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0:01:11 Welcome to the PropG Pod’s Office Hours.
0:01:16 This is the part of the show
0:01:17 where we answer your questions
0:01:18 about business, big tech, entrepreneurship,
0:01:20 and whatever else is on your mind.
0:01:22 In last week’s Office Hours,
0:01:23 we answered your questions surrounding luxury, commerce,
0:01:25 the rise of the remote husband, and time management.
0:01:28 So what you’ve seen is, effectively,
0:01:31 everyone’s been crowded out.
0:01:32 This goes to a broader issue
0:01:34 in that I believe almost every industry
0:01:36 is turning into an oligopoly.
0:01:38 You will lose some professional trajectory.
0:01:41 You will lose some opportunity to develop relationships
0:01:43 that will pay off later in life by being remote.
0:01:46 I just think to myself, okay,
0:01:48 is this something I need to do,
0:01:49 or I have to do, or something I want to do,
0:01:51 and then I eliminate everything else.
0:01:54 Today, we’ll answer your questions
0:01:55 about AI and higher education,
0:01:57 the intersection of passion and talent,
0:01:59 and charitable giving.
0:02:01 So with that, first question.
0:02:03 (phone ringing)
0:02:06 – Hi, Scott.
0:02:07 I work in college student affairs,
0:02:09 and I’ve been both curious and concerned
0:02:11 about the rise of AI
0:02:12 and how it’s changing higher education as an industry.
0:02:15 Open AI just announced their new ChatGPT EDU product,
0:02:20 which feels like a play to legitimize
0:02:22 and maybe tame the untamed Wild West aspect of AI.
0:02:27 How do you think a product like ChatGPT EDU
0:02:30 will influence the rest of ed tech
0:02:32 which you criticized in the past?
0:02:34 Thanks for all the content.
0:02:36 I don’t always understand what you’re talking about,
0:02:38 but I always learned something.
0:02:40 – Okay, so a thoughtful question,
0:02:42 and let’s be clear,
0:02:43 I don’t always understand what I’m saying.
0:02:45 So look, ChatGPT EDU is a version of ChatGPT
0:02:49 built on its faster GPT-4O model.
0:02:52 God, talk about some shitty branding.
0:02:55 Specifically for universities.
0:02:56 According to Open AI, ChatGPT EDU
0:02:59 allows universities to responsibly deploy AI to students.
0:03:02 Yeah, that’s what they’re worried about.
0:03:04 Faculty researchers and campus operations.
0:03:06 Open AI has claimed it’s available
0:03:08 at an affordable rate for universities.
0:03:10 It’s smart, almost every software or media company
0:03:14 or even Apple has discounted rates for universities
0:03:17 because that is an audience
0:03:19 that will represent a fairly significant lifetime value
0:03:22 both in terms of economics and influence.
0:03:26 ChatGPT EDU also offers reliable administrative controls
0:03:29 robust data security and high usage limits.
0:03:32 Examples of ways you can use ChatGPT EDU
0:03:35 per Open AI’s release include personalized tutoring
0:03:38 for students, right grant applications,
0:03:40 assist professors with grading,
0:03:42 several universities including ASU,
0:03:44 University of Oxford, a bunch of them, UT Austin,
0:03:48 have been key players in shaping ChatGPT EDU.
0:03:50 Look, I like this.
0:03:51 I don’t think you can keep technology in a bottle
0:03:55 across any sector and also in education.
0:03:57 I remember that when I was in business school,
0:04:00 there was a little bit of debate around
0:04:02 whether we should be allowed to use spell check.
0:04:04 I just think you should give your students,
0:04:06 you want your students to be critical thinkers,
0:04:07 you want them to be just ninja warriors
0:04:10 and you want to essentially train them
0:04:11 to use every tool such that they are better
0:04:14 than their average bear, it can develop differentiation,
0:04:17 the currency and the margin that commands
0:04:20 in the marketplace such that they can do good things,
0:04:23 lead the world, save the dolphins.
0:04:24 And mostly, in my view, create economic security
0:04:26 for them and their families.
0:04:27 I think that’s why most people pursue higher education
0:04:30 other than the beer and football, which is why I went.
0:04:33 But I think that we want to give them
0:04:35 as many tools as possible.
0:04:36 I tell my students to use ChatGPT to the extent they want.
0:04:40 If it’s something comes back anodyne and bad,
0:04:43 and I believe I can notice something,
0:04:45 whenever I get really pissed off of my team
0:04:47 and I get shit that I think is just mediocre,
0:04:50 I say, what did ChatGPT write this?
0:04:52 Because it comes back like a computer wrote it, I find.
0:04:55 I find it’s a great tool for brainstorming.
0:04:58 So for example, if I’m looking for,
0:05:00 I don’t know, characteristics of income inequality
0:05:03 in Northern Europe versus Southern Europe,
0:05:06 it’ll write something up for me and it’ll give me examples.
0:05:08 And I don’t like most of them and I don’t like the way
0:05:09 it frames it, but it’ll give me two or three things
0:05:11 I haven’t thought of before.
0:05:12 I use it for brainstorming.
0:05:13 Will it get to the point where it can write in the voice of,
0:05:16 I don’t know, a Maureen Doubt or a JD Solinger, probably,
0:05:19 but I think it’s still a long way from there.
0:05:21 I think we let kids have at it and raise the standards,
0:05:25 have them expect higher quality work for them.
0:05:28 I think this makes a lot of sense.
0:05:29 Now as it relates to higher ed,
0:05:32 everyone’s saying Harvard’s out of business,
0:05:33 bullshit, Harvard will go from 55,000 applicants
0:05:36 to 45,000 and keep in mind they’re a corrupt institution.
0:05:39 It’s really a hedge fund just offering classes
0:05:41 and they’ll still just let in 1,500 kids.
0:05:43 So instead of admitting 5% they’ll admit 6%.
0:05:47 The elite schools aren’t in the business of educating.
0:05:50 We’re in the business of certifying.
0:05:51 Our value add is our brand and our admissions department,
0:05:55 which pre-screens people who are,
0:05:56 and only lets in freakishly remarkable people.
0:05:59 So if you could have a button on LinkedIn
0:06:02 that said freakishly remarkable,
0:06:03 it would give you graduates of elite colleges
0:06:05 or children of rich people,
0:06:07 which quite frankly in our economy
0:06:08 are good people to hire oftentimes.
0:06:10 Sometimes they’re a lot of times they’re shitheads,
0:06:12 but they have a lot of contacts.
0:06:13 So anyways, I’m not even gonna go
0:06:16 into the whole NEPA bullshit,
0:06:18 but you effectively have elite colleges are gonna be fine.
0:06:21 Technology is not gonna disrupt them.
0:06:23 The online ed space, which I am in, has been a shit show.
0:06:28 I got this wrong.
0:06:29 It has not disrupted traditional education.
0:06:30 Those brands are the strongest brands in the world.
0:06:33 They say Apple or Coca-Cola are the strongest brands
0:06:36 in the world, bullshit.
0:06:37 Harvard, MIT and Stanford are the strongest brands
0:06:39 in the world, no one’s giving Apple $200 million
0:06:41 for their name on the side of a building
0:06:43 on the Cupertino campus.
0:06:44 These brands are really fortresses.
0:06:47 Now, are they gonna be disrupted?
0:06:48 Are there, is there an overdue reckoning?
0:06:51 Yeah, it’s not gonna come from students or applicants though.
0:06:53 It’s gonna come from donors.
0:06:55 These organizations have built these insatiable beasts
0:06:58 around all their bullshit of people, administrators,
0:07:00 thoughtful people, FIPS, formerly important people,
0:07:03 hanging out as the vice chancellor of something
0:07:05 before they run for Senate and lose again.
0:07:08 And the reckoning is gonna come from alumni who say,
0:07:10 “Fuck this, I am no longer going to fund
0:07:13 the zombie apocalypse of useful idiots on campuses
0:07:17 and pull their funding, which will require,
0:07:19 which will require a modification or a reduction
0:07:22 in their, or a rethinking of their cost structure.
0:07:25 They will turn to AI to relieve some,
0:07:28 some teachers of their administrative tasks
0:07:30 that they were smart.
0:07:31 They would cut 10, 20, 30% of the cost right now.
0:07:33 Where did, when the hell were we asked
0:07:35 to morph from being centers of excellence
0:07:37 to social engineers?
0:07:38 No one ever asked us to do that.
0:07:40 Anyway, where are you gonna see the biggest impact of AI?
0:07:43 Is leveling the playing field
0:07:45 across lower and middle income homes?
0:07:47 What do I mean by that?
0:07:49 I engage in this.
0:07:50 My kid has tutors.
0:07:51 I actually just told us he doesn’t want a tutor
0:07:53 and we’re like, okay.
0:07:54 And then we realize that he’s a kid,
0:07:55 which means he’s stupid.
0:07:56 And as I think about this,
0:07:57 I’m gonna force him to have continuous math tutor.
0:08:00 But tutors are expensive
0:08:02 and the reason they’re expensive is they’re effective.
0:08:04 And they help your kid get better grades,
0:08:05 help them do better on tests.
0:08:07 What this will be,
0:08:08 I think the biggest impact this is gonna have
0:08:10 on primary education is that ChatGPT and Anthropic
0:08:14 will be able to offer what are pretty reasonable facsimiles
0:08:18 of $150 an hour tutor for nearly free.
0:08:22 Now, you’re gonna have to monitor your kid more closely,
0:08:24 but I think they’re gonna be able to zero in
0:08:26 on where the kid is weak,
0:08:28 where he or she is strong and level them up,
0:08:31 even if they don’t have wealthy parents.
0:08:32 I think that’s a great thing.
0:08:33 Unfortunately, it’ll also lead to great inflation
0:08:36 and take the bar even higher.
0:08:37 I sometimes worry about my 16 year old
0:08:40 in the sense that you want your kid
0:08:41 to have just the right amount of stress.
0:08:43 You don’t want them to be totally carefree
0:08:45 and walking or sleepwalking through life
0:08:46 as I was at 16 and I give a shit.
0:08:48 But at the same time,
0:08:49 you don’t want them to be one of the part
0:08:50 of the anxious generation.
0:08:52 You want them to have just enough amount of stress.
0:08:54 But on the whole, on the whole,
0:08:57 ChatGPT isn’t gonna change the elite institutions.
0:09:00 They have brands that are almost impenetrable.
0:09:02 It will provide an opportunity for an overdue look
0:09:05 at cost cutting at an administrative level.
0:09:07 And I think the good part will be
0:09:09 that it’ll push tutorial
0:09:11 or the tutorial industrial complex will bring the cost down
0:09:14 and offer it up for middle-class and low-income homes.
0:09:16 Thank you so much for the thoughtful question.
0:09:20 Question number two.
0:09:21 – Hey Scott, I’m a big fan of the show and your latest book.
0:09:24 I’m 24 and working in advertising as a visual effects artist
0:09:27 at a small, but successful studio in New York.
0:09:30 I graduated two years ago with a degree in visual effects
0:09:33 and chose a job in advertising
0:09:34 over some lesser paying jobs in film and TV.
0:09:37 I’ve just read the chapter of your book
0:09:38 about finding your talent
0:09:39 and I’m trying to identify where I draw the line
0:09:41 between my own talent and passion.
0:09:43 I feel very lucky that I’ve begun a career in visual effects
0:09:46 and I like to think that I’ve got at least some talent for it,
0:09:48 given my ability to leverage my portfolio for jobs so far.
0:09:51 Call it if you’re burnout or diminishing passion or both,
0:09:54 but I’m wondering if you have any advice for young people
0:09:56 whose passion and talent seem to be awkwardly blurred together.
0:09:59 How do you go about separating them to avoid,
0:10:01 as you said in the book, letting the work spoil the passion?
0:10:04 And is there a way of balancing both on a schedule
0:10:06 you can’t control?
0:10:08 – So Ryan, if you’re doing something you’re good at
0:10:10 and you like, maybe you don’t even love it at this point,
0:10:13 it’s hard to find something you love at a young age
0:10:15 because generally at a young age,
0:10:17 it means you’re doing the shit work.
0:10:18 You’re doing the work that no one else wants to do.
0:10:21 You’re editing stuff, you’re writing the copy.
0:10:23 You’re, you know, your bosses get to show up late,
0:10:26 but you don’t.
0:10:27 I do that a lot and it’s something I hate
0:10:29 about myself and my newest resolution
0:10:31 is the same every year, be on time for stuff.
0:10:33 And I’m not, I don’t know if it’s because I like
0:10:34 the rush of being late or I’m just a narcissist,
0:10:37 but anyways, I don’t know how I got here.
0:10:39 It sounds to me like you’re kind of where you should be.
0:10:42 And that is you’re getting good at something
0:10:44 and ask yourself, could I be great at it?
0:10:46 And if you can be great at it,
0:10:48 would I can promise you with near certainty
0:10:50 or assure you or claim with near certainty?
0:10:53 I guess I guess a promise that’s 100% certainty
0:10:55 is that if you become great at it,
0:10:57 you’re gonna become increasingly passionate about it.
0:11:00 Because the accoutrements of being passionate
0:11:01 about something, the camaraderie, the economic security,
0:11:05 the prestige, the achievement, the ability,
0:11:08 or just the recognition when you produce something great
0:11:10 with a team of people, it feels really good.
0:11:13 I think it’ll make you passionate about whatever that is.
0:11:15 I think passion comes from mastery.
0:11:18 So, I mean, a couple of things.
0:11:20 One, look at the space you’re in and think,
0:11:22 am I learning a lot?
0:11:24 Am I learning a lot at this company?
0:11:25 Do I have senior level sponsorship?
0:11:27 Is the firm doing well?
0:11:28 Is it a good culture?
0:11:30 Do they pay me fairly?
0:11:31 Is there a path?
0:11:32 Has someone taken an irrational interest
0:11:35 or at least a real interest in my future
0:11:38 and it’s coaching me?
0:11:39 All of these things are important to ask yourself
0:11:42 at a specific organization.
0:11:44 Separate that, the organizational components
0:11:46 to do I like this field?
0:11:48 Am I good at it?
0:11:49 Could I be great at it?
0:11:50 And it strikes me that your industry is gonna go
0:11:52 through tremendous disruption.
0:11:53 A friend of mine has invested in an Indian special effects
0:11:55 company that uses technology to bring down the cost.
0:11:58 I think they did a lot of the special effects for Dune
0:12:00 and instead of costing 10 million,
0:12:02 it costs three or four, seven, I don’t know what it is.
0:12:05 But your ability as a young person,
0:12:07 your brain is more agile, more neuroplastic,
0:12:10 whatever the term is to absorb new technologies
0:12:12 and then apply them or cut a swath between technology
0:12:15 and creativity and be great at visual effects
0:12:18 and be more efficient.
0:12:20 I think that is a fantastic seat.
0:12:23 So, I’d just be careful.
0:12:24 I think a lot of young people think,
0:12:26 “Well, I’m not loving my job or I find it difficult.”
0:12:29 Well, there’s a word for that, work.
0:12:31 And I don’t care how romantic the industry is.
0:12:33 If you’re gonna be good at something and really,
0:12:35 I think there’s just a ton of stress and work involved.
0:12:38 And it sounds to me like you found a good seat for yourself.
0:12:42 So, how do you balance both?
0:12:44 I don’t know, boss, I hate the word balance.
0:12:46 I think at the age of 24, this is what I would do
0:12:48 if I were you and I were blessed with a career
0:12:51 that it sounds like you’re pretty good at
0:12:53 and that is growing or I think visual effects
0:12:56 are gonna grow.
0:12:57 Just one quick side note,
0:12:59 design media for a smaller screen.
0:13:02 You don’t wanna be in the movie effects business.
0:13:03 The movie business is gonna get smaller and smaller.
0:13:05 The TV business is gonna be fine.
0:13:07 It’s gonna be a huge business but it’s not gonna grow.
0:13:09 But if you can be great at capturing people’s imagination
0:13:12 with effects or figure out a way to do things
0:13:14 for the small screen, specifically the phone,
0:13:16 that is champagne and cocaine.
0:13:18 Anyways, be the guy that really understands
0:13:21 the intersection between creativity, storytelling
0:13:23 and technology but it sounds to me, Ryan,
0:13:24 like you’re in a pretty good seat.
0:13:27 And also, don’t be hard on yourself.
0:13:28 Recognize that at the age of 24,
0:13:30 the majority of people have no fucking idea
0:13:31 what they wanna do.
0:13:32 You know what I was doing at 24?
0:13:34 I was deciding not to stay in investment banking
0:13:36 and moving back in with my mom
0:13:38 and I had absolutely no idea what I wanted to do
0:13:40 with my life and then with my best friend
0:13:41 and my girlfriend said they were applying
0:13:43 to business school and I go,
0:13:44 “I’ll apply to business school then.”
0:13:46 With a 2.27 GPA from UCLA, I applied to business school.
0:13:49 Go figure, Ryan, definitely be that guy
0:13:51 who understands the intersection
0:13:53 of technology, creativity and storytelling.
0:13:56 Thanks for the question, Ryan.
