out what's going

on and why the first is that bonds are falling so US Treasury yields as a result of bonds declining in price have spiked up we nearly hit the 10year yield dropping as low as 3.5 in September obviously leading up to the the the big 50 bit rate cut and as of this morning we're seeing the 10year yield over 4 and a quarter at the same time we're seeing gold prices Spike so gold is typically a safe asset and gold has moved considerably as you all can see here from the start of the Year where was

around 2,000 an ounce up to 2750 an ounce an incredible runup one of the best performing assets of the year and then finally in a market like this you would typically see pain in equities but we've seen the opposite the S&P 500 is up considerably has been been on this endless runup alltime highing at alltime high where's Bitcoin buddy and let's pull up Bitcoin nobody cares about gold show Bitcoin well there's a lot more assets that have moved into gold than Bitcoin but here's Bitcoin at today this morning who picked that at the beginning of

the year was it hold on one second up give us your read on what's going on there's a there's another couple of nuances here that I think are important the US dollar complex is thriving which means like the US dollar is strong backend yields are rising and then another thing that I look at is this thing called put call skew so basically like on balance how are people hedging in the short term and in the bond market they own a lot more puts than they do calls I think that this is the entire Financial infrastructure

of the world repositioning itself from what was a tossup election to a trump win and when you look at why it's because when you forget the candidates themselves for a second but if you think about the actual policies and where the spending will occur I think that there has been a very clear decision that the Trump economic plan will drive better growth than the Harris plan and if you think that there is more growth coming typically what will come with that is a little bit more inflation the risk premium that you're going to need in

a high growth environment is higher what is risk premium that is how much do I want to invest for a risky asset vers as a safe asset and so all of these things are coalescing so so I think that the shortterm takeaway that I have just looking at all of this data is that in the economic distribution of outcomes this is now tilted overwhelmingly to a trump win and this is not an emotional statement or what I want to happen but this is just an observation how how tens of trillions of dollars of self-interested financial

actors have now repositioned their risk and if Trump wins which it looks like he's increasingly going to do and if he wins by the margins that it looks like it's going to do you're going to see a lot of these things exacerbate Gold's going to go up more probably Bitcoin will probably go up the short-term economic upside for the economy will probably get reflected in higher Equity prices but it'll also push out long-term rates the inflation picture becomes a little bit murkier but I think that that's what's happening I think that the the financial markets

are pricing in a trump wi sorry just to understand better why is gold go up and a trump win I think in the short term what happens is that you see more economic growth but in the medium- term inflation goes up and so you want a hedge right so it's it's more about a durational balance of assets so in the short term you'll be long the things that will generate earnings but in the medium to long term you want to head yourself so Bitcoin and gold I think will trade that way well let's up the

video clip from Paul Tor Jones Nick given all the things you're saying are you off buying gold and Bitcoin and and I think all roads lead to inflation we're going to end up if you so but does all roads lead to inflation therefore gold is a good investment is Bitcoin a good investment to you I I I'm long gold I'm long Bitcoin I think Commodities are so ridiculously under owned so I'm long Commodities I think most young people find their inflation Hedges via the NASDAQ that's also been great it's probably some combination I probably have

some basket of gold Bitcoin Commodities and NASDAQ something like that and i' would own zero fixed income if I had my cash it'd be very short term SX well I think as you heard right there the key line that Paul tutor Jones said was all rad lead to inflation I mean that that's what's basically happening right now is that the market is afraid that inflation is not whipped and it's going to resurface and the FED may have to Pivot from the pivot and raise interest rates that's why he doesn't want to own any treasuries separately

another Financial Legend Stan drucken Miller gave an interview where he has something like a 20% short position meaning 20% of his Holdings are short us treasuries right now so he's betting that there are long-term inflation pressures and that rates are going to have to rise and and you're seeing again that since the FED cut rates on September 18th by 50 basis points that the 10e T bills yield has risen by 60 basis points so I I think my interpretation is that this is less about the election and more about the markets not liking the fed's

ray cut on September 18th I think that in hindsight it was too big we discussed it on the show and I pointed out that the 50 base point cut was contradictory in the sense that the only two times in recent history where the FED began a rate cutting cycle with a 50 basis point cut was in 2001 and 2008 which were on the verge of pretty big recessions and so the FED felt like it needed to cut dramatically in order to help Stave off those recessions but that was not Pal's rhetoric what pal said is

the economy was doing very well so what I said a month ago was with the economy is doing really well why w't you just tiptoe into the rate cutting cycle with say a 25 base point cut and then see how the market absorbs it and get another month's inflation data well we've gotten another month of inflation data and it's showing that these are not huge moves but it's showing that inflation in uh was a core CPI was just a little bit higher than expected so again the market is concerned that inflation is not whipped that

the FED may have been overly precipitous and how it cut cut rates and then the other thing is they just not like the long-term fiscal picture of the US one other chart we should bring up is interest on the national debt what you can see here is that it has gone absolutely parabolic in the last couple of years our interest on the debt what like 1.3 1.4 trillion a year 1.35 trillion run rate yeah $3,500 per American pre and it's something like 20 to 25% of federal revenue now is going to Debt Service and this

continues to increase now I think there was an expect that we'd be able to get this line to go back down once we had rate Cuts right because if inflation's licked and the FED can lower interest rates again and we can get back to a 2% 10year bond which is where we were a few years ago then all of a sudden that National Debt Service becomes a little bit more reasonable right I mean you can you could service that debt at half the cost but now it looks like that may not happen so just to

to wrap this up I just think that the market doesn't like these fundamentals of the US fiscal picture you've got rapidly increasing debt service costs you've got an inflation picture that is murky and may not be going away and the bond markets are starting to price in higher interest rates for longer and this is why Paul tutor Jones is saying all Rose lead to inflation and this is why Dr Miller is shorting us treasuries jcal do you think either party uh or either candidate in this presidential election is going to drive a different outcome in

terms of federal spending and the long-term impact on deficit and as a result rates well if we look at previous performance as an indicator of future success the answer is no they're not going to cut spending most of the reports out say they're going to spend another 10 trillion in the next Administration independent of who you vote for and I think that's actually what you have to think about here is where does all that money wind up right it it's certainly not going to trickle down and what's probably going to happen is it's going to

find its way into equities and that's why these equities are so high is because people are recognizing correctly that if we do spend another 10 trillion and go another 10 trillion into debt that money winds up somewhere where does it wind up government salaries contracts and if we get a tax cut as well that's going to Goose and I think one party will do do a tax cut and spend 8 n 10 trillion the other party will spend 10 trillion and maybe raise taxes a little bit it's going to net net into the same place

and then I think what we'll see on top of that is what I think could be cataclysmic contraction in White Collar employment in the United States over the next four to 10 years next two administrations and that's going to exacerbate this problem and create I think some social tension because we've had record low unemployment and so even though people feel bad about the economy generally and and some of that is related to which parties you know which party you're part of and how you perceive the economy and all this data but just brass tax you

know we had the lowest unemployment of our lifetime for the past five 10 years and it's been absolutely fabulous and salaries have gone up and this is going to result in I think a little bit of austerity measures coming at some point probably won't come in this next Administration but certainly the one after that is going to have to do some bell tightening and we're going to have to address this issue because spending you know everybody in America having to pay their share of that interest alone is $3500 I mean let that sink in you're

going to spend for every member of your family $3,500 a year in interest that's your part of it take the 1.3 trillion it's just a lot of money and um if that is the case uh it's going to create a massive bubble in equities again and then if you look inside of the big companies three or four years ago Uber Airbnb Google and Facebook had more employees or the same number of employees they have now while growing those companies are all growing 20% year-over-year so the earnings and the Topline of these companies continue to grow

while they have a static team size this is like an extraordinary thing we haven't seen so the two pieces here that we haven't seen before is what happens when you put another I don't know 20 trillion dollar of debt into the US economy and what happens when companies the big ones stop hiring and they just become wildly efficient and become wildly profitable and this will be a renters renters you know story where people who have equities and people who own property are going to do fabulous over the next 5 to 10 years and then the

