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0:02:01 Welcome to the PropG Pods Office Hours. This is the part of the show where we answer questions
0:02:05 about business, big tech, entrepreneurship, and whatever else is on your mind. If you
0:02:10 would like to submit a question, please email a voice recording to officehours@profitmedia.com.
0:02:15 Again, that’s officehours@profitmedia.com. So with that, first question.
0:02:21 Hey, PropG. This is Ryan. I’m coming to you from Denver, Colorado. I have a question
0:02:27 just regarding the recent rumors that surfaced about Uber’s potential acquisition of Expedia.
0:02:32 We’d love to get your thoughts on just the financial feasibility of this deal. Thanks
0:02:36 for all you do, PropG. I’m a weekly listener of all the pods and love the content you
0:02:38 put out. Keep doing what you’re doing.
0:02:42 Ryan, from Denver, Colorado. Thanks for the question and the kind words. By the way,
0:02:46 I think just Colorado should run America. I think they do a great job there. Hey, it’s
0:02:51 spectacular. They’re beautiful. I just bought a home in Colorado. Anyways, where am I going
0:02:52 with this?
0:02:56 All right. So the Financial Times reported that Uber recently explored the possibility
0:03:01 of buying Expedia, the $20 billion travel booking giant. By the way, they have a fantastic
0:03:06 new CEO. They do a great job. I actually use Expedia. I think they are incorporating
0:03:09 AI in very subtle ways to kind of remember who I am when I show up at the site and they
0:03:13 know my economic weight class, kind of tells I stay up. They do a very good job and I like
0:03:16 kind of the UI, if you will.
0:03:19 Big picture, this would be Uber’s largest acquisition to date and would further diversify
0:03:24 the ride-hailing company. In the past few years, Uber has expanded into other businesses,
0:03:29 including train and flight bookings, food delivery, logistics, and advertising. Some
0:03:34 of Uber’s deals since the one public in 2019 include its expansion into food and beverage
0:03:38 delivery via the acquisition of Postmates for, I think it was about $2.7 billion and Drizly
0:03:44 for $1.1 billion. I bet they overpaid for that thing. Drizly, $1.1 billion, really.
0:03:47 It also went into the freight and logistics business through a two and a quarter billion
0:03:53 purchase of Transplace. Uber also purchased Karim, a Middle Eastern ride-hailing business
0:04:00 for $3.1 billion. Wow, that’s serious shit. So this is essentially, companies can either
0:04:06 expand horizontally or vertically and that is they can go after similar businesses or
0:04:12 they can try and find, basically offer more businesses to the same consumer.
0:04:18 I kind of like the idea of one app that uses AI and I say, “Okay, so tonight I’m going
0:04:23 home to London. I like the idea of hitting the app and then using AI.” It says, “Okay,
0:04:28 when do you want to travel? How many people?” And it kind of does the whole thing. It says,
0:04:33 “All right, these are the flights we think you’d want to go. These are the hotels we
0:04:38 think you’d want to stay at. By the way, we’re going to ask you a bunch of questions once
0:04:42 you figure it out and say, “I want this. Use voice-enabled AI. We’re going to set up the
0:04:45 Ubers. We’re going to set up the right seat for you on the plane because we know your
0:04:51 preference.” There’s going to be a travel app that just takes you off the table. And
0:04:57 I also think that Uber has such an incredible, Uber’s primary asset is it has user interface
0:05:03 and custody of the consumer, incredible trust with, I don’t know, I don’t know what they
0:05:08 have, 100, 200 million people. Also, I would absolutely be going shopping if I was Uber’s
0:05:12 head of corporate development right now. The stock is up 56%, meaning they’re kind of playing
0:05:16 with the house’s money. And Expedia’s market cap, just under $20 billion, they probably
0:05:22 have to pay $25 or $30. Their stock is up 24% a year to date, but Uber’s market cap is
0:05:28 173 billion. So you’re talking about what is potentially probably about a 15% dilution.
0:05:33 For them to have those assets and those additional consumers, I do think there’d be synergy there.
0:05:40 More Uber towards Expedia than Expedia towards Uber. Also, Dara knows the company really well.
0:05:44 What are the successful acquisitions? Well, first off, there are a few of them. Only one
0:05:49 in three acquisitions works or pays off. Why? Because it’s kind of the lazy CEO’s way to
0:05:55 greater compensation. What do I mean by that? All behavior in a company can be reverse engineered
0:06:01 to the compensation of the senior executives. And the way compensation works for CEOs the
0:06:08 following, the compensation committee looks at the compensation of CEOs in that industry
0:06:14 of companies that size. So there is an incentive to get bigger. Also, there’s an incentive
0:06:19 to diversify into other fields such that it smooths out your earnings. And everyone’s
0:06:24 looking for the transformational acquisition that’s going to do for their company what
0:06:30 Instagram did for Metta or what YouTube did for Alphabet. A great acquisition can be transformational,
0:06:34 but you almost always overpay because the assets you want are expensive and they want
0:06:39 a premium and they can only sell once. And they almost always, generally speaking, overpay
0:06:45 for the acquisition. So most acquisitions don’t work out well. And the most valuable company
0:06:48 in the world, Apple, effectively does almost no acquisitions because they see their cultures
0:06:53 being very important. They don’t want overpay. And they’d rather build stuff. Anyways, in
0:06:58 this instance, I think it’s a really interesting idea. I like it. The dog likes it. Question
0:06:59 number two.
0:07:05 Hey, Scott, this is Barton in San Diego. I’m a longtime listener and I always appreciate
0:07:11 hearing your good faith, a well thought out point of view, even when I disagree. Something
0:07:17 you bring up a lot is how Europe has stagnated economically while the US enjoys growth over
0:07:23 recent decades. For me, it seems like the growth is mostly on paper and mostly for the rich
0:07:30 while the average European enjoys, in practice, a much higher and more secure quality of life.
0:07:38 What am I missing here? And what do you think the US can do to ensure that security while
0:07:39 maintaining growth?
0:07:43 Barton, that is a really thoughtful question. And also, I just want to acknowledge there
0:07:48 is some truth to what you’re saying because most of our stats look at economic growth
0:07:53 and aggregate. Look at household income and aggregate. First off, let’s acknowledge the
0:07:59 US has been driven by the prosperity of the top 1%. And I think one of the unhealthiest
0:08:04 metrics we have out there is the Dow Jones or the NASDAQ because it gives you the impression
0:08:08 that the economy is doing really well. Well, guess what? 1% of the American populace owns
0:08:13 90% of the economy. So essentially, the Dow Jones industrial average in the NASDAQ are
0:08:20 metrics on how well the 1% is doing. And guess what? 71 new highs this year. So, okay, spoiler
0:08:26 alert, the top 1% are absolutely killing it. But also, the American public lets it happen
0:08:32 because one of our superpowers is our optimism. And people believe there’s a shot they’re
0:08:37 going to be in the 1%. So how would you categorize or how would you summarize the American economy?
0:08:43 I still believe that America is the place that if you’re talented and want to go flat
0:08:47 out, you just want to run so fucking hard. You want to leave it on the field. You’re
0:08:51 not working to live. You’re living to work. You want to be economically secure. You really
0:08:57 want to go after influence, power, and economic security. America is absolutely the best place.
0:09:03 Things just go slower in Europe. Average incomes in Europe lack 27% behind the US with wages
0:09:09 that are 37% lower. If you took out London out of the UK, essentially the household income
0:09:15 is lower than it is in our poor state in the US, Mississippi. Between 2010 and 2023, the
0:09:23 US saw its GDP grow by 34% while the EU managed only 21%. So, a lot of people say, “What’s
0:09:29 different between Europe and the US?” I mean, it’s a few things. On a very base DNA level,
0:09:35 the US is everyone who decided to leave, and Europe is everyone that decided to stay. Think
0:09:41 about that. The people who left, and by the way, they’re selfish. My mom left two siblings
0:09:46 that were still in an orphanage. Both her parents were gone. That was a selfish move,
0:09:52 but she came to America and off a secretary’s salary. My mom lived and died a secretary,
0:09:57 but we as an upper, lower, middle-class family, I think we had better lives than the majority
0:10:04 of our family that stayed in the UK. Now, why is that? Risk-taking, infrastructure, natural
0:10:09 resources, incredible education institutions, geographically blessed with friendly Canada
0:10:15 to the north and harmless Mexico to the south, more oil reserve with the largest energy producer
0:10:20 in the world, largest coal. I mean, we’re just so blessed. We’re one of the largest
0:10:24 agricultural producers in the world. We produce the brightest minds. Not only that, the brightest
0:10:28 minds in the world all have one thing in common. They want to come to the US. So, we’re just
0:10:34 blessed with a ton of attributes. And back to risk aggressiveness, one of the stats I love
0:10:38 is that there are dramatically more per capita entrepreneurs in the US coming out of college,
0:10:43 but even more importantly, we have the capital to fund their dreams. For every startup in Europe,
0:10:48 there’s 1 million in venture capital raised. For every startup in the US,
0:10:53 there’s 5 million in venture capital. So, we have five times the risk capital.
0:10:57 Anyways, long-winded way of saying, I’m not entirely sure, but I think it’s about risk
0:11:02 aggressiveness. It’s about capital and some of the natural blessings we have. And if Europe
0:11:06 wanted to inspire growth, they would need to have government subsidies to tech companies and also
0:11:14 a bigger investment in a world-class engineering educational institutions. Thanks for the question.
0:11:18 We have one quick break before our final question. Stay with us.
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0:14:42 Welcome back, question number three.
0:14:50 Hi, Scott. I’m in my mid-30s married and have a two-year-old. I manage three properties while
0:14:56 working two jobs. Growing up, my parents always did everything themselves to save money. So I’ve
0:15:03 had a hard time outsourcing tasks to contractors. Even though I know hiring help would make things
0:15:10 easier, I tend to focus on money I save doing it myself, which ends up taking more time and adding
0:15:16 stress. It’s becoming harder to manage, especially with the two jobs and caring for my toddler.
0:15:22 I want to scale up and start investing in commercial properties, but the amount of work I
0:15:28 already have is holding me back. Do you have any advice on how I can change my mindset
0:15:32 to be more comfortable with the outsourcing so I can grow my business?
0:15:40 So Anonymous, first off, you’re a young man who’s raising a kid and you own real estate.
0:15:46 This puts you in the top 10% of men in terms of your success. You’re already building
0:15:52 a future for yourself, for your family. So the first is, yeah, you’re stressed out,
0:15:57 but just be clear, don’t be hard on yourself. You’re doing really well. And if you are feeling
0:16:01 stressed and occasionally sort of overwhelmed, that’s kind of where you should be. The arc of
0:16:09 happiness where you have the y-axis is happiness and the x-axis is age. It looks like a smile and
0:16:17 that a zero to 25 is beer, prom, you know, making out. It’s a lot of fun in Star Wars. 25 to 45 is
0:16:22 what I call the shit gets real part of your life. It’s hard, economic stress. Kids are stressful.
0:16:27 I mean, I know it’s supposed to be all like fun and hallmark moments and things to make TikTok.
0:16:32 It’s not. Generally speaking, when people have kids, they’re less happy. They’re happier over the
0:16:38 long term, but during the child rearing years, it is stressful. So look, in terms of how you
0:16:43 develop a mindset around growth, what I have found, I mean, it’s a double-edged sword because
0:16:50 you kind of want to be all over everything. I think that’s the attribute of a founder and an owner,
0:16:56 but at the same time, if you’re fortunate enough to find someone good, a good property manager,
0:17:00 someone who comes to work with you as an intern and they’re good, this is what you got to do.
0:17:06 You got to be generous with that person and make it near impossible for them to leave. Why?
0:17:13 Because greatness, right? And a more boring word for that is scale. Greatness and scale is in the
0:17:21 agency of others. And my kind of core competence is storytelling, but my superpower is the ability
0:17:26 to attract and retain really talented people. And by the way, that’s not just paying everyone more.
0:17:30 If someone isn’t working out, you got to get rid of them. You’re a small company. You don’t have
0:17:35 time to find the right role for them. I am pretty harsh that way. To get to the first 10 or 20 super
0:17:40 people, it takes me 30 to 50. And it’s not fun. It’s not aspirational. It’s not pleasant, but
0:17:44 it’s hand down combat in the beginning. But when you find someone really good,
0:17:48 you got to sit them down and you’re going to say, this is our plan. We’re going to buy commercial
0:17:55 property here. We’re going to build this asset and I’m going to give you 1, 2, 3% of the profits,
0:18:00 whatever it is. Give them ownership. You want them to act like owners. And the only way to make
0:18:05 them act like owners is to make them owners. And that is say, I have my shit together. This is
0:18:09 my plan. This is how we’re going to raise capital by commercial properties is the opportunity. And
0:18:16 this is why you are going to participate in our success. You’ll, you should be able to recognize
0:18:22 those people and to let go and to not be all over them. So give them some slack. But the key
0:18:27 to any type of scale, the key to you not being totally stressed out. And by the way,
0:18:32 you’re going to be stressed out. Owners have to be all over almost everyone, almost all of the time.
0:18:40 Greatness is in the agency of others. Focus on finding the right others and keeping them.
0:18:45 That’s all for this episode. If you’d like to submit a question, please email a voice
0:18:50 recording to officehours@proppgmedia.com. Again, that’s officehours@proppgmedia.com.
0:19:03 This episode was produced by Jennifer Sanchez and Caroline Shagren. And Drew Burroughs is our
0:19:07 technical director. Thank you for listening to the ProfG Pod from the Vox Media Podcast Network.
0:19:12 Please follow our ProfG Markets Pod wherever you get your pods for new episodes every Monday and
0:19:18 Thursday. Hey, it’s Scott Galloway. And on our podcast Pivot, we are bringing you a special
0:19:23 series about the basics of artificial intelligence. We’re answering all your questions. What should
0:19:27 you use it for? What tools are right for you? And what privacy issues should you ultimately watch
0:19:33 out for? And to help us out, we are joined by Kylie Robison, the senior AI reporter for The Verge,
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0:00:47 Hey, it’s Scott Galloway, and on our podcast Pivot,
0:00:51 we are bringing you a special series about the basics of artificial intelligence.
0:00:52 We’re answering all your questions.
0:00:55 What should you use it for? What tools are right for you?
0:00:58 And what privacy issues should you ultimately watch out for?
0:01:01 And to help us out, we are joined by Kylie Robison,
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0:01:10 So, tune into AI basics, how and when to use AI.
0:01:13 A special series from Pivot, sponsored by AWS,
0:01:15 wherever you get your podcasts.
0:01:19 What is AI actually for?
0:01:21 Everybody is talking about AI.
0:01:23 Wall Street is obsessed with AI.
0:01:25 AI will save us. AI will kill us.
0:01:28 It’s just AI, AI, AI, everywhere you turn.
0:01:33 But what does any of that actually mean, like, in your life right now?
0:01:35 That’s what we’re currently exploring on The Vergecast.
0:01:40 We’re looking for places and products where AI might actually matter in your day-to-day life.
0:01:43 And I don’t just mean for making your emails less mean,
0:01:45 though I guess that’s good, too.
0:01:49 Lots of big new ideas about AI this month on The Vergecast, wherever you get podcasts.
0:01:55 Welcome to Raging Moderates, I’m Scott Galloway.
0:01:56 And I’m Jessica Darlove.
0:01:58 How are you, Jess?
0:02:00 I’m really good. How are you?
0:02:01 I don’t believe you. And to…
0:02:05 No, it’s true. My algorithm doesn’t hate me anymore.
0:02:08 I’m, like, coconut-pilled again. I’m having the best time.
0:02:13 I don’t know if Elon just wants to spare me or what, but no, it’s genuine.
0:02:19 So, I can’t tell if this election that I’m now older and wiser in this election
0:02:23 really is a consequential and there’s no reason to be stressed,
0:02:27 or I’m just older and stressed over anything.
0:02:32 And I found the only thing that helps is I listen to 80s music
0:02:35 that plays over, like, peanuts cartoons.
0:02:35 Okay.
0:02:39 That really calms me down, especially the cure
0:02:41 and all the peanuts characters dancing.
0:02:43 That brings me a moment of calm.
0:02:45 Also, the traveling will vary strangely enough.
0:02:47 Their music seems to calm me.
0:02:49 Okay, in today’s episode of Raging Moderates,
0:02:53 we’re discussing what the campaign trail looked like during the final week,
0:02:55 what to watch out for on election night,
0:02:59 and, of course, we’ll wrap up with our final predictions.
0:03:02 The thing that has absolutely blown my mind
0:03:04 is that poll that came out of Iowa.
0:03:05 Yeah.
0:03:06 And actually, I’m going to let you take this
0:03:09 because you’re the pollster and you’re so much better at this than me,
0:03:13 but explain for the listeners why that is significant and what it is.
0:03:16 Well, I wouldn’t say that I’m better at it than you.
0:03:19 And I’m interested in your thoughts
0:03:21 because I feel like I spend too much time
0:03:24 crosstab diving or whatever it’s called.
0:03:28 But J. Ann Selzer, who is the pollster there in Iowa,
0:03:33 is widely considered one of the top pollsters in the country,
0:03:36 certainly the top one in Iowa and probably the top one in the country
0:03:37 for most people.
0:03:39 And I think that there is going to be,
0:03:42 depending on the outcome Tuesday night,
0:03:46 there is going to be another reckoning with the polling industry
0:03:49 that seems to have been “herding” all of these polls.
0:03:52 No one wants to be an outlier in any way.
0:03:56 So they’re just telling us in like 50 different languages,
0:03:57 this thing is really tight, this thing is tied.
0:04:00 Maybe it’s one point advantageous way, one point the other way.
0:04:05 And Ann Selzer comes out with her final Iowa poll
0:04:08 that has Kamala Harris up three in Iowa.
0:04:09 Iowa, yeah.
0:04:10 In Iowa.
0:04:15 So Donald Trump won Iowa in 2020 by eight points.
0:04:18 So this is a significant swing.
0:04:22 And I think he was up like 18 on Biden before Biden left the race,
0:04:24 which is not that surprising,
0:04:27 because a lot of people felt like Biden should have left the race.
0:04:30 So maybe then you take it down to an actuality,
0:04:32 he would be like up eight to 10,
0:04:34 something that you would feel is more normal.
0:04:39 But this is a complete earthquake in the polling conversation.
0:04:41 A lot of people want to dismiss it,
0:04:43 but most of the pollsters and commentators
0:04:45 who know what they’re talking about
0:04:49 are looking at this as a harbinger of a trend.
0:04:52 So even if Donald Trump wins by five points,
0:04:54 let’s say she’s eight points off on this,
0:04:57 that’s still a really shitty result for Donald Trump
0:04:58 and what he needs in all of this.
0:05:01 And it would be indicative of the fact
0:05:04 that Harris should be winning Wisconsin and Michigan
0:05:06 and probably Pennsylvania.
0:05:10 And the big underlying story in the poll was the gender gap,
0:05:12 which we’ve been talking about a lot.
0:05:14 The Harris up 20 with women,
0:05:18 up 28 points with women who are affiliated with no party,
0:05:20 who are “independence.”
0:05:22 But the thing that was blowing everyone’s mind
0:05:24 is the granny gap.
0:05:28 So Harris is up two to one with seniors,
0:05:29 with female seniors.
0:05:33 And she did a ton of interviews over the weekend.
0:05:35 She was on with Tim Miller on the Bull Work podcast.
0:05:37 And I would really recommend everyone listen to it
0:05:39 if you’re interested in getting to know her a little bit better
0:05:43 and hearing a deeper dive into the methodology.
0:05:47 But she was talking about how Iowa’s abortion ban
0:05:48 came into effect.
0:05:50 So it was litigated through the courts
0:05:53 and it actually was implemented over the summer.
0:05:55 So this is fresh in people’s minds.
0:05:59 She said, these older women are not only looking at a world
0:06:01 where their daughters and their granddaughters
0:06:03 are less free than they were,
0:06:05 which frankly pisses anyone off, right?
0:06:07 No matter what the subject is,
0:06:10 you know, abortion, a healthcare issue or otherwise.
0:06:13 But what was really interesting is this line
0:06:18 between what people think of as abortion,
0:06:19 typically pro-life people
0:06:21 and what people think of as healthcare.
0:06:23 And now that we live in a world
0:06:25 where you can have a miscarriage
0:06:27 and be denied care for that,
0:06:29 people are saying like,
0:06:32 how dare you lump this in with abortion?
0:06:34 And Iowa has this very restrictive ban
0:06:37 that came into effect just a few months ago.
0:06:40 And there are other factors that could be playing into this.
0:06:42 Like tariffs have hurt farmers really hard.
0:06:45 It started under Trump and frankly did continue under Biden,
0:06:47 the soybean farmers in particular.
0:06:50 And one kind of wild card in this
0:06:53 that I was wondering if you thought had any impact
0:06:55 is Tim Walls.
0:06:57 ‘Cause you would think that Tim Walls would be someone
0:07:01 that was very resonant with an Iowa voting base.
0:07:06 And if they thought maybe Kamala was a San Francisco lefty,
0:07:10 that Walls would have felt like a moderating factor
0:07:11 in all of this.
0:07:13 But net net, my mind is blown.
0:07:15 And what was really interesting
0:07:16 for those who want to dismiss it,
0:07:18 and I brought it up yesterday.
0:07:19 I was on Fox a couple of times on Sunday.
0:07:23 We did normal programming in the lead up to the election.
0:07:27 There was a poll out that Trump is only up five in Kansas,
0:07:29 only up three in Ohio.
0:07:31 And in Nebraska’s second congressional district,
0:07:35 you know how there’s one vote in Nebraska that is separate.
0:07:37 Kamala is up 12 and I believe Biden only won it
0:07:39 by seven or eight.
0:07:43 So that speaks to a regional shift
0:07:47 versus just Ann Selzer is out over her skis.
0:07:50 What do you think about all of the things that I said?
0:07:54 – So, first off, I think there’s more than a kernel,
0:07:57 a bushel of truth in everything you believe
0:07:58 and that I believe.
0:08:01 The issue is we are absolutely cherry picking data
0:08:02 that makes us feel better about ourselves
0:08:03 or better about our views.
0:08:05 – That’s fine, it’s our show.
0:08:10 – That’s right, it’s confirmation bias gone crazy.
0:08:12 So it wasn’t the Iowa poll,
0:08:16 it was that this woman Ann Selzer who is from the heartland,
0:08:18 she doesn’t live in LA or New York
0:08:23 and has this annoying habit of being remarkably correct
0:08:26 with her polls, arguably the best pollster in the nation.
0:08:30 – And she caught Obama’s rise and Trump’s rise.
0:08:33 – Yeah, and doesn’t appear to have a bias,
0:08:35 it appears to be doing what she’s supposed to be doing
0:08:38 and for Harris to be up three or four,
0:08:40 that would be like if all of a sudden a poll came out
0:08:43 in Florida and showed Harris up
0:08:46 by almost outside the margin of error.
0:08:49 And if this in any way is a harbinger of what’s going on,
0:08:51 it’s just exceptionally good news.
0:08:55 And then I look at Holly Market, I was going to,
0:08:58 and I’m still trying to, I’m thinking about doing it today,
0:09:01 but I wanna make Wednesday morning either really good
0:09:03 or really bad for me.
0:09:08 So I am gonna wager a significant amount of money
0:09:10 for me on Harris, one, because I do think
0:09:13 she’s gonna win, but two, supposedly,
0:09:15 I know a lot of media is looking at this thing
0:09:18 and I like the idea of giving her a little bit of a bump.
0:09:20 And also I think I told you this,
0:09:23 she is on a risk-adjusted basis just a great bet right now
0:09:25 ’cause if you assume it’s a coin flip,
0:09:30 right now the odds are 39.6% likelihood that she wins,
0:09:34 meaning to get a million dollars back,
0:09:36 you have to bet $396,000.
0:09:39 Now, if I’d had bigger balls last week
0:09:41 and I’d done this last week when I said I was gonna do it,
0:09:45 I would have only needed to wager $333,000
0:09:47 and I would have got three to one,
0:09:48 I would have got a million bucks back.
0:09:51 Now, her odds have dramatically increased on Holly Market,
0:09:52 which I think has an underlying bias
0:09:54 ’cause the people who are likely gonna go on
0:09:56 an online gambling site are younger and more male,
0:09:58 i.e. more Trump.
0:10:00 But the fact that even these sites
0:10:04 are seeing momentum with her, I was big.
0:10:07 And the thing that we talked about,
0:10:10 Tony Hinchcliffe, the thing you mentioned,
0:10:15 I heard that we have 300,000 people in swing states
0:10:17 doing what I love, the term used, souls to polls,
0:10:20 helping people get to the ballot box
0:10:22 and that they have somewhere between 30 and 50,000.
0:10:26 So we’re running somewhere between six and 10 to one
0:10:29 in terms of actual ground game in these swing states.
0:10:31 And then, and I mentioned this last time,
0:10:34 my friend Whitney Tilson says all of his friends
0:10:36 on the ground are saying that the Latino vote
0:10:38 is more energized.