0:13:58 We have one quick break before our final question.
0:13:59 Stay with us.
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0:15:26 You could hire a private tutor,
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0:15:32 but not all language apps are created equal.
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0:15:54 One of our producers, Caroline, tried Babbel,
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0:15:59 It’s really annoying, but I guess that means
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0:16:36 it’s easy to say, hard to do.
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0:17:13 (upbeat music)
0:17:16 – Welcome back, question number three.
0:17:21 – Hey Scott, this is Frank Paula from South Florida.
0:17:24 Just finished Algebra for Welk, loved it,
0:17:27 ended up sending it to both my 30 year old kids
0:17:30 with a couple of notations
0:17:31 on things they need to specifically look at.
0:17:33 What is a 65 year old business owner?
0:17:35 I’ll tell you a lot of stuff over in there.
0:17:37 Love the show and also love pivot.
0:17:39 Just listen to your last episode
0:17:41 talking about giving and the wonderful women in this world
0:17:45 that are doing it so kind-hearted,
0:17:47 you know, obviously so generously.
0:17:49 So my question’s around that.
0:17:51 You’re a charitable giver, you’ve mentioned that as well.
0:17:54 And I also believe that there’s no point
0:17:56 in kicking the stuff forward until the time I go
0:18:00 and giving it out there and working in the world.
0:18:03 Tell me a little bit about how you go about making decisions
0:18:06 with regards to the types of giving that you’ve done
0:18:09 now that you’ve kind of put away your chunk of change
0:18:11 that’s gonna support you through the balance of your life.
0:18:14 Again, love the show, looking forward to your answer.
0:18:17 – Brandt, thanks for the question.
0:18:18 First off, you sound like just such an impressive man.
0:18:21 You have a great voice, by the way.
0:18:22 You could have a second career in podcasting.
0:18:25 And this is what I call the mother of all good problems,
0:18:28 right, trying to figure out how to give away money
0:18:30 and what to do about it.
0:18:31 As a matter of, it’s interesting,
0:18:32 it is a bigger issue than people think.
0:18:33 UBS, I used to get invited every year
0:18:36 to this UBS generational wealth conference.
0:18:38 And basically it was a conference for rich kids.
0:18:40 So, think of the wealthiest names in the world.
0:18:44 You get to meet their kids
0:18:45 and I would talk about living a meaningful life.
0:18:49 I talk a little bit about brands and technology
0:18:52 and then they would spend an entire day on giving,
0:18:56 which I thought, I didn’t participate in it,
0:18:58 but I thought that was interesting
0:18:59 ’cause obviously wealthy people are very philanthropic.
0:19:03 I do think, and just to revisit what you referenced,
0:19:06 I do think there’s a virus in the United States of hoarding.
0:19:10 And that is, the problem with the numbers,
0:19:12 if you get to 10 million, you can imagine 30 million,
0:19:15 then you can imagine 100 million.
0:19:16 And because your life has consistently gotten better
0:19:19 along that scale as you increase your wealth,
0:19:21 you think that that scale is linear.
0:19:23 And that if you can get from 10 to 30 million,
0:19:25 your life’s gonna get three times as good.
0:19:27 And what Daniel Kahneman has shown us
0:19:28 is that the difference between zero and one million is huge.
0:19:31 The difference between one and 10 million is modest
0:19:33 and the difference between 10 and 50 million
0:19:35 is really negligible.
0:19:37 So, once you hit your number,
0:19:39 and a decent way to calculate your number
0:19:40 if you wanna be really conservative
0:19:42 is figure out how much money you need every year.
0:19:44 What is your burn?
0:19:45 Say you need a half a million dollars
0:19:47 to live really well a year, then times it by 25.
0:19:51 That means you would need 12 and a half million dollars
0:19:53 in savings and income.
0:19:55 Now, anything above that,
0:19:56 I think you could start thinking about giving away
0:19:59 or spending or going above that half a million dollars a year.
0:20:03 I’m a big spender, I like it.
0:20:05 Hey, big spender, I’m indulgent, I’m materialistic.
0:20:09 I love, I think I’m good at spending money.
0:20:11 You know what I hate?
0:20:11 I hate it when people who have money
0:20:13 can’t spend their money well.
0:20:14 I can’t tell you, speaking of Florida,
0:20:17 how many really wealthy people I know
0:20:18 and I go into their house, I’m like, ugh, my God.
0:20:21 I mean, fountains and stairways
0:20:23 and like shitty modern art
0:20:25 and pictures of themselves everywhere.
0:20:27 Oh, God.
0:20:28 I’m like, Jesus Christ,
0:20:30 can someone show these people how to spend their fucking money?
0:20:33 That’s not what you asked.
0:20:34 How do I approach giving?
0:20:35 I try to put it to something I’m passionate about
0:20:38 and I think I know something about
0:20:40 and then I want to change.
0:20:41 So my big thing is how men are struggling.
0:20:44 I have recently made a gift, if I think about,
0:20:47 14 or $15 million to the University of California,
0:20:50 Berkeley and UCLA for the development of programming
0:20:54 that’s more vocational,
0:20:55 that would have no entrance requirements,
0:20:57 not a traditional four year degree
0:20:58 that appeals to younger people, mostly younger men,
0:21:02 who no longer have access to wood shop, metal shop,
0:21:04 and auto shop that are thinking about specialty nursing
0:21:07 or construction or plumbing or electric
0:21:11 and can foot or can find skills that foot
0:21:14 to this enormous gap in the real economy
0:21:17 and that is the trades sector.
0:21:20 The trade sector is gonna lose five people
0:21:22 over the next 10 years for every two that go into it,
0:21:23 which means the cost of renovating
0:21:25 and having soapstone installed in your kitchen,
0:21:27 which I just had exceptionally expensive.
0:21:30 So those people are gonna have incredible pricing power.
0:21:32 Probably the biggest opportunity in our economy right now
0:21:35 is, in fact, to buy a trades business,
0:21:38 a small business, if you will.
0:21:39 Anyway, I’m passionate about that.
0:21:41 I really like the new chancellor
0:21:43 of the University of California, Berkeley, Rich Lyons,
0:21:45 he’s a wonderful guy, I’ve known him for 20 years,
0:21:47 so I trust him to deploy the capital prudently
0:21:51 and effectively, so that’s kind of my thing.
0:21:54 The other thing I’m passionate about
0:21:55 as it relates to young men is teen depression.
0:21:58 I’ve given a bunch of money to the Jed Foundation.
0:22:01 Is that fair?
0:22:02 I don’t know, get a couple hundred or 500 grand of them.
0:22:05 And then just a personal relationship.
0:22:07 I have a personal relationship with a kid named Scott Harrison
0:22:09 that I’ve known for 25 years
0:22:11 and he is building wells in sub-Saharan Africa.
0:22:14 Do I have a passion around water or people in Africa?
0:22:16 No, I’d probably rather give money to Americans.
0:22:19 I know if that sounds jingoistic, trust your instincts,
0:22:21 but I’m so inspired by Scott and him
0:22:24 and his personal story that I feel a friendship,
0:22:27 a kinship with him, so I wanna be supportive
0:22:30 of his amazing charity, charity water,
0:22:33 and he runs it so well that I’m confident
0:22:35 my money will be put to good use.
0:22:37 So how do I do it?
0:22:38 I find things that foot to my passions
0:22:40 are things I think are really important
0:22:43 that I have a specific interest in,
0:22:45 but let me finish where I started.
0:22:47 This is a great problem.
0:22:49 Congratulations on your success.
0:22:51 And I think it’s very American
0:22:53 to be thinking the way you’re thinking.
0:22:55 That’s all for this episode.
0:22:58 If you’d like to submit a question,
0:22:59 please email a voice recording
0:23:00 to officehours@proptimedia.com.
0:23:02 Again, that’s officehours@proptimedia.com.
0:23:05 This episode was produced by Caroline Shagren.
0:23:16 Jennifer Sanchez is our associate producer,
0:23:18 and Drew Burroughs is our technical director.
0:23:20 Thank you for listening to “The Propti Pop”
0:23:22 from the Vox Media Podcast Network.
0:23:24 We will catch you on Saturday for “No Mercy, No Malice”
0:23:26 as read by George Hahn.
0:23:28 And please follow our Propti Markets Pod
0:23:31 wherever you get your pods for new episodes
0:23:33 every Monday and Thursday.
0:23:34 By the way, our Propti Markets Pod
0:23:37 is already the number one pod in business in America.

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0:01:54 (upbeat music)
0:01:57 – Today’s number 19, that’s the percentage of employers
0:02:00 who claim to have had a recent college graduate
0:02:02 bring a, get this, parent to a job interview.
0:02:05 Ed, true story.
0:02:06 I figured out that my parents favored my twin brother
0:02:09 when they asked me to blow up balloons
0:02:11 for his surprise birthday party.
0:02:12 (laughing)
0:02:14 (upbeat music)
0:02:16 (upbeat music)
0:02:19 – Hold me Ed, little twin humor.
0:02:27 Little twin neglected dog humor.
0:02:29 That’s right, we’re trying to clean it up.
0:02:31 Still PG-13, still PG-13.
0:02:34 Welcome to Prop G Markets.
0:02:35 Today, we’re discussing the Texas Stock Exchange
0:02:39 and the dying breed of the short seller.
0:02:42 Here with the news is Prop G Media Analyst, Ed Elson.
0:02:46 – Ed, what is the good word?
0:02:47 – I’m just pretty shocked by that start, 19%.
0:02:50 – Makes no fucking sense.
0:02:51 – Makes no way, do you think that’s right?
0:02:53 – I don’t know.
0:02:53 – Surely there was something wrong with the survey there,
0:02:57 unless I’m just completely out of touch, it’s unbelievable.
0:02:59 – Yeah, no.
0:03:01 I asked my parents if I was in an accident,
0:03:02 and they said, “No, it’s really more of a tragedy.”
0:03:05 (laughing)
0:03:06 – That could have been our opening joke too.
0:03:08 – Yeah, there you go.
0:03:09 – You were in Scotland yesterday, how was that?
0:03:11 – And this morning, it was great.
0:03:12 Went up there for the night to a place called
0:03:15 Five Arms in Aberdeen.
0:03:17 – By the way, one of my favorite things to do
0:03:18 is when I look at your schedule,
0:03:20 I will look at the hotels you’re staying at
0:03:23 and Google them and look at all the photos.
0:03:26 So I’ve already seen the Five Arms website.
0:03:29 I know what all the amenities are.
0:03:31 Looks quite nice, yeah.
0:03:32 – Yeah, what do you think?
0:03:33 What should we have done?
0:03:34 We pretty much just drank whiskey and had a long dinner.
0:03:37 We didn’t even take a walk, we’re gonna go outside.
0:03:39 Also, I don’t know if I told you this,
0:03:40 but actually, speaking of parents,
0:03:41 my parents treat me like a god,
0:03:43 and that is they don’t believe in me, Ed.
0:03:44 They don’t believe in me.
0:03:46 Back to the Five Arms.
0:03:48 – Do you have like a joke’s website pulled up
0:03:51 in front of you right now?
0:03:52 Where are these coming from?
0:03:53 – 100%.
0:03:54 So what place am I going to that you’re most excited about?
0:03:57 I love that you’re stalking me.
0:03:58 – I love doing that.
0:03:59 I don’t know, I…
0:04:02 – First off, where are you guys going?
0:04:03 Where’s the team going?
0:04:05 – Oh, we’re going to St. Bart’s.
0:04:06 – That’s right.
0:04:07 That’s what happens when you work for the dog.
0:04:08 – That’s right.
0:04:09 – That’s right, he sends you the same bar.
0:04:10 So I tell you, once I walked in on my parents having sex,
0:04:13 seriously, Ed, seriously, I’m not joking.
0:04:16 It was the worst 45 minutes in my life.
0:04:18 – You’ve told that one before, but yeah.
0:04:23 – Never get told.
0:04:24 – And just a reminder, just a reminder,
0:04:27 just a reminder to go listen to the ProfG Markets Feed,
0:04:32 ProfG Markets, go subscribe.
0:04:35 – All right, get to the news.
0:04:36 – Gladly.
0:04:36 – Get to the news.
0:04:38 – Let’s start with our weekly review of market vitals.
0:04:40 (upbeat music)
0:04:43 The S&P 500 hit a new record, the dollar declined,
0:04:50 Bitcoin top $70,000 and the yield on 10-year treasuries fell.
0:04:55 Shifting to the headlines.
0:04:56 Spotify is increasing the cost
0:04:58 of its premium subscription plans,
0:05:00 including the family duo and student plans.
0:05:02 That’s its second price hike in a year.
0:05:05 Meanwhile, Warner Brothers Discovery
0:05:06 also announced a price hike for Max.
0:05:09 Morgan Stanley’s trading platform, eTrade,
0:05:12 is considering banning Keith Gill,
0:05:14 also known as Roaring Kitty,
0:05:15 over concerns of potential stock manipulation.
0:05:18 The company is concerned that Gill’s influence
0:05:20 can enable him to pump up stocks like GameStop
0:05:23 for his own gain.
0:05:25 And finally, Nvidia became the first computer chip company
0:05:27 ever to reach a market cap of wait for it $3 trillion.
0:05:32 As of Wednesday’s close,
0:05:34 the company surpassed Apple
0:05:35 as the second most valuable company in the S&P 500,
0:05:38 also in the world, behind only Microsoft.
0:05:41 Scott, your thoughts?
0:05:43 – I think that the subscription space
0:05:45 is just such a fascinating lesson
0:05:48 in economics and markets.
0:05:49 And essentially what you had is everyone figured out
0:05:51 that the future is in streaming.
0:05:53 And it’s also consistent revenue.
0:05:56 It’s not ad revenues where if there’s a recession,
0:05:58 everyone stops advertising.
0:05:59 Even though it was a recession,
0:06:00 people usually don’t cancel their Netflix or their Spotify.
0:06:03 And so the market got drunk on it.
0:06:06 This is the future and gave these companies
0:06:07 an enormous valuations.
0:06:09 And then the ones with the biggest market cap,
0:06:11 specifically Netflix,
0:06:13 started reinvesting that capital
0:06:14 to take an Amazon-like strategy
0:06:16 of just using capital as a weapon
0:06:17 and pull away from everyone else.
0:06:19 And Netflix got up to $17 billion a year
0:06:22 and spend on content, which no one could match.
0:06:25 And then the markets got less excited about the space
0:06:29 ’cause it didn’t appear anyone was very profitable
0:06:31 and that the space had been over-invested
0:06:34 ’cause everyone was trying to catch up with Netflix.
0:06:36 So it was a great time to be a gaffer.
0:06:37 It was a great time to be in the business of production.
0:06:41 But at some point the music was gonna end.
0:06:43 And it ended about, I think about two years ago
0:06:45 when Netflix crashed and all of a sudden became clear
0:06:48 that things like Paramount Plus just might not survive.
0:06:52 And the market has done two things.
0:06:53 It’s consolidated and it’s also based on the consolidation
0:06:57 given some players, specifically Netflix,
0:06:59 the cloud cover to raise prices.
0:07:02 And this cloud cover and the consolidation
0:07:04 ’cause there’s fewer and fewer options
0:07:06 at the very high levels has given this pricing power
0:07:10 back to the organizations and Spotify has increased prices.
0:07:14 I think it’s gonna be twice now
0:07:15 and Spotify for the first time,
0:07:18 I think in a while their stock is performing really well.
0:07:21 The individual, dual and family subscriptions
0:07:23 will increase one, two and $3 respectively.
0:07:25 The stock popped 5% on the news.
0:07:28 Its performance to date has been underwhelming
0:07:30 and it’s 25 quarters as a public company.
0:07:32 It’s only been profitable of eight of them
0:07:34 but things are looking up.
0:07:35 Stocks has doubled in the last 12 months
0:07:38 and you’re also seeing max is increasing
0:07:40 its prices on ad-free plans.
0:07:42 So the companies that come out the other end of this
0:07:44 it will be the Consolidate Ores
0:07:46 as opposed to the Consolidate Ease.
0:07:48 I think it’ll do well.
0:07:49 And that’s one of the reasons our three stock picks for 25,
0:07:53 again, invest in index funds,
0:07:54 but it’s fun to follow stocks are Alphabet,
0:07:58 which is up I think 25 or 26% on the year.
0:08:00 And then Warner Brothers and Disney
0:08:02 and Warner Brothers has been a laggard,
0:08:03 Disney’s done okay because I think that the pricing power
0:08:07 that they will register at Disney Plus
0:08:08 and at HBO respectively,
0:08:11 will start to give the markets a reason to look at them again.
0:08:13 But this is just a case study in overinvestment
0:08:18 and then a crash and then consolidation
0:08:20 and then pricing power coming back.
0:08:22 Any thoughts?
0:08:23 – I just couldn’t believe the stock performance of Spotify.
0:08:25 It’s 110% in the past year, it’s doubled.
0:08:28 It’s just pretty fascinating to me.
0:08:30 I mean, we discussed their earnings from last quarter
0:08:34 on this podcast, which was also pretty phenomenal.
0:08:36 20% revenue growth.