40% 50% of people who don't are going to really be feeling a pinch well it does depend also on how lever they are so just to give you a sense total us household corporate and government debt which include state and local and federal so household debt in the US about 18 trillion corporate debts about 11 trillion state and local government debts 3 trillion obviously the federal debt 36 trillion that adds up to a whopping $68 trillion of total debt across um the US which if you assume a 6% average interest rate you know you got

corporate debt and household debt so it's a little more risky so it carries a higher rate that means we're spending about $4 trillion a year of an economy that's only 29 trillion a year to service the debt just to pay the interest on the debt so 15% of every dollar that trades hands is going towards interest payments on existing leverage on existing debt it's a highly leverage system and if you look around the world this problem is not just a US challenge Global Leverage is a problem that's now becoming a crisis for uh countries everywhere

the UK is waiting on a big budget proposal this week higher taxes is going to be in there to make up for a budget deficit which is currently 4.4% of GDP the UK economy is only growing at 0.9% a year France has a major budget crisis underway right now they're struggling to reduce their deficit from 6% down to 5% of GDP and they've got skyrocketing bankruptcies 74% of people that can work in that country are working and they have and that's because of large social programs that support the balance 7.3% technical unemployment and uh they're

raising tax on 440 firms 440 companies in the country that make a billion or more in Revenue with a quote temporary tax there's a 4% searge on income over 500k that's going into effect second home real estate taxes and so on France is struggling to figure out a way to generate Revenue to make up for the shortfall in Brazil there's a major budget crisis States owe $130 billion to the federal government there inflation is accelerating at 4.6% rates are going to go higher and longer complicating other economic growth opportunities in the country so um this

is becoming kind of a global leverage problem which might explain the flight to Safety in assets like gold and Bitcoin and um is going to present a lot of real struggles for every global economy now the question is does the US dollar maintain its Reserve status because ultimately I think it is inevitable that the Federal Reserve in the United States is going to need to buy the debt they're going to need to monetize the debt which means printing money there is no one else to buy the debt so pull up the China chart Nick China's

historically been the biggest buyer and owner of us treasuries but here's what's happened in the last couple of years it peaked at about $ 1.3 trillion about 10 years ago and then recently particularly starting around Co they began selling down and have been selling down at an accelerated Pace today China is back to the level they were at nearly 15 years ago in terms of their treasury Holdings and they have publicly declared that they are selling off us treasuries and buying gold instead so the big buyer of us treasuries has kind of left the market

or is leaving the market who does that leave well at the end of the day the Federal Reserve has been the kind of buyer of Last Resort and if they end up buying treasuries that's where we have a problem with too many dollars and inflation kicking up and so it feels like a lot of the trades in assets are what's going to benefit from the inflation and it's going to be gold it's going to be Bitcoin and in some cases because you're pumping more money in the system it's going to be equities and uh that

might explain why equities are moving up as well where do you guys invest here I mean chamat like do you care about how the Market's position or how you're positioned in this election right now and based on how we're seeing markets trade and what these kind of macro indicators are telling us or you just business as usual heads down invest and build as you always have yeah I I think that you can't trade these things and any attempt to do it is probably a level of false decision where you're going to lose more money and

there's a lot of slippage and even just trying to execute it I mean at the beginning of the year I said the breakout asset was going to be Bitcoin I think it looks like it's going to be the resounding inflation hedge asset for the next 50 or 100 years so that die has been cast I think you're seeing the last vestages of people using gold as a rational economic insurance policy but I think the future is specifically Bitcoin on that Dimension so I guess you could trade that you could speculate on that I think the

question that I've been grappling with is in my scenarios what happens if K Harris wins what the markets do and I actually think it would reverse a lot of these Trends over like the last month and a half like I said I really do think that there's a repositioning rebalance component to everything that's happening right now so I don't think there's much to do unless you have a very specific specific bet that you want to make I would just keep my head down and keep building are you the same place are you are you Jake

K are you guys trading at all and I mean I I think trading is a mistake time in Market is better than trying to time the market and as I said before where is all this money gonna flow all this spending ass class right I mean that's that's the key question right like do you change what assets you own I don't think so and I I I do think there's another thing that's worth sort of unpacking here because when you do see people feel like the economy is working against them all kinds of interesting movements

start cultural movements Etc and I think that's what we're seeing in this election is people who believe in capitalism and free markets and people who don't people who believe in free speech people who don't people who see themselves as victims victims and then other people who see them as creators and I really study a lot of like what young people are doing and I don't know if you guys are watching sort of the anti-war movement or the fire movement which is financial Independence retire early a lot of young people now are looking at financial markets

whether it's Robin Hood or coinbase or prize picks whatever Market it is young men especially and they're saying I need to control my destiny I need to this capitalism is not working for me I need to own equities I need to make trades and I need to retire early and have experiences because the capitalist system is broken to some extent and then then there's another group of people who are just anti-work and there was this term back in the day called neat not employed not being educated and not in training basically the people who are

called the patient and we're 10% off that maybe more maybe we're at 61 or 62 I think a lot of people are going to give up because the debt is going to be so crushing that the logical thing to do if you don't think you can get out from under it might be to move in with your parents or two or three other people tighten your belts and enjoy life and go skiing and and and go have experiences and a lot of young people are electing to do that in other words they're oping out the

American dream sorry to your point the one thing the one thing that I realized with a lot of young men that Jason I think you're you're really hitting the nail on the head is a lot of them now do not view the job that they do as their only path to economic independence and if anything they may do a job but then they're actively trading on the side something crypto options whatever they're on Robin Hood they're using coinbase because it's almost like they've separated in their mind that the job they do will never give them

the financial Independence they want and so instead they're going to do that job because they like it hopefully they love it but then separately they're going to go and speculate to try to make money it's a really interesting thing because I had always been taught you earn your wealth through the job you have and so if you wanted to make more money you have to ladder up and do something different yeah so that that's not true that that idea has been sort of decoupled now that's a really interesting change in how people approach work I

call them gen bet like they're the generation that believes on there's just like subset of them it's not all of them a number of them are just quiet quitting and they just don't believe in capitalism and then there's this other group which are like trying to get control I call them gen bet because they just want to bet on themselves and you know and if they don't get wrecked by the financial markets CH trading options you know and and doing PR sorry the other the other thing I'll say just in recruiting a bunch of people

at 8090 over the last three or four months is there is an enormous difference that I have seen psychologically in the people that are 25 and older versus the people that are 25 and under and I'm calling 25 as a rough number but there are kids that are 18 19 20 21 years old that are off the charts good they're motivated they're hungry they're like let's get after it and they are honestly different in the way they approach their job than folks that are in their late 20s and early 30s these folks I think they're

the first generation who didn't go into debt in college and didn't buy into that like so they might the the Millennials ahead of them might might have like taken the bullets you know yeah the folks that are in their late 20s early 30s and I'm not trying to generalize or disparage but they lack a level of motivation again generally speaking that the youngest folks in the workforce have and that also that people in our generation sort of have so they're sort of sandwiched in between a very different way of approaching work and as a result

they stand out and I don't think they're standing out for all the right reasons well the majority now of young people the number I believe and Nick if you could pull this up 57% of Jen's years want to be influencers as their primary career now that the idea of working a job is almost like a secondary option the primary option that everyone would thri strive for is to be an influencer and this number has grown considerably continues to grow and in fact if you look at the the rest of this report this was out of