0:10:40 The thing you haven’t mentioned that I think
0:10:44 is gonna play a role is in not one, not even two,
0:10:48 but three of the most recent Trump appearances,
0:10:50 it feels as if in the last three months,
0:10:52 he has aged 10 years.
0:10:56 The last one I saw of him, he had that.
0:10:59 When I saw, remember when Joe Biden popped up
0:11:02 to do the stupid garbage comment?
0:11:05 First up, I’m like, oh wait, I forgot, Joe’s still here.
0:11:09 And it was if he was sending a video to his grandkids
0:11:11 as he was going into hospice, I’m like, Jesus Christ,
0:11:13 this guy’s dying.
0:11:14 – We made the right decision.
0:11:16 – Oh, unfortunately we made it six months too late
0:11:20 in my view, but anyways, or maybe six months too late.
0:11:24 But Trump, in that last rally, he looked edled,
0:11:29 he looked weak, he’s getting that weak breath, weak voice.
0:11:30 Maybe he’s just exhausted.
0:11:32 I don’t know, it doesn’t matter.
0:11:36 But he has always presented himself as much more robust.
0:11:39 Fairly, he comes across as more robust as Biden.
0:11:41 But the last few times I’ve seen him speak,
0:11:46 his America has basically said we’ll take obnoxious,
0:11:52 we’ll take offensive, we’ll take whatever it is,
0:11:55 someone whose policies we won’t agree with
0:11:58 on the Biden side, what we will not tolerate
0:12:00 is old and weak.
0:12:01 That’s it.
0:12:02 That’s what kicked Biden out of the race,
0:12:04 came across as old and weak.
0:12:09 It feels like the momentum huge through the debate
0:12:12 and the momentum flipped back to Trump dramatically
0:12:14 over the ensuing three weeks.
0:12:18 And I would argue in the last 96 hours,
0:12:20 maybe the last five days,
0:12:25 it feels like the momentum has swung back substantially
0:12:26 towards Harris.
0:12:28 And I can’t tell if the only people I know knocking on doors
0:12:31 are Harris people reporting back positive news
0:12:32 that I wanna hear.
0:12:35 But, and that my algorithm is just serving me the shit
0:12:36 I wanna see.
0:12:39 I went on Diary of his CEO with Stephen Bartlett,
0:12:41 who’s the biggest podcaster in the UK
0:12:43 and this is incredibly impressive young man
0:12:46 to talk about the election and the comments.
0:12:49 It was just 10 to one people railing against me.
0:12:51 You know, the same comments they give to us.
0:12:53 These people are not moderants, da, da, da.
0:12:55 The last week has been all Kamala.
0:12:58 Also, even did you see the SNL sketch?
0:13:02 – Yeah, I thought she was so charming and funny.
0:13:03 – And kudos to them.
0:13:05 Kudos to the writers who figured,
0:13:07 I mean, these people naturally aren’t that funny themselves.
0:13:07 Some of them are.
0:13:12 I thought actually Obama had decent instincts around humor.
0:13:16 But the writers, you get the sense, spoiler alert,
0:13:19 that SNL writers are probably pretty regressive
0:13:20 and that they sat down and they said,
0:13:22 “All right, this shit is serious.
0:13:24 “We have got to make her likable, intelligent
0:13:27 “and it’s got to be funny, yet poignant.”
0:13:29 And they just nailed it.
0:13:31 I mean, they just nailed it.
0:13:34 She came across as likable, funny, poking fun at herself,
0:13:38 but not enough while depositioning Trump
0:13:40 and keep Kamala and carry on a lot.
0:13:41 I mean, it just–
0:13:43 – Give me your Pamala.
0:13:43 – Oh my gosh.
0:13:46 That was, it was, it was wonderful.
0:13:47 I keep hearing about the ground game.
0:13:49 Every time I see him, I think,
0:13:51 “Wow, he looks older and older and older.”
0:13:55 – Yeah, I think the SNL moment was definitely worth
0:13:59 the FCC violation, so NBC had to give Trump,
0:14:01 I think like a minute and a half commercial
0:14:05 during a car race yesterday or something like that.
0:14:06 I don’t think they care.
0:14:08 – Okay, let’s take a quick break.
0:14:09 Stay with us.
0:14:16 Support for Prop G comes from Wondery
0:14:19 and their new podcast, “The Best Idea Yet.”
0:14:20 Did you know that McDonald’s Happy Meal
0:14:23 has sold over 35 billion boxes,
0:14:26 possibly making the best-selling meal in history,
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0:14:34 over 250 years ago?
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0:14:43 and the people who brought them to life.
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0:14:47 and offer you fun and surprising anecdotes,
0:14:49 like how Super Mario only exists
0:14:52 because Nintendo couldn’t get the rights to Popeye.
0:14:55 From the Happy Meal to Pest Dispensers to Air Jordans,
0:14:57 every week on “The Best Idea Yet,”
0:14:59 you’ll be able to discover the surprising stories
0:15:01 behind these viral products and more,
0:15:02 and you’ll also be picking up
0:15:05 real business insights along the way.
0:15:07 Follow “The Best Idea Yet” on the Wondery app
0:15:09 or wherever you get your podcasts.
0:15:11 You can listen to “The Best Idea Yet” early
0:15:14 and ad-free right now by joining Wondery Plus.
0:15:18 (upbeat music)
0:15:22 Support for Prop G comes from Quince.
0:15:23 It’s getting colder out there,
0:15:24 and that’s a great opportunity
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0:16:23 – What software do you use at work?
0:16:24 The answer to that question
0:16:27 is probably more complicated than you want it to be.
0:16:31 The average U.S. company deploys more than 100 apps,
0:16:33 and ideas about the work we do
0:16:36 can be radically changed by the tools we use to do it.
0:16:38 So what is enterprise software anyway?
0:16:40 What is productivity software?
0:16:42 How will AI affect both?
0:16:44 And how are these tools changing the way
0:16:45 we use our computers to make stuff,
0:16:48 communicate, and plan for the future?
0:16:50 In this three-part special series,
0:16:52 Decoder is surveying the IT landscape
0:16:54 presented by AWS.
0:16:56 Check it out wherever you get your podcasts.
0:17:02 – Welcome back.
0:17:05 We, of course, had a great guest
0:17:07 because I believe you know them or are friends with them.
0:17:09 We had Charlemagne the God on.
0:17:12 Let’s hear a quick clip from that appearance
0:17:14 with Charlemagne the God.
0:17:16 – Like, you know how many people I run into every day
0:17:21 who literally have not heard 95% of the crazy rhetoric
0:17:23 that has come out of Trump’s mouth
0:17:25 or come out of people in his camp’s mouth?
0:17:27 And so it’s like, you should keep putting that
0:17:30 in people’s face to let folks know what he’s saying,
0:17:31 what he’s planning to do,
0:17:34 and you should keep drilling home your message,
0:17:37 your plan for the economy, especially her,
0:17:40 ’cause he’s only been running for 100 days.
0:17:42 – So to find the rest of that interview,
0:17:44 type in Raging Moderates wherever you get your podcasts
0:17:46 and hit follow.
0:17:47 We have more election coverage coming out,
0:17:49 so please subscribe so you don’t miss an episode
0:17:51 or write enough of the mid-pod ad.
0:17:54 Jess, let’s get on with the show.
0:17:55 So both campaigns have been
0:17:57 crisscrossing across battleground states.
0:18:01 We had Harris wrapping up her message on the ellipse
0:18:02 and appearing on SNL.
0:18:05 Biden making a gaffe that Republicans jumped all over.
0:18:09 Trump dressing up on Halloween as a garbage truck driver
0:18:11 and RFK Jr. declaring he’s going to take charge
0:18:13 of vaccines and food safety,
0:18:16 which I saw again as yet another unforced error.
0:18:19 What other moments are, are there any other moments
0:18:20 than these that stand out to you and do any
0:18:23 of these moments, do you think make a difference?
0:18:25 – I mean, those were the big ones.
0:18:27 Obviously, if you don’t want to get into the minutiae
0:18:30 of the specific things that he said at a rally,
0:18:33 you know, the Giannis-Antigio Compo lines,
0:18:36 I do think that the prominent role of RFK
0:18:39 in health and safety is something
0:18:41 that low key matters a lot to people.
0:18:45 And I think that because they are the island
0:18:48 of the misfit toys, which I know is how you describe
0:18:50 your business as well.
0:18:52 – My staff, not my business, my staff.
0:18:54 – Oh, your staff.
0:18:55 – Yeah.
0:18:57 – I don’t see them in that way, by the way.
0:18:58 They seem–
0:18:59 – Oh, you don’t know them.
0:19:00 You don’t know them.
0:19:02 It’s like the functional family.
0:19:03 The functional families, you know,
0:19:05 are the dysfunctional ones.
0:19:07 I always say in our reviews that this person
0:19:08 isn’t doing this well.
0:19:09 And I’m like, if they could do this well,
0:19:11 they’d be working at Google, not for you,
0:19:13 here at this Joey Bagadonis podcast.
0:19:16 Anyways, love my staff, love my staff, go ahead.
0:19:21 – So because you have this wild cast of characters
0:19:23 and you can’t get a lot of the people
0:19:26 that you would want to be out there,
0:19:29 you end up with a showcase that has Dana White,
0:19:33 Hulk Hogan, RFK Jr., Tulsi Gabbard, et cetera.
0:19:36 And I think for a certain piece of the base,
0:19:41 that’s really resonant, but RFK Jr. for a normal person
0:19:45 is really like anathema, you know,
0:19:49 because he’s not even representing a departure
0:19:51 from the Democratic Party that I think is resonant
0:19:52 with a lot of people.
0:19:55 The reasons that it happened, for instance,
0:20:00 because he holds these kinds of beliefs about health
0:20:04 because of what a terrible person he has been morally
0:20:07 himself in terms of what he put his former wife through
0:20:10 and ended up resulting in her suicide.
0:20:11 And just the weird stuff, right?
0:20:14 Like having a whale head strapped to the top
0:20:17 of his station wagon and dead bear cubs
0:20:19 in Central Park, et cetera.
0:20:23 And I think that, you know, Trump this time around
0:20:26 can’t say I’ll be surrounded by great people
0:20:29 because 40 out of 44 cabinet secretaries have said
0:20:31 that they’re not for Trump anymore.
0:20:34 So then you think, okay, well, maybe there’s this other layer
0:20:36 of like not the worst people in the world,
0:20:40 but kind of okay people that might go into the administration.
0:20:42 And listen, people love a fancy title.
0:20:45 I’m sure he will be able to get some good people
0:20:48 from the business community to go work for him.
0:20:50 People who have served the country
0:20:53 and feel that this is their patriotic duty.
0:20:58 But RFK Jr.’s views on vaccines and health and safety
0:21:01 are so far outside the mainstream.
0:21:02 I mean, did you see the latest one
0:21:05 that he wants to remove fluoride from the water?
0:21:07 – We’re drinking water, so it’s a cause of cancer, yeah.
0:21:12 – Yeah, not only does it, does water turn frogs,
0:21:13 trans or something like that.
0:21:15 Now we want to get fluoride out of our water.
0:21:16 And Tim Scott was being interviewed
0:21:19 the senator from South Carolina and he was asked
0:21:22 about this and he tried to do the usual dance of like,
0:21:25 oh, I don’t know what you’re talking about, blah, blah, blah.
0:21:28 And it turns out that he co-sponsored a bill
0:21:30 to make sure that there was fluoride in water
0:21:32 in underserved communities in 2018.
0:21:35 Because guess what, fluoride is really important.
0:21:39 You know, I take a two and a half year old to the dentist.
0:21:43 They start talking to you about fluoride at one, right?
0:21:48 And I think that it will really hurt Trump’s candidacy
0:21:53 to have that be someone that we can identify
0:21:57 as a harbinger of quote unquote professionalism
0:21:59 that he would have in there and then to add to it
0:22:02 that he would also be in charge of women’s health,
0:22:05 which is frightening to have someone who’s so,
0:22:07 first of all, disrespectful towards women anyway,
0:22:11 but this weird pro-life Democrat sometimes,
0:22:12 he used to be pro-choice,
0:22:14 I guess he says that he’s pro-life now,
0:22:17 but someone who has never taken any interest
0:22:21 in this issue whatsoever or moderated the party on it
0:22:23 since he switched over.
0:22:24 – I thought that was another tactical error.
0:22:27 I thought he should have said we’re gonna put him
0:22:29 on something around the environment.
0:22:30 – In a corner?
0:22:30 – Well, he’s actually–
0:22:31 – Yeah, actually, yes.
0:22:33 He believes in climate change.
0:22:34 He has some good, yeah.
0:22:35 – He’s good around the environment.
0:22:37 It was soft in this position.
0:22:39 I forget, who was the, who was the guest
0:22:42 when you and I were panelists on Bill Maher together,
0:22:44 which is how we met, how we fell,
0:22:47 how I fell in love with Jess Tarlaugh.
0:22:48 What, who was our guest?
0:22:50 Who was the third person or the person?
0:22:53 – It was Cuomo and Melissa DeRosa.
0:22:54 – Oh, and then you bailed, right?
0:22:55 – For the interview, it was when Maher,
0:22:57 it’s still only two people.
0:22:58 It was like post-COVID, so it was only–
0:23:00 – It’s still, yeah, but it’s still only two.
0:23:03 That was easily the most impossible.
0:23:05 I had to sit around and talk about post-COVID
0:23:10 with the guy who, with Cuomo as he started his apology tour.
0:23:12 That was the most uncomfortable TV I think I’ve ever,
0:23:14 and you got to bail ’cause whatever Fox
0:23:16 doesn’t want it on CNN, anyway.
0:23:18 – It’s Melissa DeRosa who was,
0:23:21 who worked for Cuomo as the other person.
0:23:22 – Yeah, who worked for him.
0:23:23 I didn’t understand the whole thing.
0:23:25 Anyways– – They were promoting a book.
0:23:26 It was a thing.
0:23:29 – Yeah, and I said, oh, anyways,
0:23:32 but I met RFK Jr. backstage.
0:23:34 He’s very handsome, he’s very charming,
0:23:37 he’s very likable, and he started texting,
0:23:38 “Can I come on your pod?”
0:23:40 And I thought, “Well, yeah, sure, why not?”
0:23:43 And I checked with the team and the team was resounding now.
0:23:46 We’re not gonna platform this guy.
0:23:48 And I think they made that, you know,
0:23:51 my island here is the wisdom of crowds.
0:23:53 It’s always good for me to check in
0:23:55 ’cause occasionally, or actually quite frequently,
0:23:57 they get it right and I get it wrong.
0:24:00 And he seems like he’s just gotten crazier.
0:24:03 And the interesting thing, the reason I bring it up,
0:24:04 is that he was the guest.
0:24:05 He did the long form interview up front.
0:24:09 And I thought Bill Maher tried to be as kind as possible,
0:24:12 but asked hard questions and torn limb from limb,
0:24:14 just made him look like an idiot, in my opinion,
0:24:17 just pointed out inconsistencies left and right.
0:24:20 And then RFK Jr., you know,
0:24:23 he’s supposed to come out for the conversation afterwards.
0:24:25 He didn’t come out, he refused to come out.
0:24:26 – Really? – And so, yeah.
0:24:27 – Oh, I didn’t know that.
0:24:28 – Yeah, he didn’t come out.
0:24:29 He was supposed to come out, and I was looking-
0:24:31 – So he’s a baby on top of you.
0:24:32 – Well, his comms person.
0:24:34 And what’s interesting is just a couple of days ago,
0:24:37 I got a text message from his comms person saying,
0:24:38 “We need to speak.”
0:24:40 And I’m like, I immediately texted back,
0:24:40 “What’s up?”
0:24:41 And I haven’t heard back from him,
0:24:42 but I can’t imagine,
0:24:44 I have no idea what they want from me.
0:24:49 Anyways, this is, again, another absolutely unforced-
0:24:52 – A forced error.
0:24:53 – Unforced error.
0:24:57 So, they’re pivoting through the swing states here.
0:25:00 Do you think there’s anything, if you’re advising them,
0:25:01 I mean, this is pretty much it.
0:25:03 This is go time, right?
0:25:04 – Yeah, I mean, it’s election day.
0:25:06 – If you were advising either of the candidates,
0:25:08 anything they should do tomorrow to put a cherry on the top,
0:25:11 or is it kind of like the ball is out of their hands?
0:25:13 – I mean, I think for Trump,
0:25:15 he is facing, as you said, a rally scene
0:25:17 that is not tip-top.
0:25:21 You know, it’s emptier, people are less engaged,
0:25:23 and he is descending a bit.
0:25:27 And if he can muster a few lines of unity,
0:25:32 or even re-centering around his economic message,
0:25:34 I mean, that has been the big problem here.
0:25:36 She has totally matched him
0:25:39 in terms of who’s best to handle the economy,
0:25:42 because he won’t talk about anything normal, right?
0:25:44 He’s advertising on anti-trans issues,
0:25:47 and he’s giving no specifics on his economic plan
0:25:49 anyway, when he does talk about it.
0:25:50 So, I would say to him,
0:25:52 if you could do all of your rallies
0:25:53 and really be talking about the economy,
0:25:55 that would be best for you.
0:25:57 For Kamala, you know,
0:26:01 she can only do with what has been working for her,
0:26:03 staying on message, and I did love that line
0:26:05 that she had to Charlemagne when she did the town hall
0:26:07 with him, where he said, you know,
0:26:11 there are people who say you’re all relentlessly on message,
0:26:14 you stick to your script, you can’t weave at all,
0:26:16 or whatever, and she said, “I say you’re welcome.”
0:26:18 That’s my response to you.
0:26:21 You know, you want somebody that understands
0:26:24 why they’re there to help the American people.
0:26:25 These are the ways that I’m gonna do it.
0:26:27 So, I wanted her to stick to that message,
0:26:31 but I do love when she, first of all,
0:26:34 like genuinely asks people for their vote.
0:26:37 I have found it to be one of her more compelling sides,
0:26:40 where she says, “I’m taking nothing for granted,
0:26:41 and I’m here asking for your vote.”
0:26:45 And I want more, as many of those human moments as possible
0:26:47 in the last few hours of all of this,
0:26:50 where she says, “I know that we are building a coalition
0:26:54 of people who are strange bedfellows.”
0:26:55 You know, that we have these Republicans,
0:26:59 like you have Liz Cheney and AOC backing the same ticket.
0:27:01 That’s rare.
0:27:04 And that she will be a president for all Americans,
0:27:07 and that her cabinet will reflect that,
0:27:10 and that she is not too prideful
0:27:14 to change the way that she thinks about things,
0:27:15 and to take advice from people
0:27:18 that she wouldn’t typically do so.
0:27:20 And I wanna hear that kind of stuff,
0:27:23 ’cause I think people are looking for the reassurance
0:27:25 that if they’ve gone out on a limb,
0:27:28 like if you are a Republican in Iowa,
0:27:32 that is going to end up with a Kamala Harris presidency.
0:27:34 You have gone out on a limb to do that,
0:27:37 and she really needs to continue
0:27:41 talking about how she’s going to meet them in the middle,
0:27:44 and respects what they’ve done.
0:27:46 -Before we break, just a quick review
0:27:49 of the most recent New York Times-Santa College poll.
0:27:52 In Nevada, the poll, the New York Times-Santa poll,
0:27:55 has Harris up by three.
0:27:57 In North Carolina, Harris up by two.
0:27:59 Wisconsin, Harris up by two.
0:28:01 Georgia, Harris up by one.
0:28:03 Pennsylvania tied, Michigan tied.
0:28:06 Arizona, Trump up by four.
0:28:07 The way I read this,
0:28:09 and maybe I don’t have the math correctly,
0:28:13 but then doesn’t it all come down to Pennsylvania?
0:28:15 I guess if, yeah, I think it all–
0:28:17 -Always, but she has more,
0:28:18 I mean, what they’re emphasizing is
0:28:21 she has more paths than he does.
0:28:24 Like the Sun Belt is still in play for her,
0:28:26 and he needs Pennsylvania,
0:28:28 but it has to go through the Georgia-North Carolina path,
0:28:30 and he’s having to spend way more time
0:28:32 in North Carolina than he would have hoped.
0:28:35 My takeaway from the New York Times-Santa poll,
0:28:38 what I was excited to see back to normal levels
0:28:40 of Democratic support with black voters,
0:28:44 and Latino voters, and the gender gap there,
0:28:46 I think it was the gender gap they were saying
0:28:49 was the least in Pennsylvania, which surprised me.
0:28:50 We’ll see how it all bears out,
0:28:55 but I’m still concerned about minority support
0:28:57 for the Democratic candidate.
0:28:59 And one other thing that popped up during the week,
0:29:00 I don’t know if you caught this,
0:29:03 Gallup released a survey around enthusiasm,
0:29:06 and Democrats are right now more enthusiastic
0:29:09 than they were in 2008 with Obama,
0:29:13 and 10 points more enthusiastic than Republicans.
0:29:14 Have you been feeling that?
0:29:16 It honestly surprised me.
0:29:19 -It’s so hard because I live in London,
0:29:21 and I’m in a bit of a bubble around my social media algorithm,
0:29:24 and the people I talk to are so–
0:29:25 -I shouldn’t say everyone.
0:29:27 I have a lot of friends in LA.
0:29:29 A lot of my Jewish friends are very–
0:29:33 I don’t want to say pro-Trump, but squarely Trump.
0:29:35 And there’s just no getting around it, though.
0:29:38 I’m getting emails with, like, check out this data.
0:29:41 Everyone’s sort of– people are feeling almost a little bit.
0:29:44 The way I describe it is bereft about a week
0:29:46 and a half, two weeks ago, and people
0:29:48 are starting to get their mojo back.
0:29:50 OK, let’s take a quick break.
0:29:52 Stay with us.
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0:31:27 a message from the government of Canada.
0:31:32 Welcome back.
0:31:34 Let’s switch gears to the battleground states.
0:31:36 Georgia, Michigan, and North Carolina
0:31:38 might get called fairly quickly, but we
0:31:40 could be waiting for a while for Arizona, Nevada,
0:31:44 Pennsylvania, and Wisconsin, especially if it’s a close race.
0:31:46 Justice gets a little bit to predictions.
0:31:48 Do you think there’s any potential surprises here?
0:31:51 Obviously, Iowa would be a big effing surprise.
0:31:54 Is there any– my gut is one way or the other.
0:31:56 We’re going to have two or three states pop up
0:32:00 on the screen with Steve Kornacki or Bill Hammer.
0:32:01 Who, by the way, is a lovely guy?
0:32:03 I met him in the Hamptons.
0:32:04 He’s a very nice man.
0:32:05 Very handsome, too.
0:32:06 He’s a big SAG harbor guy.
0:32:08 Very, very handsome.
0:32:09 I mean, I hope HR is not listening.
0:32:11 I didn’t mean it that way, but he’s handsome.
0:32:11 You know what?
0:32:13 It’s OK if you objectify.
0:32:14 Let me give you a little tip.
0:32:16 As someone who is an HR nightmare,
0:32:20 it’s OK to objectify people as long as you objectify men.
0:32:22 Then it’s OK.
0:32:26 Anyways, Bill Hammer is a tall drink lemonade.
0:32:29 So what states do you think might
0:32:31 be surprises here one way or the other?
0:32:32 Obviously, there’s Iowa.
0:32:33 That would be a shocker.
0:32:36 Any states that are traditionally
0:32:39 or Harris thinks she has in the bag that could potentially
0:32:41 pop up Trump?
0:32:43 I don’t think so.
0:32:44 Obviously, if North Carolina, Georgia
0:32:47 are going in Harris’s direction, then
0:32:48 we know it’s a big night.
0:32:51 In her favor, Trump really needs to hold those.
0:32:55 What I’m still curious about is that inefficient vote.
0:33:01 If he’s running up the tally in New York and Florida–
0:33:03 I mean, we actually haven’t talked about Florida a lot.
0:33:06 If Harris is performing well in Florida,
0:33:09 that will also be a harbinger of something to come.
0:33:13 And obviously, they have a huge Latino and Puerto Rican,
0:33:15 specifically, population there.
0:33:20 But if Trump is banking votes in New York, Florida,
0:33:22 California, these places, he’s been going.
0:33:24 I mean, he was in New Mexico.
0:33:27 All of this is so bizarre if you’re actually
0:33:28 being strategic about it.
0:33:29 And I get it.
0:33:30 It’s fun to win the popular vote.
0:33:31 Republicans should try it sometime.
0:33:36 I think they’ve only done it once in the last eight elections.
0:33:41 But it will be interesting if it ends up
0:33:43 that Republicans somehow win the popular vote
0:33:44 and lose the electoral college.
0:33:47 But it will be a very poor reflection
0:33:52 on the electoral strategy that Suzy Wiles, who’s very–
0:33:54 supposedly very, very good at her job,
0:33:55 has taken with all of this.
0:33:57 And I get that he’s hard to control,
0:34:00 and he wants a rally at MSG, and he wants to go to Coachella.