0:08:38 They had this massive reduction in spending.
0:08:40 And now they’re doing what great companies get to do,
0:08:44 which is raise prices.
0:08:45 So I will see how that will affect the usership
0:08:49 in the next earnings.
0:08:49 It’s got its next earnings call a month from now,
0:08:52 but I have a feeling that it’s not really gonna hurt.
0:08:55 MA use that much.
0:08:56 I feel like price hikes are always less damaging
0:08:59 than people predict and that’s certainly been the case
0:09:01 for Netflix as you pointed out.
0:09:03 Thoughts on Keith Gill and eTrade.
0:09:06 – So I thought this was really interesting.
0:09:07 When we first talked about it in the editorial meeting,
0:09:09 I thought, this is bullshit.
0:09:11 You know, it’s the SEC’s job to decide
0:09:13 what market manipulation is, not eTrade.
0:09:15 And then it dawned on me, eTrade is full of shit.
0:09:19 This is what’s going on or what I think is going on.
0:09:21 eTrade is worried about what happened to Robinhood.
0:09:25 And that is when the meme stock phenomenon
0:09:27 went just literally parabolic.
0:09:30 The ability to pair trades on these highly risky,
0:09:33 highly volatile stocks meant that the trading
0:09:35 or the clearing firms asked them to have a certain amount
0:09:38 of capital reserved in case the stock accelerated
0:09:42 before they paired it with another trade.
0:09:44 And I think eTrade is worried
0:09:46 that they might get caught with their pants down.
0:09:48 Cause if you remember what happened to Robinhood,
0:09:50 they effectively said to people, you cannot buy GameStop
0:09:55 or I forget which equity it is.
0:09:56 And to a certain extent, they probably should have gone
0:09:58 out of business when they did that.
0:10:01 And I think eTrade looks at what’s happening
0:10:03 and says someone in their compliance
0:10:05 or the risk department comes back and goes,
0:10:07 if this shit gets real again
0:10:08 and it starts going fucking crazy,
0:10:10 we could potentially find ourselves
0:10:12 in a Robinhood-like position where the people
0:10:14 who clear our trades demand so much equity
0:10:18 that we don’t have it.
0:10:20 But this notion somehow that they have decided
0:10:22 they’re the arbiters of market manipulation
0:10:24 makes absolutely no sense to me.
0:10:27 What are your thoughts?
0:10:28 – Yeah, I found it really interesting,
0:10:30 the debate that’s going on at Morgan Stanley
0:10:31 as you pointed out why they should ban him,
0:10:34 but also why they shouldn’t ban him.
0:10:37 Because it actually isn’t a question of legality for them
0:10:40 because their terms and conditions are very clear.
0:10:42 They can basically restrict whoever they want.
0:10:45 That’s what you sign up for
0:10:46 when you sign up with their platform.
0:10:48 But their concern is that if they do ban him,
0:10:52 that they’re gonna make enemies with the Reddit army
0:10:55 and that by antagonizing him,
0:10:57 it’s gonna start this chain reaction
0:10:59 and all of his hundreds of thousands of fans
0:11:01 are gonna leave and follow him to a different platform.
0:11:05 And I just find it so interesting
0:11:06 that this issue is kind of becoming a theme
0:11:09 for every platform.
0:11:11 And the first obvious example
0:11:12 that comes to mind is Trump.
0:11:14 But it’s sort of like, if you’re a platform,
0:11:17 if you have users, you have to develop a strategy
0:11:20 for dealing with these larger than life characters
0:11:23 with these huge followings who misbehave.
0:11:26 Because even if you rightly punish them,
0:11:29 you risk losing millions of users
0:11:31 and eventually probably millions in revenue.
0:11:34 So it’s interesting to me that a stock trading platform
0:11:37 could be dealing with the same issues
0:11:39 that we’ve seen over and over again
0:11:41 on the social media platforms like Twitter and Facebook.
0:11:44 And I just think that every platform,
0:11:46 no matter what industry you’re in,
0:11:48 should have a game plan for situations like this
0:11:51 because it feels like it’s happening
0:11:52 more and more frequently.
0:11:54 – Your analysis is the right one.
0:11:55 But the folks at Morgan Stanley are really smart
0:11:58 and they sat down and said,
0:11:59 okay, what are the risks of a Robin Hood-like moment for us?
0:12:03 That is a terrible scenario for us.
0:12:06 What are the risks we’re gonna lose
0:12:07 a bunch of meme stock traders?
0:12:09 They probably looked at their,
0:12:10 I would imagine their trading base
0:12:11 and said, it’s not a big part of our business.
0:12:14 I think they would have rather not done this,
0:12:16 all things being equal.
0:12:17 But I think they decided the risk,
0:12:19 the kind of tail risk or the black swan risk
0:12:23 of an event where the stock goes to,
0:12:26 one of these meme stocks goes absolutely parabolic
0:12:29 and there’s just a 30, 50, 100 X increase in volume.
0:12:33 And all of a sudden,
0:12:34 the people clearing their trades freak out
0:12:35 and say, you need 30, 40 X the capital reserves here.
0:12:39 They thought, okay, that’s just not a scenario
0:12:42 where we all wanna be woken up at 2 a.m.
0:12:43 and try to figure out how to get more liquidity.
0:12:46 Okay, so we piss off Roaring Kitty
0:12:49 and his followers or some people on Reddit.
0:12:52 They probably did some analysis
0:12:53 and tried to figure out what percentage
0:12:55 of our trading volume is these individuals.
0:12:58 And they said, no,
0:12:59 we’d rather piss off this small group of people
0:13:02 and not be subject to this tail risk.
0:13:05 Thoughts on NVIDIA to $3 trillion in market cap.
0:13:09 I just never been accompanied this successful.
0:13:12 If you define success by the ability
0:13:14 to add that type of value in a short period of time,
0:13:17 it’s added $1.8 trillion year to date.
0:13:21 It added three quarters of a trillion dollars in May.
0:13:24 So it’s now larger than the entire stock markets
0:13:27 of Canada and South Korea.
0:13:29 It’s market cap is larger than the GDPs
0:13:32 of all but six countries.
0:13:33 I mean, we were talking with Bill Cohen about Paramount.
0:13:36 We’re talking about $5 billion is worth $15 billion.
0:13:38 You know, this company loses that in a trading hour,
0:13:40 gains it and it’s absolutely striking.
0:13:45 And we’re gonna see all sorts of stories here
0:13:46 about thousands of employees in the Bay Area
0:13:49 who are now worth $10, $50, $100 million.
0:13:52 The numbers here, people can’t even wrap their head
0:13:54 around what the numbers here are.
0:13:57 And then one of the things that me have pulled up
0:13:59 that just fascinates me is I believe
0:14:02 that the S&P is up about 13 or 14% year to date,
0:14:06 but half of that gain is NVIDIA.
0:14:11 So the S&P outside of NVIDIA
0:14:14 is basically up a little bit more than inflation.
0:14:17 So essentially, if you have money in the S&P,
0:14:19 you’re kind of flat if you don’t own NVIDIA.
0:14:22 But if you own NVIDIA or you’re part of an index fund,
0:14:25 and this is why you should be in an index fund
0:14:26 because you’re balanced across based on a weighted adjusted
0:14:31 ratio of the market cap, you’re up 14%.
0:14:35 But if you’re buying individual stocks, most likely,
0:14:38 you’re probably not doing that well
0:14:40 unless one of those stocks was NVIDIA.
0:14:42 And it goes back to, I think it’s a lesson
0:14:44 in the power of index investing
0:14:46 because what I have found,
0:14:48 having been through a lot of ups and downs financially,
0:14:51 is that the pain of losing a lot of money
0:14:55 is much greater than the joy of making a lot of money.
0:14:58 And so diversification and index funds
0:15:02 and getting that 14% feels really good.
0:15:06 Now, it doesn’t feel as awesome as getting 300%,
0:15:09 but what really fucking sucks is being the guy
0:15:11 that’s not beating inflation or has lost money.
0:15:15 So this thing is an absolute phenomena.
0:15:19 Josh Brown had a really interesting point.
0:15:21 I said, “This is Cisco all over again.”
0:15:22 He said, “Yeah, there’s a key distinction though.”
0:15:24 And that is, as the market cap has accelerated,
0:15:27 the PE has actually come down,
0:15:29 which means that their earnings growth has been greater
0:15:31 than this exponential market capitalization growth.
0:15:35 I think this is a bubble.
0:15:36 I think it’s a matter of when, not if,
0:15:39 but I think it’s gonna happen when a company,
0:15:42 a big company who’s a big purchaser,
0:15:45 announces they have their own ship
0:15:48 and that it’s pretty good.
0:15:49 Or when, you know, Mary Barra from General Motors says,
0:15:53 “We’re dramatically decreasing our spend in AI
0:15:55 “while it’s still important to us.
0:15:57 “We’ve realized that it’s not gonna revolutionize
0:15:59 “everything we’ve done.”
0:16:00 And that’s when I think you see the bubble pop here.
0:16:02 But this is, as of today,
0:16:04 this is the most successful company in history
0:16:07 as registered by an acceleration in value.
0:16:09 What are your thoughts?
0:16:10 – I just love seeing the star power
0:16:13 that Jensen Huang has accumulated in the past year.
0:16:16 Two awesome examples of that.
0:16:18 One, that viral photo of Jensen signing a woman’s shirt
0:16:23 who comes and it costs him
0:16:25 while he’s walking out of an interview.
0:16:26 If you haven’t seen it yet, you should go check it out.
0:16:29 He literally looks like a rock star.
0:16:31 I mean, he’s wearing the leather jacket,
0:16:33 but it’s sort of like,
0:16:34 it’s Cristiano Ronaldo, like Justin Bieber level fame.
0:16:39 And the second thing that I found also pretty interesting
0:16:42 is what he did to Samsung stock.
0:16:44 And that is Samsung rose 4% in one day
0:16:48 after Jensen said in an interview
0:16:50 not that he was partnering with Samsung
0:16:53 or that he was even conducting
0:16:54 any sort of business with Samsung.
0:16:56 All he said is that he has been looking
0:16:59 at the chips that Samsung has been producing.
0:17:02 And through that comment alone,
0:17:04 he was able to create $15 billion in market value
0:17:08 and increase the stock 4%.
0:17:11 Here’s a question for you.
0:17:13 Do you think Jensen Huang is at this point
0:17:15 the most powerful non-politician in the world?
0:17:17 – It’s a really interesting question.
0:17:18 I think some people would argue that it’s
0:17:21 Mark Zuckerberg or Sachin Adela
0:17:23 because of their control over such huge swaths,
0:17:25 huge businesses and also their ability to sway elections
0:17:28 or not sway elections or depress teens
0:17:30 or whatever it is they do.
0:17:32 But what Jensen in my opinion sort of indicates
0:17:36 is the financialization of everything.
0:17:38 As a society becomes more capitalist,
0:17:40 what it offers is different gradients of life.
0:17:43 What do I mean by that?
0:17:45 When I was younger, my dad would have people over
0:17:49 who work for him.
0:17:50 And then we would occasionally go over to his boss’s house.
0:17:53 His boss had the nicest house on the block,
0:17:56 but it was still the same neighborhood.
0:17:57 And we were all still members of the same country club.
0:17:59 And he had a Cadillac, right?
0:18:01 Instead of a Thunderbird, he had a Cadillac.
0:18:02 My dad had a Gran Torino, but his boss had a Cadillac.
0:18:05 But now the guy who runs a company flies private
0:18:11 and stays at a series of hotels that people just,
0:18:15 most 99% of people could just never even afford.
0:18:17 – The five owns, yeah.
0:18:19 – Well, not even that.
0:18:20 I mean, what you can do with money now,
0:18:23 that wasn’t even an option back in the 70s and 80s.
0:18:27 Like money bought you some stuff,
0:18:28 but it didn’t buy you what it buys you today.
0:18:31 And so I think the reason we’re morphing
0:18:33 to a different species is one,
0:18:34 mostly because of loneliness,
0:18:35 but two, the financialization of everything
0:18:37 has created different criteria.
0:18:38 What do I mean by that?
0:18:40 The sex symbols used to be military.
0:18:43 Your ability to protect the tribe
0:18:45 made people attracted to you.
0:18:47 Now, the people we’re most attracted to
0:18:50 are the people who can offer a better life
0:18:52 to the entire tribe.
0:18:53 And that is if you’re very wealthy,
0:18:55 you have power, a ton of power,
0:18:57 and you can offer such an extraordinarily different life
0:19:00 to not only your immediate family,
0:19:01 but the people around you, your employees,
0:19:03 that these people have become the new generals,
0:19:06 the new athletes, the new movie stars.
0:19:09 They are the sex symbols.
0:19:11 They are the new heroes in a species that has evolved.
0:19:16 Also, because they’re in the technology field,
0:19:18 they’re the closest thing we have to a God,
0:19:19 ’cause we don’t understand this shit,
0:19:21 similar to the way we don’t understand religion.
0:19:23 But I feel like we’re evolving to a different species
0:19:27 with different criteria and different heroes.
0:19:29 And Jensen Huang is an example of that.
0:19:31 And here’s our strategy.
0:19:33 I did get that picture with him at Cannes, he came up,
0:19:35 I told you this story, said, “I like your videos.”
0:19:37 I’m like, “Do you want a picture?”
0:19:38 I thought he was a fan, took a picture, he walked away.
0:19:41 I’m gonna find that picture.
0:19:43 And I’m going to announce that Prop G
0:19:45 has entered into an exclusive relationship with Nvidia,
0:19:48 and then we’re gonna spack.
0:19:50 We’re gonna spack.
0:19:51 Hell yeah, I love that.
0:19:52 We’re gonna spack.
0:19:53 I’m gonna get Chamath as an investor,
0:19:55 I haven’t go on CNBC every other fucking day,
0:19:57 and they’re gonna pretend what he says is gold,
0:20:01 so they can fill up 18 hours of opioid-induced
0:20:03 constipation network, and they’ll bring on
0:20:06 any carnival barker to talk up any chicken shit.
0:20:08 I love that.
0:20:09 We’ll be right back after the break
0:20:12 with a look at the Texas Stock Exchange.
0:20:15 (gentle music)
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0:23:54 We’re back with PropG Markets.
0:24:04 A new national stock exchange is preparing
0:24:06 to set up shop in Texas.
0:24:08 A group of investors including BlackRock and Citadel
0:24:11 have raised $120 million to establish an alternative
0:24:15 to the New York Stock Exchange and the NASDAQ.
0:24:17 Those exchanges, according to the group, are too regulated.
0:24:21 The Texas Stock Exchange plans to file
0:24:23 with the SEC later this year
0:24:25 and it wants to start trading in 2025.
0:24:28 Scott, the NYSE and the NASDAQ have had this duopoly
0:24:33 on the US stock market for years now.
0:24:36 How do you think the Texas Stock Exchange
0:24:38 could affect the financial markets?
0:24:40 Well, I like this in the sense
0:24:41 that I think we need more competition.
0:24:44 I just think it’s a good idea to have more than two options
0:24:47 in what is the largest equity market in the world.
0:24:49 The US markets trade more than $360 billion in value each day
0:24:53 and that’s more than four times the liquidity
0:24:57 of all European markets combined.
0:24:59 So they are, it really is at this point,
0:25:00 a bit of a duopoly and then what you see
0:25:04 is because that the criteria and the risk disclosure
0:25:08 that the SEC mandates to trade on these exchanges
0:25:10 results in a series of companies
0:25:12 that have a halo of prestige.
0:25:15 That if you’re a publicly traded company
0:25:16 on the NYSE or NASDAQ, it says something about you.
0:25:19 It’s like going to Princeton, for example.
0:25:21 It says that you’re smart, you’re probably mentally fit
0:25:24 and probably an entitled douchebag.
0:25:27 But still, despite this, the average PE in London is 13.
0:25:32 The average PE on the Shanghai index is 13 also
0:25:36 and New York City, it’s 26X.
0:25:39 That’s the combined or the average PE affirms
0:25:42 on the NYSE or the NASDAQ.
0:25:44 So these companies offer an incredible brand halo
0:25:49 and they also get paid for it.
0:25:51 So the minimum fee to the exchange for listed companies
0:25:54 in London is 14,000 and Frankfurt is 17.
0:25:57 And here’s the duopoly gets their pricing power.
0:25:59 The NASDAQ and the NYSE are 52 and 80,000 respectively.
0:26:04 So I like competition.
0:26:06 The thing I don’t like about this is, of course,
0:26:09 this is the politicization of everything.
0:26:11 This has very much a red state feel
0:26:13 and they’re trying to say NYSE and NASDAQ are blue state
0:26:15 and I thought, God, I never thought of them as blue.
0:26:17 I just thought of them as financial.
0:26:19 But it feels like everything is being politicized, right?
0:26:22 Just as we were talking about the financialization
0:26:23 of everything, we have the politicization of everything.
0:26:26 And I would bet, I would bet that the person
0:26:29 behind all of this who said I’ll be your anchor tenant
0:26:33 is Elon Musk.