a did you say 50% of gen zers aspire to be influencers correct okay 57% as their career or just they want to be influential and build a brand around themselves I wonder that's what they want to do for a living that's what they would like that's what they want their paycheck to be interesting they want to be independent and I don't think they believe this they believe the system's rigged against them and why wouldn't you think the system's rigged against you if you went 150 or 250k in debt and you couldn't get a good job

job sax as a successful influencer how would you advise the youth on their career choices well played yeah look I think that believing you're going to be an influencer is like believing that you're going to be like a rock star or movie actor something like that pro aete pro athlete yeah it's like a one in a million shot it's just not a great thing to want to design your career around because it's just very unlikely to happen so I think you're better off finding a career that you're passionate about but where you're actually adding value

the world doesn't need 50 something per of the population become influencers that's kind of crazy it it reminds me of a line from Fight Club where Tyler Duran says we've all been raised on television to believe that one day we'd all be millionaires and movie gods and rock stars but we won't and we're slowly learning that fact and we're very very pissed off and that was Gen X that was J X yeah so that was us they headed they're headed for a uh a fight club like realization about this SX how do you advise a

young person on there there's this temptation to go and spend all this time making content and pursue that as your career and that's a life opportunity for you now it's more free and open they would think than perhaps being a movie star or a basketball player used to be so I think it's it's just uh important to recognize that if we ourselves are influencers the the reason why we're not being hypocritical is that none of us here with the possible exception of JAL ever set out to be influencers right we did something different we actually

had a career and we did something interesting and then as a result of that maybe people want to listen to our pod the idea that you can just go be an influencer without having actually done anything interesting what's your credential for that so what I would advise is just people should go do something productive and then you know if it leads to other people wanting to hear from them then that that's good but out to be someone that other people should listen to without having any experience or having done anything productive in your life it's

like why should we listen to you yeah one thing I I did build and sell two out of my three businesses over the years but there are tens of millions of people making money in the long taale as a content creator and it's low thousands of dollars in some cases per month but if you combine that with people who are gig economy workers and they don't believe in the system because they worked really hard they got this job at Google they went to the office then they got laid off and nobody cares about them now

they're getting dragged back into the office they still have these payments and then they look at this other system where hey they started to get 10,000 followers they started to make $11,000 a month then $3,000 a month they actually see a path to being independent of a system that has no loyalty to me and that's what I hear from folks and I think it's great if we're not going to be loyal as like corporations to individuals those individuals are now responding and the anti anote to that poison of just being laid off randomly or being

dragged back to the office after you told you could work from home all that stuff they now believe hey I can be independent and then you have to fight to get my services and I think that's what this is about if and and well we're g to talk about Starbucks later and I think that's a big part of the Starbucks problem having a side hustle makes you antifragile you you have other sources of income and you can tell your boss to f off and that's what young people are doing I've seen it seen people just

quit jobs and just say you know what I've got other ways to make money and I don't have a big burn rate and so that's smart for young people to do that and I think my advice would be to build your brand be as independent as possible and to make things in the world and show people what you made that's the best thing you can do can I can I give you the other side of this before we go back to macro yeah imagine that Tom Brady who really respected bill bellich but I wouldn't say

is super fond of him they're not super close but imagine that Tom Brady had a side hustle and let's just say he drove an Uber and he made enough money where when things got hard and he didn't get enough playing time he opted out would that have made Brady the person he was I think the answer is no I think there are a lot of people who started companies after being in very difficult and challenging environments that stretched and pushed them beyond their comfort zone and they lived in that world for years before they started

something if all of a sudden the answer is let me have an escape hatch so that I can egress off whenever things get hard I don't think you're going to accomplish much of anything because I'm not sure that that is the kind of boundary conditions that push greatness upon people so I would just keep that in mind as well I'm not sure the side hustle solves anything it may actually allow you to quit before you actually get to the other side of something and realize what you're capable of yeah I think that's a great point

you kind of have to mentally burn the boats when you do a startup it's Cortez you got to burn the boats yeah I agree with that your life your life needs to be like Cortez you got to burn the boats if you keep the safety net with you as you move through life all the time and you never put yourself at risk you're never going to figure out what you're capable of and then you're going to look back at some point and the odds that you're going to be disappointed are higher than if you actually

just tried and lived it it and just said okay you know what I'm really glad I'm on myself here to wrap up the the conversation about where markets are headed SX I think we were going to just do a quick round the horn anything that you've repositioned in your portfolio around investing or asset classes that you shift as we Face kind of looming budget crises the election cycle I'm trying to sell every single SAS startup I have in secondary markets and you know how many bids there are for these SAS companies negative one bid H

that's interesting I had a couple of my startups get get offers I've had three or four secondary offers in the last two weeks I've had to like deeply consider and they weren't like 75 what kind of companies let's see two were SAS and then one I can't say because it' be too easy to guess but the Bottom Feeders went from offering like an 80% discount to now a 25% discount so you know you're not allowed to sell your your shares and all in right I'm trying I'm trying Brad G's bought 7% so far so I'm

I'm I'm quickly offloading to G much as I you just you just super tilted freeberg there looking he's laughing but inside just the s% he gets 16 minutes per you know what if he if he'll moderate I'll have him I mean this is moderation going okay or should I jump in and save the show he should write all in a get fit memo just on the question of you know how do you reposition so first of all the easy one to avoid is is treasuries right I mean do you really want to accept a 4.2%

yield for 10 years to own a US Bond and with the looming inflation that is still out there or the looming de crisis that might be out there so that's probably the easy one I think the hard one is around equities because equities are at an all-time high part of the reason why they're an all-time high is because the FED telegraphed that we'd have big rate Cuts this year remember at the beginning of this year they said there'd be seven rate Cuts those expectations have kept coming down I think we had one I guess we

had a double rate cut last month and we were supposed to have one more 50 bit rate cut this year I have to wonder if that's still going to happen and more to the point if you believe Dr and Miller and Paul tutor Jones we might be in for a extended period of higher interest rates for longer and that will be bad for equities equities normally are inflation protected in the sense that those companies can just raise prices over time to keep up with inflation and so equities are generally a pretty good thing to own

in the face of inflation but if we're in for a period of high interest rates longer than anyone thinks that's going to be bad for equities well I would just argue one thing which is except in the scenario where you believe the only inevitable path is for the central banks to monetize the debt meaning the central banks step in to buy the outstanding treasuries that need to be issued which both supports inflation but also introduces Capital into the system and that's where both equities that that's where you could see a scenario where equities and gold

go up while fixed income goes down to to have higher rates so it's effectively a money printing indicator or signal now my personal position on this going into this new era if it manifests as the markets are telling us it will is kind of where Paul tutor Jones is I think that Commodities have and you know gold is a commodity everyone talks about it as being the safe haven asset but there are other Commodities out there that are much more fungible and used in in production Cycles to make food to make energy to make goods

and a commodity linked businesses meaning businesses whose revenue or profit grows with the underlying commodity price growing will outperform other businesses they're going to struggle to raise prices or struggle to pay higher labor costs or struggle to in to deal with higher cogs whereas commodity link businesses that effectively just make a margin on the Comm example a mining business so businesses that do mining of of Natural Resources um businesses that trade agricultural Commodities so those businesses usually make kind of a fixed margin on the underlying commodity price and they do they do well in these