0:34:02 But that’s something that I’ll be looking for.
0:34:06 And also, his effect down ballot, because New York should
0:34:09 decide control of the House.
0:34:12 And we talked about those close congressional races
0:34:15 last week on the podcast.
0:34:17 Trump is not a lift for most of these people
0:34:19 that are in these tight races.
0:34:24 So inefficient vote is what is fascinating me currently.
0:34:26 One thing that’s clear, this race is expected
0:34:28 to be the most contested in history.
0:34:31 Trump is already toying with the public’s trust in the results.
0:34:34 Both campaigns have teams of lawyers prepped and ready to go.
0:34:36 Lawsuits have been filed for weeks now.
0:34:39 And we can be seeing legal fights over results for months
0:34:41 if the margins are thin.
0:34:43 There are even zombie lawsuits, cases
0:34:44 that Trump could bring back.
0:34:47 If there’s a chance, they might shift the vote.
0:34:49 What do you make of all these legal challenges, Jess?
0:34:50 Have you spoken to many of these lawyers?
0:34:52 How do you see them unfolding?
0:34:56 Does one side have an edge over the other?
0:34:58 Well, the Democrats have the edge.
0:35:01 And the Republicans even openly talk about that.
0:35:05 Mark Elias, who is our top elections lawyer,
0:35:09 and you can see him, he goes on MSNBC pretty regularly,
0:35:11 is a big target.
0:35:13 And the Republicans just talk about him.
0:35:15 They’re like, we didn’t have a Mark Elias in 2020.
0:35:17 And I don’t think they have one guy,
0:35:20 but they certainly have a better operation this time around.
0:35:24 But they’re throwing everything they can at the wall
0:35:26 and seeing what sticks.
0:35:29 I mean, part of the problem is the way
0:35:32 that what they are perceiving or what they are, frankly,
0:35:39 lying about as being unfair election practices
0:35:40 are getting amplified on social media.
0:35:44 And either if they are getting community-noted or not,
0:35:46 it’s not making a difference to people.
0:35:47 And they’re running with this argument.
0:35:50 There was this whole thing about that a bunch of ballots
0:35:54 were just getting dropped off by this random person outside
0:35:55 the door.
0:35:57 I think it was in Allegheny County in Pennsylvania.
0:35:59 And it turns out that it was a postmaster that
0:36:01 was doing his job.
0:36:04 Or they went after Bucks County, because they were saying
0:36:06 it was election interference, that there were long lines.
0:36:07 No, baby.
0:36:09 Sometimes there’s just long lines.
0:36:12 Like a lot of people showed up to vote and they were understaffed.
0:36:15 And in Georgia, they had to come into the courtroom
0:36:16 to defend this.
0:36:20 There were more boxes for dropping off mail ballots.
0:36:23 You can mail your ballot in, or you could put it in a drop box,
0:36:24 which a lot of people like to do.
0:36:27 My sister in California, that’s how they vote, that they go.
0:36:30 And drop off their mail ballot in person.
0:36:33 And there were, I think, four new drop boxes that were added.
0:36:35 And the Republicans were saying that it was illegal.
0:36:36 And they were brought in front of the judge.
0:36:38 I think it was like 8 AM on Saturday morning.
0:36:41 And the judge was like, what are you talking about?
0:36:45 Like everything has– and I’m not saying that it’s impossible
0:36:49 that there’s some minor fraud somewhere.
0:36:53 But the theme is always that Republicans want less people
0:36:55 to be able to vote.
0:37:00 And they hide behind this facade of election integrity.
0:37:03 But we know that election integrity in 2020
0:37:05 looked like calling up Brad Raffensberger
0:37:10 and threatening him, trying to stop the count in Arizona
0:37:13 and continue the count in Pennsylvania.
0:37:15 And it’s really so disheartening.
0:37:21 And I’ve been reading a lot of articles about former Trumpers
0:37:23 and what turned them off.
0:37:25 And an interesting one, actually, or part of it,
0:37:28 has been that he went too left on abortion, which I never
0:37:30 expected to see.
0:37:31 I would think getting rid of Roe v. Wade
0:37:33 would have been this huge miracle.
0:37:36 But they feel that he’s too left on it.
0:37:39 But a lot of it is about this disrespect
0:37:44 for the electoral process and not being able to take a W.
0:37:46 It’s more than a disrespect for the electoral process.
0:37:48 It’s a lack of respect for institutions, which
0:37:50 is a lack of respect for the country.
0:37:54 A country is a series of structures, protocols,
0:37:57 legal entities that create an infrastructure that
0:38:01 can impose taxes, uphold laws, prosecute, defend those laws,
0:38:03 and set up an operating system.
0:38:05 In this instance, 50 different operating systems,
0:38:08 50 different protocols to try and create a diversity
0:38:11 around the process to maintain election integrity such
0:38:13 that no one system can be hacked.
0:38:17 And when Governor DeSantis spends $3 million
0:38:21 for, quote unquote, election integrity, that is so cynical.
0:38:22 There’s no reason that Florida needs
0:38:25 to spend $3 million on what are–
0:38:27 it’s like 60 contested votes.
0:38:30 And I have a close friend who I went to college with,
0:38:33 who I would describe as a reasonable intelligent guy.
0:38:36 And his entire Instagram reels the last few days
0:38:38 has been, what to do if you’re worried about your vote
0:38:39 being counted?
0:38:41 And he’s a pretty hardcore Trumper.
0:38:42 And I called him, and I said, you
0:38:44 realize you’re inciting violence?
0:38:45 And he was like, what do you mean by that?
0:38:48 And I said, look, there’s absolutely no evidence
0:38:55 that there’s anything more than 0.0001% of election fraud.
0:38:57 Both Republicans and Democratic commissioners
0:39:01 have done a great job of having fidelity for the Constitution
0:39:02 and their responsibility.
0:39:05 There are few processes that involve humans
0:39:08 that have had the same integrity as our elections.
0:39:11 And basically the last time we had kind of a split decision,
0:39:14 a Republican or a conservative Supreme Court justice
0:39:17 said, OK, Bush is the president.
0:39:21 And then, in what has become a very unusual move,
0:39:23 Vice President Gore conceded the election,
0:39:25 recognizing he didn’t want to have violence,
0:39:27 he didn’t want to have a revolution.
0:39:30 And all of this, we don’t trust the CDC,
0:39:33 we don’t trust the American Pediatric Association,
0:39:38 we don’t trust the secret service when our guy gets
0:39:42 shot out, we don’t trust any of these institutions.
0:39:45 The Fed, Jesus Christ, the Fed has put on a fucking master
0:39:47 class here.
0:39:50 But this notion that you can’t trust institutions,
0:39:53 you need to trust your emotions and your feelings
0:39:56 and what you get on a social media feed that
0:39:59 is purposely there to take you further to the left,
0:40:01 further to the right, and enrage you.
0:40:04 So it’s more than just a lack of trust in elections.
0:40:07 But this, I mean, you just see, it’s just so naked.
0:40:09 If we win, it’s democracy at work.
0:40:14 And if we lose its election fraud and our institutions,
0:40:19 and you can already see on these ridiculous social media
0:40:23 feeds, somehow laying the groundwork for cases,
0:40:25 someone burned a ballot box.
0:40:26 OK, I believe that.
0:40:30 What on earth does that have to do with a conspiracy
0:40:31 around election fraud?
0:40:33 Someone lit a ballot box on fire.
0:40:34 OK, you win.
0:40:37 Is there any evidence that that ballot box had more votes
0:40:38 for Harris than for Trump?
0:40:41 It’s just, it’s so–
0:40:46 I mean, it’s what the head of propaganda for the Kremlin
0:40:49 said back in the days of Gorbachev,
0:40:50 that this is how we win.
0:40:52 We just flood the zone with misinformation.
0:40:54 We make no one trust institutions,
0:40:57 which is Latin for no one trusts America anymore.
0:40:59 And we just overwhelm them with information left and right
0:41:01 and just confuse this shit out of them.
0:41:03 And they no longer believe in their government
0:41:05 or in their country.
0:41:08 But it is this lack of respect for our institutions,
0:41:10 especially I think it went crazy in COVID.
0:41:13 I think people were kind of mentally unwell
0:41:15 and were so upset about what was going on,
0:41:18 didn’t know what to trust, and said, oh, we can’t trust the CDC.
0:41:21 And when the American Pediatric Association says,
0:41:23 there is no correlation between these vaccines
0:41:27 that we can see in myocardia and teenage boys
0:41:30 or in large tarts, no one wants to believe them
0:41:32 because they know somebody whose kid had an arrhythmia.
0:41:34 OK, fine.
0:41:38 But that doesn’t mean there’s a there there.
0:41:42 So I find all of this very dangerous.
0:41:44 It’s just another example of,
0:41:47 there really is a double standard here.
0:41:48 You can tell it’s going to be,
0:41:51 I mean, Kerry Lake sort of embodies this, right?
0:41:53 That in Arizona voters,
0:41:54 I just can’t get over the fact
0:41:56 that they decided to put her up.
0:41:58 That is going to be my ointment.
0:42:01 That is, if things go wrong for us tomorrow,
0:42:06 I’m just gonna watch the numbers coming over and over
0:42:09 on the Gallegos Lake Senate Contest
0:42:12 ’cause my understanding is things are probably gonna go.
0:42:13 Yeah.
0:42:14 Representative Gallegos way, but so–
0:42:16 Kamala may not win Arizona.
0:42:18 Ruben Gallego is going to win.
0:42:19 Just take it, right?
0:42:20 Yeah, that’s probably gonna be–
0:42:22 I mean, people, yeah, people are doing it.
0:42:25 But hopefully she can pull it out.
0:42:27 Arizona looks tough, though, for Kamala right now.
0:42:28 And what do you think?
0:42:30 Do you think there’s any chance that the Supreme Court,
0:42:32 if something ends up in the Supreme Court,
0:42:33 that they’ll impact the election?
0:42:38 I mean, I don’t wanna say no
0:42:41 because the Supreme Court has been quite activist
0:42:44 and activist in Trump’s direction.
0:42:46 Pretty sure that all of them don’t wanna have anything
0:42:49 to do with this and that they’ll try to keep it
0:42:52 in lower courts as much as possible.
0:42:57 But again, it has to be very normal polling errors
0:43:03 could lead to huge wins on either side of this.
0:43:07 And I continue, if I was a praying gal,
0:43:11 I would pray for a decisive win, most of all.
0:43:15 And Trump actually this weekend, for the first time,
0:43:17 acknowledged that he could lose.
0:43:20 Like he said something like, yeah, we could lose.
0:43:22 We shouldn’t lose, but it could happen.
0:43:25 And there was a report, I think, in Axios
0:43:29 that Suzy Wiles had put out a memo to the campaign
0:43:33 that said, we’re optimistic,
0:43:37 but no matter what happens, blah, blah, blah, blah, blah.
0:43:40 And that’s a bit of a different tone
0:43:43 from the usual Trump triumphalism.
0:43:44 And I’m sure they still think that they’re gonna win.
0:43:49 And again, it may happen, but even having a little glimpse
0:43:53 into the fact that there is some understanding
0:43:55 that it might not be a Trump victory
0:44:00 is a tiny bit heartening for me at this moment.
0:44:02 – Okay, Jess, this is it.
0:44:03 It’s go time.
0:44:05 Your prediction and any nuance
0:44:08 or any wrinkle around your prediction.
0:44:11 – Notiously optimistic that Kamala wins.
0:44:15 One thing that I had been actually feeling
0:44:18 a little bit better about is there was some good polling
0:44:21 for our friend, John Tester, in Montana.
0:44:24 And that story about Ryan Sheehy, his opponent,
0:44:28 who lied about getting shot in Afghanistan.
0:44:30 Who did the shooting?
0:44:33 It was in a parking lot at a national park.
0:44:37 That that story has actually been breaking through to people.
0:44:39 And I think that there’s a lot of folks out there,
0:44:42 especially in the age of Trump,
0:44:46 that are looking for good people to put in office.
0:44:51 That they feel that there’s some baseline level of okay
0:44:55 that they’re going to be if you have ethical
0:44:58 and morally sound folks in office.
0:45:01 And John Tester is that.
0:45:04 And so I’m a little bit more hopeful about that,
0:45:06 still feel that the Republicans
0:45:07 are going to control the Senate.
0:45:09 But was excited to see that.
0:45:13 And I think the Democrats are going to take the house back.
0:45:14 What about you?
0:45:18 – Yeah, I agree with you, both the Senate and the House.
0:45:20 The markets are predicting that regardless of who wins,
0:45:22 it doesn’t matter that it’ll be a split government
0:45:27 and that the populace and the media are overestimating
0:45:28 the impact one way or the other.
0:45:30 And essentially that’s what the market is saying.
0:45:34 Is that no one individual is going to have that much power
0:45:36 to get much done over the other.
0:45:37 – Won’t that be fun?
0:45:40 – Because it’ll be a split government.
0:45:43 My prediction is it’s going to be a,
0:45:45 actually a decisive win for Harris.
0:45:49 All of the things I’ve seen breaking our way,
0:45:54 the poll from Seltzer in Iowa absolutely blew my mind.
0:45:56 All of these self-inflicted wounds.
0:45:59 You mentioned the story about Tester.
0:46:02 It just feels like all the atmospherics indicate
0:46:06 whether it’s on the ground reporting back from canvassing,
0:46:07 whether it’s the amount of money,
0:46:11 the 10 to one people on the ground trying to turn out the vote.
0:46:13 And again, I just might be in a bubble
0:46:15 where I not only have a social media algorithm
0:46:17 but I have a friend algorithm
0:46:18 and people are only sending me things
0:46:20 that are going to make me feel better.
0:46:23 But I was pretty honest, I think with myself
0:46:26 in the two weeks leading up to the last four days.
0:46:28 Seven days ago, I was pretty convinced
0:46:31 that the edge was distinctly Trump.
0:46:32 And then these videos of him,
0:46:34 which have been going around,
0:46:35 showing that he’s just old,
0:46:38 even little stupid things like him,
0:46:40 trying to open a door and having a tough time.
0:46:41 – Or the garbage truck door.
0:46:42 – Yeah, the garbage.
0:46:45 I feel like he’s aged 10 years in the last three weeks.
0:46:47 Even this is, this polymarket thing,
0:46:50 I’m becoming addicted, I’m like a kid trading crypto.
0:46:53 In just the time we’ve been on this pod,
0:46:56 Jess, the likelihood according to polymarket
0:46:58 that Harris will win the presidency
0:47:03 has gone from a low of 38.6% to a high of 43.2.
0:47:07 And now it’s back to 42.3.
0:47:10 I mean, the market is just so volatile around this stuff.
0:47:13 You can just feel the tension,
0:47:16 but every piece of media I’m seeing
0:47:18 points to more people turning out.
0:47:20 And then I think this will,
0:47:23 this race will be remembered for a couple of things.
0:47:26 One, if Harris loses,
0:47:28 I think Biden is gonna have some explaining to do,
0:47:29 so to speak.
0:47:30 I think people are just gonna be furious
0:47:33 at the Democratic Party and Biden
0:47:35 and the people around him for not getting him
0:47:37 to drop out sooner than how on earth
0:47:39 did we not run away with this?
0:47:42 And I do think that if he loses,
0:47:44 the things that they’re gonna remember here
0:47:48 is that this was the podcast election.
0:47:49 I think her going on Caller Daddy
0:47:52 and him going on Rogan were more kind of seminal
0:47:54 in terms of identifying this new medium.
0:47:57 And also I think this is,
0:47:58 you know, I hate it when people say,
0:48:00 oh, this is the election of women or whatever,
0:48:02 but having raised boys,
0:48:07 I just see the way we had a Halloween party for my son.
0:48:10 The party was supposed to be at 9 p.m.
0:48:12 And the girls show up on time.
0:48:14 They help clean up.
0:48:16 Their costumes were perfect.
0:48:19 They’re just more organized.
0:48:20 And I think you’re just gonna see,
0:48:24 I think women have a big issue here
0:48:26 and they’re organized.
0:48:28 I just think women are gonna show up
0:48:32 because especially if you look at the demographics here,
0:48:34 I think demographics are destiny.
0:48:36 There’s 12 million fewer people on the voter rolls
0:48:38 ’cause they’ve died since 2016.
0:48:40 There’s 20 million new voters.
0:48:42 And the 12 million that have died generally are older,
0:48:45 wider and more Republican and the new voters,
0:48:48 the 20 million new voters are generally younger,
0:48:53 more non-white and I believe more progressive.
0:48:59 And I think you’re gonna see that women showed up here
0:49:03 and we’re just more organized across every age group
0:49:05 and that leans Harris.
0:49:07 So I’m predicting, I believe this is gonna be Harris
0:49:10 and it’s gonna be decisive.
0:49:12 – I love it.
0:49:14 I agree with you about the women showing up
0:49:17 and I do hope that a consequence of this though
0:49:22 is not kind of brow beating men about the victory
0:49:24 but figuring out a better way forward
0:49:29 to have a more balanced party where everyone feels included
0:49:34 because young men have basically the same political beliefs
0:49:36 as young women.
0:49:39 They’re just not being spoken to in a way
0:49:42 that is resonant and that’s on us.
0:49:43 – I love that, that’s where we’re gonna leave it.
0:49:45 All right, that’s all for this episode.
0:49:46 Thank you for listening to Raging Moderates.
0:49:50 Our producers are Caroline Shagrin and David Toledo.
0:49:52 Our technical director is Drew Burroughs.
0:49:55 You can find Raging Moderates on its own feed every Tuesday.
0:49:57 That’s right, Raging Moderates is on its own feed.
0:49:59 What a thrill.
0:50:02 Please follow us wherever you get your podcast
0:50:05 or I’m sending an incredibly intelligent person
0:50:07 who is almost six feet tall.
0:50:10 And by the way, her husband’s even bigger.
0:50:13 You don’t mess with the tarloves.
0:50:15 Jess, stay safe. – No, large people.
0:50:18 – Enjoy your evening on Fox.
0:50:21 Watch cure videos or REM or Tom Petty.
0:50:24 If things get really scary, I promise it’ll calm you down.
0:50:25 – Happy voting.
0:50:28 – Happy voting where this will still be America.
0:50:29 All right, Jess.
0:50:30 – Probably.
0:50:32 – Probably, America-ish.
0:50:34 (upbeat music)
0:50:37 (upbeat music)

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0:01:52 Today’s number, $20,000. That’s how much Russia has found Google for blocking its news channels
0:01:59 on YouTube. A sexual predator, a racist, and a Russian spy walk into a bar, Ed. The bartender
0:02:16 says, “What can I get you, President Trump?” Boom, a little election humor there. We’re going to
0:02:21 have us election. We’ll count some votes, says James Carvel. That guy’s got to be like 110.
0:02:25 DLSM. That guy’s, that guy, I like him. Do you like him? Do you like James Carvel?
0:02:29 I think I prefer your impression of him. I think that’s sort of my highlight so far.
0:02:34 I appreciate that. It must be bonus season. Someone’s kissing someone’s ass. Hello,
0:02:41 plucker up, you little podcast co-host bitch. Today, we’re discussing earnings from Google,
0:02:48 Microsoft, and Meta. But first, here with the news is PropG analyst Ed Elson. Ed,
0:02:50 what is the good word? How are you? I’m doing very well.
0:02:57 I didn’t know that 20 decillion was a number, but I looked into it. It’s 20 trillion times a
0:03:04 trillion times a billion, and the global GDP is 100 trillion. So, I should put it into perspective.
0:03:08 It just shows you the Russians have their head screwed on straight. That’s what I’ll say about
0:03:12 that. That’s actually what our producer, Claire, requested as a bonus for managing
0:03:15 young irresponsible podcasters. That’s right.
0:03:20 We can’t quite get there. This is a profitable business, but no. I had never heard the term
0:03:24 “decillion” either. Where are you at? Are you in New York? I’m in New York, as always.
0:03:29 We’re past Halloween. I need more banter, pretend I’m interested in your life. What are you doing
0:03:33 for Thanksgiving? I haven’t made a Thanksgiving plan yet. I know what that’s like. It’s okay,
0:03:37 those soldiers. Things will get better. I could go back to London, but it’s kind of weird to
0:03:42 celebrate Thanksgiving in London. It’s not really… Yeah, they don’t have Thanksgiving. We left them.
0:03:46 Yeah, exactly. What are you doing with Thanksgiving? Are you going to celebrate now you live in
0:03:51 London? No, I’m doing my world tour. I’m back. I got back to London yesterday, and in two weeks,
0:03:59 I had to New York for a speaking gig, then to Los Cabos for Baja Summit, where I’m speaking,
0:04:03 and talking about vertical farming, and doing mushroom chocolate at night, and listening to
0:04:09 some DJ who supposedly is hot. Then I got to Vegas, or I got LA for another writer’s room,
0:04:14 because I don’t know if you’ve heard them working on an original scripted drama for Netflix.
0:04:21 So, what do you do in the writer’s room? Do you shout over them at things they’re doing wrong,
0:04:26 or how does it work? No, it’s the guy, the showrunner, and the lead writer will say, “Well,
0:04:31 what do you think, Scott?” And I’ll say, “No, they would never say that, even though I’m not listening.
0:04:36 I just pretend that what they’re saying is unrealistic.” Okay, so I’m kind of on the right
0:04:40 track. I’m supposed to be the person that puts you in the room that makes it feel authentic,
0:04:45 and I’m supposed to be the person that understands these people, which is kind of comical.
0:04:49 But yeah, it’s fun. It sounds very fun. You don’t actually have to do the writing,
0:04:55 you just kind of like opine on what’s happening. You know me, I don’t like to actually work.
0:05:03 There’s no real work involved in this whole Prop G enterprise for the Prop G. It’s actually a lot
0:05:08 of fun. I get to envision scenes, and I’m working with this really talented guy named Scott Burns,
0:05:15 and Meteoraz, and all these super talented people. So far, we’re in the honeymoon period. We’ll see.
0:05:17 Sounds like the best job ever.
0:05:19 All right, enough of that shit. Ed, stop delaying. Get to the news.
0:05:23 Well, before we get started, just a quick reminder to subscribe to Prop G Markets
0:05:27 on its dedicated feed. Type in “Prop G Markets.” Wherever you get your podcasts,
0:05:33 hit follow, and tune in to our interview with Anthony Scaramucci on Thursday. That interview
0:05:37 will only be available on the dedicated feed. And now let’s start with our weekly review of
0:05:50 market vitals. The S&P 500 declined, the dollar fell, Bitcoin rose, and the yield on 10-year
0:05:56 treasuries increased, shifting to the headlines. US GDP grew 2.8% in the third quarter. That was
0:06:01 slightly slower than the previous quarter, and just below expectations. However, economists
0:06:06 were largely encouraged by the growth, driven by strong consumer spending on goods.
0:06:08 Reddit turned a profit for the first time ever,
0:06:13 with revenue reaching almost $350 million in the third quarter. That’s up 68%
0:06:18 from a year earlier. The company also reached nearly 100 million daily users,
0:06:24 and those strong earnings sent shares up more than 40%. Shares and drugmaker Eli Lilly fell
0:06:29 more than 6% after its third quarter profit and revenue missed analyst expectations.
0:06:34 The company also reported disappointing sales of its weight loss and diabetes drugs.
0:06:40 And finally, Elon Musk’s artificial intelligence startup XAI is in talks for a funding round
0:06:45 that would value the company at $40 billion. That’s nearly doubled the valuation from its
0:06:51 previous round. Your thoughts, starting with this national economic data GDP growth in America,
0:06:58 2.8% in Q3. A GDP number doesn’t mean a lot unless it has a benchmark. So just some benchmarks
0:07:05 there. Japan’s annual GDP growth was up 0.3%. So we’re growing nine times faster than Japan.
0:07:13 France up 1.1% and Canada up 1.3%. I mean, this is just the economy here. It’s just really striking
0:07:17 to listen to these kind of person on the street interviews about how people feel about the economy.
0:07:23 It’s so obvious that there’s kind of a vibe session, as Kyle Scanlon called it, or people,
0:07:27 again, have this habit of crediting their character and their grip for the raises and blaming
0:07:32 everyone else or blaming the government for whatever price hikes there are. But our growth is
0:07:39 impressive. And 2.8% may not seem a lot, but what that means is about every 25 or 27 years,
0:07:45 the size of the American economy would double. In addition, we have this new inflation data that
0:07:52 just came out. It’s down to 2.1%. In other words, inflation has officially been dealt with. Meanwhile,
0:07:56 you look at other developed nations that have struggled with not only higher inflation than we
0:08:02 had, but also longer inflation. So it sort of makes the case, or not sort of, it does make
0:08:07 the case for Kamala Harris. If you believe that Kamala Harris is just a continuation of the current
0:08:13 administration, and if you care about the economy, then this is a big reason to vote for Kamala Harris.
0:08:20 But if you’ve made this point before, she should be making a way stronger argument about how she’s
0:08:25 sort of the economy vote. If you care about the economy, you should be voting for Kamala Harris.