0:26:34 I think he’s so pissed off about what’s happened
0:26:37 with the SEC and his pay package.
0:26:39 I bet he can’t wait to move all of his shit
0:26:43 and trade on the Texas, whatever it’s gonna call,
0:26:46 the Yeehaw Stock Exchange or the Texas Stock Exchange.
0:26:50 So it’s sort of discouraging that my guess is
0:26:53 intentionally or not, they’re gonna position it
0:26:55 as red state versus blue state.
0:26:57 What are your thoughts?
0:26:58 – Well, I think it’s interesting to go over
0:26:59 what the complaints about the NASDAQ
0:27:02 and the New York Stock Exchange actually are.
0:27:05 So there have been complaints about costs,
0:27:07 particularly costs around trading data access
0:27:11 and financial data, but that’s mostly an investor complaint.
0:27:15 It’s less of an issue for a company listing itself.
0:27:19 And there’s obviously the listing fees
0:27:21 and the annual fees, but those numbers are pretty small.
0:27:24 There’s also been complaints around regulatory overreach,
0:27:27 just that there are too many rules
0:27:29 and too many regulations for both exchanges
0:27:31 if you wanna list.
0:27:32 But the most common complaint that I’m seeing,
0:27:36 and this is what I find so interesting about this story,
0:27:38 is that both exchanges are too woke.
0:27:42 Like every written opinion on this topic,
0:27:45 there’s this one fact that they love to talk about,
0:27:47 which is that the NASDAQ has these rules
0:27:49 around board diversity.
0:27:51 And the rules are that one,
0:27:54 your board has to have at least one female director.
0:27:58 And two, your board must have at least one non-white
0:28:02 or LGBTQ plus director.
0:28:06 I think those rules are ridiculous personally,
0:28:09 but I also find it pretty ridiculous
0:28:11 that you would go out and create an entirely new exchange,
0:28:15 basically just despite these other exchanges
0:28:17 that you think have become too woke.
0:28:20 – So I agree with you.
0:28:21 I’m not, I think it’s important to have a board that looks,
0:28:26 that at least has somewhat representative
0:28:30 of your customer base and your employee base,
0:28:32 but the exchange is mandating it.
0:28:34 I just don’t think they should be in that business.
0:28:36 I don’t, no one charged the NYSE or NASDAQ
0:28:39 with social engineering or solving the world’s,
0:28:42 you know, diversity problems.
0:28:43 I don’t think that’s the business they’re in.
0:28:44 I think it’s a lot of virtue signaling.
0:28:46 And I think investors can make up their own minds.
0:28:49 So they have kind of created an opportunity or wide space,
0:28:54 but they’ll also have lower or less stringent disclosure
0:28:58 or filing mandates.
0:29:00 This will be more like, we’re a market maker
0:29:02 and we’re in the business, we’re gonna be more,
0:29:04 they’re gonna, they’re not going after investors,
0:29:07 they’re going after investors on the woke shit,
0:29:08 which is, you know, I don’t know, what a fine,
0:29:11 but who they’re really going after is companies
0:29:13 by saying that we’re gonna make it less expensive
0:29:15 and less onerous for you to list on this exchange.
0:29:18 And then they’ll say to consumers,
0:29:20 I just smell musk here.
0:29:23 – Yeah, right? – I smell musk here.
0:29:25 I think Tesla and SpaceX and I think then Twitter or X,
0:29:29 whatever it’s called, are gonna end up on this exchange.
0:29:32 And then some of the politicians in Texas
0:29:35 will urge companies to relist on this exchange.
0:29:39 It’ll be a state thing like Texas and New York,
0:29:42 we hate each other, we’ll stop sending money to New York.
0:29:45 – Yeah, I mean, you mentioned like fees,
0:29:48 that fee that you mentioned before,
0:29:51 $80,000 to annual fee to be on the New York Stock Exchange.
0:29:56 Like that’s nothing, like I just can’t see
0:29:59 the value proposition here being anything,
0:30:02 but screw the woke liberals.
0:30:05 – Yeah, but as someone who has,
0:30:08 I didn’t run a public company,
0:30:10 but I founded a public company.
0:30:12 I think that, what did I think?
0:30:14 I think it was like, I think we figured out
0:30:16 to be public costs, two to three million bucks a year.
0:30:19 In terms of the accounts you’ve got to hire,
0:30:23 the audit requirements, the filings,
0:30:26 it’s real, it’s real cabbage.
0:30:31 And my guess is they’re gonna try and say to businesses,
0:30:34 we’re much lower cost, not only on the fee.
0:30:37 – Yeah, with the regulations.
0:30:38 You know, they’re just,
0:30:39 they’re gonna try and position themselves
0:30:41 as more business friendly on the supply side
0:30:44 and on the demand side to consumers, you know, we’re Texas.
0:30:49 – I think this story also plays into a larger
0:30:52 economic story about Texas.
0:30:54 And that is businesses just love Texas right now.
0:30:58 Just some stats on that.
0:30:59 It’s one of the leading states
0:31:00 in terms of business relocation.
0:31:02 And Texas is now tied with New York
0:31:05 for having the second highest number of S&P 500 companies
0:31:08 in the state.
0:31:09 They’re both just behind California.
0:31:11 – That’s a great stat.
0:31:12 – That includes old companies like Exxon and AT&T,
0:31:15 also new players like Tesla and Oracle.
0:31:19 GDP growth was 5.7% last year.
0:31:21 That’s the second highest in the nation.
0:31:23 And then of course, there’s this Texas
0:31:26 versus Delaware story that’s playing out
0:31:28 where Elon wants to reincorporate Tesla in Texas.
0:31:32 Instead of Delaware, he’s encouraging all these other
0:31:33 companies to do the same.
0:31:37 – What are your thoughts on Texas
0:31:39 and just the possibility that it could lead the US
0:31:42 in terms of business activity?
0:31:44 – I think Texas is fantastic.
0:31:45 I think it’s done a great job.
0:31:47 I can’t stand it when people create a stereotype
0:31:49 around Texas as being this kind of Republican.
0:31:52 I mean, Austin’s an amazing city
0:31:54 and it’s attracting a ton of business.
0:31:55 And it’s really, it’s a progressive place.
0:31:58 Houston’s a decent city.
0:32:00 Dallas, I mean, Dallas, one of the things
0:32:03 I was just so moved by is that I have a friend
0:32:06 whose daughter is severely disabled
0:32:10 and they moved to Dallas because Dallas
0:32:13 has developed an enormous infrastructure
0:32:16 of nonprofits and healthcare companies
0:32:20 and public infrastructure that is specifically focused
0:32:23 on kids with severe disabilities.
0:32:26 And you just immediately go like, fuck, yeah.
0:32:28 I mean, right on Texas, right?
0:32:30 – That’s awesome.
0:32:31 – And that it’s so strong.
0:32:33 And it has such a reputation for this
0:32:35 that a lot of people with kids who are struggling
0:32:38 move to Dallas.
0:32:40 And also, you know, all the stereotypes
0:32:43 about it being just a bunch of, you know,
0:32:45 white, good old boys and cowboy hats.
0:32:46 There’s a huge Indian population.
0:32:49 It’s a wonderful state.
0:32:51 I love that they’re offering zero taxes,
0:32:53 which forces other cities to take a really close look
0:32:56 at at least their state taxes.
0:32:58 A lot of people would argue in terms of consumption taxes,
0:33:00 it’s actually a middle to upper tax state.
0:33:03 That’s a different talk show.
0:33:05 Actually, Texas effective tax rate on businesses is 5.4%.
0:33:08 That’s the 14th highest nationally.
0:33:10 But their headline news is zero state income tax.
0:33:15 – Will Prof. G move to Texas?
0:33:16 – I don’t think I will ever live in Texas
0:33:18 because I don’t need to.
0:33:19 I get to live in New York and London,
0:33:23 which so it’s like, yeah, I mean, you know,
0:33:25 that works for you.
0:33:26 That’s a good idea for you, Ed.
0:33:28 – I will not be moving to Texas.
0:33:29 Let’s move on to our second story.
0:33:31 – Come on.
0:33:32 Why not?
0:33:33 You’re a closet, I thought you were a closet Republican.
0:33:35 I thought you were like Texas.
0:33:36 – No, you love saying that about me.
0:33:38 I don’t know, I love New York.
0:33:40 I’m having a great time here.
0:33:42 I just have the feeling that Texas is overrated
0:33:44 and people go because they don’t wanna pay taxes.
0:33:47 And that just doesn’t sound that appealing to me.
0:33:49 But I don’t know, I haven’t,
0:33:51 actually I went for South by Southwest,
0:33:52 but we were there for maybe 24 hours.
0:33:55 So I didn’t really get to experience it properly.
0:33:57 So I’m not really giving it a fair review.
0:34:00 – I can totally see you in Austin.
0:34:03 You can totally see at the proper hotel at the bar
0:34:05 getting like totally rejected by every recent UT crowd.
0:34:09 Why does that make me happy?
0:34:11 Why does that make me happy?
0:34:12 I’m a podcaster.
0:34:14 Hi, I’m a podcaster.
0:34:16 You may have heard of me.
0:34:17 – We’ll be right back after the break
0:34:21 with a look at the decline of short selling.
0:34:23 (upbeat music)
0:34:26 Support for this episode of Prop G comes from Indochino.
0:34:36 Summer is wedding season.
0:34:38 The Shemaltzi saved the day.
0:34:39 It’s the mason jar centerpieces
0:34:41 that tears warranted and unwarranted.
0:34:43 A wedding is the time for the brighter groom
0:34:45 to look their very best,
0:34:46 but it’s also a chance for you, the guest,
0:34:49 to look great as well.
0:34:50 And you might start with a custom suit from Indochino.
0:34:53 They send Ed, our own Ed, a pair of pants.
0:34:57 Just a pair of pants.
0:34:58 What did you think of your pants, Ed?
0:35:00 – Love them, man.
0:35:01 Fit well, got a pair of dark blue pants.
0:35:05 You can never have too many pants, so love them.
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0:35:16 Set up your measurement profile on Indochino’s website
0:35:19 and choose customizations without even leaving the house.
0:35:22 And if you’re looking for a premium experience,
0:35:25 you can book an appointment at one of their showrooms
0:35:27 and Indochino Style Guide will walk you through every step.
0:35:30 Look your best this wedding season at the table
0:35:33 or on the dance floor.
0:35:34 When you wear Indochino, go to indochino.com
0:35:37 and use Prop G to get 10% off any purchase
0:35:39 of $399 or more.
0:35:41 That’s I-N-D-O-C-H-I-N-O dot com.
0:35:45 Promo code Prop G.
0:35:47 (upbeat music)
0:35:52 – Support for Prop G comes from Atlassian.
0:35:55 Atlassian software, including JIRA, Confluence and Trello
0:35:58 help power the collaboration for teams
0:36:00 to accomplish what would otherwise be impossible alone.
0:36:03 Because individually, we’re great,
0:36:04 but together, we’re so much better.
0:36:07 That’s why millions of teams around the world,
0:36:08 including 75% of the Fortune 500,
0:36:11 trust Atlassian software for everything
0:36:13 from space exploration and green energy
0:36:15 to delivering pizzas and podcasts.
0:36:17 Whether you’re a team of two, 200 or 2 million
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0:36:21 or on another continent altogether,
0:36:22 Atlassian software is built to help keep you
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0:36:36 Learn how to unleash the potential
0:36:38 of your team at Atlassian.com.
0:36:40 That’s A-T-L-A-S-I-A-N dot com.
0:36:44 Atlassian.
0:36:48 (upbeat music)
0:36:51 – I’m Claire Parker.
0:36:55 – And I’m Ashley Hamilton.
0:36:56 – And this is Celebrity Memoir Book Club.
0:37:00 – A podcast that says what if your must read book list
0:37:04 and your absolutely must not read book list got married?
0:37:07 If you’ve ever seen a celebrity memoir and thought,
0:37:09 what could they possibly write about?
0:37:11 – The answer a lot of times is nothing,
0:37:12 so we have to make up the jokes to fill in the blanks.
0:37:15 – Yeah, so if you wanna know what’s in there,
0:37:17 but you don’t wanna waste your eyeballs’ strength,
0:37:20 we’re gonna tell you what’s in it.
0:37:21 So hop along for the ride.
0:37:23 – Who are we?
0:37:24 We are two best friends and two comedians
0:37:25 who had enough time to read a full book a week.
0:37:28 – We live in New York,
0:37:28 so we think we know everything about everything
0:37:30 and we’re gonna tell you what’s what.
0:37:33 – And if we’re wrong, that’s part of the fun.
0:37:35 – So if you are interested in celebrities,
0:37:38 in literature, in a good time with your pals,
0:37:42 tune into Celebrity Memoir Book Club.
0:37:44 – The podcast where we read the book
0:37:46 so that you don’t have to.
0:37:47 – You can listen to Celebrity Memoir Book Club
0:37:49 wherever you get your podcasts.
0:37:51 – I mean, can’t wait to hang.
0:37:53 – We’re back with Prodigy Markets.
0:38:00 It appears that short sellers may be a dying breed.
0:38:03 For the average S&P 500 company,
0:38:06 short interest in its stock is at its lowest level
0:38:08 in more than 20 years.
0:38:10 Activists were sluggish in 2022,
0:38:12 taking up short positions at the slowest pace in a decade
0:38:15 and 2023 was barely an improvement.
0:38:18 Even the most famous in the game have bowed out.
0:38:20 Jim Chanos, who’s known for calling BS on Enron,
0:38:23 gave up on shorting last year.
0:38:25 Assets in his short selling hedge fund
0:38:27 had created from more than $6 billion in 2008
0:38:30 to less than $200 million in 2023.
0:38:33 Now, as a reminder, short selling is a strategy
0:38:36 where you borrow a stock, sell it,
0:38:37 and then buy it back at a lower price.
0:38:39 You’re essentially betting on the stock going down.
0:38:42 But Scott, why do you think this strategy is dying off today?
0:38:46 – Well, I would argue this is cyclical, not structural,
0:38:49 because since 2009, the S&P’s increased 655%.
0:38:54 So, you know, if the market had lost 90% of its value,
0:39:01 it would have been awesome to be in the short business.
0:39:03 So, I mean, there’s just,
0:39:05 if you were short over any extended period of time
0:39:09 in the last, you know, in the last 15 years,
0:39:12 you’ve gotten your ass handed to you,
0:39:13 and it’s been hard to raise money,
0:39:14 and finally, you’ve probably thrown in the towel.
0:39:16 And typically, when people start throwing in the towel,
0:39:18 is usually the time, you know,
0:39:20 Julian Robertson, arguably one of the greatest investors
0:39:23 in history, Tiger, saw just these crazy stocks
0:39:26 going up and up in the internet,
0:39:28 and threw in the towel, I think, in ’99,
0:39:30 and then they crashed.
0:39:31 So, I think this is just purely cyclical.
0:39:36 Now, I would argue that short sellers play
0:39:39 in a really important part of the market.
0:39:42 They are very good at giving the other side
0:39:44 of the narrative.
0:39:45 When everyone barks up the same tree, you get stupid.
0:39:47 When you watch CNBC, you get stupid
0:39:49 because it’s, I think the vast majority of the people there
0:39:52 are basically just pumping, and, you know,
0:39:54 their advertisers are kind of long.
0:39:57 Their exchanges and trade like Chuck
0:39:59 has proprietary algorithm.
0:40:00 If you just ordered this investment strategy
0:40:03 on laser disk, which gives you a hint
0:40:05 of just how sophisticated he is,
0:40:07 or on Betamax or VHS,
0:40:08 you can spend more time with your family.
0:40:10 So, they’re gonna have a long bias.
0:40:12 Most of the people that are talking about pumping up stocks,
0:40:15 it’s really important to have people come on and say,
0:40:16 this is why this stock is overvalued.
0:40:19 Also, there’s a lot of whistleblowers in this,
0:40:22 which I think is probably helpful.
0:40:23 They call bullshit on companies.
0:40:25 And also, in cases where firms misrepresent
0:40:29 their financial statements, short selling is associated
0:40:31 with a faster discovery of the fraud.
0:40:33 And it also diminishes share price inflation
0:40:36 that occurs when firms misstate their earnings.
0:40:38 So, you know, this is important.
0:40:40 It’s also short selling is used by large institutions
0:40:43 as a means of hedging their long exposure.
0:40:45 Because, yeah, it’s sure you give up some on the upside,
0:40:49 but if things go to shit,
0:40:51 your widows and your orphans don’t,
0:40:54 you know, the reason I go short sometimes,
0:40:56 or at least the way I justify it,
0:40:57 in addition to the crack cocaine dope ahead I have
0:40:59 to gambling, is that I think while I’m so long,
0:41:03 especially heavy in tech, because that’s kind of what we do,
0:41:06 it’s not a bad idea every once in a while
0:41:08 to just have a bit of a short position.
0:41:11 And hedge funds are supposed to be 60, 40, 60% long
0:41:13 ’cause the natural trajectory of the markets is usually up,
0:41:16 but also to go short.
0:41:17 And what’s ended up happening over the last 15 years
0:41:21 is hedge funds really aren’t hedge funds.