Cycles so anyway I think that Paul tutor Jones rather because if you own a commodity it's not a productive asset it's not generating yield for you but if you own a business that's making a profit and just seems like it's easier to own Bitcoin that's one asset but the Bitcoin isn't a productive asset right I mean so that's one one way to kind of build a portfolio but I I personally like owning businesses where they're doing something and making value and in the process they earn a profit especially if the profit grows with an underlying

inflationary pressure on Sak's point about the equity markets there is this thing that people look at called the buffet indicator which is the total value of the Wilshire 5000 divided by GDP he mentioned it in 2000 and said it's probably the most reliable measure of where equities are and where they're about to go and there is this long run mean when you calculated going back back you know 50 60 years and every time it's had a short-term High there's been a pretty meaningful retrade so in 2000 in the Doom bubble in 2007 during the great

financial crisis during covid and now we've actually set an absolute new high in this thing which again to the extent that you believe in indicators like this would kind of tell you that at some point here equities are probably going to be cheaper before they're going to get more expensive this is definitely the high end of normal Nick if you pull up the PE chart this is the obvious one to look at is you know not just the how dramatic the stock market Peaks are but you know the the price earnings ratio and it's uh

at the high end of normal at like I don't know if we're at 25 um PE ratio on average David's right how can you get 4.25% when you have all of these risks looming over the next 10 years because you know Howard marks his letter uh he he had an investment letter that he published this week and it was so great because it was so elegant in its Simplicity which is investing in an equity and investing in a bond are just completely opposite to each other even though they're treated and spoken as if they're the

same thing and his concept is like people need to understand exactly what the terms fixed income means it means that you will get something reliably over a long period of time time and so the question is whether is that fair knowing everything you know today and I mean all of you guys have said this now for feels like years and when you show these charts of like ballooning debts and deficits is it reasonable that the market clearing price for government issue debt over the next decade is 4% I mean my gosh it could easily be

6% it could easily be seven or 8% that is very scary totally the big difference between a bond and a stock is that the bond provides you with like you said fixed income payments and those would be horribly debased if you have high inflation a stock gives you earnings and a company can always raise its prices and so in theory it should be hedged against inflation but both a stock and a bond are similar in the sense that they're both hurt badly by Rising interest rates right because the discount rate is higher so this is

where I'm just not sure about equities if we do head into a new regime of higher rates longer does that hurt equities even though equities normally are pretty good inflation hedge so I just don't know the answer to that I do think we're headed for a period of constraints I think that since 2008 we basically were living in a sort of a consequence-free environment where the FED could keep interest rates at or near zero the federal government could spend as much as it wanted we we you know we sort of normalized emergency conditions first we

had trillion dollar deficits as a result of the 2008 GFC and then those got normalized then we had2 trillion doll deficits as a result of covid and those got normalized and then the Fed was also doing QE which means that it's buying the US government's own bonds thereby propping up us bonds and the bond market so now that's normalized that's normalized yeah keeping interest rates lower than otherwise would need to be to attract those Bond holders so for about 15 years we kind of normalized emergency conditions and consequence-free spending by the US government I think

now we're we may be entering an era of consequences and what that means is that you can't push on one aspect of the federal government's balance sheet without giving up on something else so in other words if you're going to allow higher inflation basically monetizing the debt the bond markets are going to make the government pay higher interest rates on its debt right because they not dumb so we're going to be in a world of higher interest rates which means that equities get clobbered real estate gets clobbered the value of people's homes gets clobbered so

there's real consequences from that or you can tackle inflation you know which means that the fed's going to have to tighten but then I think what that means is the federal government's going to have to get religion around spending they're not just going to be able to spend all of this money we've seen this austerity measur in Europe right were pretty hard for people in Greece and Spain and to get their heads around and I think Americans are going to have to get used to we can't just spend and give handouts constantly on the equity

side though there's also the concept sacks that you can cut spending and increase earnings and that that's well within your control as a CEO and board and that's exactly what we've seen coming out of Co and I said it here a couple years ago I think the earnings are going to do well because people have this other lever and they can just turn the dial and reduce spending and increase earnings and it's like oh that's painful but it's not so painful that it's not worth doing and so corporations have gotten religion around cost cutting and

austerity and increasing earnings the question is and individuals have to so they're pushing out buying new cars and uh spending on travel so then what happens when does the government get that austerity that companies and individuals are forced to do and that's the problem you keep talking about freeberg is you know this entire election cycle is about who can give more free enough with the free like somebody's got to be an adult in the room and say we don't have any more free left I think this is what the market is saying is that regardless

of who gets elected here they've both kind of shown that the deficit will increase not decrease uh under their presidency and look maybe that is positioning to get elected and maybe there is a kind of more rational underlying economic Advisory Group that is counseling a different path than what they are presenting and I I hope to whoever is listening that that is the case for both candidates uh very deeply hope if you look at what happened in Argentina so we've talked a lot about Javier mle he came in as president and um his austerity measures

by absolutely slashing government spending has reduced monthly inflation from 25% to around you know three and a half percent so he's really kind of brought inflation under control but the consequence of that is that the economy has now shrunk because the government is spending less that means there's less revenue for certain businesses there's less income for individuals so they spend less so the economy has shrunk by 1.7% in the last quarter and um unemployment has spiked so now unemployment is at 8% in Argentina and it's rising fast so for the US to actually execute this

policy when we have a fundamental mandate for the Federal Reserve to keep unemployment low means that something is going to have to break you can't keep unemployment low and inflation low if federal spending gets too high and federal debt gets too high so we are in a condition now where federal debt is too high and if we cut federal spending too fast we end up seeing unemployment Spike and if we don't we're going to have inflation those those are the two paths we could walk just one thing to challenge what you say because I actually

I disagree with it is that I don't think that people view the spending package of both candidates the same because the dollar is not created equal so there are certain programs that the Republicans have proposed that are markedly different than the programs that the Democrats have proposed even if the numbers look the same and so this is why I think you have to look at how the short-term markets when they thought Kamala was winning behaved versus now the short-term markets short-term mean how do you hedge this risk and that is completely changed and this is

why I mean over the last 30 days you've had a complete and absolute repositioning of the front end of the yield curve in terms of risk and who's making the bets and I think why is because the the Trump package whether we agree with him or not is viewed as more stimulative to long-term economic growth which is why the inflation risk is being hedged out versus The Comma risk which is they're just going to spend money now on top of that what I would say is this may be where Elon Musk being able to streamline

the government could be an incredible gift for us as well as our children and our children's children and why is that it's because if there's this sort of Damocles hanging over us constantly of billions and trillions of dollars of wasteful spending he is probably in a position to show us that we have spent decades spending more and getting less and now we can run the ab test where we spend meaningfully meaningfully less cut regulation and if we actually get more you will have the proof and That Could set us on a long-term path of being

more judicious in how we spend money and I think that we deserve to run that experiment somehow to just go back to your your definition of GDP it's true that if you cut government that might cut GDP because GDP includes government spending however one could argue that although technically that is how the definitions work that by cutting government you actually unlock resources that could be used by the private sector and that ultimately it would lead to more efficiency but also stimulate the private sector and I think that argument is particularly true when you've got an

economy running of Full Employment so you know if we had lots of unemployment then cutting all these government workers would be very painful but if you've got an economy that's doing quite well and there's a lot of job creation going on then it's a good time to actually cut government because the private sector can reabsorb these people we should use the fact that we still have that we have a good employment picture to make these painful Cuts now as opposed to waiting until it would be far more difficult best point I've heard in a long

time that's a great Point sex give us the election update what's going on are we going to get your guy in office is it going to be uh vice president Harris what's the sense of what the polls are telling you of what the markets are telling us what's your read on where we're at all the data is basically pointing One Direction which is a trump Victory and by data I mean the polling I mean the prediction markets and then the early voting numbers so if you look at the the polls there were two new polls

by mainstream Media One The Wall Street Journal yesterday said that Trump was up three nationally and I think CNBC had a poll this morning saying that Trump was up two nationally that's very good because that's the popular vote that's a popular vote so if Trump is winning the popular vote it's Landslide most prognosticators say that because the Republicans have a slight Electoral College advantage that Harris would need to win the popular vote by more than 2% to have a chance at winning the Electoral College so if Trump is winning the popular vote then it's a