0:08:30 It hasn’t really resonated. But for those of us that care about statistics, that care about
0:08:34 data, what the data is actually telling us. And when you look at the U.S. compared to other
0:08:41 nations that have struggled with problems way worse than ours, the answer is pretty clear.
0:08:44 Statistically speaking, Kamala Harris should be your answer.
0:08:48 I so badly want to be head of comms for like 11 days for the Harris campaign.
0:08:50 I’ve heard people saying you should be, by the way.
0:08:53 I just think she should have in her back pocket. Every time someone starts complaining about the
0:08:59 economy, saying the economy is saying, okay, Sean Hannity, there’s 190 sovereign nations,
0:09:03 you’re an intelligent guy. What economy globally is stronger than ours right now?
0:09:09 Name it. Instead, they always go to this democratic self-hate of,
0:09:12 I know things are tough out there and we have work to do. It should be,
0:09:16 bitch, we are on fucking fire. Get your head out of your ass.
0:09:21 Anyways, okay, Reddit, why don’t I listen to my own advice? I bought some stock here,
0:09:28 but not enough. I believe the stock is now at about triple where it priced in its IPO about
0:09:32 two months ago. Can I ask how much you bought? You can ask. May you answer.
0:09:39 I think I bought about $3 million for the stock, but I paired some of it, so I don’t own nearly as
0:09:44 much as I’d hoped, but I’ve done very well. But it pops so big the first day, I trimmed some of my
0:09:50 holdings and I just didn’t listen to myself. I knew this thing. I still think it has more room to run.
0:09:57 Anyways, its revenue up 68% year on year. Daily users is up 47%. They’re going global. They’re
0:10:02 being really smart. They’ve translated their posts via AI in the French, Spanish, Portuguese,
0:10:05 and German and its international daily active unique visitors increased 44%.
0:10:11 Which was huge and it’s just such a simple innovation. It’s such a great use case for AI,
0:10:19 just simply translating the language of your content, but it’s so, so effective. It essentially
0:10:24 just 10X is your total addressable market. And that is what we’re doing, or at least we’re trying
0:10:31 to do it. We’re using AI to translate this podcast into Spanish and Portuguese at the moment.
0:10:49 But I think this is something that everyone in content should be looking at. How can we figure
0:10:55 out a way to just overnight flip a switch and make this all available to the 8 billion people
0:11:01 across the entire globe? It’s just a really quick and nice way to just skyrocket your total
0:11:06 addressable market. So that would be the first thing that I would commend Reddit on.
0:11:11 The second key driver of their growth actually was not intentional, but it’s very interesting.
0:11:18 And that is Google recently changed the way it ranks search results. So they made this update
0:11:24 called the hidden gems update. And what they’ve done with the algorithm is they’re now preferencing
0:11:29 what they call authentic content, which is the content that is generated by users content you
0:11:35 find on forums and on chat rooms. And so as a result, you will find that Reddit is showing up
0:11:41 more and more when you search things on Google. It’s also appearing higher in your rankings.
0:11:47 And here’s a great stat. Reddit is now the sixth most Googled word in the US. So it’s this great
0:11:53 combination of, you know, this intentional play with AI, but also the market dynamics are shifting
0:11:58 to Reddit’s benefit. And it’s just, it’s just translated to this explosion
0:12:02 in the business and in the stock. So incredible quarter for Reddit.
0:12:07 But when you were talking about flipping a switch and accessing a global market using AI,
0:12:12 and again, the operative term there was flip a switch and go global. You sound like me and our
0:12:18 all hands last week, where at that point, the person who runs the company, Catherine Dillon said,
0:12:22 “Bitch, you translate this shit into Farsi and try and find the equivalent of Zip Recruiter in
0:12:28 Iran to advertise.” I think it’s not quite flipping a switch is what the pushback I got.
0:12:33 It’s flipping a million switches. Yeah. It’s, and someone actually has to build
0:12:38 the switch and manage it while I just, you know, the podcast hosts say, “Flip a switch and let’s go
0:12:42 global.” This is strategy versus operations. Yeah. This is the difference between being front
0:12:48 of front of house and back of house, right? So I interviewed the CEO at their annual advertiser
0:12:54 event and they had big, they had big advertisers in the room. I saw the CMO of Mars, they had the
0:13:00 biggest media agencies there. It feels to me a little bit like kind of, I don’t know, meta or
0:13:05 Pinterest or Snap in the early days. One of the reasons I’m going to kind of kiss the ass to the
0:13:09 CEO, other than he seems like a nice man is I bet my prediction is they’re going to have an
0:13:14 amazing party at Cannes in the next one or two years. They’re going to decide we need to be,
0:13:20 you know, stroking the hair of people who we are putting out of business and bring them to some
0:13:27 great party and get Dua Lipa or Bad Bunny or somebody. Anyways, we’re going to the Red
0:13:31 and Beach party. That’s what I take away from all of this. I can’t wait. I’m waiting for my
0:13:38 invite. Let’s move on to Eli Lilly, as many of our listeners probably know. Eli Lilly sells Zep
0:13:45 bound and Munjaro, which are these GLP1 drugs. They are the alternatives to Ozempic and Wagovi,
0:13:49 and it’s not selling as much as people had thought, or at least that Wall Street had thought,
0:13:54 and the obvious question is, of course, why? What is going wrong? Now, what’s interesting is that
0:14:00 the CEO’s answer to that question was that there isn’t a problem with demand, but there is a problem
0:14:07 with supply. So supposedly the suppliers of the inventory for these drugs, those suppliers cut
0:14:14 down on their stock and it affected Eli Lilly’s ability to get the drugs out. But as a Barclays
0:14:21 analyst pointed out, if that’s true, that could only have accounted for around 20% of that drop
0:14:27 off in revenue. In other words, there must be something else afoot here, something else is
0:14:36 going wrong in the Eli Lilly GLP1 drug story. And it can’t just be this sort of chokehold on
0:14:42 inventory, and certainly Wall Street doesn’t believe that story either. So I have a few
0:14:46 thoughts of my own as to what might be going on, but I will throw it back to you. What do you think
0:14:53 could be the problem at Eli Lilly that the CEO did a bad job of explaining or at least won’t tell us?
0:14:59 I wonder if we keep hearing about all these compounded GLP1 producers being able to sell,
0:15:04 I don’t know if you call it off market, but there’s a bit of a glitch in the matrix or a loophole
0:15:09 where if a product is sold out, you can build almost like a generic version of it that costs
0:15:16 much less. I got to think that that’s denting demand a little bit. And I would think that in
0:15:22 not only that, you have a lot of these kind of upstarts are sort of scrappy and maybe don’t
0:15:27 take as institutional approach, but are great marketers and understand new mediums. So I wonder
0:15:33 if it’s some of the new guys or these compounded GLP1 producers maybe slowed their growth. What
0:15:37 are your thoughts? I was thinking that too. And if you look at Hymns, which we have discussed
0:15:43 before, they have been getting into the GLP1 game. Yes, the compounded version, their revenue
0:15:49 increased 52% last quarter. And a large part of that was their weight loss drug business.
0:15:53 And there are several other companies that are offering these compound alternatives.
0:15:58 It’s sort of becoming a growing space. And I think it is possible that this
0:16:05 duopoly that we’ve seen on semi-glutide that has been owned by Novo Nordisk and by Eli Lilly,
0:16:10 it could be a little more fragile than we think. The other thing I think is worth mentioning, which
0:16:16 one of our team members, Jessica Lang, points it out. And it’s a simple but important point is
0:16:23 when you think of GLP1s, Manjaro and Zep bound do not come to mind. The two names that come to
0:16:30 mind are Osempic and Wagovi. And so it could be just a simple brand recognition problem that these
0:16:35 products just aren’t present in the public discourse enough. If you’ve been watching the
0:16:42 World Series recently, you will likely have seen this Wagovi ad over and over this new Wagovi jingle
0:16:46 that is probably stuck in a lot of people’s heads right now. So I think the other explanation here
0:16:51 could be a very simple issue. It’s just a marketing problem and a brand awareness problem.
0:16:55 We know what Zep bound and Manjaro is because we study this stuff for a living,
0:16:59 but for the average American, you just think Osempic and Wagovi and you probably don’t even
0:17:04 know what GLP1 is either. It’s interesting. I agree with you. I usually don’t like the idea of
0:17:09 typically when I walk into a brand and they say they want to show me a brand campaign and they’re
0:17:13 going to spend money on advertising. I usually say, well, if you’re spending a lot of money on
0:17:17 advertising, usually you have somebody who wants to hang out with really cool, interesting people,
0:17:22 which ad agency people are, or you’re out of ideas because the companies are the best products,
0:17:26 don’t need a lot of brand marketing. In this case, I think an awareness campaign,
0:17:32 exactly how you said around Zep bound and Manjaro. Awesome. Manjaro is awesome. If I came back and
0:17:38 in my next life as an MMA fighter, I want to be called Manjaro. I think that’s a badass name.
0:17:42 It’s a really cool name, Manjaro. Anyway, but I agree with you. I think they need fire up the
0:17:47 ad budgets. Yeah, it gets some awareness out of that. There’s so much money on the line here.
0:17:54 Also, supposedly there’s a lack of scarcity that finally there’s enough production here to meet
0:17:59 demand. I wonder what’s going to happen though when it reaches into the markets it should be in.
0:18:04 I’m just such a huge fan of this technology. Speaking of which, let’s bring this back to me,
0:18:08 Ed. I’m doing this NAD treatment. Have you heard of this? Only from you mentioning it last week.
0:18:15 Ed, that’s it. I’m fine. I’ll leave. No desilient dollar bonus for you.
0:18:18 I’ll make my way out. Just Claire’s getting a desilient dollars.
0:18:25 Anyways, this NAD stuff is really, really powerful, but I wonder if it has a similar compound,
0:18:34 this GLP-1, because I have noticed. I’m losing my taste for the sauce. I’m going to fit right
0:18:38 into Baja Summit. I told you about Summit last year. They all take drugs, but they don’t drink.
0:18:43 I would bet, going back to Eli Lilly, I apologize, I’m all over the place. This fucking NAD is
0:18:49 supposed to give me focus. Maybe it isn’t working. I think this is probably a buying opportunity.
0:18:56 I think anyone in this market with two great brands, or one great brand, Monjato, and ZepBound,
0:19:02 that’s a terrible, you’re bound for Zep. Is that bound? That sounds awful. That’s like some
0:19:07 rock climbers started some bad ropes company or something. I think other than the CEO making
0:19:16 lame excuses, I’d say on this one, buy the debt. Our final headline is XAI, which Elon, this is
0:19:25 Elon’s AI company, which he is supposedly trying to raise around at a $40 billion valuation.
0:19:31 Just a reminder of what this company is. People may remember the premise of this company was to
0:19:39 create a competitor to chat GPT that was “more truth seeking.” For a while, Elon was calling it
0:19:47 kind of jokingly “truth GPT.” He saw how successful chat GPT had become, and he wanted to make
0:19:54 a competitor that was also less woke pretty much. XAI did build that product, and the product is
0:20:01 called GROC. Many people may have heard of it, and it’s available to all paid users of the X
0:20:06 platform, formerly known as Twitter. I’ve used it. It’s fine. There was a period where it tried to
0:20:14 be anti-woke and funny, and it felt like a not very funny guy who’s trying to just crack jokes
0:20:19 at every second. It wasn’t a great product. Yeah, it’s the Tony Hengecliffe of LLMs.
0:20:25 It’s exactly right, and they fall flat. I’ll get your reactions to XAI in this
0:20:29 funding round. There are a few more details we can go into, but what are your thoughts on this
0:20:37 round? I think this is Musk’s next opportunity to turn $40 billion into 10. My sense is this
0:20:44 is now a distant fourth or fifth in the LLM market. He did some sleight of hand trying to give,
0:20:51 take the rights to the data I think of Twitter and spin out XAI, and he got a disproportionate
0:20:54 amount of the firm. I would have gone apeshit crazy if I was a shareholder in Twitter,
0:21:01 but it’ll GROC right now is a distant fourth, fifth, or sixth, trying to trade at the same
0:21:07 valuation as Anthropic, and that’s the analog here. I would imagine that Anthropic has dramatically
0:21:15 more traffic, revenues, better technology, etc. And what they keep leaking is that Jensen Huang did
0:21:21 say that it’s easily the fastest supercomputer on the planet. XAI has built its own data center,
0:21:25 but I’m not, I’m not sure if that ends up being much of a competitive advantage.
0:21:30 Anyways, I think that’s an important point is, is that a competitive advantage? And
0:21:36 when I look at XAI, it’s like there are three main differences that make it different from other
0:21:42 AI companies. The first is that Elon Musk is leading. So that’s a big deal. It means you can
0:21:48 raise a bunch of money. The second is, as you said, they’re building their own data centers,
0:21:54 and that’s what sets it apart from open AI. Open AI does not own any data centers. Instead,
0:21:59 they essentially rent their compute from Microsoft, and that’s why they have that partnership.
0:22:06 And then the third big difference is that XAI is building its own frontier models. And that’s
0:22:12 where it’s similar to open AI, but not similar to a company like Perplexity, which is building
0:22:17 models on top of the models that are built by other companies like open AI. So in other words,
0:22:22 their sort of strategic differentiation is that they want to own everything that they create.
0:22:28 They want to be a truly independent AI company, which is a little rare these days because it’s
0:22:33 developed into this massive supply chain where you have the chip manufacturers
0:22:38 selling to the data centers and the data centers selling the compute to the model makers and the
0:22:44 model makers selling their models to the app makers. It’s a big supply chain. And XAI has decided
0:22:48 we’re just going to own all of it ourselves. I just don’t know if XAI is going to have the
0:22:52 capital. They’re starting from less than zero versus everybody else, and they want to raise
0:22:59 it the same valuation as the number two or the number three player anthropic. So I have a bias
0:23:03 because I’m not a fan of Musk, but on just a straight valuation standpoint, this feels to me
0:23:10 like a bad deal. Yeah. I mean, it sounds like the Elon Musk premium, but it’s why he still deserves
0:23:16 a premium like this to me is beyond me. The fact that he’s destroyed 80% of the market value of
0:23:23 Twitter, that was his last venture. I mean, it’s crazy. It’s loco. He’s gone mungado on us.
0:23:30 We’ll be right back after the break with a look at big tech earnings. If you’re enjoying the show
0:23:35 so far, be sure to give Prof2Markets a follow wherever you get your podcasts.
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0:24:43 You’ve always wanted to be part of something bigger than yourself.
0:24:54 You live for experience and lead by example. You want the most out of life and realize what you’re
0:25:04 looking for is already in you. This is for you. The Canadian Armed Forces, a message from the
0:25:17 government of Canada. We’re back with Prof. G. Mockets. Most of the magnificent seven reported
0:25:22 earnings last week bringing AI demand and spending into sharper focus. Google and Microsoft both
0:25:29 reported cloud revenue growth above 30% beating expectations. But while Google stock rose,
0:25:34 Microsoft’s fell as the company advised its overall revenue growth would slow in the
0:25:40 current quarter. Meanwhile, Metastock also fell after the company missed expectations on user growth
0:25:48 and warned that its AI expenditures would continue to increase in 2025. So I think let’s just start
0:25:53 here. A lot of tech earnings telling slightly different stories. Let’s just start with what
0:26:00 Wall Street thought about these earnings. So for Google, Wall Street was very happy. Revenue grew
0:26:07 15%. Cloud revenue skyrocketed and the stock rose 4%. I think the main story with Google is there
0:26:12 was nothing that you could really fault the company for in that earnings report. Everything was going
0:26:18 well. Microsoft and Meta on the other hand, Wall Street was not so happy with. It’s a very
0:26:23 similar story that we’ve seen before in tech, which is the top and bottom lines were very
0:26:31 strong. They beat expectations at both companies. But there was just one tiny little pimple on the
0:26:36 earnings report for both of them. And for Microsoft, it was that their guidance was a little bit soft,
0:26:42 not as strong as Wall Street wanted. And for Meta, the user growth was slightly weaker than
0:26:50 expected. 3.29 billion active users versus 3.31 billion expected. I should remind you that’s
0:26:55 daily active users. So it’s still pretty incredible. As a result, Microsoft stock fell 4%
0:27:02 and Meta stock fell 3%. So I think the summary with these earnings here is that it’s very strong
0:27:08 overall. But again, incredibly high expectations for these companies. Let’s just start with your
0:27:12 headline reactions to the tech earnings that have come in this week. What you said
0:27:19 was really prescient and insightful a few months ago. And that is the expectations are now that
0:27:26 you’re going to blow away expectations. So Meta actually, the revenue earnings beat expectations,
0:27:32 increasing 19 and 35% respectively. But investors were disappointed by weaker than expected daily
0:27:38 active user growth. And also, I think the thing that freaked everybody out is when Zuckerberg
0:27:43 wasn’t threatening to spend tens of billions of dollars and mixed reality headsets. He was
0:27:50 promising and he did it. And he kept spending well beyond any evidence that this was working.
0:27:55 And when Zuckerberg says, “No, we’re going in on AI and get ready, folks, hold on to your hats,”
0:28:02 it kind of spooked, I think as investors a little bit, just because relative to the earnings and
0:28:08 the revenue beat, the revenue and earnings were amazing here. And at the same time,
0:28:13 let’s go to the other end of the spectrum. Everyone’s sort of waiting and anticipating
0:28:21 Snap to start a death rattle. And even though their sales jumped 15%, not as much as the other guys,
0:28:30 their stock was up 10% because the expectation, when people listen to a Meta call, they’re waiting
0:28:35 to see just how amazing it is. When people listen to a Snap earnings call, they’re kind of a little
0:28:41 nervous. Like, is this the quarter that Snap announces that Meta is just putting them out of
0:28:47 business? And the expectations here have gotten so crazy. And I know I’m jumping around a lot,
0:28:52 but let’s talk a little bit about Microsoft. They also beat revenue and earnings expectations.
0:28:59 The stock was off 4%. And after hours trading on weaker guidance, good CEOs, sandbag guidance.
0:29:04 You always want, in my opinion, under promise and over deliver. And when you start getting desperate
0:29:08 or you’re worried about losing your job, you start over promising and under delivering their total
0:29:16 revenue increase. Get this at 16% off a huge number. That means that they have, they found
0:29:20 another eight or $10 billion per quarter in incremental revenue. And also the revenue mix
0:29:28 is getting more solid because their cloud offering Azure revenues were up 33%. And that is a business
0:29:36 with incredible margins. And 12 points of growth came from AI services. So in sum, this was just,
0:29:44 this was just striking. And the only wrinkle here, the thing I would offer that I noticed,
0:29:50 and we’ve been talking about this a lot, is that if I were to ask you, what comes to mind when
0:29:56 I think of the, when I ask you, who is the leader in the streaming market? Who comes to mind?
0:30:01 Well, you know, you know my real answer, but I think the average person would say Netflix.
0:30:09 That’s right. And yeah, but, but it isn’t right. It’s YouTube. And YouTube’s combined ad and
0:30:15 subscription revenue over the past four quarters has surpassed $50 billion. So Netflix is at $37
0:30:22 billion over the same period over the last four quarters. So, so YouTube is a bigger streaming
0:30:26 network, bigger revenue. I’d be curious what the growth rate is there. I’m not sure they break it
0:30:32 out. But if you applied the same multiple to YouTube, you’d have a half a trillion dollar
0:30:36 market cap company. And I wonder if there’s opportunity for Alphabet to cut a deal with
0:30:42 the DOJ and among other things in their remedy trial, say, look, what if we spin YouTube? But
0:30:48 across all of these folks, you know, whether it was Reddit, which looks like it’s becoming a truly
0:30:55 big tech company, Meta, all of them, Snap, showing it, we’re still here. Snap’s like,
0:31:00 hey, don’t forget us. We’re still here. We’re still growing. We’re still doing really well.
0:31:05 And the other guys, the big guys, the Alphabets, the Metas of the world are just,
0:31:11 you know, still on fire. Yeah, a lot, a lot there. We’ll start with YouTube. I just want to
0:31:18 reemphasize that number. You said $50 billion in revenue in the past four quarters compared to
0:31:27 Netflix at $37 billion. With the same multiple, YouTube would be a half a trillion dollar company
0:31:32 in market cap. It would probably be higher given the margins and given the growth rate.
0:31:37 But if it were broken up into its own company, which you have just suggested,
0:31:41 just want to point out, it would be one of the top 20 most valuable companies in the world.
0:31:46 It would be more valuable than Oracle. It would be more valuable than Mastercard. It would be
0:31:52 more valuable than Johnson Johnson. And yes, of course, it would be more valuable than Netflix.
0:32:00 So I mean, we’ve discussed why we believe YouTube is basically the most underrated asset in the
0:32:04 market right now. I think this should really drive it home for people. It’s something that
0:32:09 people don’t seem to talk about that much. And I think to your point, it’s a little bit of the
0:32:14 conglomerate tax. It sort of gets lost in the noise because of all of the other things that
0:32:20 Google is doing. But this is just a juggernaut in the entertainment space. I am just fascinated
0:32:25 by this business of YouTube and they continue to crush it. One of the other things you pointed
0:32:35 out there is the idea that Meta, they spent really big on the Metaverse and it freaked everyone out.
0:32:40 And now they’re spending really big on AI. And so the numbers are,
0:32:47 Meta is raising its Carpex forecast for 2024 to between $38 billion and $40 billion. And that is
0:32:53 slightly freaking the market out. They don’t love how much that expense line is going to grow.
0:32:59 Having said that, though, all the other tech companies are doing it. So over at Google,
0:33:06 their Carpex rose 62% from a year ago to $13 billion. Microsoft is doing it too.
0:33:12 Microsoft’s Carpex doubled from last year to $20 billion. And this is just for the quarter.
0:33:16 The ultimate business strategy has become capital as a weapon. Mark Zuckerberg goes,
0:33:21 we have access to cheap capital, so I’m going to outspend you. I mean, there’s kind of three or
0:33:28 four. No one can keep up with these guys except each other. The biggest companies in the world
0:33:33 that aren’t big tech can’t make these types of investments any longer. They’re spending more
0:33:38 money on GPUs and exxon spent on oil exploration at their peak.
0:33:44 I mean, so just some data here. Microsoft, Meta and Alphabet will spend more than $150
0:33:53 billion on Carpex in 2024. And more importantly, Microsoft, Meta, Alphabet and Amazon account for
0:34:01 roughly 40% of NVIDIA sales. So what we’re seeing here is a dynamic where NVIDIA is pretty much
0:34:08 propping up the stock market. We’ve all kind of identified that. And NVIDIA’s entire top line
0:34:14 is being propped up by the Carpex spend of Microsoft, Meta, Alphabet and Amazon. So in a way,
0:34:21 that Carpex number is the most important number in the entire global stock market right now. We
0:34:28 should all care a lot about how much they’re spending. But as you mentioned, the competitive
0:34:34 aspects to this, the idea that they’re all ramping up spending, I wonder to what extent this is
0:34:41 becoming a little bit of a big dick contest. Where if you’re if you’re Mark Zuckerberg and you’re
0:34:47 seeing, you know, you’re seeing Sundar Pichai invest billions and billions into this space and you’ve
0:34:52 decided to get into the space too. I wonder to what extent they’re just going to start outbidding
0:34:57 each other, not because it necessarily makes sense for the business, but because they don’t want to be
0:35:02 caught out and they don’t want to look to the world like the loser or like the coward who wasn’t
0:35:08 down to double down on AI. And, you know, maybe I’m not giving them enough credit,
0:35:13 but I could certainly see if I were in their position, how I could get caught in that dynamic.
0:35:17 Google’s doing it, Microsoft is doing it, so we better do it too.
0:35:25 Well, I think correctly, in hindsight, it looks like the stimulus plan during COVID that the Fed
0:35:29 and the White House overdid it. They spent more money than was needed.
0:35:34 And Janet Yellen, when faced with that question, did you overdo it? She said, we decided. She said,
0:35:40 yeah, we probably did. But at the time, the analysis was it’s much riskier to underdo it than
0:35:47 overdo it. And I think that’s how these guys are approaching AI. And that is, if they overdo it,
0:35:53 they spend too much. That’s not the same risk as being the company, one of the big tech companies
0:35:59 that had all of the assets, all of the IP, all the customer interface, but got bested and saw
0:36:03 their stock lag everyone else’s because they underinvested in what appears to be the most
0:36:09 seminal technology trend of the last 20 years. So, I got to imagine that they’re like, okay,
0:36:15 we need 10 billion. The range of requisite capex to meet our plans is somewhere between,
0:36:21 I don’t know, call it 20 and 30 billion. You got to think the CEO says, with a stock at an all-time
0:36:28 high with access to cheap capital, I’m not going to be the CEO that missed on AI. You say 20 to
0:36:34 30 billion, here’s 32. We’ll be right back. And if you’re enjoying the show so far, hit follow and
0:36:53 leave us a review on ProfG Markets. This episode is brought to you by A Real Pain. From Searchlight
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0:38:33 We’re back with Prof2Markets. Meta’s revenue jumped 19% to $40.6 billion. That’s its record revenue.