0:41:22 What they are is levered long funds.
0:41:25 And so, I think it’s absolutely an important part
0:41:28 of the market, the people fomenting this bullshit
0:41:31 are CEOs and people who get angry at short sellers
0:41:34 who happen to show up on earnings calls and say,
0:41:37 okay, you’re an automobile company, not a software company
0:41:40 and you’re trading like an AI company.
0:41:42 And, you know, they don’t like those people.
0:41:43 They want all longs such that they can have a,
0:41:47 you know, basically a series of sick of fans
0:41:49 and stenographers asking them questions
0:41:51 and writing about them.
0:41:52 So I think it’s really important.
0:41:54 And the fact that short selling has gotten so out ofogue
0:41:56 and so many of these funds have been crushed,
0:41:58 I think that means one thing.
0:42:00 And I want to ask you, young padwan,
0:42:01 what does that likely mean, Ed?
0:42:06 – Sorry.
0:42:06 – Jesus Christ.
0:42:07 Go back to your slight saver training.
0:42:11 You’re clearly not ready for the beauty and–
0:42:14 – Repeat the question.
0:42:15 – Well, okay, let me put it this way.
0:42:17 Do you think short funds are going to beat
0:42:20 or miss or underperform the market over the next five years
0:42:24 based on what you have learned on this podcast?
0:42:27 – Well, I think we probably have a different view.
0:42:31 – That’s it.
0:42:32 You are banned to Tatooine.
0:42:33 You are seriously.
0:42:34 – Have you fucking learned nothing?
0:42:36 – I said, I think we’re gonna have a different view.
0:42:38 I think they probably underperform,
0:42:39 but I think you’re gonna say that it’s cyclical
0:42:41 and that they’re gonna overperform.
0:42:42 – Well, the fact that you have people
0:42:44 getting out of this business means that there’s less people
0:42:46 trying to borrow money, which means the interest costs
0:42:49 on borrowing stock will go down,
0:42:51 which means on a risk-adjusted basis,
0:42:54 there’s gonna be more upside to shorting stock.
0:42:56 So I would argue that this is exactly the time
0:42:59 to think about a hedge fund or a diversified index fund
0:43:02 that has, does occasionally short some companies.
0:43:05 And I would suspect that the few short funds
0:43:08 that survive this or go into this or run into the fire
0:43:11 are gonna overperform the market,
0:43:13 because as Jamie Dimon said,
0:43:14 a recession is something that happens every seven years.
0:43:17 It hasn’t happened in 15 years, and we are due.
0:43:20 – Haven’t we been due for the past?
0:43:23 I mean, as you just said,
0:43:24 we’ve been due for the past eight years.
0:43:26 – 100%.
0:43:27 And we keep using your credit card to juice the markets,
0:43:29 but at some point, what you just said is scary.
0:43:32 I remember in 1999, the Wall Street Journal
0:43:36 put out an article saying maybe we have moved
0:43:38 to a new economic model that because of technology
0:43:41 that is deflationary and productivity’s gotten so crazy
0:43:45 that there’s no reason that the markets aren’t in a new era
0:43:48 where they have sustained increases.
0:43:50 And then we saw what happened in 2000.
0:43:53 The only thing I am 100% certain of
0:43:57 is the market is absolutely going to throw up
0:44:00 and even crash.
0:44:02 I just don’t know when.
0:44:03 But that is part of the animal spirits
0:44:06 and the beauty of the market.
0:44:07 And that hasn’t happened in 15 years,
0:44:10 which leads me to believe when it happens,
0:44:13 it’s only gonna be more severe.
0:44:14 – Concerning.
0:44:15 I mean, the other side to this is that there’s just a lot less.
0:44:20 I’m getting away from the markets themselves,
0:44:23 just focusing on shorting.
0:44:25 There’s a lot less upside to going short,
0:44:28 even if you’re right.
0:44:29 I mean, that’s statistically true
0:44:32 because when you sell short, your maximum return is 100%
0:44:36 because the stock can only go to zero.
0:44:38 Meanwhile, your downside is unlimited
0:44:40 ’cause the stock can keep rising into perpetuity.
0:44:42 But here’s one start that I found very surprising,
0:44:46 which is that Hindenburg research,
0:44:48 which we’ve talked a lot about on this podcast,
0:44:50 kind of the gold standard of short selling firms today,
0:44:55 it actually doesn’t make that much money.
0:44:57 And you might remember this short seller report
0:45:00 that they released on Adani Group, which we covered,
0:45:03 and that was this industrials company in India
0:45:06 that’s owned and operated by this guy, Gautam Adani,
0:45:10 like the Indian billionaire, which is guy in India.
0:45:13 So when they released that short seller report,
0:45:15 it wiped out $70 billion in market value
0:45:19 just through their actions.
0:45:21 According to Bloomberg,
0:45:23 apparently they only made $50 million off of that trade,
0:45:26 which just feels like peanuts to me.
0:45:30 And the firm itself, I think only has like 12 to 20 employees,
0:45:36 some really small number.
0:45:37 And it just feels like there’s not actually that much money
0:45:41 in the short selling game, even if you’re right.
0:45:44 I mean, you’ve gone short in the past.
0:45:49 Have you ever made like a meaningful amount of money
0:45:52 on a short position?
0:45:53 Yeah, so I write covered calls.
0:45:56 When I have a stock that’s gone way up,
0:45:58 I’ll write covered calls way out of the money
0:46:00 as a means of taking some money off the table
0:46:02 and hedging a little bit.
0:46:04 So yeah, I’ve made meaningful money,
0:46:05 but I do it a little bit differently.
0:46:07 I don’t like to write naked calls
0:46:09 ’cause your loss is infinite.
0:46:11 It’s like collecting dimes in front of a bulldozer.
0:46:13 It’s a lot of fun until it’s not.
0:46:16 But writing covered calls where you write,
0:46:19 essentially you sell a call at a higher price
0:46:21 and kind of collect rent against your stock.
0:46:23 And if the stock skyrockets, it’s a net wash.
0:46:26 You give up some upside,
0:46:28 but technically it’s a wash because the stock goes up.
0:46:30 But yeah, I have made, I think I told you this in ’21,
0:46:33 I made a ton of money, ’22, I made decent money, ’23,
0:46:36 I lost a ton of money.
0:46:38 And so far this year, I just haven’t done as much of it
0:46:41 ’cause I’m trying to just sort of,
0:46:42 I don’t wanna be staring at my phone all fucking day.
0:46:45 But the way I see it is,
0:46:46 I don’t think of it as an investment strategy on its own.
0:46:51 I think of shorting as a great way to hedge.
0:46:54 I can sort of understand that market.
0:46:56 I do think the ultimate strategy for a young person
0:46:58 who has the benefit of time is just to go into a,
0:47:02 you know, SPY or to dollar cost into an index fund.
0:47:06 But shorting is a valuable part of the market.
0:47:08 And especially if you find your portfolio
0:47:10 for whatever reason is highly concentrated
0:47:12 in a specific sector and you don’t wanna sell
0:47:14 because you don’t wanna incur short-term capital gains.
0:47:17 I think that I like the idea.
0:47:19 It’s worth it to take a little bit off the table
0:47:21 in terms of upside to reduce some of the downside.
0:47:24 I think that’s a way to live a more kind of
0:47:26 emotionally balanced life, if you will.
0:47:29 – There have been a lot of arguments in the past and today
0:47:33 that it’s short-selling is harmful to companies.
0:47:36 It’s harmful to investors.
0:47:38 It’s sort of, it’s a predatory practice
0:47:42 where you’re profiting off of people’s losses.
0:47:44 And a lot of people have argued that it should be banned.
0:47:48 And in some cases, by the way, we have banned it.
0:47:50 For example, in 2008, during the financial crisis,
0:47:53 the SEC made it illegal to short financial stocks.
0:47:57 And that was all, you know, part of an effort
0:47:59 to sort of stem the decline and restore faith in the market.
0:48:03 My assumption is you just flat out disagree,
0:48:05 but where do you stand on short-selling regulation?
0:48:09 Do you think there’s any,
0:48:11 do you think those guys have a point?
0:48:12 – I would imagine that they saw kind of systemic risks
0:48:15 to the entire markets and the economy.
0:48:17 And so from the short term, they said,
0:48:18 “Look, we just can’t have short sellers.
0:48:20 We can’t have a run on the bank
0:48:22 that might cross the global economy.
0:48:23 Fine, I get it.”
0:48:25 In general, I don’t see why anyone would have
0:48:28 any less license to go short of stock versus go long it.
0:48:31 And it can reduce risk for people.
0:48:35 It creates a different level of scrutiny,
0:48:37 which is really good, creates more transparency.
0:48:40 And you have to have,
0:48:42 it’s really important to have a deliberative body
0:48:45 where we have Democrats and Republicans
0:48:46 giving each side of the issue such that we shape
0:48:49 through evidence and debate, better solutions.
0:48:52 What CEOs are saying,
0:48:53 whose economic wellbeing is tied to the company long,
0:48:57 are saying is we don’t want a debate.
0:48:59 We don’t want anyone looking over my shoulder.
0:49:01 We don’t want a counter narrative.
0:49:02 I want all of you to bark up the same fucking trees
0:49:04 so I can vest my options and have my Gulf Stream
0:49:07 before this pile of shit crashes.
0:49:10 You need these people.
0:49:12 You need these people out saying,
0:49:13 “This is why this company is overvalued.”
0:49:15 It’s, that’s an important,
0:49:17 the shit I get on,
0:49:18 hands down the most shit I’ve ever gotten on Twitter
0:49:21 is when I say a stock is overvalued
0:49:23 because the entire venture capital industrial complex
0:49:27 is like how dare you call my dog walking app
0:49:31 not worth $2 billion.
0:49:32 (laughs)
0:49:33 And it’s important that investors
0:49:38 have both sides of the story.
0:49:40 That plays an hugely important role.
0:49:44 All right, let’s take a look at the week ahead.
0:49:46 We’ll see earnings from Oracle and Adobe
0:49:48 and we’ll also see the consumer price
0:49:50 and producer price indices for May.
0:49:53 Do you have any predictions, Scott?
0:49:55 – Well, I can’t help it.
0:49:56 I’ve been watching the GameStop saga again
0:49:59 and it’s up, I don’t know if you saw this.
0:50:00 It’s up to 30% today.
0:50:02 It’s at 40 bucks as we record this.
0:50:05 My prediction is, I don’t know where it’s gonna be next week.
0:50:08 I don’t know where it’s gonna be the week after,
0:50:09 but my prediction is within 90 days, it’s below 20 bucks.
0:50:14 My thesis all along has been that
0:50:17 when Michael Jordan jumps into the air,
0:50:18 it looks as if he’s never gonna come down,
0:50:20 but gravity is underlying valuation, it’s fundamentals.
0:50:24 And this is a company that on any reasonable,
0:50:26 it’s trading at a P of 1,830 right now.
0:50:30 And at some point, the people in the stock are gonna go,
0:50:33 okay, this is fun, we’re gambling,
0:50:35 but at some point we need to cash in our chips.
0:50:37 And I think it’ll be as violent coming down.
0:50:39 And to say it’s an okay company is really generous
0:50:43 and this company will be below 20 bucks a share within.
0:50:47 This isn’t financial advice
0:50:48 ’cause this thing could be at 60 or more tomorrow,
0:50:52 but in 90 days, I think it’s below 20 bucks.
0:50:55 I think it’s cut in half, if not more.
0:50:57 Gravity, gravity, Ed.
0:50:59 – This episode was produced by Claire Miller
0:51:02 and engineered by Benjamin Spencer.
0:51:04 Our associate producer is Allison Weiss.
0:51:06 Our executive producers are Jason Stavis and Catherine Dillon.
0:51:09 Mia Silverio is our research lead
0:51:10 and Drew Burroughs is our technical director.
0:51:13 Thank you for listening to “ProfG Markets”
0:51:14 from the Vox Media Podcast Network.
0:51:16 Join us on Thursday for our conversation
0:51:18 with Morgan Housel, only on “ProfG Markets.”
0:51:21 (upbeat music)
0:51:23 ♪ Lights ♪
0:51:28 ♪ You help me ♪
0:51:34 ♪ In kind reunion ♪
0:51:39 ♪ As the world turns ♪
0:51:47 ♪ And the dark lights ♪
0:51:52 (upbeat music)
0:51:54 – Do we want to bang the new feed drum again?
0:52:06 – I don’t know, what does it look like?
0:52:07 (laughing)
0:52:08 Oh, I’m sorry.
0:52:09 That’s good.

0:00:00 Support for the show comes from Atlassian.
0:00:03 Atlassian software like Jira, Confluence, and Loom
0:00:05 help power the collaboration needed for teams
0:00:07 to accomplish what would otherwise be impossible alone.
0:00:10 Because individually, we’re great,
0:00:11 but together, we’re so much better.
0:00:13 That’s why millions of teams around the world,
0:00:15 including 75% of the Fortune 500,
0:00:17 trust Atlassian software for everything
0:00:18 from space exploration and green energy
0:00:21 to delivering pizzas and podcasts.
0:00:22 Whether you’re a team of two, 200, or two million,
0:00:25 Atlassian software is built to help keep you connected
0:00:28 and moving together as one.
0:00:29 Learn how to unleash the potential of your team
0:00:31 at Atlassian.com.
0:00:32 That’s A-T-L-A-S-S-I-A-N.com.
0:00:36 Atlassian.
0:00:37 – In difficult times, one of the more useful things
0:00:46 we can do is turn to history’s greatest thinkers for wisdom.
0:00:50 This week, we revisit Albert Camus’ writings
0:00:53 on the French-Algerian War and apply some of those lessons
0:00:56 to the ongoing conflict in Gaza.
0:00:59 He’s trying to explain when we lose sight
0:01:03 of those individual lives.
0:01:07 We’ve lost sight of what it is that makes us fully human.
0:01:12 – Hear more on this week’s Gray Area,
0:01:14 available wherever you get your podcasts.
0:01:16 – I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:23 Too many people hoard, obtaining more for no other purpose
0:01:28 than amassing more.
0:01:30 There are good alternatives.
0:01:32 Spend it and give it away.
0:01:35 Hoarders, as read by George Hahn.
0:01:39 – Throughout human history,
0:01:45 if we had access to more than we needed,
0:01:47 we kept the access to survive in leaner times.
0:01:51 Having surplus items also signaled wealth
0:01:54 and desirability as a mate,
0:01:56 and key rituals often depended on precious items
0:01:59 being stored safely.
0:02:01 Our ability to store crops was key
0:02:03 to developing an agricultural economy.
0:02:06 Artisanal objects, to be preserved for centuries,
0:02:10 made us feel closer to God.
0:02:13 The most beautiful items were kept in houses of worship,
0:02:16 which then became stores of value.
0:02:19 The industrial age and ensuing mass production
0:02:22 created the mother of all good problems,
0:02:25 which soon became just a problem.
0:02:27 Superabundance.
0:02:29 Our instincts have not kept pace
0:02:32 with productivity or processing power.
0:02:35 We not only gorge, we hoard.
0:02:38 It’s incredibly challenging to ascend
0:02:42 through the soupy atmosphere of youth
0:02:44 and sate our desire for things and experiences
0:02:47 when an entire economy and society
0:02:49 runs on one incentive, more.
0:02:53 It’s a cliche but true.
0:02:55 The first million, i.e. launch,
0:02:58 is the hardest and most dangerous.
0:03:01 The Falcon 9 heavy rocket, which travels thousands of miles,
0:03:05 burns a third of its propellant in the first mile.
0:03:09 Most folks who reach orbit keep the engines roaring.
0:03:12 They aspire to travel from multimillionaire
0:03:15 to billionaire to Bezos.
0:03:17 Also, it gets easier once you’re in space.
0:03:20 A touch of thrust or effort moves you thousands of miles
0:03:24 versus feet.
0:03:24 Capitalism favors capital,
0:03:28 so more quickly becomes irresistible.
0:03:32 Unable to turn off the boosters,
0:03:33 many uber-wealthy people become hoarders,
0:03:37 obtaining more for no other purpose than amassing more.
0:03:41 My father and mother were never more than two degrees
0:03:45 of separation away from economic anxiety.
0:03:48 Yes, my mom was disappointed that my dad left her
0:03:51 for another woman, but her financial fear was worse.
0:03:55 How would she take care of me and herself by herself?
0:04:00 I never realized, and most people never will,
0:04:04 how much economic anxiety we carry
0:04:08 until the weight has been lifted.
0:04:09 Economic security brought something else
0:04:13 I did not anticipate, a multi-year exhale.
0:04:18 Not having been able to afford a home nurse
0:04:21 when my mom was going through chemo,
0:04:23 the feeling of failure when I later lost my business
0:04:26 the same month my oldest son was born was acute.
0:04:30 I still register an ache in the small of my back
0:04:34 remembering those moments.
0:04:35 It’s unacceptable, full stop,
0:04:39 that an economy where one company, NVIDIA,
0:04:42 can add the GDP of Australia in one calendar month
0:04:47 also has large swaths of the population
0:04:50 who live with this profound anxiety.