landslide second area is if you look at the state-by-state polling Trump has been advancing pretty much in every Battleground State for the last couple of weeks if you use RCP Trump is now ahead slightly in every Battleground State and the momentum is all towards Trump and then the final data point is around early voting in states where they have this early voting and put out the numbers the Republicans are tracking well ahead of where they were in 2020 now there's still a question of you know do this mean that Republicans are just shifting their votes

to voting earlier and then they'll do less well on Election Day there's always that chance but right now if you're a republican it's what you want to see and if you're a Democrat it's definitely not what you you want to see yeah and the essay that Nate silver wrote that was published by the New York Times yesterday said it's a 5050 tossup either candidate could win but my gut tells me it's going to be Trump he's kind of indicated that's where you know as a guy who's obviously been a big prognosticator says the Market's headed

jel you think saaks is is right on this anything for to mention prediction markets prediction markets have moved very very sharply in favor of trump it's almost two3 oneir now in favor of trump so there's been a huge move among betters that Trump is gonna win on poly Market yeah poly market and then Ki as well do you think it's over jcal I'll go with Nate I mean I think Nate's probably the best thinker on this who I think puts a lot of into it if he says it's 50/50 with a slight advantage to Trump

I think I would go with his gut but he's saying don't trust anybody I don't trust the prediction markets and I think the prediction markets are closing that Gap as we get closer because they are easily manipulated poly Market is only offshore right the US market is not allowed to participate in poly market so it's all foreign investors now of course Americans could be putting money overseas somehow and and using foreign accounts to to place these bets I'm guessing if you were a sharp and you really want to make money that's what you would do

so I don't know what percentage of it it was it was reported this morning that a French Trader has bet $45 million on Trump on poly Market that he is the whale he's a French national with quote extensive trading experience he's not quote manipulating the market he just really is trying to build a big position so he sounds like he's a pretty active Trader that uh made the big move but it's a crypto-based site so you you get the benefit of like you can track some amount of this on blockchains and then eventually find the

person but because it's crypto as well you can also hide yourself pretty well with tumblers and other systems so I I would discount poly Market uh a bit it's probably not as Extreme as it seems but it does seem like kamla has not helped herself with the interviews they haven't been great and um you know it it is a tossup and so it's any surprise any October surprise come in I mean there have been a few attempts the last couple days I mean it seems like the rhetoric for 24 hours there have been some really

gnarly ones that we shouldn't give it I don't think we should give any freedance too but some Republicans have been coming out talking about like a really gnarly one about the Republican side and I mean it's not much more gnarly than other things that have been said about Trump already and judgments that Trump is against him already for $100 million so it's in that vein but I do think that that looks to me like it's cap and I think there's going to be a lot of fake news maybe even deep fakes that come out you

know in the last week or two so I I think people should not trust anything they see on social media be very careful with that information I'll tell you guys my kind of view is like things seem to be getting more inflammatory leading up to the election here it's like we've got 12 days left or or whatever it is and the the rhetoric and the tonality of the stuff that's being said is getting so nasty on both sides and um I just worry more about the reconciliation reconstruction phase that needs to happen in America see

it on both sides is it equal on both sides you think that's your observation um I like I you know I think like Trump leaning out the window of McDonald's and it was I I mean I laugh pretty hard when he was like someone said to him when they interviewed Trump when he was serving french fries and he said something like I've now worked in McDonald's 15 minutes longer than kamla has and then they one of the reporters said well why do you think she would lie about that and he leans out the window he

says because she's lying kamla and you know it's a funny joke that's his quip he makes fun of everyone but I think the whole thing about making fun of everyone it's such a different tone and a different rhetoric then I think what's going to be needed because imagine if she wins and you know he's painted her as being you know a liar and crooked and deep State I mean look I'm you can possibly compare that to what the Democrats are saying right now which is that Trump is literally hit call him a fist she called

him a fist she said it's democracies on the line and obviously when you say something like that when you say that the fundamental system of the electoral process is on the line it implies that if he wins We've Ended democracy that will inevitably lead people to feel like we are in a place of civil chaos and I don't think that anyone's going to feel good coming out of this how do you guys think we kind of deal with a like the election outcome here one side or the other I mean half the country's gonna hate

the president and half the country is gonna hate where where we are and how we sit as a country and half the country is going to think that democracy is over I mean one half is going to feel like this is the end and it's it just a temporary thing and everyone reconciles and we all like get back to work and the election's over and whoever wins wins I think unfortunately the mainstream media is responsible for giving roughly half the country a psychosis about Trump because they are pushing out this rhetoric non-stop that he's a

fascist that he's Hitler they keep putting out all these fake stories and they are basically training people or indoctrinating them that he's just like threat to democracy I was having dinner last night with someone who's a Democrat who pretty much gets all their information from mainstream media and she's like terrified of this it's just not who Donald Trump is it's a it's ridiculous hyperbole but if you're locked in that media ecosystem and that's all you hear you really are frightened by this so I think that the media the media's irresponsibility the way that they don't

report honestly and that they Jin up these threats has really terrified half the country do you think that the Trump trump is Hitler rhetoric indicates that the Democrats feel they're lying I mean that's like pretty par for the course what's so horrible about that I mean you could make the argument that she's lied about a lot of things as Anderson Cooper interrogated her quite well just yesterday on that town hall he pointed out that she had said 50 times that Trump's was a stupid idea and now she appears to be in favor of it so

I think that accusing your opponent of lying is pretty par for the course for a politician what's not part for the course is saying that your opponent is literally Hitler and a fascist that's just going to a whole different level of rhetoric okay jamat do you think we're in a nasty State and we're going to be able to get out of it after the election and I think we're going to be fine okay I'm actually pretty optimistic because I actually don't think it's going to be that close I mean right now it's looking like maybe

Landslide is too strong a word but a solid victory for for Trump that's what the polls are showing that's the prediction markets are showing that's what the early voting is showing and if you look at all the other data points right now it's showing Trump winning pretty handily the other data point that we haven't talked about is just how these campaigns are acting in the final stretch if you look at the Trump campaign is pretty much Steady As She Goes you look at the comma campaign and they're in this throwing spaghetti against the wall mode

they're back to to kind of the dark Brandon type messaging where the reason to vote for us is Trump's a fascist this is very different than their messaging when they made the switcheroo from Biden to Kamala right when they first made that switch they said okay let's get away from this dark Brandon threat to democracy type messaging it doesn't seem to be working let's emphasize KLA Harris as a change agent as a transformational candidate as a candidate of joy and positive vibes and they did get a big bounce in the PS because of that the

problem is that over the last couple of months that sort of Bounce in the polls has worn off as Harris has not been able to explain what she would change she keeps getting asked in all these interviews what would you do differently than Joe Biden Anderson Cooper just asked her that yesterday for like the 19th time and she still does not have an answer to that question and so the problem she has is that the sort of veneer they gave her as this change agent has kind of worn off and she seen as a continuation

of Biden and the public does not want a continuation of Biden and so now it feels like they're frantically trying to figure out how to reposition they're back to the to the the anti-trump sort of hysterical messaging which didn't work it wasn't working three months ago when they made the the switcheroo so I tend to think that if you look at the behavior of this these campaigns it's pretty easy to see which one feels confident and uh and which one is in a panic okay Jal if you could go back in time and you were

kamla's adviser when she became the nominee what would you have advised her to do differently than she has done in this campaign today I would have had a speedrun primary and I would have let democracy play out that was the big mistake when when the Democrat if the Democrats lose I think they'll look back yeah 100% but and and then in terms of thinking about why people believe that Trump is an existential threat to democracy I encourage everybody who's a fan of this podcast to go back to episode 16 of the all-in podcast and that's