0:38:37 Staggering number. And you mentioned earlier about revenue mix.
0:38:44 The point that Microsoft has done a really good job of diversifying its revenue, which makes it
0:38:49 that revenue a little bit more stable. They’re able to weather a storm. It’s a great reason
0:38:55 to diversify your revenue. Just want to point out this one start about Meta. 96% of their revenue
0:39:05 still comes from advertising. So they’re not in a very strong position from a longevity perspective,
0:39:12 but it sort of highlights just what a juggernaut this advertising business is. The fact that
0:39:17 this company is one of the top 10 most valuable companies in the world, and it’s all just from
0:39:21 all of that advertising, you talked about how they’ve been getting into AI, which has been
0:39:27 massively increasing their ability to accumulate users and also monetize
0:39:32 those users. I’m just amazed that Meta is worth this much and making this much money,
0:39:36 and it’s still just a pure play ad business. I just thought that was quite fascinating.
0:39:42 I mean, these companies combined probably have ad driven revenue growth of somewhere between,
0:39:49 I don’t know, $20 billion and $40 billion in incremental ad growth. I had dinner the other
0:39:57 a week ago with this iconic broadcast anchor, and this is someone who likely,
0:40:00 I don’t know what this person makes, but I imagine it’s tens of millions of dollars,
0:40:04 household name, outstanding or what they do. You have to tell us.
0:40:08 Now, I can’t in this instance because we’re good, good friends and I don’t like to
0:40:13 prostitute my relationships. I’m imagining it’s Anderson Cooper and I’ll just let you not comment.
0:40:17 What I will say is it wasn’t Anderson Cooper. I have a second friend. I have a second friend
0:40:21 now in the media ecosystem. Anyways. Oh, Tucker Coulson. Got it. Okay.
0:40:28 Me and Tucky. Yeah, we fisted each other and we were screaming out the ghost of Rick Santorum.
0:40:34 I don’t know where I got that name. That’s an image. That’s an image. Anyways,
0:40:39 and he said that every contract renewal that’s coming up across the biggest anchors,
0:40:44 the biggest stars in broadcast television, the conversations are going something like
0:40:49 this. As you know, it’s a stressed ecosystem. We know you are making 10 million a year. Now,
0:40:55 we’re going to pay you three and a half and it’s directly correlated to these earnings
0:41:01 because the economy is growing 3% a year and all of these companies are growing 18%.
0:41:07 Ad spending is not up 18%. This has become a bit of a zero-sum game and that is,
0:41:12 say ad spending is up because it’s a strong economy. Say, okay, fine, it’s up 5%.
0:41:18 Ad spending is an up 15. So that incremental 10% is coming from somewhere else and I can tell you
0:41:22 where it’s coming from. It’s coming from, generally speaking, ad-supported media that
0:41:30 isn’t one of these guys. Whereas if you hosted the ultimate morning show program,
0:41:37 and they were just printing money, they could pay Hoda 7 or 10 million a year and now they’re like,
0:41:43 Hoda, we love you, but revenues are down 30%, profits are down 60%. We’re going to pay a
0:41:48 two-man and it’s like, fuck that, I’ll just go drink white wine all day. Also, just more generally
0:41:55 speaking, I have spoken to two individuals. I like to think I’m trying to be good about my
0:42:00 word and I’m coaching young men. I’ve heard I’ve had two men reach out to me and ask to speak to
0:42:06 me and they’ve both been men who are my age, who are both very successful in the media market
0:42:10 and they’ve either quit or been laid off and they have no idea what to do right now.
0:42:16 Because the motion picture and television market in Los Angeles and generally speaking,
0:42:21 the media market is really strained if you’re not working for one of a handful of companies that
0:42:28 are just killing it. And it strikes me that these folks haven’t connected the dots. There is real
0:42:34 pain on the other side of these revenue numbers and that is it is a terrible time to be a CBS
0:42:42 or an MTV. Does anyone even remember what MTV is? Newspaper revenue is off 80% in the last 30 years.
0:42:50 Billboard’s drive time, if it wasn’t for the election, local news stations would be just gone.
0:42:55 Yeah, that’s a great point. And you think about the other beneficiaries of that revenue growth,
0:43:01 where is that advertising going? It’s going to the people who are creating content on Instagram
0:43:06 and on TikTok and on YouTube. Those are the beneficiaries. Granted, they’re not getting
0:43:11 multi-million dollar contracts, but the reason you’re seeing those millions getting shaved off
0:43:16 of the Anderson Coopers of the world is because frankly, it’s going to the Scott Galloway’s of
0:43:21 the world and people are a lot less famous than you. People who are creating content on Instagram,
0:43:26 who are making videos, who are commentating on things in the news. There are thousands,
0:43:32 probably millions of these people out there who are making a living and who are making real money
0:43:38 by creating on the digital platforms. And what I just can’t wrap my head around is how those
0:43:44 people continue to not be taken seriously by the mainstream media. It’s been almost like
0:43:49 mainstream media just sort of covers their eyes and pretends like they’re still in their heyday.
0:43:55 Well, what’s happening is we’re seeing the social media companies having this explosion in growth
0:43:58 and meanwhile, legacy media is completely drying up.
0:44:02 Well, it’s really interesting. So election night, and I’m bragging right now, but I was
0:44:09 asked to appear on a variety of cable networks. They go for 12 hours straight. They have a lot
0:44:14 of time to fill. So they’re like, “Oh, bring in the guy on young men. Just tell him not to tell
0:44:19 dick jokes.” So almost every network called and said, “Do you want to come on and election
0:44:25 night?” And the one I chose, I’ve been going on Amazon with Brian Williams. And that’s kind of
0:44:30 telling, right? It used to be going on CNN or Fox or CBS or ABC because those are the high
0:44:35 prestige. Now I’m like, “No, I’m going with the new guy.” And today on Pivot, we interviewed Margaret
0:44:41 Brennan, who I just think is so talented and sober. And as I was listening to Margaret, I thought,
0:44:48 she’s going to get hired by YouTuber Amazon and she’s going to be positioned with the right
0:44:53 technology in the right format in one of these mediums. And she’s going to drive so much more
0:45:00 economic value for the parent company and herself. And even our little podcast, we just started
0:45:06 posting our videos on YouTube. We’re now making $40,000 or $50,000 a month in incremental ads
0:45:12 from YouTube just by putting our stuff on YouTube. Not to mention all the stuff that’s
0:45:18 happening on Instagram where you’ll post an Instagram reel and it’ll go viral and then you’ll
0:45:24 get speaking engagement requests. I mean, the flywheel is up and running in social media.
0:45:29 One of the things I’ve learned over the last 10 years, we’re in an attention-based economy,
0:45:34 full stop. If you can command attention, you can get revenue. Otherwise, the person running the
0:45:40 firm should be let go. And what you want to find is companies where there’s a delta between the
0:45:44 two. So newspapers used to get 30% of the advertising and they were getting 10% of the
0:45:50 attention. You knew they were in trouble. And the web was getting 30% of time and had 8% advertising.
0:45:57 You knew those two were going to true up. Right now, the greatest delta in terms of attention
0:46:06 to revenues is podcasting. Total consumption is up 15 or 20%. And revenues are solid and growing,
0:46:11 but they’re nowhere near the attention. And in addition, I think if you collapse that with
0:46:19 the following, and that is, there are very few ways or increasingly fewer ways for an advertiser
0:46:25 to reach you. You’re the great white rhino for advertisers. And that is at the age of 26,
0:46:32 you’re what I would actually refer to as stupid. And that is you’re in your mating year. So you’ll
0:46:39 spend 150 bucks on that stupid crew net shirt you’re wearing. You’ll join Soho House. You’ll
0:46:44 spend $7 on coffee. You on the other hand would never do any of these things. No, no, I’m much
0:46:48 more down to earth. I’m much more down. By the way, did I tell you about the global express? I flew
0:46:56 back here from Miami. Anyways, I’m not nearly as superficial as you are. Anyways, but advertisers
0:47:00 love young people because they’re stupid. And they’re in their mating years. So they will spend
0:47:06 a ton of money on high margin products trying to attract a mate. They are the ultimate target.
0:47:13 And the problem is MSNBC’s average viewer is aged 70. MTV is like 52 or 54.
0:47:19 And you or in your cohort is listening to podcasts. So you not only have growth and attention,
0:47:26 but you have growth and attention across a group that is increasingly difficult for advertisers
0:47:32 to reach. So I think you’re going to see, in one of my predictions, I’m doing predictions that
0:47:37 I think the podcast revenue is going to grow faster than every digital platform’s revenues,
0:47:40 maybe with the exception of TikTok who align claim their numbers are lower. But I think you’re
0:47:48 going to see next year revenues, ad revenues grow 25% plus. I think 2025 is going to be the
0:47:55 year a podcast busted open by these election or candidate interviews, attention, and advertisers
0:48:03 are figuring out the media landscape is dramatically shifting under our feet. Let’s take a look at the
0:48:08 week ahead. We’ll see the Fed’s interest rate decision for November. We’ll also see earnings
0:48:14 from Palantir, Nova Nordisk, Airbnb, and Paramount. I doubt we will care about any of that
0:48:19 because we’ll have bigger fish to fry tomorrow. Scott, your predictions.
0:48:24 Well, like it’s the election, Ed. I’m predicting that Vice President Harris is going to win the
0:48:32 election. The gambling markets say that it’s two to one in favor of Trump. You correctly pointed
0:48:38 out that that might be skewed because of these markets overindex young men who are much more
0:48:42 biased towards Trump. A lot of people think these markets are being manipulated to send a signal
0:48:48 of confidence around the Trump campaign. I also want to recognize I have huge confirmation bias
0:48:54 here. I’m very emotionally caught up in this. I could not get over. I was happy to get back to
0:48:58 London. I don’t know if you’ve noticed it, and maybe you don’t notice it when you’re in boiling
0:49:06 water, but I cannot get over how tense things are. I wonder, and again, confirmation bias here,
0:49:13 that people are just fucking exhausted and think, “How can I take some of this temperature down
0:49:20 and distinct of the policies, distinct of whether perfect is not on the menu?” I think a lot of
0:49:26 people are going to go, “You know, I just rather not go back to that shit.” Anyways, my prediction
0:49:33 simply put is that it’s not only going to be a Harris win, but I think it’s going to be a decisive
0:49:39 win. All of the odds and all of the data say that that’s unlikely. Anyways, in some, I’m predicting
0:49:43 that in January of 2025, we’re going to inaugurate Vice President Harris.
0:49:49 People forget how much it sucked, not from a policy perspective, but from just a day-to-day
0:49:55 discourse perspective. Having that guy plastered over the news, people freaking out about him,
0:50:03 24/7, every single conversation is about politics and about how the U.S. is in decline. And whether
0:50:11 or not you believe any of that is true, are you really down for that to just dominate your life
0:50:20 all day, every day for the next four years? That to me is just, that was the big nightmare of the
0:50:27 Trump presidency is how I just, we could never escape him. We had four nice years of some kind
0:50:32 of boring politics, and I really hope that we can have four more of them.
0:50:36 My favorite thing about Senator Bennett, I did a fundraiser at my place for him,
0:50:40 and he said, they said, “What would you be like as president?” Someone asked me,
0:50:43 he’s like, “I’m going to be the president you never hear about.” And I thought,
0:50:47 Jesus Christ, wouldn’t that be refreshing? I absolutely love that.
0:50:51 He said, “I want to be the president you don’t think about. I’m going to do the job.
0:50:55 I’m not going to say incendiary things. I’m not as charismatic as some of these other people.
0:50:59 I’m just going to be the guy that gets the job done.” Anyways, I hope that the guy that gets the
0:51:06 job done is a she, and I really hope that when I move back to the U.S., it feels less tense,
0:51:12 less anxious that we keep this economy going, that young men recognize that their default
0:51:17 operating system should be one of protection, and that I genuinely do believe that women are
0:51:25 under threat here, and that men don’t recognize how much this could affect us. So I’m hoping,
0:51:32 I’m hoping and trusting that some of these things enter people’s brains as they enter
0:51:35 the voting booth. And I’d also just like to highlight, I acknowledge that a lot of people
0:51:40 don’t come to this podcast for politics. I endorse Harris, my newsletter, No Mercy, No Mouse.
0:51:44 We have the greatest number of unsubscribes we’ve ever received, and as I’ve said before,
0:51:48 there’s no point in having economic security and people who love you unconditionally if you
0:51:53 can’t speak your mind. And also to all the people who unsubscribe, I just want to tell you a full
0:51:58 refund is coming your way. Why don’t you read us out, Ed? This episode was produced by Claire Miller
0:52:02 and engineered by Benjamin Spencer. Our associate producer is Allison Weiss. Mr. Vario is our research
0:52:07 lead. Jessica Lange is our research associate, Drew Burroughs is our technical director, and
0:52:11 Catherine Dillon is our executive producer. Thank you for listening to ProfG Markets from
0:52:16 the Vox Media Podcast Network. Join us on Thursday for our unpack on the election with
0:52:31 Anthony Scaramucci, only on the ProfG Markets field.
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0:01:59 Scott, we’re two days away from the presidential election.
0:02:02 I know who you’re voting for, but who do you have your money on?
0:02:04 I’m actually thinking of going into one of these
0:02:08 in gambling markets and placing some money on Harris.
0:02:09 They have 300,000.
0:02:12 This is where the money and the ground game kicks in.
0:02:16 They have 300,000 volunteers getting people to the polling
0:02:19 station, making sure they know where the polling station is,
0:02:19 banging on doors.
0:02:21 When you bang on a door and someone says, yes,
0:02:23 I’m voting for that person, they are much more
0:02:25 likely to actually go vote.
0:02:28 Supposedly they have 300,000 people on the ground,
0:02:30 feet on the street over the next two weeks.
0:02:34 And estimates are Trump claims he has 50,000, which
0:02:35 means he probably has 30.
0:02:37 So I like our ground game.
0:02:38 I like our choices.
0:02:40 I recognize I’m hugely biased here.
0:02:45 But I wonder if people are just sick of the chaos.
0:02:49 Anyways, I think Harris is going to be our next president.
0:02:54 [MUSIC PLAYING]
0:02:55 Welcome to First Time Founders.
0:02:57 I’m Ed Elson.
0:03:01 This election is very unique for a lot of reasons.
0:03:03 But one of them is that for the first time
0:03:08 in our nation’s history, Americans can bet on it legally.
0:03:11 My next guest is responsible for that change.
0:03:15 He created the country’s first CFTC-approved prediction
0:03:17 market that lets you trade on future events,
0:03:20 including the election.
0:03:22 And if you’re a regular consumer of politics,
0:03:25 you’ve likely heard of this company before.
0:03:27 This is my conversation with Tarek Mansour,
0:03:31 co-founder and CEO of Kalshee.
0:03:33 Tarek Mansour, thank you for joining me.
0:03:34 Well, thanks for having me.
0:03:34 I’m excited.
0:03:36 I’m just going to start with–
0:03:38 I was driving over here, I was in the Uber over here,
0:03:40 and I was just scrolling on TikTok.
0:03:41 Yeah.
0:03:44 This is 100% true about 20 minutes ago.
0:03:47 And this was the video that came up.
0:03:49 I’m just going to show you what this video is.
0:03:50 Can you see this?
0:03:51 Yeah, I’m looking and looking.
0:03:53 Captions, Uber driver kicked us for saying
0:03:54 he’s going to lose his bet on Trump.
0:03:56 Uber driver is literally kicking us out
0:03:58 because we’re not Trump supporters.
0:03:59 That’s not why I’m kicking you out.
0:04:01 I’m kicking you up because you make fun of me.
0:04:03 Because we made fun of you for betting.
0:04:05 You’re betting while driving.
0:04:07 Why are you doing that?
0:04:09 OK, if you want to do it, you’re out.
0:04:10 You’re out.
0:04:11 You’re out.
0:04:13 For people who are not watching on YouTube,
0:04:18 it is an Uber driver who is betting on Kalshi,
0:04:21 on Tarek’s platform, on the election,
0:04:23 on his actual screen on the Tesla,
0:04:26 and then the passengers are complaining about it,
0:04:27 and he’s kicking them out.
0:04:30 Your reactions to that TikTok I saw 20 minutes ago?
0:04:33 Well, I mean, it’s pretty ridiculous.
0:04:36 But like, I mean, first of all, don’t bet and drive.
0:04:40 I mean, you know, so we legalize betting in the US,
0:04:42 but not betting and driving at the same time.
0:04:43 That is actually dangerous.
0:04:44 It’s good, OK.
0:04:47 You know, I think betting on the election is not dangerous.
0:04:48 Betting on the election while driving,
0:04:49 that is actually dangerous.
0:04:50 Very different thing.
0:04:51 So do not do that.
0:04:53 Kalshi is not advocating for doing that.
0:04:55 But pretty cool, though.
0:05:00 It’s crazy, and I will also say, you are everywhere right now.
0:05:04 There are articles about you, a lot of very negative articles,
0:05:07 or about your company.
0:05:10 We’ve talked about your company multiple times on the pod.
0:05:14 We’ve had debates about whether it should exist or not.
0:05:18 So I would like to just get your, on a personal level,
0:05:22 how does it feel to be everywhere right now?
0:05:24 Yeah, we are in a lot of places.
0:05:26 I mean, I think, you know, we are obviously
0:05:28 ramped up the marketing with billboards.
0:05:30 I don’t know if you saw these live billboards.
0:05:31 I did, in New York.
0:05:32 These are actually, if you bet on Kalshi right now,
0:05:36 it will show up live on billboards in New York, Vegas, LA,
0:05:37 pretty much every single major city.
0:05:39 So yeah, I mean, it’s a big moment.
0:05:40 Look, personally, on a personal level,
0:05:44 I mean, I think there’s ups and downs in companies.
0:05:47 I think what Luana, my co-founder, and I have learned,
0:05:49 you just got to write it out.
0:05:51 We’re less volatile now.
0:05:53 We feel the ups a bit less, and we feel the downs a bit less.
0:05:57 And everybody’s super excited and loves us right now.
0:05:59 And in four months, we’re not the news anymore,
0:06:00 and people forget about it.
0:06:01 And it goes on and on.
0:06:04 And that’s what building a company is, right?
0:06:07 The street today is like, oh, Kalshi is the newest quote unquote
0:06:09 overnight success, but they’ve been writing it out
0:06:10 for God knows how many years.
0:06:12 So it’s a grind.
0:06:14 There’s been a lot of down moments, a lot of pain,
0:06:16 but these up moments make it worth it.
0:06:17 It’s really fun to do.
0:06:20 But honestly, I don’t think we really care about the attention
0:06:23 so much, as much as like, we just love this product.
0:06:25 We love that people can trade on the election right now.
0:06:27 We’re having these real-time odds.
0:06:28 We love that we’re providing,
0:06:30 and we believe we’re providing more truth
0:06:30 than we can talk about that.
0:06:33 But it’s been tiring as well.
0:06:34 We’ve been working 24/7.
0:06:36 – For people who don’t know, I think most do,
0:06:38 what actually is Kalshi?
0:06:41 – So Kalshi is the first legal prediction market in the US.
0:06:43 So the first legal place in the US
0:06:45 where you can bet yes/no or trade yes/no
0:06:47 on any future events.
0:06:50 So who will win the election as of this October?
0:06:52 We can talk about us winning the lawsuit,
0:06:54 but also will it rain tomorrow?
0:06:56 Will inflation go up?
0:06:57 Will the Fed raise interest rates?
0:06:58 Will COVID come back?
0:06:59 Will TikTok get banned?
0:07:00 Really anything you can think about?
0:07:03 We don’t do violence, war, terrorism, assassinations.
0:07:05 And as of now, we don’t do sports.
0:07:06 – And how did you come up with this idea?
0:07:09 – So I worked at Goldman Sachs when I was at MIT.
0:07:12 So at MIT, I interned at Goldman Sachs in 2016.
0:07:14 And I also worked at Citadel and a few other places.
0:07:16 But at Goldman, something striking happened.
0:07:20 In 2016, that summer, most of the institutional money,
0:07:24 like high net worth individuals, family offices,
0:07:26 just big, rich corporations or people,
0:07:29 it was crazy because they weren’t asking
0:07:31 about the instruments that we were trading.
0:07:33 There’s options and swaps and quite a default.
0:07:34 So all these complicated things,
0:07:35 but no one actually gave a shit about that.
0:07:37 Like what people cared about, they were like,
0:07:39 what do we do about the election?
0:07:40 What do we do about Brexit?
0:07:42 So those two were happening right in that fall.
0:07:44 And it was like, we want to bet on the election
0:07:46 or we want to hedge against Trump,
0:07:47 like bet on Trump or hedge against Trump,
0:07:49 bet on, at the time it was Hillary against Hillary.
0:07:51 And so we come up with these bundles.
0:07:53 And you see them right now, like Goldman and J.P. Morgan,
0:07:56 they’re all like the Trump bet, the Trump bundle, whatever.
0:07:59 And it was weird because one, it was a proxy.
0:08:00 It wasn’t exactly what they wanted for it.
0:08:01 It was indirect.
0:08:03 Two, we would charge them crazy fees.
0:08:05 It’s over-the-counter, not on exchange traded.
0:08:07 And three, this is the thing that hurt me the most,
0:08:09 which is like, why is it not accessible for everyone?
0:08:10 Well, they’re doing it.
0:08:11 Why can’t anyone do it?
0:08:13 So the idea of building, hey, like,
0:08:14 what if you build a New York Stock Exchange,
0:08:16 where this is actively traded, it’s transparent,
0:08:18 everyone can see, and anyone can access.
0:08:20 It’s like an exchange where you can bet on an event,
0:08:21 where you can trade on an event
0:08:22 the same way you trade a stock.
0:08:23 That was the generous of calcium.
0:08:24 It was illegal.
0:08:25 We spent three years getting it regulated
0:08:27 and we did get it regulated by the federal government.
0:08:29 – So you said at the time,
0:08:32 betting directly on an election was illegal.
0:08:33 Why was it illegal?
0:08:36 – It was kind of never regulated in the US,
0:08:37 but it was done a lot.
0:08:38 So it was insane.
0:08:40 If you look at the New York Times and publications,
0:08:42 back in 1900s, 1800s,
0:08:45 they had like live tabloids of live bets,
0:08:46 live election bets, yeah.
0:08:47 And it was huge.
0:08:48 It was huge, like, even back in the time,
0:08:50 it was like, you know, hundreds of millions,
0:08:52 if you adjust for inflation.
0:08:54 But I don’t think it’s election specific.
0:08:56 I think it’s like financial instruments
0:08:59 consistently, consistently, whenever they come in
0:09:01 and they’re new, they face scrutiny.
0:09:02 And it’s like, is this gambling, is this not?
0:09:03 – Yes.
0:09:04 – I don’t know if, did you know grain futures,
0:09:05 do you know that at some point
0:09:07 they were gonna get illegalized?
0:09:08 – Is that right?
0:09:09 – People were saying it was gonna be gambling
0:09:11 and there was a Supreme Court decision in 1905
0:09:13 that legalized them.
0:09:14 They said like, look, some people speculate.
0:09:15 Yeah, sure.
0:09:16 Some people are quote unquote gambling
0:09:17 or betting on grain futures, which is true.
0:09:20 It’s still true today, but they have economic value
0:09:22 because people hedge and people use them to know
0:09:24 what the price, the future price of grain is gonna be.
0:09:26 And that’s very economically relevant.
0:09:30 – So why was the election contract,
0:09:31 the one they said no to?
0:09:34 They said, yeah, we’re down with you trading on the weather.
0:09:35 – Why elections?
0:09:39 – Yeah, as you point out, the economic value argument
0:09:42 doesn’t seem to hold up because there’s no economic value
0:09:44 necessarily in understanding what,
0:09:46 if it’s gonna be rainy tomorrow.
0:09:50 So what was the sticking point on the election question?
0:09:53 – So look, I mean, I think there’s like a,
0:09:55 well, first of all, I do think whether it’s gonna rain tomorrow
0:09:55 or not is very important.
0:09:56 – Okay.
0:09:57 – I do think it has economic value.
0:09:59 – Let’s hear that, let’s hear that first.
0:10:03 – Well, I mean, I think the OG traders of the weather
0:10:05 are actually the farmers.
0:10:08 It’s like, you know, there’s this lingo of orange futures,
0:10:11 forecast the weather better than the weather channel.
0:10:12 – I didn’t know that, but I love that,
0:10:13 and I’m sure that’s true.
0:10:15 – And they do because actually oranges fluctuate a lot
0:10:18 with the weather, like the harvest and the prices
0:10:19 of oranges fluctuate a lot with the weather.
0:10:24 But so forecasting the weather is very important actually.
0:10:26 And you can extend it to knowing whether a hurricane
0:10:28 is gonna hit a certain territory versus not.
0:10:31 Like we actually have people in the keys in Florida
0:10:34 and every hurricane season, it’s interesting.
0:10:36 We do have a phone number on Kashi.