0:04:53 What is the ratio of the explosion of billionaires
0:04:56 to deaths of despair in America?
0:04:59 My gut tells me it’s positive
0:05:02 when any decent society would demand
0:05:04 the size of these cohorts be inversely correlated.
0:05:07 This anxiety is largely absent
0:05:11 in other less wealthy countries.
0:05:13 Incumbents will make excuses
0:05:15 that these countries sit on oil or are more homogenous.
0:05:20 Pro tip, that’s a bullshit narrative
0:05:22 meant to wallpaper over just how fucking outrageous it is
0:05:26 that six people control more wealth
0:05:29 than the bottom half of America
0:05:31 and pay an average tax rate of 6%.
0:05:34 Also, we produce more oil than any country in the world
0:05:38 but I digress.
0:05:41 It’s fashionable to disdain spending
0:05:43 but spending puts money back into the economy
0:05:47 often at points with the most impact
0:05:49 generating wages and opportunities.
0:05:51 I don’t understand people who are wealthy
0:05:54 and don’t spend their money.
0:05:56 Being social creates jobs for waiters,
0:06:00 bartenders and bus boys.
0:06:02 All jobs I had in college.
0:06:05 A busy night at the Westwood Marquis,
0:06:07 Chart House Restaurant or Monty’s Steakhouse?
0:06:10 Ask your parents if they lived in West LA in the 90s.
0:06:14 Could change my life that week.
0:06:16 It takes hundreds of hands to make a new car
0:06:19 or refurbish a vacation home.
0:06:22 This isn’t an argument for trickle down economics.
0:06:24 We don’t need to put more money
0:06:27 in the pockets of the wealthy
0:06:29 but the money they have is better spent in the economy
0:06:33 than hoarded in the market.
0:06:36 Consumer spending makes up two thirds
0:06:38 of economic activity in the US
0:06:41 and the top fifth of households by income
0:06:44 account for nearly half of that spending.
0:06:47 A million dollars in entertainment spending
0:06:50 supports 6.5 jobs directly
0:06:53 and another 22.5 indirectly.
0:06:56 Modern research confirms Aristotle.
0:07:02 Long term sustainable happiness doesn’t come from wealth
0:07:07 but from relationships with others.
0:07:09 The real gift of wealth is being free
0:07:13 from the economic anxiety
0:07:15 that can stress nearly every relationship.
0:07:18 Economic insecurity can rob us of happiness
0:07:21 but wealth offers diminishing returns.
0:07:24 The lifestyle and entertainment opportunities
0:07:27 available to someone with $10 million in assets
0:07:30 differ in modest degree from those available
0:07:33 to someone with $100 million.
0:07:37 Going from $100 million to $1 billion
0:07:41 is likely a wash.
0:07:42 You can buy a football team
0:07:44 but you’ll also need private security.
0:07:46 I know many centimillionaires and a few billionaires
0:07:51 and I have witnessed no evidence scientific or anecdotal
0:07:55 that wealth beyond relief from economic anxiety
0:07:58 and the ability to do wonderful things with your family
0:08:01 results in any incremental increases in happiness.
0:08:05 If there’s nothing to be gained above a certain amount
0:08:11 and nearly everything to buttress low income households
0:08:15 then isn’t a highly progressive tax policy
0:08:18 at the very top income levels a no-brainer?
0:08:21 One form of spending that’s proven to generate reward
0:08:27 and happiness is giving.
0:08:30 The more you spend on others
0:08:32 the greater your increase in happiness.
0:08:35 In fact, giving to others provides both passing pleasure
0:08:40 and long-term happiness.
0:08:42 Something born out in numerous studies.
0:08:45 MRI scans show that giving money to a food bank
0:08:49 lights up the same pleasure center in our brain
0:08:52 that responds to cocaine.
0:08:53 People who do small acts of kindness for strangers
0:08:58 report being happier for weeks afterward.
0:09:01 Volunteering is correlated with a stronger sense of well-being.
0:09:06 Giving money away has been shown to have a similar correlation
0:09:09 with happiness as making more of it.
0:09:12 In sum, if or when you hit your number, good problem
0:09:17 why wouldn’t you spend or give away your incremental wealth?
0:09:22 Why wouldn’t we pursue real wealth?
0:09:24 Happiness, a sense of belonging,
0:09:26 being part of something bigger than ourselves.
0:09:29 Any philanthropic effort is probably better than none at all
0:09:34 but not all giving is created equal.
0:09:37 There’s too much tech and finance bro PR boosting
0:09:40 and not enough actual giving.
0:09:43 Exhibit A, in 2010, ambitious Newark mayor Corey Booker
0:09:48 wanted to attract $200 million to fix Newark’s
0:09:53 corrupt and broken public school system.
0:09:56 He convinced Mark Zuckerberg to pledge $100 million
0:10:00 and investor Bill Ackman to add $25 million.
0:10:05 Then he, Zuck and Governor Chris Christie
0:10:08 all went on Oprah to announce their grand plan.
0:10:11 After the show aired, Zuck went back to depressing teens
0:10:15 and coarsening our discourse.
0:10:17 Christie became a full-time presidential candidate
0:10:20 and Booker rode the attention to DC.
0:10:23 The $200 million disappeared into the same corrupt
0:10:27 and broken school system without a trace.
0:10:30 Were they wrong to invest in Newark’s schools?
0:10:34 No, just not effective.
0:10:36 Without a sustained structural investment
0:10:40 in infrastructure, money from the wealthy
0:10:44 is often just a sugar high.
0:10:46 Exhibit B, far too much billionaire philanthropy
0:10:52 isn’t giving but a 12 carat misdirection,
0:10:56 shuffling money to avoid taxes and sustain dynasties.
0:11:00 41% of giving from the ultra wealthy
0:11:05 goes to private foundations and donor-advised funds.
0:11:10 These organizations pay board members, consultants
0:11:13 and others donate money to one another
0:11:15 and may never plant one tree or dig one well.
0:11:19 Many are warehouses for money to grow tax-free,
0:11:24 in effect subsidizing billionaire investing
0:11:26 with taxpayer money.
0:11:27 The super wealthy have weaponized the tax code
0:11:31 to hoard wealth and then take the moral high ground
0:11:34 with philanthropy that is camouflage for taxes owed.
0:11:38 For every dollar a billionaire donates to charity,
0:11:43 the government loses 74 cents in revenue.
0:11:47 Exhibit C, the giving pledge is a promise
0:11:52 to give the majority of your wealth away
0:11:54 by the time you die.
0:11:56 The pledge receives a lot of press.
0:11:59 Bill Gates and Warren Buffett introduced it
0:12:01 in an effort to spur billionaire giving
0:12:04 above the anemic 10% that’s been the norm.
0:12:07 The good it has done, however,
0:12:09 is dwarfed by its promise and PR.
0:12:13 Giving excludes political donations but that’s about it
0:12:17 and notably permits the same private foundations
0:12:20 that billionaires have long used
0:12:22 to avoid actually giving anyone else a dime.
0:12:26 There’s an organization behind the pledge
0:12:29 that coordinates events and conversations between members
0:12:33 but I believe this has mostly been window dressing,
0:12:36 obscuring an obscene level of income inequality
0:12:39 that runs unfettered.
0:12:41 Gates and Buffett are richer than when they started giving.
0:12:45 The 73 members of the pledge,
0:12:48 who were all billionaires in 2010,
0:12:50 have tripled their collective wealth in the past decade.
0:12:53 Wouldn’t a more apt name be the hoarding pledge?
0:12:58 I’ve written before about Mackenzie Scott,
0:13:03 who practices a below the radar approach
0:13:05 to giving that is inspiring.
0:13:07 Operating with a small team,
0:13:10 she vets possible recipients quietly,
0:13:13 often without their knowledge,
0:13:15 and makes sizable grants with no strings attached,
0:13:19 no PR fanfare, nor any demand for input on issues
0:13:22 she has no domain expertise in.
0:13:25 She’d given nearly $2 billion
0:13:28 before making any public statement
0:13:30 and has given away $14 billion to date.
0:13:33 Her fellow PNW mega-billionaire, Melinda French Gates,
0:13:38 left the Gates Foundation last month
0:13:40 to focus her philanthropy on organizations
0:13:43 working on behalf of women and families,
0:13:46 and she’s already donated $1 billion in gifts
0:13:49 spread across dozens of organizations.
0:13:52 There’s more than meets the eye here.
0:13:58 Evolutionary theory suggests kin selection
0:14:01 and inclusive fitness comes more naturally for women
0:14:05 who are raised to be more empathetic
0:14:08 and have an easier time forming social bonds.
0:14:11 Women are also socialized to be more nurturing,
0:14:14 cooperative, and community-oriented.
0:14:18 The previous sentence is a decent
0:14:19 disarticulation of generosity.
0:14:22 Women develop a desire to help others
0:14:25 without personal recognition.
0:14:27 85% of charitable giving decisions
0:14:30 in affluent households are made or influenced by a woman.
0:14:35 In some, women give differently.
0:14:38 There’s more emphasis on the giving part.
0:14:42 I hit my number almost a decade ago.
0:14:47 I purposefully paused and spent a great deal of time
0:14:51 and consciousness on erecting scaffolding
0:14:54 to update and temper my instinct to acquire more wealth.
0:14:58 I decided I would spend a great deal of money
0:15:01 on experiences with my family or services
0:15:04 that gave me more time to spend with them and my friends.
0:15:08 I likely only have a third of my chronological life left,
0:15:13 but I’m intent on living four thirds of my life
0:15:17 in that remaining time, meaning I want to have
0:15:21 a series of experiences that make me feel closer
0:15:24 to my family and friends and squeeze as much juice
0:15:27 from this seven-continent ellipsoid as possible.
0:15:31 After molesting the earth for 30 years for business,
0:15:36 it became obvious that staying in the most beautiful places
0:15:40 in the most iconic cities meant nothing
0:15:43 when I was there alone.
0:15:44 The previous sentence could also describe my 30s.
0:15:49 It’s as if that decade never happened
0:15:51 as I was mostly alone.
0:15:53 Another observation I’ve made, roaming terror,
0:15:57 is that the U.S. is the best place to make money
0:16:00 and Europe is the best place to spend it,
0:16:03 one of the reasons we moved to London.
0:16:06 In addition, I have a self-imposed tax of 100%.
0:16:11 Each year, I add up my spending
0:16:15 and give that same amount or more away.
0:16:19 The surprise for me around giving
0:16:22 is how masculine it makes me feel.
0:16:25 I feel my strength and skills are protecting and providing.
0:16:29 The hoarding I’ve described above
0:16:33 is relevant to only a small percentage of the population.
0:16:37 What is more prevalent is the hoarding of goodwill.
0:16:41 Each of us has wealth in the form of good intentions,
0:16:45 positive gestures, and comedy toward others.
0:16:49 Do you hoard this goodwill?
0:16:51 The first 40 years of my life, I was cheap with my emotions,
0:16:57 not telling people how impressive they were
0:16:59 or how much I admired and cared about them.
0:17:02 This is the real environmental waste in our society,
0:17:06 possessing the resources to help people
0:17:09 feel better about themselves and not sharing that capital.
0:17:13 After finishing this sentence,
0:17:16 I am going to clear my mind and wish you well.
0:17:20 I want you to be happy and prosperous.
0:17:26 I really do wish you well.
0:17:31 And there’s no reason to hoard that sentiment.
0:17:34 Life is so rich.
0:17:39 (gentle music)
0:17:43 (gentle music)
0:17:45 (upbeat music)
0:17:48 [BLANK_AUDIO]

0:00:00 This week on Prof. G Markets, we speak with Morgan Howsell, partner at the Collaborative
0:00:05 Fund and best-selling author of The Psychology of Money.
0:00:08 We discussed the path to wealth creation while balancing a life well spent.
0:00:12 I think once you suppress your desire, then you are almost a victim of your money.
0:00:17 You are a slave to it because you’re saying, “I want to do X,” and you’re saying, “Well,
0:00:22 your money’s telling you no.
0:00:23 You can’t do that.
0:00:24 You want to go on a vacation, but you can’t do it.”
0:00:27 I think people should really follow what their personality leads them to do.
0:00:31 You can find that conversation and many others exclusively on the Prof. G Markets feed.
0:00:40 Support for the show comes from Mercury.
0:00:42 Financial operations are needlessly complex.
0:00:44 With Mercury, you can simplify them with banking and software that power your critical
0:00:48 financial workflows, all within the one thing every business needs—a bank account.
0:00:53 And with new bill pay and accounting integrations, you can pay bills faster, stay in control
0:00:57 of company spend and speed up reconciliation.
0:01:01 Apply in minutes at mercury.com.
0:01:03 Mercury, the art of simplified finances.
0:01:06 Episode 303, 303 is here.
0:01:12 I go covering parts of Colorado in 1903.
0:01:15 Henry Ford founded the Ford Motor Company.
0:01:17 True story.
0:01:18 I left my Adderall and my Ford Fiesta.
0:01:21 I came back and it’s a Ford Focus.
0:01:25 True story.
0:01:26 I was a brand strategy consultant and engaged by Ford Motor to help sell more cars.
0:01:30 My idea, add anal to every brand.
0:01:33 Anal Charger, Anal Challenger, Anal Expedition and Anal Fiesta.
0:01:39 Go, go, go!
0:01:50 Welcome to the 313rd episode of the Prof. G Pop.
0:01:53 313th?
0:01:54 It feels like if I say that three times, some sort of poltergeist is going to show up and
0:01:57 turn me into, I don’t know, the 59-year-old is angry, depressed and has erectile dysfunction.
0:02:02 No way no poltergeist needed.
0:02:03 Anyways, in today’s episode, we speak with Jessica Tarlov, a co-host on the Five, Fox’s
0:02:09 weeknight news program to hear about Trump’s conviction and what it means for American
0:02:13 politics.
0:02:14 You are going to say that you heard about Jess here, if you don’t watch Fox.
0:02:19 On Fox, she’s a bit of a superstar, but I just love that her star is literally the shooting
0:02:24 star and she’s, I don’t know her well, but I do know her and she’s just an impressive,
0:02:29 cool woman.
0:02:31 Anyways, Jessica has become our go-to Yoda for all things politics.
0:02:36 I find that she kind of hits it up the middle.
0:02:39 She’s an unabashed Democrat, but she comes from a background of consulting and data,
0:02:44 and oh my gosh, you want to see just her.
0:02:47 I just love, my favorite moment is when the five or four of the five say something just
0:02:52 fucking ridiculous and she just punctures them in the middle of the forehead with a bunch
0:02:57 of data and they all sit there looking as if they’ve just been caught masturbating.
0:03:00 I mean, they have the strangest looks on their face like, “Who the fuck invited this smart
0:03:03 Democrat to come in and make us look like idiots?”
0:03:06 Anyways, she’s fantastic.
0:03:08 What else is happening?
0:03:09 The dog is back in London.
0:03:11 I went to the UEFA finals.
0:03:12 I saw Dortmund play Real Madrid, by the way, Mbappe, not that you care about football.
0:03:17 By the way, it’s called football, folks.
0:03:19 3 billion people can’t be wrong.
0:03:20 It’s called football.
0:03:21 Have hired Mbappe, who’s arguably the best, maybe the best player in the world right now.
0:03:26 I’ll probably get shit for that.
0:03:28 All fans are very, very serious about their football, but Real Madrid did not need Mbappe.
0:03:33 They’re going to be dominant now.
0:03:35 Anyways, took my two sons and their friends, Santi from Florida, who came all the way over
0:03:41 just for three days.
0:03:42 You can do that when you’re, literally no jet lag when you’re 16.
0:03:45 No jet lag.
0:03:46 I go come up early in the morning.
0:03:47 No problem.
0:03:48 Time to go to sleep.
0:03:49 No problem going to sleep.
0:03:50 So little bit different.
0:03:51 A little bit different when you enter your sixth or seventh decade.
0:03:55 It’s great to be back here.
0:03:56 When I say great, it’s just good.
0:03:58 It’s not great.
0:03:59 It’s sort of good.
0:04:00 It’s a beautiful day here for London.
0:04:02 It’s like almost hit 60 degrees for a moment.
0:04:05 And I think I saw this round orange thing in the side, although I will say I do love
0:04:09 London in June as the days go on forever.
0:04:12 It’s really nice.
0:04:14 It’s also nice to be back, see my kids, you know, nice to be home, get back, get back
0:04:19 in the swing of things.
0:04:20 Anyways, let’s move on to some news.
0:04:22 The Wall Street Journal reported that New York State is proposing a bill that would
0:04:26 prohibit social media companies from serving up algorithmically driven feeds to minors
0:04:30 and prevent them from delivering notifications during the wee hours of the night without
0:04:33 parental consent.
0:04:35 Governor Cathy Hockel believes this measure is needed in order to make these platforms
0:04:38 less addictive and to address the growing crisis of teens in distress.
0:04:42 According to the journal, opponents that is industry leaders and trade groups have questions
0:04:46 about the constitutionality of the proposal and believe media literacy would have a more
0:04:51 immediate impact.