the episode where we all reacted the week of January 6th and we all had great consensus amongst us that we thought this was one of the most disgusting horrific days in the history of the country and that Trump was trying to overthrow the election results and that he was doing so in a non-democratic fashion now I know some people have re underr it or changed their positions but encourage you all to pause this episode and go back and listen to our very thoughtful discussion on episode 16 of the Allin podcast because we were scared as

well I think that things happen in a moment and you have to have enough compassion to say you react in a moment but then you also have to have the intellect to separate yourself from the things that happened learn more and possibly and potentially change your mind I don't want to be defined by a thing that I said in a moment and I won't do that to other people in that moment I thought what happened was really terrible and then since then I've got to know the person and I don't think that he actually incited

much of anything that's my belief yeah and that's fine that's your belief but I do think there's another group of people agree with your original assessment yeah well I think that those people need to also rewrite the way I did because I'm not really want to flip for random reasons but that's not the point the point is I think that if you still believe what you believe then then you should tell people to listen to you said yeah okay but there are L listen to what sa said and listen to what free said I thought

we had a very productive discussion when it happened I think people have memory hold it what you're trying to say which I I partially disagree with is those beliefs have changed over time and I think it's it's more balanced for you to say that that's a point in time and if you believe that that point in time still exists that's fine for you to say that but I think that's the way that you should say it the other thing that I would like to say about this election which I find really interesting is we are

in the part of the cycle now where the side that's losing is going to panic and I think it's happened a couple times but I would just remind everybody we have run the ab test we know what the presidency is going to look like under Trump except you get a real vice president plus RFK plus Elon Musk whether you like them or not but my point is I think you need to consider that you're getting four for the price of one and if the other side if Harris wins you mostly know what the trend will

be because you've seen the trend under four years of Biden the second thing is I think it's interesting to see that when you get into the home stretch the losing side tends to turn on itself because they start to play protectionism for their own careers and there's a lot of stuff that I think you can consume that starts to show that and I think that's just an interesting observation a lot of the tried and true most reliable media sources that I think were trying to navigate as much as possible for a pro Harris presidency are

starting to push back in a way that I find a little surprising I think the CNN town hall yesterday was one of those moments for me where even people like David Axelrod a little bit throwing kamla Harris under the bus I didn't expect that at all so I think it's just important to observe that these things are happening I would agree with that we're going to make it through whatever hold on let me just give one thing to to your point jamat since you know I am challenging you with that episode 16 call out I

do hope that whoever wins we all support that person to do the best they can for all Americans and that's always been my commitment and I did it the last two times and I we will survive this one I don't think we'll survive two or three of these Cycles if we spend 10 trillion each time just you know since um Jak you're referencing an episode that I participated in said said things I mean look I think that the goal of the mainstream media has been to try and keep us in the heat of that moment

for four years I mean if you've watched MSNBC for the last four years it's like j6 is occurring every single day I mean this is all that they talk about but I think like jamas said we have learned a lot of things since that day I didn't know for example that Twitter had censored president Trump's tweets telling all of these people to go home that basically he said to protest peacefully and then when they rioted that he actually published tweets to try and tell them to go home so that was new information and that what

that came out remember at the beginning of the whole primary cycle Trump did that town hall on CNN with Caitlyn Collins where he dramatically pulled the piece of paper out of his pocket with the tweets and started reading them that was a lot of new information for people and I think that gave him a different picture and then I think one other point that I think is important is that imagine if the Press had tried to keep us in the Heat of the Moment of the summer of 20120 riots the George Floyd Floyd riots then

we'd have a very different perception of which party was in favor of riots because Tim Waltz was the governor of Minnesota when those riots occurred he did not want to send in the National Guard Trump did and then K haris tried to raise money for bail for an organization that was bailing out some of these protest ters and riers out of prison so if the media was so inclined they could portray KLA Harris and Tim Waltz as the party of the Riots of the summer of 2020 I think at the end of the day that

both those takes are propagandistic and they happened four years ago and it's certainly a piece of information that voters can take into account but it's only one piece of information and there's a whole lot of other issues and policies in this election and I think at this point everything that happened four years ago is kind of priced into the stock and what voters want to know about now is what would you do on the issues what would you do about immigration what would you do about inflation what would you do about the economy and when

you look at the polling on those issues that voters say matter to them Trump has a decisive advantage and KLA Harris cannot explain what she would do differently than Joe Biden David Axelrod word solid City that's what he said last night which was very shocking that he would say that totally that is throwing her under the bus but it's also just preserving his own credibility because it's hard to look but this is my point Anderson Cooper now has to preserve his own credibility you can only prop up a candidate so long and then at some

point you have to prioritize your own media career and I think Anderson Cooper last night had to start to push back that's what when everyone turned on Biden yeah when that one night when everyone turned on Biden after the debate all the journalists who had been covering Biden for so long that it was obvious in their face the whole time they suddenly had to be like okay I guess we got to admit now now he's not really there I think I think in one important way KLA Harris has been set up to fail here because

on the one hand she wants to distance herself from Joe Biden's record but on the other hand she won't say what she would do differently so she's in this kind of like never Neverland this this limbo yeah that's right but that's also not her fault that's the position the Democratic party put her in and this goes back to what jcal said we should have run a primary they should have run a primary for sure I think they could have had a better candidate but also I think to go back to fre B's question this is

a little bit of a premortem what should they have done differently I think you either defend Joe Biden's record or say what you would do differently you can't be in this limbo State and you know Joe Biden's got to be in the white house there and gritting his teeth like wanting to get out on the campaign Trail and defending his record because I think Joe Biden thinks he has a good record and there are things you could say in favor of that record I mean I personally don't think it's great but you could talk about

the Full Employment picture you could talk about the fact that yes we have had 9% inflation but now it's down to 3% I mean there are things you could say I mean he Market Equity markets are an all-time high I mean he signed a lot of legislation that he obviously believed in so the Democrats do have a record to run on it's not a record that I personally believe in but it's certainly one that I think you could make an effort to defend and I think Biden if he was the candidate would be defending that

record and it's very awkward to have a candidate who was part of this Administration who will not defend that record who distance herself from that record but won't really say with any detail or conviction what she would do differently that is just a losing proposition and I think Anderson Cooper exposed it more than Brett Bearer last night because Anderson Cooper had the time Brett Bearer only had 26 minutes and Brett Bear was seen as adversarial whereas Anderson Cooper is fundamentally a friendly interviewer and when she can't answer those questions for Anderson Cooper that's when you

know you're done by the way we've said this now consistently almost monotonously now for about two or three months she has to go into these swing States and answer about four or five critical questions and and I would just say this is still the problem so if she wants to try to close this Gap in the next 12 days and have a legitimate chance of winning she I think there's still 12 days I mean it's a very simple way to do it number one the Border got out of control we've shut it down already and

we're going to tighten it even more number two the stock market's at a record for a reason number three the employment is at the lowest it's ever been in our lifetimes this is the As Good As It Gets folks and if you go with the other guy honestly look what did on manager well you're a better campaign manager than the person that's running the campaign right now they're not look they're not doing a good job and I think that saak is right they're afraid of their own shadow and they're going to walk into a a

meaningful reset of the democratic party of let me let me even finish it number four this person overturned roie Wade that's what they're doing and his VP candidate has said he wanted a national ban they walked that back but if you're a woman you shouldn't trust them and number five obviously you saw what happened on January 6 he'll do it again and they just said that over and over and listen I'm not Biden Biden obviously needs to retire he was a great president he was a great Vice President we thank him for a service I'm