0:10:36 We keep it very hidden
0:10:38 because we don’t want a lot of people to call us
0:10:39 and support, we get flooded.
0:10:40 No one uses it, right?
0:10:42 People use Zendesk and chat and,
0:10:44 but actually around hurricane season,
0:10:45 we start getting phone calls.
0:10:48 And it’s basically people from the keys in Florida
0:10:51 that usually, you know, it’s a bit kind of like older,
0:10:53 older generation and so on.
0:10:55 Insurance companies have pulled out of the keys in Florida.
0:10:57 They don’t insure, they don’t love insuring
0:10:59 and taking the risk because there’s been so many hurricanes.
0:11:00 It’s kind of like a very dangerous area,
0:11:02 but we have a market about that.
0:11:05 So people put on a hedge on Kashi
0:11:07 against damages to their properties,
0:11:08 against a hurricane hitting their time.
0:11:10 So that’s economically relevant.
0:11:11 That’s insurance, that’s important.
0:11:12 Like that’s important to do.
0:11:13 And yes, some people are speculating,
0:11:14 but that’s true for insurance, right?
0:11:16 If you’re insuring against something bad happening,
0:11:18 someone else is speculating on that on the other side,
0:11:21 which could be the insurance companies and so on.
0:11:22 You asked about elections.
0:11:24 I mean, okay, I can’t speak on behalf of regular,
0:11:26 but the thing that happens is like,
0:11:29 there’s always a sort of official and unofficial like,
0:11:30 I think the official response was like,
0:11:35 hey, trading on the election is gaming.
0:11:38 That’s no different than, you know,
0:11:41 going to a casino and betting on a slot machine
0:11:45 or betting on the outcome of roulette.
0:11:46 And I think you’re asking a good question.
0:11:49 Like how is that gaming, but whether it’s not?
0:11:52 That sounds like a weird line to be drawing.
0:11:53 So there’s an unofficial answer.
0:11:55 It’s just like people have found it to be taboo.
0:11:58 DC doesn’t love the idea of people trading on the election.
0:12:00 Generally speaking, that has always been true,
0:12:02 but that does not mean it’s a bad thing, right?
0:12:04 And so we argued in court, actually,
0:12:08 it’s a tremendous proposition to be arguing
0:12:09 that elections are a game.
0:12:10 – Right.
0:12:12 – If elections are a game, what are we all?
0:12:13 – What are we doing?
0:12:14 – What are we doing, right?
0:12:15 Like, what if people get some?
0:12:18 I mean, you know, elections have no economic impact
0:12:23 on society that is hedgeable, like clearly like,
0:12:26 hedgeable and you can transfer risk with respect to,
0:12:27 then what do we care so much?
0:12:29 Like, you know, and we won, right?
0:12:32 I mean, the law is on our side very squarely.
0:12:33 – How did the ruling go down?
0:12:36 What were some of their reasons for why you are correct?
0:12:38 – So, I mean, we’ve always been consistent about the law.
0:12:42 We’re like, look, I think the law says the underlying,
0:12:44 the thing that you need to be trading on
0:12:46 cannot be gaming, right?
0:12:50 And we argued elections are not a game, right?
0:12:53 Elections are different from looking at, you know,
0:12:57 two boxers fighting and betting on the outcome, right?
0:12:59 Like, or rolling a dice and betting on the outcome.
0:13:01 And at a high level, the way to think about that
0:13:03 and how do we differentiate these from betting?
0:13:05 Look, I’m okay with people calling this betting.
0:13:06 I’m actually okay.
0:13:08 People, when CME launched Water Futures,
0:13:10 one of the most economically relevant commodity,
0:13:13 like financial instruments you can imagine, it’s water,
0:13:15 people call it betting.
0:13:16 Oh, now you can bet on the water.
0:13:17 Okay, fine.
0:13:19 So that’s fine because betting is very similar
0:13:21 to speculation, are people betting on the stock market?
0:13:22 Yes, in some forms, but that doesn’t mean
0:13:24 the stock market in and of itself is bad.
0:13:26 But there is a line to be drawn.
0:13:29 And the line is artificial risk versus natural risk, right?
0:13:31 If you and I, right now, I don’t know,
0:13:36 like pick dice and roll it and we bet on the outcome,
0:13:39 we create an artificial risk so we can speculate on it.
0:13:40 That’s entertainment.
0:13:42 We’re having fun with it, right?
0:13:46 Brexit happening or not, hurricane hitting somewhere,
0:13:49 TikTok being banned or not, legislation,
0:13:50 elections are natural risks.
0:13:53 They exist independently of you and I.
0:13:55 And once there’s a risk that exists,
0:13:58 you now have the need for a market to transfer risk
0:14:00 from people that have it, but do not want it.
0:14:02 They cannot bear it to people that don’t have it
0:14:03 and have capacity for it.
0:14:06 It could be hedge funds, it could be large institutions,
0:14:06 it could be people, it could be people
0:14:08 that want to speculate and so on and so forth.
0:14:09 And that’s why we have a derivatives market,
0:14:11 it’s risk transfer essentially.
0:14:15 I think that the majority of transactions
0:14:18 that are happening on the stock market are gambling.
0:14:19 – Sure.
0:14:21 – I think that’s true of options too.
0:14:26 I think that’s true of trading and that’s okay.
0:14:29 And we’re down with that.
0:14:32 I don’t think it’s necessarily a good thing,
0:14:34 but I almost don’t feel like it matters
0:14:36 whether it’s a good thing or not.
0:14:37 It just is.
0:14:40 It’s something that people do and that’s okay.
0:14:43 And so that’s how I view Kalshi.
0:14:47 I’m like, in my view, I think it is gambling in most cases.
0:14:50 I’d be interested to see if you agree with that.
0:14:51 But that’s fine with me.
0:14:54 If you want to gamble, you can gamble and that’s okay.
0:14:59 And the other side to this is gambling is legal.
0:15:01 You can go to the casino and gamble
0:15:05 and you can bet on a boxing match.
0:15:08 So why, I still don’t fully understand
0:15:10 what the regulatory questions are here
0:15:14 because there are many, in many states,
0:15:16 you can gamble on sports.
0:15:18 You can do whatever you want.
0:15:20 – Look, honestly, I think that’s a very informed view
0:15:23 and I love that because I’ve learned to believe
0:15:27 that the simple statements like gambling on elections is bad
0:15:29 just resonate better.
0:15:33 Then telling people, like, hey, you should get informed.
0:15:35 Like, read why economists love these markets.
0:15:36 Why?
0:15:38 People don’t like going below the surface.
0:15:40 They just hear the thing and like, great.
0:15:43 – And by the way, I just want to point out, again,
0:15:45 I kind of agree with that.
0:15:48 Personally, I don’t want to gamble on the election personally.
0:15:49 – But you think it’s fine.
0:15:50 – But it’s fine.
0:15:54 I also don’t want to like smoke, chain smoke cigarettes.
0:15:57 – Yeah, I mean, again, I think like,
0:15:59 I would say a few things and I kind of like,
0:15:59 I’ll address a few.
0:16:01 So let’s talk about some of the kind of alternatives
0:16:02 and then we come back to our market.
0:16:05 So quite a default swaps,
0:16:08 which are basically a way to insure against company debt.
0:16:11 So generally, the market for that is around,
0:16:13 like I think it per year today,
0:16:15 it’s like in the tens of billions of dollars,
0:16:18 like maybe close up to a hundred billion, right?
0:16:21 That’s the market for hedging actual debt.
0:16:22 But the trading volumes,
0:16:25 the volumes are actually closer to trillions.
0:16:28 So you have a solid like 10 to maybe even like 50x factor.
0:16:29 – Exactly.
0:16:31 – What is the rest of that?
0:16:32 – Yeah, for exactly.
0:16:33 – That’s speculation.
0:16:34 – Speculation.
0:16:36 – No, no, I mean, it’s speculation.
0:16:38 So my point is we’ve just established
0:16:38 that in traditional market,
0:16:40 and by the way, this is also true for grain futures,
0:16:41 for commodity futures,
0:16:43 all these things that have a lot of economic value
0:16:46 that are important and the stock market.
0:16:48 I actually do think that most of transaction stock market
0:16:50 are not capital allocation.
0:16:52 And the reason why you cannot stop speculation,
0:16:54 if you take out speculation from the stock market,
0:16:55 you know what would happen?
0:16:57 There’s no more liquidity.
0:16:58 It dries up.
0:17:00 There’s no more stock market.
0:17:01 There’s no transactions anymore, right?
0:17:03 Like there’s no life-taking prices.
0:17:04 Nothing is happening.
0:17:06 So the people that need the capital at that point,
0:17:08 the very purpose of the stock market fades away.
0:17:09 And we’ve seen that.
0:17:11 No stock market weakens capitalism.
0:17:14 It, you just start airing on the side
0:17:15 of telling people what to do
0:17:17 and what not to do with their money.
0:17:18 So it’s the same thing here.
0:17:19 Yes, there’s a lot of speculation.
0:17:20 And I’ll tell you like,
0:17:22 majority of things are going to be stuck.
0:17:23 If the market is liquid on cash,
0:17:25 it will be a lot of speculation.
0:17:26 Because for every hydra,
0:17:27 you need multiple speculators.
0:17:28 You need that market to be vibrant
0:17:30 and you need that type of speculative activity.
0:17:33 But it doesn’t make the market itself bad.
0:17:35 Gambling and betting in my view though,
0:17:37 like I’m okay with calling betting and speculation.
0:17:38 Gambling is a bit weird.
0:17:41 It has some negative connotations historically,
0:17:45 which come with I’m betting against the house, right?
0:17:47 Like I’m going to casino and I’m betting against the house.
0:17:50 And if I make a lot of money, they’ll kneecap me, right?
0:17:52 There’s like odds that are tilted against me
0:17:54 because the house usually wigs the game
0:17:55 so that they always win.
0:17:56 That’s a really good distinction.
0:17:57 Whereas on cow sheets,
0:17:59 and this is why I called maybe speculation or betting
0:18:00 or like the stock market,
0:18:02 you’re trading against other people.
0:18:02 It’s fair game.
0:18:03 You’re not trading against like,
0:18:05 we’re not the one setting the odds.
0:18:07 It’s not tilted towards us.
0:18:08 You’re trading against other people.
0:18:10 – That is a good point. – We just take transaction fees.
0:18:14 And so that’s a different type of dynamic.
0:18:15 – Right.
0:18:18 – You’re not always negative EV in our markets.
0:18:19 Hopefully, if you’re informed.
0:18:20 I mean, I’ll ask you a question.
0:18:23 – I’m just trying to think like how sports betting works.
0:18:24 I guess that’s kind of like–
0:18:25 – A lot of it is against the house.
0:18:26 – The house sets the–
0:18:29 – You bet against DraftKings or you bet against FanDuel.
0:18:31 There are some new ones where it’s like kind of more
0:18:34 exchange driven where I’m betting against you
0:18:36 or other people and we are setting the odds
0:18:38 by putting orders against each other.
0:18:39 So our prices are not set by anyone.
0:18:42 It’s like actually market supply and demand.
0:18:43 It’s like the stock market.
0:18:43 – Totally.
0:18:44 I hadn’t thought of that
0:18:46 and I think that’s exactly right.
0:18:49 So I’m gonna go along with you on this
0:18:53 that we’re down and propose some potential issues
0:18:56 now that let’s assume we agree.
0:18:58 One of the events you can trade on
0:19:01 is whether or not Elon Musk will be nominated
0:19:03 to the cabinet, to Trump’s cabinet.
0:19:05 Let’s say you’re Elon Musk.
0:19:07 You’ve just had a private conversation with Trump.
0:19:11 He tells you, “I wanna have you in the cabinet.”
0:19:16 What is stopping Elon legally from rigging that market
0:19:20 and thus rigging all the other gamblers, sorry.
0:19:23 – And that example applies to a lot of event contracts
0:19:24 in prediction markets.
0:19:25 I mean, that’s definitely true
0:19:28 and guess what that example applies to as well.
0:19:29 – Stock market.
0:19:30 – Stock market, right?
0:19:32 – I should just rephrase.
0:19:34 How do you prevent insider trading?
0:19:36 – There’s so many interesting things.
0:19:38 So first of all, actually, weirdly enough,
0:19:41 insider trading is not illegal and commodity derivatives.
0:19:45 Yeah, because the farmers are trading on grain prices
0:19:47 and obviously farmers have insider information
0:19:48 on grain prices.
0:19:49 – Okay.
0:19:52 – To be clear, that said, we have it in our own rules.
0:19:54 Our designation is a designated contract market.
0:19:55 It’s like a legal designation
0:19:57 and what we are is a self-regulated organization.
0:19:59 Think of it as a little bit of an extension
0:20:01 of a government where we have our own set of rules
0:20:05 and these rules basically can go from civil prosecution
0:20:07 all the way to criminal prosecution.
0:20:08 And we have a rule against insider trading.
0:20:09 We do have it, actually, calcium.
0:20:10 But that’s not because of the law.
0:20:13 We impose the rule that you cannot trade
0:20:15 on material and non-public information
0:20:17 on prediction markets, on our prediction markets.
0:20:19 So if you do, you’re actually violating the law
0:20:22 because violating the rules of an SRO is violating the law.
0:20:23 – This is fascinating.
0:20:24 – Yeah, yeah.
0:20:25 So if you violate the calcium rules,
0:20:27 you’re violating the law and you can impose fines
0:20:29 all the way to criminal prosecution,
0:20:30 you can be prosecuted by the CFTC.
0:20:32 Basically, same way that if a Goldman trader
0:20:34 commits insider trading, they’ll be prosecuted by the SEC.
0:20:35 So same thing.
0:20:36 – Yes, yeah.
0:20:37 – So from a legal perspective, it’s the same thing.
0:20:38 We established that.
0:20:41 Now the question is like, how do you enforce against it?
0:20:43 – Exactly.
0:20:44 – Same thing as a stock market, right?
0:20:46 Like if Elon has a product announcement
0:20:48 or actually anyone at Tesla
0:20:50 has an upcoming product announcement
0:20:52 and they call their cousin and they say,
0:20:53 “Hey, this is coming.
0:20:56 You should load up on Tesla options.
0:20:58 How does the New York Stock Exchange police against that?”
0:20:59 Right?
0:21:01 They have actually a very good mechanism.
0:21:02 We have the same ones that we’ve built over the years.
0:21:05 So we have, first of all,
0:21:06 like we have surveillance systems
0:21:08 that are constantly ingesting trading data
0:21:10 and seeing weird artificial patterns, right?
0:21:12 Like if someone is loading way out of the money,
0:21:14 buying stuff that’s trading at 10%
0:21:16 and suddenly it moves to 90 the next day,
0:21:17 those usually get flagged.
0:21:19 Especially if the transactions are large,
0:21:21 they get flagged and they go to investigation.
0:21:22 We have a whole investigation department
0:21:24 that basically investigates who they are
0:21:26 because we KYC people, we know who they are.
0:21:27 We ask them questions.
0:21:28 It’s like opening a brokerage account.
0:21:30 So we have their SSN and so on.
0:21:32 And then they can be escalated for an investigation
0:21:33 where we figure out why did you place that trade
0:21:35 and how did it come to fruition.
0:21:38 Very similar to how insider trading is monitored on stocks.
0:21:39 Is this perfect?
0:21:42 No, but people do do insider trading on stocks.
0:21:44 The most important thing to flag
0:21:46 when insider trading becomes vile
0:21:48 and bad is when it’s large.
0:21:51 Like the larger, the more important it is to flag.
0:21:54 Like if someone puts $10 on Tesla options
0:21:57 because they had some of their cousin told them something,
0:21:59 like is that gonna be flagged?
0:22:00 Probably not.
0:22:02 Now, if that $10 turns into $20 million,
0:22:03 that’s a very different story.
0:22:05 But also $20 million is much easier to flag.
0:22:07 You figured out the regulation.
0:22:10 That’s your big innovation, exactly.
0:22:14 And you described how when you’re working at Goldman
0:22:16 and these family officers who wanna make bets
0:22:19 on the election, I would bet that Goldman
0:22:21 is looking at Kelsey right now
0:22:23 and they’re thinking, holy shit,
0:22:26 they’re about to take our entire trading business
0:22:28 or at least in that aspect of things
0:22:32 where people wanna make these sort of narrative driven bets.
0:22:35 And why wouldn’t they just do it on Kelsey?
0:22:37 They don’t need Goldman to bundle up
0:22:39 this special options package for them.
0:22:41 They can literally just bet on the story.
0:22:46 And it’s all because you guys figured out the regulation.
0:22:47 How did you do that?
0:22:51 And what did you learn about the regulatory system?
0:22:54 What about your process actually pushed this through?
0:22:55 – It took a long time.
0:22:57 Like because you need to imagine it’s three years,
0:22:58 all we’re doing is regulation.
0:23:00 I’m drafting law and policy and regulations
0:23:02 all day, all night.
0:23:03 Everyone around us was saying
0:23:04 this is never gonna happen.
0:23:05 Every single lawyer, I mean,
0:23:06 for when we first started a company,
0:23:08 one day we called 65 lawyers, all of them said no.
0:23:10 It’s not happening, this is stupid, yeah.
0:23:12 And the safety wasn’t giving us any like,
0:23:13 oh yeah, we’re gonna do this.
0:23:14 It was like mostly like,
0:23:15 oh, here are all the issues with this thing.
0:23:17 And we would go and take these issues, fix them.
0:23:18 And then there’s more issues and more issues.
0:23:21 It was like rocking through this desert.
0:23:24 You have no evidence whatsoever that the desert ends.
0:23:25 Actually, all evidence is pointed
0:23:27 that this desert is not gonna end.
0:23:28 And we kept going.
0:23:29 And I really think that was it.
0:23:31 Like I think a lot of it is actually
0:23:32 you just have to stick it through
0:23:33 and it’s a war of attrition.
0:23:35 And you have to just like keep pushing
0:23:37 and keep your conviction.
0:23:39 And what kept us convicted is like,
0:23:42 look, we will stop when we get what we want
0:23:44 or we are proven wrong.
0:23:45 And until we are proven wrong,
0:23:47 like literally mathematically proven wrong,
0:23:49 like why shouldn’t these markets not exist?
0:23:50 – Yes.
0:23:52 – So we’ll keep going and see what happens.
0:23:54 – We’ll be right back.
0:24:12 – Hey, it’s Scott Galway.
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0:26:47 – We’re back with first time founders.
0:26:49 I want to move on to another topic.
0:26:53 So this has become super, super politicized because–
0:26:55 – Yeah, the odds are off.
0:27:00 – Yes, and a lot of people are looking at the odds
0:27:03 on Calci right now, which as of today,
0:27:06 I think they’re around 60%.
0:27:07 Is it 60 right now?
0:27:08 – Let me try.
0:27:10 (laughing)
0:27:12 – It was, I think, 60 a day or two ago.
0:27:14 I thought it might have dropped to 58, I think.
0:27:15 – 59%. – 59, yeah.
0:27:17 – 59%.
0:27:20 So a lot of people are saying that this is,
0:27:22 one of the arguments in favor of this,
0:27:23 which I don’t fully agree with,
0:27:27 is that this is an alternative to polls.
0:27:29 Because it’s more accurate than the polls
0:27:32 because people are actually putting their money forward.
0:27:34 You’re drawing from the wisdom of crowds.
0:27:40 My belief is that this is not necessarily the base truth
0:27:45 because one of the biases that I’ve noticed,
0:27:47 which I saw you guys put your numbers out
0:27:51 on your demographics, is 90% of the people on Calci are men.
0:27:56 And so my view is, baked into this is a level of bias
0:28:01 that means that it can’t just be the exact truth.
0:28:03 Your points on my thoughts on that.
0:28:05 – Yeah, I think that’s a great point.
0:28:07 Let me address a few things.
0:28:09 Like, you know, and I kind of keep repeating this,
0:28:10 and I know you know this,
0:28:12 but it feels like general population doesn’t understand this.
0:28:14 Like, market odds are pricing the probability
0:28:15 of a candidate winning.
0:28:16 That’s not what polls do.
0:28:17 – That’s not what polls are.
0:28:19 – Like, if you’re up two points on the polls,
0:28:21 you’re kind of, you’re up more like 5% to 10%
0:28:24 in prediction markets and in odds.
0:28:25 That’s not the same thing, right?
0:28:28 Like 60% odds is not 60% in polling.
0:28:31 If you’re polling 60% up, you won.
0:28:34 You’re like 90% chance of winning in a certain place.
0:28:38 So I think people are overreacting to this
0:28:39 in either case.
0:28:40 Like the Republican candidate.
0:28:41 – They’re going crazy.
0:28:43 This has been crazy on this question.
0:28:45 – I know, it’s been crazy.
0:28:46 I agree.
0:28:47 Like, I think the Republicans are like kind of taking it
0:28:48 as a strong sign of victory
0:28:51 and the Democrats are taking as a strong sign of defeat
0:28:53 and it’s rigged and all that.
0:28:55 But like, I’m telling everybody, like calm down.
0:28:57 First of all, this is a still coin flip.
0:28:58 It’s slightly biased.
0:29:00 And if it was in the sports context,
0:29:02 like if Barcelona is slightly disfavored
0:29:04 versus Real Madrid, Barcelona wins very often.
0:29:06 Like, you know, so that’s one.
0:29:09 Two, 10 days is a very long time for these markets.
0:29:11 10 days ago, the odds were 51% Kamala Harris.
0:29:13 Now there’s 60, it moves.
0:29:14 That’s like the whole point is it moves
0:29:16 and it’s pricing in real time.
0:29:17 So that’s kind of putting that out there.
0:29:21 Now, I don’t think sampling bias is a real thing
0:29:23 in prediction markets, to be honest.
0:29:24 I don’t think so.
0:29:27 And I don’t actually really agree with that.
0:29:28 The basic point is actually, so fine.
0:29:30 There are more men than women on Kashi, that is true.
0:29:33 We released that, we said that publicly.
0:29:34 90% is men, 10% is women.
0:29:38 But amongst the women, like if you just see
0:29:40 where women, what women are buying and betting,
0:29:42 they’re actually buying more Trump than Kamala.
0:29:45 There is zero evidence right now that if we had 50/50 women
0:29:46 that it would actually change.
0:29:51 Actually, the Trump bias is slightly higher amongst women
0:29:54 than it is amongst men.
0:29:54 – Interesting.
0:29:57 – So does it definitely, like this is not a poll by the way,
0:29:59 this is not saying that more women
0:30:01 is gonna vote for Trump than Kamala, not at all.
0:30:02 That’s not what this is saying.
0:30:03 All that this is saying is,
0:30:04 I don’t think this bias is really there.
0:30:09 – So, one of the issues with polling that has often happened
0:30:14 is that Democrats, historically speaking,
0:30:17 have been more down to pick up the phone
0:30:19 and to answer the polling question.
0:30:20 – Sure, sure.
0:30:23 – And Republicans, historically speaking,
0:30:24 when they hear someone,
0:30:26 “Hey, I’d like to ask you a few questions about the election.”
0:30:27 Fuck off.
0:30:29 So that’s historically been what’s happened.
0:30:31 And that could totally change.
0:30:34 The point being, there is a very specific
0:30:38 and kind of weird bias baked into the polling,
0:30:40 which means that you can’t take it as base truth,
0:30:42 which I think all of us already know.
0:30:46 What I would say about Kalshi is that,
0:30:47 you mentioned that the women on Kalshi
0:30:49 are actually more pro-Trump.
0:30:51 I would bet that Kalshi is also attracting
0:30:53 a certain type of woman.
0:30:55 And the certain type of woman
0:30:57 is probably more likely to bet Trump.
0:31:00 Would be my guess, but again, that’s total speculation.
0:31:03 And my point being, both of these things
0:31:08 are trying to draw the base truth out of what’s happening.
0:31:08 – But it’s biased, yeah.
0:31:11 – But they’re biased in small different ways.
0:31:15 And so the idea that either is more accurate than the other,
0:31:17 to me, isn’t true.
0:31:18 – That is a fair point.
0:31:20 And I think that there is a difference, though,
0:31:22 and that’s why that was my second point, actually.
0:31:24 So first, I mean, that’s kind of the face value.
0:31:26 Maybe, maybe, maybe these women are actually more pro-Trump
0:31:26 than they are pro-Kamala,
0:31:29 and they wanna buy more Trump, that’s possible.
0:31:32 But, and that’s important to understand.
0:31:34 In polls, if that happens, it’s done.
0:31:35 You poll the bunch of people,
0:31:36 and you get the number, and that’s it.
0:31:41 In markets, if the true value, if the fair value,
0:31:43 the theoretical correct answer is 50,
0:31:46 and there is weird flows that are biasing it to 60,
0:31:49 arbitrageurs and traders that like making money.
0:31:51 I hope that we can all agree that people in America
0:31:53 are really everywhere like making money.
0:31:56 Like, I hope that, like, there’s no disagreement
0:31:57 about– – No, I don’t,
0:31:58 I don’t care about money. – Like, people are greedy.