0:04:52 What the fuck does that even mean?
0:04:53 They’re supposed to read about how terrible these social media platforms are.
0:04:58 Look, when we look back on this era of big tech, we’re going to regret the income inequality,
0:05:01 we’re going to regret the monopoly abuse, we’re going to regret the weaponization of
0:05:05 our elections, we’re going to regret the deep fakes, the shallow fakes, but more than anything,
0:05:09 more than anything.
0:05:11 We’re going to ask ourselves, how the fuck did we let this happen to our kids?
0:05:16 My colleague at NYU, Jonathan Hightison, great work basically demonstrating irrefutably
0:05:21 that levels of self-harm, depression and suicide have gone up, especially among girls, since
0:05:26 social went on mobile and as a parent and someone who you would think would be really
0:05:31 mindful of this stuff, I got to be honest, we’re failing.
0:05:34 My kid struggles with device addiction, he’s on social media too much and people say, “Well,
0:05:40 just take it away or just get them off the social media platform,” said anyone who does
0:05:44 not have kids.
0:05:45 This is how they get their homework.
0:05:47 This is how they communicate with their friends.
0:05:49 I would bet that one-third, at least one-third, sometimes two-thirds of all the anxiety in
0:05:55 our house focuses on social media or devices.
0:05:59 These things are a fucking cancer and I also worry that a lot of my creativity, a lot of
0:06:05 my risk-taking came from the fact that I did not have this amazing casino, movie theater,
0:06:12 dopa machine, crack pipe in my pocket that I could just sit on the couch all day that
0:06:18 I would call people, I would call friends that I didn’t know well or potential friends
0:06:22 and say, “Hey, let’s meet at the park,” where I would go, I used to go to Westwood Park
0:06:27 and play in pickup games when I was 10 and 11 years old.
0:06:30 That wasn’t easy, it was kind of intimidating and the kids were all bigger than me, but
0:06:34 I was so fucking bored I had to get out of the house and this is the problem.
0:06:38 Kids aren’t bored now, they’re just at home and they go down these rabbit holes.
0:06:42 I have seen some of the shit that these kids say to each other.
0:06:45 You want to talk about overprotecting offline and underprotecting online, oh my god.
0:06:50 Any parent out there, demand that you get passwords for your kids’ social media and
0:06:54 go on there and see how these kids are talking to each other, it is pretty, pretty scary.
0:06:59 I think that this is something that is going to be fixed, I think parents are catching
0:07:03 on to just how incredibly damaging this has been and that the mendacious Fox who run these
0:07:08 companies will pretend that they give a good goddamn about your children, they don’t.
0:07:12 They pretend about their own wealth and their own ability to get their kids into the right
0:07:16 schools and a lot of them, a lot of them, see above Steve Jobs didn’t allow their kids
0:07:20 to be on devices because they know firsthand just how incredibly damaging these things
0:07:25 can be.
0:07:26 So let’s talk about what platforms they’re using.
0:07:28 Percentage of US teens ages 13 to 17 who say they visit or use the following apps or sites.
0:07:34 This is from Pew, number one is YouTube with 71% of US teens 13 to 3 out of 4 teens are
0:07:42 on YouTube every day.
0:07:45 Think about that every day and 54% over half, over half of 13 to 17 year olds say they are
0:07:53 either almost constantly or several times a day on YouTube and for TikTok it is 49%.
0:08:00 Just half of American teenagers are on TikTok either almost constantly or several times
0:08:05 a day and we have the added bonus with a platform influenced by the CCP of knowing they’re seeing
0:08:10 the world through a frame that is being influenced by the Chinese Communist Party.
0:08:14 What could go wrong?
0:08:16 What could go wrong?
0:08:17 And then Sam Chat which I would argue is the least mendacious of the mendacious Fox, it’s
0:08:21 about 43%.
0:08:22 Then we go to Instagram at 35% and this isn’t the total number.
0:08:28 This is the percentage of teens who say they’re using it almost constantly or several times
0:08:31 a day and then Facebook, which I guess is turned into the new Lamo one only has a total
0:08:36 of 19% or only about 10% are using it constantly or several times a day.
0:08:43 This is the frame through which our kids are developing their brain.
0:08:47 This is what is rewiring when your kid from 13 to 17 their brain gets rewired.
0:08:54 My kid is sort of the same person, but not really in terms of where he was at 12 and
0:08:59 where he was now, their brain gets rewired, the hormones kick in, the prefrontal cortex
0:09:04 finally starts to grow.
0:09:05 They start perceiving things, reacting to them, their social capital shows up and they
0:09:10 start thinking about, well, maybe my parents don’t know everything, who do I find or what
0:09:14 are the sources of information that influence who I am and my view of the world.
0:09:18 That is mostly, I’d like to believe still their peer group interesting study across parents.
0:09:23 We like to think that we’re engineers of the sheep, we’re not.
0:09:26 We’re herders, we’re shepherds, we get to choose the field they graze on, we get to
0:09:29 choose what food they get, we get to choose what direction they graze in, but the sheep
0:09:33 comes to us, right?
0:09:35 We’re not engineers.
0:09:36 Just ask yourself, what would the CCP want?
0:09:39 So we have this device or this platform or this media that is not only depressing our
0:09:45 kids, but is giving them a fucked up view of the world.
0:09:48 You don’t think the zombie apocalypse of useful idiots on campus has something to do with
0:09:53 the frame through which they perceive the world.
0:09:55 Are you totally confused as to how they would even get there?
0:09:59 Well, see above, tick and talk.
0:10:04 Okay, moving on to a lesson on brand.
0:10:06 The aforementioned Wall Street Journal who broke the news about New York’s social media
0:10:09 legislation is going through a multi-million dollar rebranding campaign.
0:10:13 Axios reported that the journal is introducing a new tagline.
0:10:16 It’s your business as it looks to attract a broader audience beyond the uber-finance
0:10:20 centric people and C-suite executives.
0:10:23 To achieve this rebranding, the journal is investing heavily in paid marketing.
0:10:27 You’ll likely see their efforts on billboards and office buildings and social media.
0:10:31 Okay, does this make sense?
0:10:32 Keep in mind, I’m biased or I should be biased.
0:10:35 I have spent my entire professional career, that’s not true, the first three quarters of
0:10:39 my professional career based on the following algorithm.
0:10:44 From the end of World War II to essentially the introduction of Google, the way you printed
0:10:48 money, the algorithm for creating shareholder value was the following.
0:10:51 Find a mediocre product you can produce at the lowest cost at scale, a mediocre salty
0:10:56 snack, sugary drink, car, tennis shoe, and then wrap it in these amazing brand codes
0:11:02 of youth, American masculinity, European elegance, sacks, never goes out of style, paternal care,
0:11:09 maternal love.
0:11:10 Why?
0:11:11 Why should you spend $3.30 on $.30 worth of peanut butter paste?
0:11:15 Because choosing moms choose Jiff.
0:11:16 You love your kids more, why?
0:11:18 And how do you prove it?
0:11:19 Buy branded toothpaste.
0:11:21 And this was licensed to print money.
0:11:24 Sell a product with 80 or 90 points of margin.
0:11:27 The can is the most expensive thing about Coca-Cola in terms of the actual product, but the real
0:11:32 expense and the real genius is the brand code that you are American and youthful and you’d
0:11:36 like to teach the world to sing in perfect harmony.
0:11:39 Or you’re like Michael Jackson if you drink Pepsi, what have you, just drink more Coors
0:11:42 Light and you’re going to be hot and on the beach playing volleyball with other hot people.
0:11:46 By the way, that has not happened to me.
0:11:48 I’ve consumed a great deal of beer in my life and modest volleyball player and just don’t
0:11:54 look the same way on the court.
0:11:56 Anyways, this was the brand code.
0:11:57 This was the algorithm for creating shareholder values.
0:12:01 He’s incredibly efficient and cheap broadcast vehicles.
0:12:05 You hire very talented people who show up wearing black, who are very attractive and you love
0:12:09 to hang out with after hours who come up with these amazing stories.
0:12:12 They tell these stories on these very efficient mediums that get huge scale, infuse this mediocre
0:12:17 product that they can produce at scale, edit a low cost with these incredible brand associations
0:12:22 and brand codes and then boom, stuff the channel with it, other people’s channels that they
0:12:26 spend the capital and they’re good at retail and we print money.
0:12:30 We’re Procter and Gamble.
0:12:31 We’re Chevy.
0:12:32 We’re like a rock.
0:12:33 We’re a unilever.
0:12:34 I mean, these companies were ABN Bev, right?
0:12:36 Oh my God, aren’t those frogs just ridiculously fucking cute.
0:12:40 And then, and then Google came along and we no longer needed to defer to the shorthand
0:12:45 that is brand.
0:12:46 That’s what brand is.
0:12:47 I don’t have time to do diligence on every hotel, so I will defer to the Mandarin Oriental
0:12:52 in the four seasons.
0:12:53 Why?
0:12:54 Because usually when I travel, someone else’s O is paying and it’s O as an eight.
0:12:56 But now I no longer need the shorthand of brand.
0:12:59 I no longer need advertising.
0:13:01 What can I do?
0:13:02 I can go on my social graph.
0:13:03 I can go on TripAdvisor.
0:13:04 I can Google and go to AI.
0:13:06 And what I find out is that when I’m in London, I want to stay at the Chiltern Firehouse.
0:13:10 Why?
0:13:11 Because I am that douchebag that likes to hang out with people who are much younger and much
0:13:14 hotter than him.
0:13:15 And I’m willing to put up with a substandard room, which they are in their choppy, to stay
0:13:18 in an Andrew Bilaz Hotel.
0:13:20 He’s got the algorithm down, underinvest in the actual hotel room, overinvest in the public
0:13:24 spaces, create the illusion of scarcity and cool, and people will pay 800 pounds such that
0:13:29 they have access to this really cool room.
0:13:31 This is the conversion of the brand age to the innovation age to the social age, where
0:13:36 your social graph and these new digital mechanisms of getting you to exactly the right product.
0:13:41 Think about the waste of any broadcast commercial.
0:13:44 What percentage of people watching Rachel Maddow tonight really have opioid-induced
0:13:48 constipation?
0:13:49 Well, not a lot.
0:13:51 Hopefully not a lot.
0:13:52 Jesus Christ, I hope not a lot.
0:13:54 Anyways, this is, this is the problem.
0:13:57 Because if I have opioid-induced constipation, I type it into Google or AI, and I get exact
0:14:03 information.
0:14:04 It’s one-to-one.
0:14:05 It’s pull versus push.
0:14:07 So the brand era is over.
0:14:10 Let’s bring this back to the Wall Street Journal, Scott.
0:14:11 I don’t think this is a great idea.
0:14:13 I think maybe a little bit of it to announce the rebranding, I would try and get free or
0:14:17 earn media.
0:14:18 But how do you know?
0:14:19 How do you know you’re a company that is not going to add 10, 50, or $100 billion in
0:14:24 market capitalization over the next 12 months?
0:14:26 See, you advertise.
0:14:29 That’s it.
0:14:30 Professor of Brand Strategy, NYU Stern, founder of Profit Brand Strategy, I have made my living
0:14:35 preaching about the power of brand.
0:14:38 It outs you now in this era is not getting it.
0:14:42 Branding in the traditional sense, and that is trying to fill an empty vessel of a mediocre
0:14:46 product or these brand associations, the sun has passed midday on that.
0:14:50 Don Draper has been drawn and quartered.
0:14:53 We are in an innovation age now where it’s about the product.
0:14:55 It’s mostly about supply chain, in my view, and I’ll come back to that at a later date.
0:15:00 But to think that rebranding something is going to reignite the structural decline being
0:15:03 felt by newspapers and content companies, boss, you’re watching too much TV.
0:15:09 We’ll be right back for our conversation with Jessica Tarloff.
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0:18:03 Welcome back.
0:18:16 Here’s our conversation with Jessica Tarloff, a co-host on the Fox’s weeknight news program.
0:18:22 Jess, where did this podcast find you?
0:18:26 At home in New York City, in the middle of my maternity leave, so I’m thrilled to talk
0:18:30 to an adult about something.
0:18:34 Maternity leave.
0:18:35 Oh my gosh.
0:18:36 How long is that?
0:18:37 I am entitled to 16 weeks paid maternity leave.
0:18:40 Good for you.
0:18:42 Yeah.
0:18:43 That’s a whole other talk.
0:18:44 Which everyone should be.
0:18:45 Yes, it is.
0:18:46 I would love to do a childcare conversation for sure.
0:18:48 By the way, does your husband get paternity leave?
0:18:50 He does.
0:18:51 They don’t have a formal policy.
0:18:52 It’s just kind of like a take what you need situation and I still, because he works in
0:18:56 finance, I still think that they are a little uneasy with taking a lot of time, but people
0:19:02 seem to be splitting it up.
0:19:04 Like they take a bit at the beginning and then when they really want to be off, like
0:19:08 in August, they’re like, “Oh, I’m on paternity leave.”
0:19:10 So it’s kind of a mixed bag.
0:19:12 Did you take time with yours?
0:19:15 So just to you know, I’ve always had my own businesses, but that take as much as you need
0:19:22 is a trick.
0:19:23 I used to do the same thing.
0:19:24 I used to tell people, people say, “What’s your vacation policy?”
0:19:26 I’m like, “You need a vacation, take a vacation.”
0:19:28 And people in a high achiever firm all feel this implicit pressure to take no time.
0:19:34 So I found it was the perfect model to make sure that no one took any time.
0:19:37 How’s that from being a terrible boss?
0:19:40 I mean, it’s honestly how you keep up, but again, it’s a whole other story, but I lived,
0:19:46 I think you know.
0:19:47 Yeah, well, we’ve talked about it.
0:19:48 When I lived in London, I did an internship for someone who was doing a maternity cover,
0:19:53 which can be up to a year over there.
0:19:55 And then the woman came back.
0:19:59 They didn’t want to get rid of the guy who had subbed in and had done such a fantastic
0:20:02 job.
0:20:03 And in the end, the woman ended up getting pushed out a couple years later because there
0:20:08 really wasn’t a role for her left, but they legally couldn’t let her come, not come back
0:20:14 after a year off.
0:20:15 And it turned into this whole mess of a thing.
0:20:17 So they’re big politics with it to say the least.
0:20:21 Kids ruin everything.
0:20:23 All right, let’s get to the serious stuff here.
0:20:26 So 34 felon accounts, what do you make of this historic verdict?
0:20:30 Well, it seems like it was the correct verdict, and everyone has really been parsing the difference
0:20:35 between what the jury did and whether this was politically motivated or if this was the
0:20:40 right thing to bring the case.
0:20:42 It seems like the jury did a fantastic job.
0:20:45 They evaluated the evidence, they won, they made a timely decision.
0:20:48 I was following really closely, at least on social media, all the questions that they
0:20:52 were asking, all of the legal commentators kept saying, “Those are the right questions
0:20:56 to be asking, paid great attention,” et cetera.
0:20:59 And Todd Blanche, Donald Trump’s lawyer, did a bunch of interviews, and he said, “We
0:21:05 expected that this could happen.
0:21:07 We made all of our decisions together about how to present our case.
0:21:10 We obviously approved the jurors and the alternates, and this is the way that it goes sometimes.”
0:21:15 We’ll see how the appeal process goes.
0:21:17 The other side of the coin, which is, should Alvin Bragg have brought this case?
0:21:22 And I was listening to your latest episode of Pivot before we got on, so I know that
0:21:27 you had Eli Hone gone, who obviously has a bit of a counter-opinion to a lot of Democrats
0:21:32 who are seething about even mentioning the fact that this was a case that perhaps should
0:21:39 not have been brought and that bringing it up to a federal charge with the campaign finance
0:21:45 fraud, essentially, was not the right way to go, is the other side of the coin.
0:21:50 And that’s where I think the really interesting stuff is.
0:21:52 Well, let’s put forward that thesis.
0:21:55 My fear is that this is going to help the president get elected, that the majority of
0:22:02 the voting public will see this as basically about sex, and that if they figured out a
0:22:08 way to elevate and attempt to cover up sex or hush money to a felony, that they’re going
0:22:15 to need more courts, that there are a lot of people who pay off mistresses or end up
0:22:21 doing things that are illegal under the context of trying to keep affairs discreet or quiet,
0:22:30 and that this is selective prosecution, and that this will be further play into the whole
0:22:35 narrative of the deep state is coming after me, rally his base.
0:22:39 My understanding is he raised a record amount of money or a lot of money post-Sovietic.
0:22:44 Distinct of the merits of when you bring a case or don’t, just strategically, if you
0:22:50 don’t want Trump to be president, do you think this helps or hurts us?
0:22:54 I think it’s going to take a few weeks to a month to understand that, and the polling
0:22:58 is really fuzzy at this moment, and some people are just ingesting the information.
0:23:03 Some people haven’t even paid attention to it yet, and the Biden campaign is still figuring
0:23:07 out how they want to approach this.
0:23:09 How often do you want to call him Donald Trump, and how often do you want to call him convicted
0:23:12 felon Donald Trump?