completely different I have a different approach to all of this and Trump is a wild card that this country doesn't need it the Sun the end and they would win but I don't know who's advising her it's the same thing with Trump I think Trump could have just gone right to the middle and when he was Trump 2.0 he should be up 20 points on her the fact that he's not up 20 points or 15 points on KLA and that this is a dead heat I think is crazy Trump's the easiest candidate to beat Kamala

is the easiest candidate to beat I I wonder who's running both of these campaigns well it's it's hard to be up 20 points when the entire mainstream media is against you that is only reporting positive things about the other candidates only reporting negative things about you and you have a 3 to one money disadvantage one thing you could say for KLA Harris is she has been a good fundraiser there's plenty of billionaires who are funding her campaign they literally have three times more money than the Trump campaign and even in California which is a safe

state for them you're seeing comma campaign ads everywhere that just tells you they're so flush with cash that they can afford to spread the money around even in California so look the reality is that Trump has the entire establishment against against him and I think for him to be ahead in the in the polls and the prediction markets and the early voting fairly decisively is an extraordinary achievement I think he's probably the only candidate who could have done that in any event and and I do think jcal that kamla has tried to make some of

the arguments that you just said not very crisply but she's trying to walk back on the border the problem is they have no credibility on that because the Democrats for the last eight years have fought Trump on the border wall it's his signature issue and if you don't think Republicans should be believed on abortion there's absolutely no reason to believe Democrats On the Border they fought Trump's wall yeah I think that's fair I thinkir they sold parts of it off for scrap metal she was supposed to be the Border Asar didn't even visit the border

which shows that she never thought it was important now she wants to pretend that she's Trump On the Border Public's not buying it to handle the border is just so simple she could just say what work then is not going to work now we we've we've we've filled up and we just Trudeau just did a tweet hey we're taking a pause for two years that's all she's got to do we're taking a pause for two years on the border we obviously it got out of control the end move on to the next issue all right

if the Harris campaign is listening J Cal's advice is out there you you may come on the Pod you're always welcome everyone that's running for president is well did you guys hear this rumor that bar she's not my candidate by the way she's not my candidate did you guys hear this rumor that bartool Sports was asked if they would interview her and they turned her down is that is this rumor true apparently I don't know why wouldn't they take it though they would take the interview so poroy claims that the that the Harris campaign reached

out and asked to be on two or three of their shows and bartool declined having her on which is pretty unbelievable well they just waited way too late I mean there's no question the last month they radically pivoted their media strategy she became the candidate roughly three months ago for the first two months they didn't let her do any press interviews then they realized that their internals were bad they're behind in the polls so now they're having her go out and do a lot of media and like I said a couple weeks ago that started

to create a doom Loop because she is not a great media performer so her polls started getting even worse so then they got to put her out on more media to try and you know rebut that your doom Loop was a good call I I'll give you credit if the Comm campaign were started we'd be saying it's in a death spiral right now okay got it you got your line it's a dead heat we got it let's go so we're gonna wrap up with stares what I think's a pretty yeah starb super interesting topic because

it's a real question around traditional shifting to digital is that why Starbucks is having challenges or is it just maturity or is it what happens when a brand that's successful as a luxury brand gets too big and the kind of you know premium experience commoditized so as you guys know we covered the Starbucks CEO Brian nickel joining a few months ago this was after the prior CEO had been in the office for just 16 months and there were a lot of problems that were plaguing Starbucks but just this Tuesday Brian niichel came on and said

that we're suspending guidance for 2025 after reporting preliminary earnings that showed another drop in sales at Starbucks same store sales which is the key metric in the qsr or um or food and beverage retail business uh it tracks what your revenue is year-over-year same Source sales declined 7% year-over-year uh earnings per share dropped 25% uh year-over-year so Nicholl said we're getting the bad news out of the way now we're going to this back to Starbucks Plan Focus On Experience improve the throughput experience and quality make Barista choose Starbucks as a career and then he went

through a whole plan he put out a six seven minute video on this whole thing so clearly customers are frustrated with the Starbucks product the Starbucks experience the employees are frustrated working there and a lot of the system seem to be breaking down I guess I wanted to kind of talk about what is the core driver and is there a business lesson in all of this about premium brands or about scale and maturity and markets to be learned from the Starbucks story so I don't know if any of you guys have gone through this earnings

report or looked at the um I I go to Starbucks on the regular and I think this really is just a case of founder versus bean counter it's reminds me of Boeing or you know even apple with their inability to produce new products post the the Steve Jobs pipeline of products and if you anybody read pour your heart into it Schultz's biography it's absolutely fantastic and he really had an obsession with user experience like writing people's names on the cups was a Starbucks Innovation remembering people's names empowering the green aprons was like a big part

of this and then once he was out of the bean counters came in and they just got all about efficiency the a much smaller number of Baristas at the store ordering your drink through the app and just trying to make these grinded efficiency decisions as opposed to the experienced ones and I think the Starbucks experience starts and begins with the Baristas and that's the main problem if you've gone to a Starbucks over the last couple years sometimes you go in and there are literally 50 drinks from the like I'm not kidding like 50 drinks on

the pickup counter and then this huge wine if you come in person and it's the most impersonal thing and the the stores are a wreck they're disgusting they look like a truck stop and the whole point of Starbucks was to create this third space this beautiful place that was welcoming with Gorgeous lighting and the Baristas was supposed to make you hang out and enjoy yourself there and they lost that and all you have to do is read Schultz's book and do exactly what he did now there are a lot of other issues there around the

competition for Starbucks employees that I think are super important do you think that's really true jcal because like nickel came on and he said we're going back to the core FL whites espressos nice nice espressos delicious coffee but the reality is in order for them to have grown Revenue over the last 20 years Starbucks has expanded their menu as chamath has pointed out to becoming a seller of sugar they've become a seller of milkshakes and flavored Beverages and high sugar cocktails mocktails that people you know run into the store to buy two three times a

day that's how they were able to get the pickup not selling what they started out doing which was fine italian roast at espresso it's now become a very different product and a very different experience and so can you really go back to the core and not lose all the customers that I would say aren't looking for a flat white and an espresso they're looking for a milkshake in the middle of day I think you want to maintain the core is the key you don't want to give up the core and the core was having a

great inore experience and I think that is not what you get when you go there putting the sugar aside it is I think like going for ice cream for kids so my kids will pick if they want to go for ice cream or Starbucks and to your point about the sugar Mo it's basically the same profile and it's a great place to get breakfast I'll tell you that you know the egg bites and the scum let's watch Nichols let's watch Nichol's clip and then shth you can give us your take on this this is a

30 second clip from nichel six minutes that he put out on Twitter to succeed we need to address Staffing in our stores remove bottlenecks and simplify things for our Baristas we need to refine mobile order and pay so it doesn't overwhelm the cafe experience we're fundamentally changing our marketing we've been focusing on Starbucks rewards customers rather than talking to all our customers and we're changing that quickly we will simplify our overly complex menu fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit we must reestablish ourselves

as the Community Coffee House by the way this is one of the things that Nichols did at Taco Bell when he was the CEO there you guys remember the Taco Bell menu there was always like really interesting hidden things on that menu he simplified the menu made it very small did the same at Chipotle he takes this approach of finding the best product simplifying The Experience simplifying the operations and giving the customers fewer choices that ultimately leads to faster turnaround better experience but the trade-off is you have less variety that people have come to know

and love and at Starbucks in particular where there is just so much variety to choose from now if your favorite beverage got pulled off the menu are you going to start to go there less frequently you know Jam I don't know if you a take on what's going on at Starbucks and whether it tells you something about the maturity about one of the most iconic consumer brands in America this business is in trouble Nick please show the chart this is Eli Lily versus Starbucks if you look at it over a year you could look at