0:32:00 Like, as long as you trust that people are greedy.
0:32:01 – I love it, yeah.
0:32:05 – People are studying these insanely obsessively.
0:32:07 They study the polls, they study how the polls
0:32:08 are being made, they study statements,
0:32:11 they study historical data, they study the markets,
0:32:15 they study other markets, like stocks and so on.
0:32:17 Now, if this is true, if we are really at 50-50,
0:32:20 and the others saying 60-40,
0:32:24 there is a multi-10 million dollar incentive to bring it back.
0:32:25 And we have institutional liquidity.
0:32:27 We have institutional liquidity on the platform,
0:32:29 like really smart money, it is there.
0:32:30 It could be individuals that are really smart,
0:32:32 I mean, we have Susquehanna on the platform,
0:32:35 SIG, one of our main partners that, you know,
0:32:37 has been pricing and trading these things forever.
0:32:39 We have other prop shops and hedge funds,
0:32:41 some of the smartest people on earth, like, you know,
0:32:43 you can imagine all the names, they’re not,
0:32:45 SIG is public, the others didn’t make it public,
0:32:48 but smart money brings back the prices to where it should be
0:32:50 because there is incentive to do so.
0:32:54 Like, fine, there is a Trump bias in the flow.
0:32:59 That is like what people consider to be the best type of flow
0:33:01 for the Citadels and Susquehannas of the world,
0:33:02 because they come and trade against it
0:33:03 and bring the prices down.
0:33:05 And these people are actually trading at a loss
0:33:07 at a negative expected value,
0:33:08 and the market makers are trading
0:33:10 at a positive expected value.
0:33:11 – That makes a lot of sense.
0:33:13 What I would say is that, you know,
0:33:15 the stock market has a lot of liquidity,
0:33:17 and oftentimes, as we have seen in the past,
0:33:19 the stock market can be wrong about things.
0:33:22 People can be just sort of wrong
0:33:23 and they can get things. – Irrational, yeah.
0:33:24 – They can be irrational.
0:33:26 So that is my view on this,
0:33:29 is that people are irrational,
0:33:31 therefore, polls are irrational,
0:33:32 and therefore, markets are irrational.
0:33:37 And so this debate over this one’s true and this one isn’t,
0:33:39 to me, feels a little bit useless.
0:33:42 And I guess the question that I would sort of wrap up
0:33:44 at this specific point to you with is,
0:33:49 do you think that Kalshi should be replacing polling in some way?
0:33:50 – I think let me address liquidity
0:33:52 and then the sort of irrationalism of markets,
0:33:53 which I agree with, by the way.
0:33:55 So we are very liquid, actually.
0:33:57 – By the way, could you just give us the statistics
0:33:59 on how much money has been wagered?
0:34:00 – It’s different, by the way.
0:34:03 So liquidity, and people confuse this a bit with volume.
0:34:05 Liquidity is how much you can take at a point in time
0:34:06 without moving the price a lot.
0:34:09 How robust is the pricing and how much you can take?
0:34:10 On Kalshi, you can take multi-million dollars
0:34:12 without moving the price at all.
0:34:12 It doesn’t move it.
0:34:13 The price won’t move.
0:34:14 You can take multi-million dollar position,
0:34:16 the price won’t move.
0:34:18 You can take up to a hundred million dollars.
0:34:19 – Which is reflective, by the way,
0:34:21 of how much money is here.
0:34:23 – But also how much the liquidity providers,
0:34:25 the institutional market makers,
0:34:27 that makes a difference in a small betting market
0:34:29 versus a stock market.
0:34:30 You can take up to a hundred million
0:34:33 and it won’t move the price by more than one to two cents.
0:34:34 A hundred million.
0:34:36 So it’s very hard to move the prices.
0:34:37 You need tens of millions
0:34:38 and the impact will be very marginal.
0:34:40 So that’s one.
0:34:43 Two, I have never said, by the way,
0:34:45 these markets are always accurate, nothing else.
0:34:48 We can’t say what the future holds, right?
0:34:50 That doesn’t make any sense.
0:34:51 But what I can say is these markets
0:34:52 are more accurate than alternatives.
0:34:54 And I do stand by that, right?
0:34:56 Like if you look at the mean error of our forecast
0:34:57 to everything else,
0:34:59 we’ve been the most accurate on inflation forecast,
0:35:01 better than the Blueberry Economist survey,
0:35:02 a variety of other surveys.
0:35:05 Yeah, Fed interest rate decisions, climate and weather,
0:35:07 even earthquakes.
0:35:09 That doesn’t mean we can forecast earthquakes.
0:35:10 That’s a crazy statement.
0:35:11 I’m not making that statement at all,
0:35:12 but the alternative is like,
0:35:13 you hear a pundit on the news
0:35:14 or like, hear someone saying something crazy
0:35:16 because they want to get some press or whatever.
0:35:17 But now you have a mechanism to like,
0:35:19 hey, if you have some information about this,
0:35:21 come put it to market and get paid for it.
0:35:22 And then we get an accurate price from that.
0:35:25 But these should not replace polls.
0:35:26 They’re doing something different.
0:35:29 This is an additional source of data.
0:35:31 I keep saying more truth.
0:35:33 I don’t say exclusive truth
0:35:35 or like we’re the only truth.
0:35:36 No, we’re not.
0:35:38 Like more truth, just get informed.
0:35:40 Look at the markets, look at the polls.
0:35:42 Maybe don’t look at all the crazy videos on TikTok.
0:35:44 Like this misinformation left and right, right?
0:35:46 Like if you, but I don’t think they should replace polls.
0:35:48 They’re doing something different.
0:35:49 Polls are important.
0:35:51 And by the way, these markets rely on polls.
0:35:51 Right.
0:35:53 Yeah, that’s how they’re informing their bets, right?
0:35:54 Yeah, like how are traders, like traders,
0:35:56 a lot of, I don’t know about any traders
0:35:58 that doesn’t have polling in their methodology.
0:36:00 Let’s talk about the business itself.
0:36:02 How does Kalshi make money?
0:36:04 How has this worked out for you as an actual business?
0:36:05 Yeah, so it’s again,
0:36:07 it’s kind of one of the decisions I’ve drawn.
0:36:07 So we’re in exchange.
0:36:10 So our business model is like New York Stock Exchange or CME.
0:36:12 We take transaction fees, like trading fees.
0:36:14 So you do a few thousand dollars,
0:36:15 we take one to two percent in fees.
0:36:18 So we take 20 bucks on that transaction.
0:36:18 That’s how we make money.
0:36:20 Over time, I think we have a lot of requests for our data,
0:36:22 like people want to poll data and more granular data.
0:36:23 But for now, we’re making it open source.
0:36:24 We want everyone to have it.
0:36:25 It’s part of the mission.
0:36:26 We’re not charging for it.
0:36:27 And specifically on the election,
0:36:29 we’re not charging fees right now.
0:36:31 We just want to have, like we want to promote.
0:36:32 Just get everyone in there.
0:36:32 We want to get everyone in there.
0:36:34 We want the market to do their thing.
0:36:36 No kind of barriers, fully efficient and so on.
0:36:39 And we’re also actually, we pay back the interest.
0:36:41 We don’t take the interest ourselves.
0:36:43 I don’t believe in making money off of people’s interests.
0:36:45 So if you deposit money on Kalshi,
0:36:48 both your cash, but also your open bets.
0:36:50 So if you buy, like if you put a position on Kamala or Trump
0:36:54 right now, that bet will pay you 4.1% annualized variable
0:36:56 interest as it’s outstanding.
0:36:59 And it’s cool because if your position goes up in price,
0:37:01 like if you bought at 50% and then now it’s 60%,
0:37:04 you get paid on the marked up position.
0:37:05 So you have no opportunity costs.
0:37:08 We’re paying your interest based on your kind of outstanding
0:37:10 bets and positions on Kalshi.
0:37:12 And the expenses, is it an expensive thing to run?
0:37:13 Yeah, regulatory.
0:37:15 I mean, we have to think of building the new stock
0:37:16 exchange from scratch.
0:37:17 So we run a clearing house.
0:37:19 We have one of the handful of clearing houses in the US
0:37:24 that can really move money and clear derivatives exchange.
0:37:27 We have the surveillance systems, you know,
0:37:28 a lot of very, very heavy infrastructure
0:37:30 that took years to build.
0:37:31 So it is expensive to run.
0:37:33 It’s a lot of upfront costs, but the marginal costs
0:37:34 are very low.
0:37:37 So it is very hard business to get into and get
0:37:38 the flywheel running for the marketplace.
0:37:40 But once it does, it’s a very profitable business
0:37:43 because the unit economics, the marginal expense
0:37:43 is very low.
0:37:44 It’s AWS.
0:37:47 And you have some significant competitors,
0:37:49 but from my understanding, no competitors
0:37:52 that have been approved in the US.
0:37:54 What is the competition?
0:37:56 So I mean, like, look, there’s always been–
0:37:58 so there’s like offshore, like polymarkets offshore
0:38:02 unregulated crypto-based pollution market.
0:38:03 Oh, it’s crypto-based, I didn’t know that.
0:38:05 Yeah, yeah, they actually did get enforcement action
0:38:06 from the CFC two years ago.
0:38:08 So they’re not allowed to cater to US.
0:38:11 And there are a lot of others similar to polymarket.
0:38:13 What I would say is don’t trust the volume on these sites,
0:38:15 because it’s not actually true.
0:38:16 There’s a lot of wash trading.
0:38:18 So it’s a lot of bots, fake bots just trading against each other.
0:38:19 But it’s not economics.
0:38:21 Like, I give you 100, you give me back 100.
0:38:24 And is that because they haven’t verified their customers
0:38:25 as well as you have?
0:38:27 Yeah, it’s like, there’s no KYC, you don’t know who’s trading.
0:38:28 It’s not reported to the government.
0:38:29 We can’t do that type of thing.
0:38:32 But it’s like, I give you 100, you give me back 100.
0:38:35 That’s called wash, which is like not real trading.
0:38:37 But the volume just went up by 200.
0:38:39 So imagine we do that 10,000 times, 100,000 times a day
0:38:42 with bots, suddenly the volume is very large, but it’s not real.
0:38:45 So that’s why we always say, trust the one that’s safe,
0:38:48 regulated, trusted, and we’re only Americans.
0:38:51 We don’t have foreign kind of participation for now.
0:38:53 We’re just only Americans and so on.
0:38:54 Look, honestly, competition is good.
0:38:58 It’s more like, I always think more people being educated
0:39:00 about these markets is a good thing.
0:39:02 I believe the regulated approach is the only approach.
0:39:03 That’s what I believe.
0:39:05 That’s a strong belief we firmly hold the company.
0:39:07 The last thing I always say is, I always worry a little bit
0:39:10 about the unregulated doing something bad.
0:39:12 And I always worry about nascent asset classes.
0:39:15 I always try to advocate, trust the regulated actors
0:39:17 and less the unregulated actors.
0:39:19 And I hope the unregulated actors come and get regulated
0:39:21 and do it the right way so that people can trust this asset
0:39:24 class because things can go wrong in unregulated venues.
0:39:28 And when they do, people don’t blame the unregulated venues.
0:39:30 Regulates blame the asset class.
0:39:31 We’ll be right back.
0:39:34 (upbeat music)
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0:42:51 (funky music)
0:42:58 – We’re back with First Time Founders.
0:43:01 I want to shift gears to your personal journey
0:43:02 as an entrepreneur.
0:43:04 Tell us a little bit about your background.
0:43:06 Like, what inspired you to get into this?
0:43:09 You mentioned you worked at Goldman, you went to MIT.
0:43:12 What sort of led up to Kalshi in your life?
0:43:13 – It’s interesting because both Michael Vander and I
0:43:15 had very similar backgrounds.
0:43:17 So I was born in LA, I grew up in Lebanon.
0:43:20 Loana grew up in Brazil.
0:43:21 We were both math geeks in school.
0:43:22 Go to MIT.
0:43:24 – This is your co-founder, Loana Lopez.
0:43:25 – Lara, yes.
0:43:28 – And you met at MIT?
0:43:29 – Yeah, so we met at MIT.
0:43:31 It was kind of like, we were both math geeks.
0:43:32 We were like, love getting into MIT.
0:43:33 That was the place for math geeks.
0:43:35 And then we both kind of love finance.
0:43:37 But we didn’t, we weren’t like the type that was,
0:43:38 you know how like there’s a persona.
0:43:40 I was like the entrepreneur, the person that’s always
0:43:41 building products.
0:43:43 I want to be kind of like, we weren’t that.
0:43:45 Yeah, we didn’t have that.
0:43:47 We weren’t reading books or listening to podcasts.
0:43:49 I think I was fairly firmly convinced
0:43:51 that I was going to be a trader.
0:43:52 I was going to be at Citadel.
0:43:53 I love working at Citadel.
0:43:53 Citadel was amazing.
0:43:54 It was incredible.
0:43:57 But it was one of those things that the idea was just,
0:44:00 wouldn’t let go basically.
0:44:03 It was just like, the idea was so kind of like,
0:44:05 constantly in the back of our minds.
0:44:07 And it was like pulling us to it slowly.
0:44:09 It kept on popping up, right?
0:44:13 Like it’s always the idea pulled us into building the company
0:44:14 rather than the vice versa.
0:44:15 Like we’re looking for an idea.
0:44:16 It’s like the idea just kind of pushed us.
0:44:18 And we kind of loved it.
0:44:20 It’s like this beautiful notion of,
0:44:24 what if you can apply markets to price the future, right?
0:44:26 Like we price anything now.
0:44:27 Why don’t we price our future, right?
0:44:29 Like imagine we can ask questions like,
0:44:32 will GDP go up if Trump gets elected?
0:44:34 Will GDP go up if Kamala gets elected?
0:44:36 And you can have a market-based pricing for that.
0:44:37 Let the market tell you.
0:44:38 Market truth, right?
0:44:39 And that was the elegance of it.
0:44:40 And we really liked that.
0:44:44 And so slowly, we basically just kind of got dragged into it.
0:44:46 And they were like, all right, we’re going to have to build
0:44:48 this company now because we would regret not doing so.
0:44:52 It’s almost like there are some ideas that are so obvious
0:44:53 that they have to get done.
0:44:56 Like if it, I feel like if it wasn’t going to be you,
0:44:58 someone else was going to do it.
0:45:03 And it’s so interesting to me that the hurdle was the regulation.
0:45:04 And you want it to be a trader.
0:45:06 You clearly have a massive math brain.
0:45:08 I doubt you’re doing any math these days.
0:45:09 Not anymore.
0:45:12 Well, we do some, I mean, we’ve hired people
0:45:15 that are a lot smarter than us, which is-
0:45:16 Helpful.
0:45:17 Which is helpful.
0:45:18 Yeah, yeah.
0:45:19 We do less for sure.
0:45:23 We were making jokes this week, actually, like I’ve slowed down.
0:45:24 I was better at math before.
0:45:25 Yeah.
0:45:26 I had to practice.
0:45:27 I had to practice for sure.
0:45:29 I’m sure you’re going to lobby in now.
0:45:30 Yeah, better.
0:45:31 Yeah, yeah.
0:45:32 I mean, not, you know, but like engaging regulators
0:45:33 and politics.
0:45:34 Yeah.
0:45:35 Definitely better.
0:45:36 But yeah.
0:45:37 I would like to hear a little bit about that.
0:45:40 I mean, first let’s talk about maybe fundraising.
0:45:43 I mean, you’ve had a huge success in fundraising.
0:45:44 You’ve got some very big name investors.
0:45:48 What would you say makes you a good fundraiser
0:45:51 and what are the qualities of a founder
0:45:52 who can go out and raise a lot of money?
0:45:54 I think I’m a good fundraiser in some ways,
0:45:56 but like there are better fundraisers for sure.
0:45:59 But I think like I build relationships with people.
0:46:00 I don’t play a lot of games.
0:46:02 I’m very honest and transparent up front.
0:46:03 Yeah.
0:46:06 And I’ve always kind of had that approach to raising money.
0:46:08 And I explained to people like, hey, this is a long journey.
0:46:13 This is a company I’m committed to and we want to build long term.
0:46:15 And I think a lot of investors kind of appreciate that
0:46:17 because they’re used to the games and the kind of…
0:46:20 So I just usually build relationships with people that I kind of like
0:46:22 and I talk to them about the business.
0:46:25 And I genuinely consider it as a two sided interview.
0:46:26 It’s like, do I like this person?
0:46:28 Do I think they get what we’re trying to build?
0:46:30 And I think like all things, it’s a bit like dating.
0:46:33 And you have to be convinced that what you have is valuable.
0:46:35 And I never meant to claim like cash sheet is going to be…
0:46:38 I hate these claims, and all funders do that.
0:46:39 We’re the next Apple.
0:46:40 Yeah.
0:46:41 We’re the next Apple.
0:46:42 We’re going to be a hundred billion dollar company.
0:46:44 And I’m like, I don’t know that, right?
0:46:45 Like I don’t say that.
0:46:48 There’s a lot of things that have to go right for us to get there.
0:46:50 But what I do say is it has the potential to.
0:46:51 And I do think so.
0:46:53 Like I think we have the potential to be a hundred billion dollar company.
0:46:56 And if things go our way, that’s the size of the time.
0:46:58 That’s the potential opportunity.
0:46:59 Will that happen or not?
0:47:00 I don’t know.
0:47:01 I can’t say for sure.
0:47:02 But I will work as hard.
0:47:04 I mean, I’ve shown how hard I’m willing to work and how much I’m going to sacrifice
0:47:06 to make it happen.
0:47:08 And I think a lot of people appreciate that.
0:47:11 It gets to the basics of just negotiating, right?
0:47:17 And it sounds like what you are is an incredibly skilled negotiator and you’ve kind of proven
0:47:21 that through getting this through in your dealings in DC.
0:47:28 And what I have found in negotiating is that it does all start with kind of your initial
0:47:35 position, which is like, how confident am I in myself and in the product that I’m trying
0:47:36 to sell?
0:47:39 So you mentioned like a two sided thing.
0:47:41 It’s like, this is where I stand.
0:47:43 This is what I’m looking for.
0:47:45 And this is what I’d like to get from you.
0:47:46 That’s my position.
0:47:50 And it sounds like you’re very, very confident about that.
0:47:56 And I think the question is for people who want to get good at that, where do you get
0:47:57 that confidence from?
0:48:00 Like, what do you sort of hype yourself up before you go into a meeting?
0:48:05 How do you sort of walk into the room and say, yep, this is who I am and I’ll be unapologetic
0:48:06 about it.
0:48:07 I’m always like interested.
0:48:11 People around me say like, hey, where’d you get the confidence from?
0:48:12 But it always rings the bell.
0:48:17 I’m like, I have long periods of lack of confidence.
0:48:18 You know what I mean?
0:48:20 It’s like, I have a lot of insecurities and variety of different ways.
0:48:24 And maybe I’ve gotten tougher over time.
0:48:26 People don’t see it as much.
0:48:31 But people over assume how confident founders are and how it feels on the inside.
0:48:36 I think I’ve really taught myself a few things.
0:48:38 You’ve gotten punched down and beat down so many times.
0:48:42 Press loves us at some point and the press hates us at other points.
0:48:44 And everything that happens at the company is always your fault.
0:48:47 And everything that happens at the company is always because you’re a legend.
0:48:50 Anything good you get congratulated for and everything that you get ready for.
0:48:54 And then you realize actually, it’s not like, I didn’t do anything in the last two months.
0:49:00 All the work was actually the day in, day out of chopwood, carry water.
0:49:05 So I realized actually less things are in my control than I think are in my control.
0:49:06 Or that people think so.
0:49:10 Two, I think I genuinely try to start loving the process.
0:49:11 I really do.
0:49:16 I’m trying not to love too much the attention and not to hate too much the bad times.
0:49:19 I’m trying to just like like my job and like my work.
0:49:24 And I would say the last one is, it’s a bit of absurdity of life.
0:49:26 Like don’t take yourself too seriously.
0:49:27 Yes.
0:49:28 You know?
0:49:29 It’s like, I’m not a legend, I’m not.
0:49:31 I think I’m a pretty good founder.
0:49:33 I think I work and the reason is not because I’m this mythical genius.
0:49:35 I like work really, really hard.
0:49:36 I really do.
0:49:38 Anyone around me knows how hard I work and how much I’m willing to sacrifice.
0:49:43 I’m reasonably smart, like, you know, I’m neither a genius nor, but I, you know, and
0:49:47 that’s because I’ve partly because of one and I’ve worked on my EQ over time.
0:49:50 Like I, and I like engaging with people and meeting people and so on.
0:49:52 But number one is by far and large, the most important.
0:49:53 That’s it.
0:49:54 I just work really hard.
0:49:55 Yeah.
0:49:57 And I, and if you really understand why, where the success or lack of success comes
0:50:01 from, then you’re like, it doesn’t get to your head.
0:50:02 100%.
0:50:03 Yeah.
0:50:07 Because as you are, you’re becoming more and more famous.
0:50:08 Yeah.
0:50:09 The company is special.
0:50:15 I mean, this company is everywhere and, you know, when this episode airs, it’ll be a few
0:50:17 days before the election.
0:50:25 I will bet that you or Kalshi are going to be just somehow in the crosshairs of all of
0:50:28 the political craziness that is going to happen.
0:50:31 And maybe it’s already happening to you.
0:50:35 Do you read the comments?
0:50:37 Do you read what people say about you?
0:50:41 I mean, I know there have been these articles that have been saying Kalshi is a problem.
0:50:42 Do you read those?
0:50:46 Like what do you think about when the public starts talking about you?
0:50:47 I don’t really read anymore.
0:50:48 You don’t read?
0:50:49 I don’t really read the press.
0:50:50 I read it.
0:50:53 I barely, like people call me like, oh, sometimes they call me about my own quotes and I’m like,
0:50:55 I don’t even remember saying that.
0:51:01 Like I really like, look, I think the way I view it and Luana Kofana is very good at
0:51:02 this.
0:51:06 If you’re long-term oriented, there’s going to be ups and downs in the short term.
0:51:10 It’s a bit like a stock, but it all stabilizes over time.
0:51:13 And so be long-term oriented, so you don’t worry too much about the short term, whether
0:51:14 good or bad.
0:51:16 Like don’t be too happy about the good and be too worried about the bad.
0:51:20 But then the second thing is actually do good.
0:51:24 I really believe in that because like, look, honestly, I was working at Citadel.
0:51:27 I think I might have been actually richer if I stayed at Citadel.
0:51:30 I mean, maybe now it’s compared, well, like, you know my point, like it’s cash, you get
0:51:31 paid a lot at Citadel.
0:51:33 Like frankly, it’s insane now.
0:51:35 Like the things I’m hearing are truly insane.
0:51:37 So like, yeah, I’m not doing this out of pro bono.
0:51:41 Like I want to make money and so on, but I really genuinely want these markets to exist
0:51:42 and I want to do good.
0:51:47 And so as long as we’re doing the right things day in, day out, I believe that there’s going
0:51:48 to be mean reversion.
0:51:52 Like when people overestimate us, it’s going to come down and be what it actually is.
0:51:55 And when people think it’s worse than what they should be thinking, I think it’s going
0:51:56 to be mean reverts.
0:51:58 I believe that.
0:52:02 My favorite saying from Scott, he has a quote that he always says, which I love, which is
0:52:06 nothing is ever as good or as bad as it seems.
0:52:07 It’s so true.
0:52:10 And I actually read this, there’s this, you know, this Chinese proverb or story about
0:52:11 the Chinese farmer.
0:52:12 Oh, I know a bit.
0:52:13 Tell it.
0:52:18 I say a lot to the company multiple times, which is like, you know, so there’s a Chinese
0:52:19 farmer in a village.
0:52:24 He’s a farmer in China and like so, you know, he had this horse that he really loved and
0:52:25 the horse basically disappears.
0:52:26 It’s just like fleas.
0:52:31 So the village comes down and it’s like, Hey, like, you know, Oh my God, it’s so unfortunate.
0:52:32 So sorry to hear the news.
0:52:35 And he’s like, you know, his answer is like, I don’t know, we’ll see.
0:52:38 And the next day, the horse comes back with a flock of horses and it’s like, wow, you
0:52:41 know, this dude is like, you know, rich and he has a flock of horses.
0:52:44 And again, they come back, they, the farmers come in and it’s like, how fortunate you’re
0:52:45 so lucky.
0:52:46 Like it’s crazy.
0:52:48 Life loves you and you know, God loves you.
0:52:49 I don’t know.
0:52:50 We’ll see.
0:52:54 His son next day is riding one of the horses, falls, gets, you know, injured.
0:52:55 Same thing.
0:52:56 I don’t know.
0:52:57 I don’t know.
0:52:58 And so on.
0:52:59 Next day, China goes to war.
0:53:01 All the young people are get, you know, drafted into war.
0:53:02 His son is injured.
0:53:03 So he doesn’t get drafted into work.
0:53:05 You’re the luckiest man alive.
0:53:06 You’re so fortunate.