it over the year to date you could look at it over two years five years five years look at that but what does this show this shows sugar versus anti-sugar and anti-sugar is winning say it differently gp1s versus things that cause you to need gp1s gp1s are winning and so I think this existential issue for Starbucks is about resetting to a much smaller footprint and a different product portfolio that tries to see where the puck is going where the puck is going is where a large percentage of the people that probably were buying Starbucks products

and were very loyal Starbucks customers will have very different consumption habits as they more pervasively use these gp1s and this in a nutshell is not something that Starbucks can fix with their current product mix and so I think that they're fighting into a headwind and these other companies are deeply incentivized to get American taste buds to be different and so Jason the things that you talked about are exactly the things that I think start to fall off the menu or just don't sell as much because whatever the population of Americans are that are on gp1s

let's say it's single digits the real question is what percentage of Starbucks customers are on these things and I think it's probably much more than single digits and this is why I think you see the continuous decline in same store sales and I think if you start to graph the adoption of gp1s pervasively in America to the drop in same store sales I think as gp1 adoption goes up same store sales will continue to go down but it doesn't it argue towards the original business freeberg that going there and having a cup of coffee and

hanging out leisurely with your friends and having a conversation and it being a third space is the core value prop and maybe the sugary drinks maybe will fall out of fashion so it may be true but I think that the the core objective of any Corporation is to maximize shareholder value driven by growing profits over time so growing profits over time requires increasing your your revenue and I there are three levers for doing this maximize brand which is to get more customers and I don't know if you can get the brand to be any more

maximal than Starbucks maximize coverage which is how many products can you get those customers to buy whether it's on a daily basis weekly basis or monthly basis how much of their and wallet share you getting and I don't know how many more times you can get people to go back into Starbucks each week than they've done with their Rewards program with their digital with their High throughput tools that they've built over the last decade and so on and then finally maximize price there's a limit to how much you can charge people when you put those

three together you got more customers you're selling them more stuff at the highest price possible at some point you reach a revenue maximum that has happened also at Apple I think that Apple has faced a similar dilemma in the last couple of years which is how do we get more customers it's the most recognized brand on Earth you can only buy so many Apple products now you know they tried to launch The Vision Pro it didn't go well today they announced that their this week they announced their discontinuing production or reducing production on the Vision

Pro and you can only charge so much for these products and I I would argue that Starbucks is a victim of the same maximization effect that at some point you get all the customers you get them to come in and spend and buy as many products from you as they can and you charge them the highest price possible and then you reach this kind of Maximum point on the the business and I think Starbucks has just reach that point of maturity so to your point it doesn't mean that it's a bad business at all it

could be a great business a nicely profitable business but the growth ahead of it is limited it cannot keep growing same store sales as it has historically because they've maximized all three of those levers so fewer costs might be a way to drive more profits you know more efficient operations I think that's the natural next state for nickel to tackle at this company the sad thing for Starbucks is that the only road that they have is to actually double down on sugar and the reason is because the arpus are meaningfully higher than traditional coffee and

so the the economic pressure that shareholders will put on it is to actually stay in the business that they're in and try to do it as long as possible as you say freeberg and just strip out as much cash as possible and then you just you grow profit by reducing cost and getting more efficient versus yeah trying to add more product to get more customers which degrades the experience but the structural problem is Starbucks should be probably a 20 billion asset yeah and so what happens when a company gets to this level of maturity much

like has happened with apple is the multiples compressed no the difference is though that Apple has not had the competitive pressure that Starbucks has because Starbucks competes on a Level Playing Field with the Dunkin Donuts of the world or the Pete's coffees of the world but they compete in an completely orthogonal plane with gp1s and I think that is not something that Apple deals with so Apple can still be at the point that you described earlier which is let me just maximize free Clash flow generation which is what they do and then let me allocate

that back to shareholders via bu back which is also what they do so there could be another decade or so where Apple can continue to run this play with very little impact to them or to the company now I'll say something else about Apple though which is I actually upgraded my phone I think this was three years in and I finally did it my gosh this phone is sucks iOS 18 software is janky iOS 18 is just terrible I'll show you one example of just like terrible design where if an if a designer that work

on my team showed me this I would have fired them look at this can you see this is it possible to understand why you have two images for the Do Not Disturb thing one above the other I no but it's a level of sloppiness and not taking care which which just shows you that it's like we make so much money it just doesn't matter anymore that's what I feel like they're telling me and then I'm like well wait a minute why did I just spend $1,200 of my hard-earned money to upgrade to this thing if

if you don't care how much was it upgrade I think it was like 1,200 bucks for this new phone the other thing is that the actual upgrade itself and I'm not exactly sure why because I didn't take the time to unpack it it took four hours the actual migration of like from an old phone to a new phone and and I thought my gosh this is such monopolistic Behavior right so if it takes you an entire day to basically upgrade your phone at some point you're just going to stay with the platform you're on and

never upgrade or you're just going to stay on the exact same device because it's just too complicated imagine going from an Apple to an Android it's some ways both of these businesses are victims of their own success they reach like Market Market saturation they reached their natural audience and then some and they've just got to figure out what to do next and the adjacencies are hard to find vision are hard adj also photos terrible it's terrible stop changing the interface this is basically a camera and you made it terrible it was good why did you

do that I think they're trying to change things for change sake one of the things Amazon's gotten correct and and other services like eBay and Craigslist is when you have an interface that works and and billions of people rely on it you have to be very very subtle in making changes to it and they made a wholesale change to the photos app and it did not work it garbage how do I get rid of the second silent thing on my thing how how can I just go back to the old thing yeah totally that's when

you know you failed as a product manager when people want the old thing but isn't this just so lazy something's not right yeah I I know there's a lot of Apple people this is come on guys can you just take the control center is what he's showing and the control center is massively confusing it's like changing where the lights are in your bedroom and like okay yeah all right troubleshooting um part of the all-in podcast is over I really want to say thanks to saaks for participating headily in our Starbucks discussion saaks anything you want

to say on the maturity of Starbucks or other mature Tech businesses or value luxury businesses as they get big too big too big to keep growing anything else I mean yeah I'm just not an expert on Starbucks I me I do like their product but what do you get what's your order tell us your order yeah what's your order I just get an Americano with a splash of oat milk oh it's like my order that's a great order what you you're yeah that's great good for you how about I just send you some Specialty Chemicals

so you can just pour it down your throat some Zan milk bad some carigan again and say you put in heavy cream you're gonna get kicked out of Maga cannot be ordering o milk and be Maga they don't have nut milks at Mara Lago I'm gonna find out in a couple weeks I'll let you know don't put that stuff in your body dude I bet they do you should take that sweater that you just took from chamath and wear that marago when you go it's like a perfect sweater for your marago visit oh yeah don't

touch it stop I'm still mad at n I'm going to talk to her about this I'll talk to her at lunch I'll talk to her at lunch she's putting a sundress on before you came on zo she was she was actually she was just sitting on his lap and they were just chatting and I'm like what is going on here outrageous what do you want for lunch I said what do I want for lunch your company that's what I told her oh sweetheart that's what I said she said oh you're like you you speak to

me so much more kindly than Jam does God my God all right this has been another amazing episode of the all in pod as a team player I have been here to pinch hit for jcal he did not want to moderate this week so I stepped in to fill the the shoes J solid job solid job one of this Show's greatest moderators for your Sultan of science for the Rainman for the chairman dictator and for the world's most abs te moderator um I want to thank you all and a great life right now time he's

stealing anything that's not nailed down I'm the world's greatest house guest he's putting together his own gift bag love you besties love you boys bye-bye byebye I'll be there in a couple of hours s let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with it love queen [Music] of [Music] Besties my dog taking driveway man oh man my will meet me we should all just get a room and just have one big huge ory cuz they're all this useless it's like this like sexual tension

that they just need to release somehow what [Music] we need to get [Music] mer I'm going all in