0:53:09 And it ends with this kind of like, you know, he smirks and he’s like, I don’t know, we’ll
0:53:10 see.
0:53:11 And I always say, like, I don’t know.
0:53:12 We’ll see.
0:53:15 Like, you know, like just, just chop wood, carry water, do the, do the work the end day
0:53:16 out.
0:53:17 And, and, and we’ll see what happens.
0:53:20 That is a great place to end.
0:53:23 Do you have a prediction for the election?
0:53:25 That’s what people really want to know.
0:53:28 I’d love to get it from you just before we wrap up.
0:53:31 You don’t have to say who’s going to win unless you’re down.
0:53:37 I’d love to hear if you, you are the, the, the expert on prediction markets.
0:53:38 What’s your prediction for this election?
0:53:41 It’s funny because a lot of people are asking me this question now, but I will answer.
0:53:42 You’re the guy.
0:53:43 You’re the guy.
0:53:46 I don’t have any different, like I just want to say I’m, I’m still a regular dude when
0:53:47 it comes to this.
0:53:50 Like, you know, if I trade on cashier, I may be, I may lose money, you know, I can’t
0:53:52 trade because I run the exchange.
0:53:55 I, I’m legally not allowed to trade, but I don’t know if I’ll make, I’d be that good
0:53:56 at doing this.
0:54:00 So, so I, I think trust the markets as the whole point, right?
0:54:01 And get informed.
0:54:02 Like, I think look at the markets, look at the polls.
0:54:07 I think the markets are accurate gauge, 60% doesn’t mean a hundred percent.
0:54:10 But I think right now 60% seems to be what fair value is.
0:54:13 And that doesn’t, you’ve got your money on truck.
0:54:17 I, I, I don’t have, but I really think trust the market, but no, but I think 10 days is
0:54:18 long.
0:54:19 It’s going to move a lot.
0:54:20 Yes.
0:54:21 Whether up or down, but it does move.
0:54:22 We’ve seen this.
0:54:23 People are so short-term driven right now.
0:54:24 It’s like, oh my God.
0:54:26 I see tomorrow that it’s moves and moves and moves.
0:54:30 Um, so it’s a very long day, 10 days is a very long time.
0:54:34 Um, and, and two, I really think 60, 40 is, is close to a coin flip.
0:54:35 It really is.
0:54:39 So, so what, what you should take from these markets, it’s a very tight race.
0:54:43 Tarik Mansour is the CEO and co-founder of Kalshee, a regulated exchange and prediction
0:54:44 market.
0:54:45 This was awesome.
0:54:47 I’m really happy you came in and thank you for doing this for me.
0:54:48 Yeah.
0:54:49 Well, this was really fun.
0:54:50 Thanks for having me.
0:54:57 Our producer is Claire Miller, our associate producer is Allison Weiss and our engineer
0:54:59 is Benjamin Spencer.
0:55:02 Thank you for listening to First Time Founders from the Vox Media Podcast Network.
0:55:16 Tune in tomorrow for Prodigy Markets.
0:55:20 Do you feel like your leads never lead anywhere and you’re making content that no one’s
0:55:24 sees and it takes forever to build a campaign?
0:55:27 Well, that’s why we built HubSpot.
0:55:31 It’s an AI-powered customer platform that builds campaigns for you, tells you which
0:55:36 leads are worth knowing and makes writing blogs, creating videos and posting on social
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0:55:41 So now it’s easier than ever to be a marketer.
0:55:45 Get started at HubSpot.com/Marketers.
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0:55:52 Stripe is a payment and billing platform supporting millions of businesses around the world, including
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0:56:00 Stripe has helped countless startups and established companies alike reach their growth targets,
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0:56:21 That’s Stripe.com to learn more.
0:56:22 Stripe.
0:56:23 Make progress.
0:56:26 (gentle music)

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0:01:21 Do you feel like your leads never lead anywhere?
0:01:23 And you’re making content that no one sees,
0:01:26 and it takes forever to build a campaign?
0:01:29 Well, that’s why we built HubSpot.
0:01:32 It’s an AI-powered customer platform that builds campaigns for you,
0:01:34 tells you which leads are worth knowing,
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0:01:45 Get started at HubSpot.com/Marketers.
0:01:52 I’m Scott Galloway, and this is No Mercy, No Mouse.
0:01:54 College is a wonder drug.
0:01:58 College admissions is a nightmare.
0:02:02 High anxiety, as read by George Hahn.
0:02:11 I just returned from the U.S. and was struck by how tense things are.
0:02:16 It feels similar to what I imagined the mood was during the Vietnam War.
0:02:20 So let’s take a break and discuss something even more stressful.
0:02:24 College admissions. Yay!
0:02:27 Last week, I did a college tour with my son.
0:02:31 It was a chance for us to bond and bask in the infinite possibilities
0:02:33 that stretch out in front of him.
0:02:35 The previous sentence is a lie.
0:02:41 The college admissions process has kicked off two years before he sets foot on a campus,
0:02:44 and it’s already a flaming bag of shit,
0:02:49 where a flaming bag of shit is a ton of unnecessary stress.
0:02:54 My industry, higher ed, is corrupt and second only to poverty
0:02:58 regarding preventable stress in U.S. households.
0:03:02 Note, you likely had the reflexive SNAPS fire of,
0:03:05 “Reducing poverty is not that simple.”
0:03:09 No, it is that simple.
0:03:15 It would just mean lower stock prices and a more progressive tax policy.
0:03:18 The incumbents deploy the illusion of complexity
0:03:22 as a weapon of mass distraction from a simple hard truth.
0:03:28 The U.S. chooses to let one in five households with children live in poverty,
0:03:31 but that’s another post.
0:03:34 Despite the lie we tell ourselves,
0:03:35 you don’t need college,
0:03:38 in a vain attempt to opt out of the stress,
0:03:43 higher education is in fact a wonder drug.
0:03:47 A pill that extends life makes you happier, healthier and wealthier
0:03:51 and strengthens your relationships.
0:03:54 America is the world’s premier manufacturer,
0:03:59 producing a compound at a purity no other manufacturer can rival.
0:04:05 No nation dominates any industry the way the U.S. dominates higher ed.
0:04:09 Millions come to the U.S. to access this drug.
0:04:12 In a rational world, we’d scale it.
0:04:16 Instead, we sequester it behind ivy-covered walls
0:04:21 and tuition that commands a gross margin of 90% plus.
0:04:28 And for centuries, we prescribed this cure all exclusively to white men.
0:04:32 Despite a 6% increase in applications this year,
0:04:37 there’s a narrative questioning the value of a college degree.
0:04:40 I’m often asked, “Is college worth the price?”
0:04:43 My answer? Mostly yes.
0:04:47 My hunch is that decades of news stories
0:04:52 about for-profit scam schools, student loan debt and income inequality
0:04:54 have dinged the college brand,
0:04:59 as those narratives speak to a sense of stagnation for people
0:05:04 who once viewed universities as an on-ramp to a wealthy lifestyle.
0:05:07 In a digital economy where everyone has access to everything,
0:05:10 there are more students applying to the top schools,
0:05:13 giving the top schools access to better students,
0:05:18 all of which creates an upward spiral of strength among the strong.
0:05:22 Lower-tier schools, however, are struggling.
0:05:28 Since 2020, 64 colleges have either closed or merged.
0:05:31 Meanwhile, the myth of “education always pays off”
0:05:34 has been busted at tier two schools,
0:05:39 many of which offer a Hyundai for a Mercedes price.
0:05:46 The strongest brands in the world, MIT, Apple, Hermes, the US,
0:05:49 are built on the artificial choking of supply
0:05:54 via rejectionist admissions, premium pricing strategies,
0:05:59 limited production, and rationing visas, respectively.
0:06:01 My business intelligence firm, L2,
0:06:04 advised nearly every luxury business.
0:06:07 The firm was founded on a simple premise.
0:06:11 Prestige brands trade at higher multiples of revenue
0:06:14 due to increasing income inequality
0:06:18 and their ability to manufacture scarcity.
0:06:22 We sold the company in 2017 for eight times revenue.
0:06:24 Mirroring our client base,
0:06:26 we were disciplined about pricing
0:06:30 and said no to many potential clients.
0:06:34 My first consulting firm, Profit, said yes to every client,
0:06:38 and it sold for 2.8 times revenue.
0:06:39 It was the right decision at the time,
0:06:42 as I didn’t have the capital to utter the sexiest word
0:06:46 in the English language, no.
0:06:48 Saying no is the correct strategy
0:06:52 for a consulting firm or a luxury brand,
0:06:55 but not for a university.
0:06:58 Yet the top 2% of institutions
0:07:01 have decided they are luxury brands,
0:07:05 saying no to more than 90% of their applicants.
0:07:09 When I applied to UCLA, the acceptance rate was 76%.
0:07:14 Last year, it was 9%.
0:07:16 Throughout the second half of the 20th century,
0:07:18 higher education was the key
0:07:22 that allowed remarkably unremarkable kids, like me,
0:07:26 to unlock America’s promise of upward mobility.
0:07:31 Today, higher ed is a bouncer at the entrance to an exclusive club
0:07:33 where wealthy kids and a cadre
0:07:36 of freakishly remarkable 18-year-olds
0:07:38 build lasting relationships
0:07:41 and lucrative networks with elite peers
0:07:43 while obtaining certification
0:07:44 that gives them access
0:07:48 to the greatest wealth-generating vehicles in history.
0:07:53 S&P 500 companies.
0:07:55 In my sophomore year at UCLA,
0:07:58 I learned my limits were not my real limits.
0:08:00 Crew.
0:08:02 Realized I would not be a doctor.
0:08:04 Chemistry.
0:08:07 Became less insecure about my insecurities.
0:08:09 Psychology.
0:08:11 Fell in love for the first time
0:08:13 and developed resilience.
0:08:16 Heart broken.
0:08:17 I’d like to think all these things
0:08:21 would have happened whether or not I attended college,
0:08:23 but they likely wouldn’t have happened
0:08:26 in such a safe and joyous place.
0:08:28 But my sense is the college experience
0:08:32 isn’t as appealing as it once was.
0:08:34 The University of Michigan, for example,
0:08:36 is a world-class institution
0:08:40 that also provides students with the college experience.
0:08:43 Except there’s something rotten in Ann Arbor.
0:08:48 Michigan invested $250 million in DEI programs
0:08:50 over the past decade.
0:08:52 The result?
0:08:54 More conflict.
0:08:55 A culture of grievance.
0:09:00 And a 33x increase in complaints involving race,
0:09:03 religion, or national origin.
0:09:07 Meanwhile, Michigan’s pro-Palestinian student assembly
0:09:11 voted to withhold $1.3 million in funding
0:09:12 for student activities
0:09:16 until the university divested from Israel.
0:09:18 Two months into the fall semester,
0:09:21 the same student assembly reversed course
0:09:24 when they realized defunding ultimate frisbee
0:09:27 made zero fucking sense.
0:09:30 In response, pro-Palestinian activists
0:09:37 accused the assembly members of complicity in genocide.
0:09:40 It may be this march of the zombies at elite schools
0:09:43 that explains why southern universities
0:09:46 experienced a 30% jump in applicants
0:09:51 from kids in the northeast between 2018 and 2022.
0:09:54 Georgia, 48% acceptance rate.
0:09:58 Clemson, 51% acceptance rate.
0:10:02 And Alabama, 83% acceptance rate.
0:10:06 Aren’t elite schools, but southern schools
0:10:07 are generally less expensive
0:10:10 and seen as less political.
0:10:12 They’re also more likely to embrace
0:10:14 the traditional college experience,
0:10:20 i.e. football games, Greek life, and fun.
0:10:24 State schools have registered an 82% increase
0:10:27 in applications since 2019
0:10:31 as they offer a better value.
0:10:34 The whales of high-tuition prestige universities
0:10:37 are international students.
0:10:41 At NYU, they constitute 22% of our student body
0:10:44 and likely half our cash flow
0:10:47 as they’re ineligible for financial aid.
0:10:50 We claim we let them in for diversity.
0:10:52 This is bullshit.
0:10:57 International students are the least diverse cohort on earth,
0:11:01 i.e. they are the richest kids on campus.
0:11:05 Letting in the daughter of a Taiwanese private equity billionaire
0:11:07 isn’t helping diversity,
0:11:10 but claiming it is illustrates just how far we’ve fallen
0:11:14 from the original goal of affirmative action.
0:11:18 Note, international PhD students, whom we pay,
0:11:23 are some of the most impressive young people on the planet.
0:11:27 In 1960, Harvard, Yale, and Princeton
0:11:30 had a total of 15 black students
0:11:33 out of a combined enrollment of 3,000.
0:11:35 That was a problem,
0:11:39 and shifting to race-based admissions made sense.
0:11:47 In 2024, 65% of students at Harvard identified as non-white.
0:11:49 The Ivy League, as a whole,
0:11:55 now scores high in the U.S. News & World Report Diversity Index.
0:11:56 This is a wonderful thing,
0:12:01 as black students, along with Asians, women, LGBTQ people,
0:12:03 and folks from other groups,
0:12:06 have historically been excluded from elite colleges.
0:12:11 But at this point, the cost of race-based affirmative action
0:12:13 outweighs the utility.
0:12:19 Affirmative action should be based on one color, green.
0:12:22 It’s poor kids who need a hand-up.
0:12:27 Identity politics have been weaponized by a DEI apparatus
0:12:31 on campuses that doesn’t translate to progress,
0:12:35 but student debt.
0:12:37 When the University of California system
0:12:40 banned affirmative action in 1995,
0:12:43 the number of black and Latino first-year students
0:12:47 plunged by nearly half at UCLA and UC Berkeley.
0:12:51 But over time, the numbers rebounded.
0:12:56 By 2021, UCLA’s first-year class included more black students,
0:13:00 346 or 7.6%,
0:13:07 than its 1995 class, 259 or 7.3%.
0:13:10 While the UC Chancellor submitted an amicus brief
0:13:14 supporting affirmative action at elite private schools,
0:13:18 they achieved similar results by implementing
0:13:23 an admission guarantee to top-performing students statewide,
0:13:27 as well as an admissions process that factors in the location of an applicant’s
0:13:32 home and high school.
0:13:35 While the Supreme Court banned race-based admissions,
0:13:39 affirmative action for the rich, aka legacy admissions,
0:13:43 continues. Not so fun fact?
0:13:47 Elite schools began using legacy admissions in the 1920s,
0:13:50 along with standardized tests, interviews,
0:13:56 and extracurricular activities to keep out Jews.
0:14:00 Despite its ugly origins, more than half the schools
0:14:03 in the U.S. continue to use legacy admissions,
0:14:10 and 40% of students nationwide benefit from such preferences.
0:14:17 At Harvard, legacies accounted for 36% of the class of 2022.
0:14:21 Culture wars center the fight around race-based preferences,
0:14:26 but elite universities are businesses, and the only color that really matters
0:14:31 is, again, green. For loyal, wealthy customers,
0:14:36 the legacy advantage is remarkable. Here’s the thing.
0:14:38 I don’t have a problem with legacy admissions.
0:14:43 When I was at Haas, there was a student who was obviously a legacy, i.e. their
0:14:46 billionaire father donated to get them into business school.
0:14:50 That’s a good thing if the money is used to expand
0:14:55 access for other students. My problem with higher education
0:14:59 is that we’re whores who aren’t transparent about being whores.
0:15:03 Many faculty and administrators forego higher paying careers
0:15:08 as they believe in the mission. Most, like the rest of us,
0:15:13 wake up every day and ask, “How can I increase my compensation
0:15:18 while reducing my accountability?” They found the answer in the LVMH
0:15:24 strategy, only hitch. College degrees aren’t Birkenbags,
0:15:28 and higher ed is not only the best path to economic security,
0:15:32 it will also shape the view of many, if not most,
0:15:36 of the people running the world for the next century.
0:15:41 The last time I wrote about higher ed, I received three cease and desist letters
0:15:46 from universities we said were likely to perish.
0:15:53 DEI, ethics, sustainability, leadership, and near anything with the word
0:15:57 “studies” in its title, is no longer about helping people,
0:16:04 but welfare for the overeducated. Here’s the dirty secret. Using AI,
0:16:09 software, the abolishment of tenure, and higher standards for faculty,
0:16:17 we could cut costs 30% and tuition conservatively in half.
0:16:21 We wouldn’t need student debt bailouts because kids wouldn’t need
0:16:24 student loans.
0:16:31 Five states and a handful of elite schools recently banned legacy admissions.
0:16:35 My Prof. G. Markets co-host Ed Elson believes the practice will be gone in a
0:16:40 few years, as donations no longer guarantee acceptance.
0:16:45 I disagree. Donating isn’t entirely transactional.
0:16:50 When I gave to UCLA and UC Berkeley, the chancellors were explicit.
0:16:55 A donation wouldn’t make it easier for my kid to get in.
0:16:59 In fact, it likely makes it harder. And that’s fine.
0:17:03 I donated to give an overdue nod to the Californian
0:17:08 and American taxpayers who invested in me. I also donated out of ego.
0:17:14 It wasn’t anonymous. Being a provider makes me feel masculine.
0:17:18 Still, Ed has a point about why many people donate.
0:17:22 Last year saw a 2% drop in private donations to universities
0:17:26 despite the strong economy and the market hitting new highs.
0:17:31 The $1.5 billion that might otherwise have gone toward donations
0:17:35 is likely up for grabs, as parental admissions anxiety is closely
0:17:38 correlated with the size of your bank account.
0:17:43 Such anxiety will likely supersize the emerging college admission consulting
0:17:47 complex. Soon it won’t be an advantage to hire a
0:17:52 consultant, but a disadvantage if you don’t.
0:17:56 I’m not suggesting we shouldn’t have elite schools that have exceptionally
0:18:00 high standards, but embracing a for-profit business model
0:18:04 more suited for Panerai than a public service,
0:18:07 unnecessarily restricting supply for money and ego,
0:18:13 is just plain wrong. We have the pill, the miracle
0:18:17 drug. Any university that has an endowment
0:18:21 over a billion that’s not expanding its freshman class
0:18:25 faster than the population should lose its tax-free status,
0:18:29 as they are no longer a place of learning but a hedge fund
0:18:34 offering classes. And schools should be on the hook for 50% of bad
0:18:40 debt from student loans. I can’t imagine the economic stress levyed across
0:18:46 American households who don’t have a spare $250,000 lying around.
0:18:51 It should be noted that many schools like ASU, Purdue, the University of
0:18:54 Illinois system offer free tuition to students who
0:19:01 meet minimum academic requirements. Also, 17 states provide tuition free
0:19:06 vocational programs via community colleges.
0:19:12 If grief is love’s souvenir, then anxiety is love’s tax.
0:19:16 I never cared much about anything until I had boys,
0:19:20 but now I’m anxious all the time despite having the funds for my boys’
0:19:25 education. We’ve lost the script. The leadership and
0:19:29 faculty of elite universities have morphed from public servants
0:19:35 to Birkenbags. Whether you’re a stressed kid in high school,
0:19:40 a family saving for college, an anxious parent, a college grad or dropout
0:19:45 struggling with student debt that’s difficult to discharge in bankruptcy,
0:19:48 or someone being asked to bail out someone who had opportunities not
0:19:55 afforded to you, we’re all paying the price.
0:20:05 Life is so rich.
0:20:09 [Music]
0:20:17 [BLANK_AUDIO]

0:00:02 (upbeat music)
0:00:12 – Hi, Prophogy fans, it’s Ed,
0:00:14 dropping in to share an episode of Prophogy Markets
0:00:16 that we do not want you to miss.
0:00:19 We are on our own separate feed now.
0:00:22 So type in Prophogy Markets wherever you get your podcasts
0:00:24 and hit follow to stay up to date.
0:00:25 This week on Prophogy Markets,
0:00:27 we spoke with one of our favorite guests,
0:00:29 Professor Aswath Damodaran.
0:00:31 We talked about tech earnings,
0:00:33 what Wall Street thinks of Harris and Trump,
0:00:36 and we spoke about some fallen heroes in the stock market.
0:00:37 Here’s a clip.
0:00:39 – I think the prompt for Intel is,
0:00:41 they were at the top for so long
0:00:44 that their story is where the biggest, where the best.
0:00:49 And when that slipped, they wanted to go back to the top.
0:00:51 I mean, think about what they’ve done over the last 10 years.
0:00:54 It’s not that they haven’t tried to do the things
0:00:55 that would make them successful.
0:00:57 I think they’ve tried too hard.
0:00:58 Tried too hard in what sense?
0:01:01 They tried to out TSMC, TSMC
0:01:03 with the Intel Foundry huge investments
0:01:07 in manufacturing chip saying we too can be like TSMC.
0:01:10 They’ve invested, I think after Nvidia,
0:01:11 perhaps even more than Nvidia,
0:01:13 they’ve thrown in billions of dollars
0:01:15 into developing the next AI chip.
0:01:17 ‘Cause they’re convinced
0:01:19 that they can out Nvidia, Nvidia.
0:01:21 And I think in the process they’ve overreached.
0:01:23 I call it metuism on steroids
0:01:25 because that’s basically what Intel has done
0:01:28 for the last five years is, me too, I can do that.
0:01:32 And I can do it five times more expensively than you can.
0:01:34 Now, I remember going into Intel six or seven years ago,
0:01:37 I went to their offices and I was talking to their,
0:01:41 they asked me to come in and speak to their general audience.
0:01:43 And what I noticed about Intel as a company
0:01:45 was the absence of energy.
0:01:48 You don’t get that sense of excitement and energy
0:01:49 and wasn’t there anymore.
0:01:52 And it’s tough to be in the business that Intel is in
0:01:55 without that driving the choices.
0:01:57 I do think though that it’s been oversold.
0:02:00 I think at, especially when it dropped below $20 per share,
0:02:03 you were effectively assuming that Intel
0:02:06 would shrink over time and its margins would go away.
0:02:09 Intel has a couple of advantages still
0:02:11 that can work in its favor.
0:02:14 One is the inflation reduction act, as you know,
0:02:19 put as a priority chips made in the US.
0:02:21 DSMC has built a factory in the US,
0:02:24 but Intel is supremely well positioned
0:02:28 to take advantage of the subsidies that come out of that.
0:02:32 So if Intel can find its feet on the foundry business,
0:02:33 there’s a way back.
0:02:36 And I think that as long as they don’t try too hard
0:02:39 and accept the fact that they will not dominate AI,
0:02:41 that battle’s lost, Nvidia will,
0:02:43 but they have a niche portion of the AI business
0:02:44 they can go after.
0:02:47 I think there’s a pathway back to middle age,
0:02:50 not great growth, but middle age for Intel.
0:02:52 And at less than $20 per share,
0:02:57 I thought it was a pretty good bargain as an investment.
0:03:01 I own Intel now, so I’ve got to be quite open about that.
0:03:04 I did it after I wrote the piece and I looked at
0:03:08 what would happen if they became a 3% growth company
0:03:10 and the margins slipped by three or 4%
0:03:12 and there were $28 per share
0:03:14 with those assumptions built in.
0:03:15 I can live with those assumptions.
0:03:19 I think the odds are, in fact, in your favor and Intel.
0:03:21 Boeing, though, is an entirely different story.
0:03:25 I mean, I’ve never seen a company blow up its reputation
0:03:28 as thoroughly and as completely as Boeing has done
0:03:29 over the last 20 years.
0:03:33 I mean, it’s one of the great engineering companies
0:03:34 in the world.
0:03:35 I mean, a company that was, you know,
0:03:40 people went to because it’s superb, superb engineering
0:03:43 and technology knowledge, trusted in many dimensions.
0:03:46 The only reason Boeing is afloat
0:03:48 is because it’s in a duopoly.
0:03:52 I mean, that’s a reality, is this company
0:03:56 has so thoroughly trashed its credibility in markets
0:03:59 that in any other market, we’d be talking about rap,
0:04:02 you know, winding up the story
0:04:05 and selling the assets to others.
0:04:06 I do think they’re thinking
0:04:08 about selling their space division now
0:04:11 and that’s the first phase in a company saying
0:04:14 we’re in trouble, we’re going to sell off our crown jewels
0:04:16 because we have to survive.
0:04:18 They’re in complete survival mode
0:04:21 and I don’t know an easy pathway back to credibility
0:04:23 because once people get the perception
0:04:25 that you cannot be trusted,
0:04:28 that your products are not safe.
0:04:33 Which for an aircraft manufacturer is diabolically dangerous.
0:04:35 It’s very difficult to find a pathway back.
0:04:37 So Boeing, I would not buy at any price simply
0:04:40 because I think there are too many things
0:04:43 that can go wrong here, that can cause the company,
0:04:47 if not to go bankrupt, at least to be taken into receivership
0:04:50 by somebody that might maintain the assets and run it.
0:04:53 But you know, the company is in serious, serious trouble.
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0:05:13 ♪ Lifetimes ♪
0:05:19 ♪ You help me ♪
0:05:22 ♪ In kind ♪
0:05:26 ♪ Reunion ♪
0:05:28 (upbeat music)