0:23:15 And that’s something that the communications people are struggling with as we speak.
0:23:19 But I actually am less pessimistic about it than you are, and the reason for that is that
0:23:25 I only care about a small subset of voters.
0:23:28 The bases of the parties don’t matter to me at this point, and I know that Biden’s polling
0:23:33 has been softer with African-Americans and Latino voters and some young voters, but that
0:23:39 happened in 2020 as well, and people came home.
0:23:43 So I’m putting that to the side now and thinking, okay, who is my focus?
0:23:48 Moderate Republicans and independent voters.
0:23:51 And there have been a few surveys taken since the verdict, and we’ll get more and more,
0:23:54 but ABC, Ipsos, was out there in the field, and they got that 52% of independents say
0:24:01 that he should withdraw from the race, and 16% of Republicans, and 16% might seem like
0:24:07 a low number, but there’s your swung election, right?
0:24:10 Those are your swing states, potentially.
0:24:13 Morning console got basically a mirror image of that result.
0:24:16 CBS also something similar.
0:24:19 So if you think about how many people are actually up for grabs, how few we have to
0:24:24 persuade that this matters and that this isn’t just a one-off that he lied about this, but
0:24:30 that he is a chronic liar, and that has been a thread through the Eugene Carroll case,
0:24:35 the Civil Fraud case, and if we ever get to the Marquis cases, which obviously I would
0:24:39 have preferred if we were talking about the nuclear secrets that are hanging out in the
0:24:43 toilet at Mar-a-Lago or January 6th before we were talking about the Hush Money case.
0:24:49 I think that you can persuade a lot of people with that to just say, you know what, maybe
0:24:53 I was thinking about giving him another shot, but the guy is such an effin liar.
0:24:58 You work with, I mean, you work with a conservative network, or what is the vibe when you talk
0:25:06 to people off camera, are they, do they generally believe this is another example of the deep
0:25:12 state going after, you know, as a function of Trump derangement syndrome, or are they,
0:25:17 this is bad for us?
0:25:19 What’s the vibe off-mic or off-camera among conservatives?
0:25:23 I think that they actually feel both of those things, and that we’re always trying to put
0:25:27 people into one box, and it’s actually a lot more complex than that.
0:25:31 So yes, the deep state is real, and they’ll go back and try to relitigate, quote, “Rush
0:25:36 a gate with me,” and then I’ll get all hot and bothered again about Hillary Clinton,
0:25:39 and they’ll be like, “Actually, I don’t want to talk to you about this anymore.”
0:25:42 And then they also understand the fact that this does not help their case.
0:25:48 And you can tell that Republicans know that it’s a bad thing from the type of panic and
0:25:53 the way that they’re speaking about him being a convicted felon.
0:25:56 A, they want to raise a ton of money, which they did, I mean, we’ll see what the actual
0:26:00 figures are, but they’re reporting $141 million, which is astronomical.
0:26:05 They will not say what it will be used for, which I’m always paying attention to.
0:26:08 So okay, you’ve got all this money now, are you going to open a field office, and then
0:26:12 they’re like, “Actually, maybe we’ll just pay Donald Trump’s legal fees.”
0:26:15 So that’s somewhere the Democrats still have a huge advantage.
0:26:18 But they know that this isn’t helpful.
0:26:21 No one ever wants to be indicted.
0:26:23 No one ever wants to be convicted.
0:26:25 And something that I don’t think folks are paying as much attention to as they should
0:26:29 be, every day that Donald Trump is out there just grievances, wall to wall, “I’m a political
0:26:36 prisoner,” whatever else he’s talking about, he’s not talking about the issues.
0:26:40 And the issues are the ones that are going to sway that little group of people, though
0:26:43 you’re talking about the independents and the Republicans, who have decided either he
0:26:48 is this guy and we don’t care, or he is this guy, and I’d like to hear something, a plan
0:26:52 for the economy, a plan for the border.
0:26:55 So I think that that does lead to an advantage for the Democrats and disappointment for my
0:27:01 wonderful colleagues, who I look forward to rejoining in Milwaukee in July, which is a
0:27:06 crazy first week back.
0:27:08 That’s going to be really interesting, the convention, Ryan.
0:27:11 It’s going to be…
0:27:12 I’m actually a little scared.
0:27:15 I live right by the courthouse in Manhattan, and it was remarkably low-key.
0:27:19 I saw a few, and I wouldn’t call them parades, but a bunch of Trump cars that had Blue Lives
0:27:28 Matter flags, and now the upside down American flag, because Samuel Alito is some sort of
0:27:33 hero for a quote not standing up to his wife, who did that all by herself or whatever.
0:27:39 So when Trump was coming in and out, they drive with him, but going to the convention
0:27:43 four days after the sentencing, I think it could get a little wild.
0:27:49 I’m not saying January 6 levels, but you have to be ready for anything to happen, especially
0:27:54 if he’s given jail time.
0:27:56 But that’s…
0:27:57 So it’s just some anecdotal evidence, and I’m curious if you’ve picked up on the same
0:28:00 thing.
0:28:01 I find one of the most encouraging things, or a signal, and granted, I’m looking for
0:28:04 signals that this is going to help get Biden reelected.
0:28:08 But when…
0:28:09 I was living in Florida in Delray Beach, and right after the election, there was a parade
0:28:13 for a stop-to-steal parade.
0:28:16 And Delray is actually kind of purplish/blue, but there is…
0:28:21 You go three miles inland, and it’s deep red.
0:28:24 I could not get over the number of people in the passion around the stop-to-steal, and
0:28:30 they had a desk set up, information, and just for fun, I walked over and had them explain.
0:28:37 And these were people who were deeply committed and believed that the election had been stolen.
0:28:41 I thought, “I’m just so out of touch with America.”
0:28:43 And the passion they felt, the number of people…
0:28:48 When the case…
0:28:49 When the verdict came down, I was encouraged at how what I’ll call “little agita” grievance
0:28:55 or rage among the general populace was.
0:28:57 I see it as there is rage fatigue, that people are starting to think, “You know what?
0:29:02 I’m still going to vote for them, but I’m not going to storm the Capitol.
0:29:07 Did you sense the same thing?”
0:29:09 I mean, that’s the hope, but we’re also far out from the election.
0:29:12 I think the vibe in October is going to be a lot more heightened on both sides of this.
0:29:19 I was surprised that there weren’t more lefties showing up at the courthouse to troll him,
0:29:24 right?
0:29:25 Or standing outside of Trump Tower and the New Tiffany’s, which is gorgeous, and trying
0:29:29 to do it that way.
0:29:30 So I think that we’re just a bit too far out for it, but I think it will be less, because
0:29:36 people probably have learned a lesson or two from the number of January Sixers who have
0:29:40 gotten pretty serious sentences, and the number of people who have been very forthcoming with
0:29:47 their transition out of being a Trump supporter and talking about how they were manipulated,
0:29:53 how they were brainwashed, how they fed him a bunch of lies.
0:29:56 And my hope is that Democrats will be able to connect what he’s saying about this Alvin
0:30:01 Bratt case to the supposition that Donald Trump lies to you at every single turn.
0:30:08 Fox is doing some really cool new polling work.
0:30:11 They have a new issues tracker, and they also have this deal breaker question, which I think
0:30:16 is so awesome.
0:30:17 What are the deal breaker issues for you?
0:30:18 Number one was abortion.
0:30:19 I think Democrats need to get back to talking about preserving female reproductive rights,
0:30:25 that that’s something that’s always going to win for them.
0:30:27 But on the issues tracker, Biden has a 15-point advantage on honesty and trustworthiness, and
0:30:32 I don’t think they’re leaning into it enough.
0:30:35 So before you became kind of a household name, you were a consultant around messaging.
0:30:40 So I want you to do sort of kind of arm-share consulting.
0:30:46 We’re the Republican Party.
0:30:47 What is our messaging around this issue moving forward?
0:30:51 I think that you’ve really got to split it up, and you got to pick your best voices that
0:30:55 are going to be out there kind of parroting what Donald Trump wants to hear.
0:30:59 So it seems like JD Vance, Marco Rubio are taking the mantle for that.
0:31:03 They’re both high up in the VP search.
0:31:04 I think JD Vance is probably ahead of Rubio in that and let them, people who are respected
0:31:12 as being intelligent folks, talk about it.
0:31:15 And the rest of the party really has got to get back to talking about the issues.
0:31:19 I saw how Larry Hogan was totally maligned for saying something pretty normal.
0:31:24 Let’s respect the jury decision.
0:31:26 He didn’t even say what he thought about Donald Trump, even though we all know what
0:31:30 it is that he thinks.
0:31:32 And people like Kevin McCarthy, who has found some courage since he’s been out of office,
0:31:38 was on Fox talking about it and said, “What are we doing going after Larry Hogan?
0:31:41 That might be our chance to actually win a Senate majority.”
0:31:44 And whatever Donald Trump wants to talk about, it doesn’t change the fact that there is an
0:31:48 election where people are going to turn up and they’re going to vote on the economy, crime
0:31:52 and policing, abortion for sure.
0:31:55 And if the only message coming out of the Republican Party is Donald Trump is a victim
0:31:59 when everyone can see that that’s not really what a victim looks like, it’s not going to
0:32:03 go well.
0:32:04 Now, do Democrats, what do you think the messaging, do you think they play up President Biden’s
0:32:10 positives as you reference or do you think they go on offense and start calling this
0:32:14 guy a felon?
0:32:15 I mean, the risk is it makes President Biden look less presidential, less bipartisan, less
0:32:22 statesman-like.
0:32:23 It lowers the contrast between him and Trump, because we know what Trump will do.
0:32:29 Do you go on offense or do you try and maintain a statesman-like demeanor?
0:32:32 Well, I think this is where you can separate Biden from his surrogates, and he has some
0:32:37 fantastic surrogates who need to be out there more.
0:32:40 I mean, John Fetterman has become the darling of the party.
0:32:44 He went from vegetable to, “Can we get this guy to come to my rally?”
0:32:48 And Republicans saying to me, I had a very funny off-air conversation with a colleague
0:32:52 who was like, “I like John Fetterman now.
0:32:55 What is that?”
0:32:56 And I was like, “Yeah, maybe you shouldn’t have been so shitty about him.”
0:33:00 He’s actually kind of always been that way.
0:33:02 You just didn’t ask him about Israel.
0:33:03 Yeah, but that isn’t that he threads the needle, right?
0:33:08 Oh, totally.
0:33:09 He throws a bone to the Republicans by saying, “I’m unapologetically pro-Israel.”
0:33:13 Had this guy as a crook.
0:33:14 Yeah, and he doesn’t think about it that way.
0:33:17 That’s the thing about John Fetterman is he doesn’t have the vibe of anyone who is calculating
0:33:22 what they’re saying.
0:33:24 And you can say that you look at his outfit, right?
0:33:26 No one picked that out, right?
0:33:27 No one said, “This is coordinated.”
0:33:29 And he just speaks from the heart.
0:33:32 And I think that that’s something that’s really resonating with folks, and you see it with
0:33:35 Gretchen Whitmer as well, Josh Shapiro, Wes Moore is becoming a superstar this way.
0:33:41 So I think that those folks can be out there threading the needle.
0:33:43 And Biden has dabbled in the convicted felon jargon a little, but in general, I want to
0:33:49 see more of the interviews like he’s on the cover of Time that came out this morning.
0:33:54 I want to see more of that, him talking about the policy issues, what he’s actually done
0:33:58 in the Middle East.
0:33:59 He’s pretty critical of Netanyahu, actually, which is something that I think will not only
0:34:05 appease the left side of the party, but a lot of the people like me were pretty moderate
0:34:10 in the middle, want Israel to do everything that they possibly can to get the hostages
0:34:14 back and to bring peace, but to recognize that Netanyahu is a bad actor and all of that.
0:34:20 So I think Biden stays a statesman, but he unleashes the beast underneath that and makes
0:34:26 sure that every one of those gettable voters knows what the alternative is, and that they
0:34:32 also are aware of the fact that if they sit it out, if they were a Nikki Haley voter or
0:34:36 a Chris Christie voter, that that is another vote for Trump.
0:34:41 He brought up a key word and something I’ve been thinking about a lot, surrogates.
0:34:45 And I’m disappointed that he hasn’t weaponized more surrogates.
0:34:49 I don’t see Mayor Pete out there.
0:34:51 I don’t see … John Fetterman wasn’t planned.
0:34:54 No, it’s total surprise.
0:34:57 And it strikes me that there are 50 or 100 incredible surrogates that could be out there.
0:35:04 Governor Newsom is really good on his feet.
0:35:05 I would argue that he might be a better candidate than an actual politician, but it strikes
0:35:11 me that why have they not put these people in, so to speak, put me in, coach?
0:35:16 Why have they not weaponized them?
0:35:17 And also, one thing I’m disappointed is that typically the person that goes on the attack
0:35:23 is the vice president.
0:35:25 And why has that not … Is it because they don’t see her as effective?
0:35:29 Is it because she is in fact ineffective?
0:35:32 And also, where’s the weaponization in the surrogate strategy here?
0:35:36 Yeah, so we are still early in campaign mode.
0:35:41 And I think that the fact that they moved up the debates puts them further on their heels.
0:35:46 You’ve got to go faster if you’ve decided that you want to have a debate June 27th.
0:35:51 So we’ve got to see that Kamala Harris, it’s been tough.
0:35:55 And we talked about the last time that you had me on.
0:35:59 She has not panned out as the superstar that a lot of Democrats hoped that she would be.
0:36:05 I was personally not a tremendous Kamala fan.
0:36:08 And the primary, and I think it said something that she dropped out before Iowa, right?
0:36:12 She didn’t even get the opportunity to have a vote cast for her.
0:36:16 And the Democratic base was sending a signal that she wasn’t what they thought she was
0:36:21 or what they had hoped that she was going to be.
0:36:24 So I think there’s a little bit of anxiety about that.
0:36:26 And I think that also she is, to give her credit, doing well talking to younger bases.
0:36:33 She’s doing a huge amount of college tours, for instance, and we know that the turnout
0:36:37 in these college towns, especially in conservative states, you know, you hear about a conservative
0:36:40 state and then suddenly there was this boom turnout for a referendum on women’s reproductive
0:36:46 rights.
0:36:47 And it’s like, oh, is there a big college town in there?
0:36:49 So she’s doing that.
0:36:50 And also, I think that she is the best representative of the administration unsurprisingly to talk
0:36:55 about women’s health.
0:36:57 And she’s been doing that really well.
0:36:58 So that’s really been her focus.
0:37:00 But I think that she has to get in on this, especially with her law enforcement background.
0:37:04 She was the top cop, right, in California.
0:37:07 And I think, you know, if we want to get away from, to fund the police, which I wish had
0:37:11 never happened, and move more towards, we’re the party of law and order, and we can make
0:37:16 that claim now, right?
0:37:17 They don’t respect any judicial decisions at this point.
0:37:21 They think the Supreme Court is on tap for them.
0:37:23 You know, Mike Johnson out there saying like, you know, I think they’ll step in, I called
0:37:27 my buddies over there and they’ll do something that she has a real role to play.
0:37:33 The surrogate strategy, it’ll be rolled out as the campaign gets going, but I would love
0:37:38 to see it more.
0:37:39 And I’m hugely enthusiastic about Democrats showing up, especially in conservative media,
0:37:42 because that’s where the persuadable voters are.
0:37:45 They’re not watching MSNBC.
0:37:47 They’re not watching CNN.
0:37:49 So they’re tuning into Vox.
0:37:51 And when Mayor Pete comes on, I still can’t call him Secretary Pete, it just feels unnatural.
0:37:57 When he comes on, he does great.
0:37:58 Yeah, he does great.
0:38:00 So, I’m with you on that.
0:38:02 Same with Governor Newsom, right?
0:38:03 Oh, he’s so charming.
0:38:04 It’s interesting that you said that though.
0:38:05 Oh, he’s so charming.
0:38:06 Yeah.
0:38:07 He’s very likable.
0:38:08 He’s very likable.
0:38:09 I remember 25 years ago, I was in San Francisco and I was thinking, I filled out the paperwork
0:38:13 to run for supervisor and I brought my friend, and we met then, I think, Supervisor Newsom.
0:38:19 And we talked to him for about two minutes, and then he walked away, and then me and my
0:38:23 friend looked at each other and I’m like, “I have no chance if that’s the competition.”
0:38:27 There’s just, my career is over before it started.
0:38:30 You meet that guy and you’re like, “I’m not even sure what he’s saying.
0:38:32 I just know I want him to be, I want to vote for him or give him money.”
0:38:36 What do you make of, you just said something very interesting, that you think there’s more,
0:38:42 that there’s more influence, more moderate or more swingable voters watching Vox.
0:38:47 I can see, I agree, than MSNBC, but you think that more moderates watch Vox and CNN.
0:38:53 Yeah.
0:38:54 Well, the Nielsen data actually bears it out.
0:38:56 So we have more Democrats and more independents who are by nature, they’re persuadables,
0:39:02 right?
0:39:03 Because they’re not going with one way or the other.
0:39:04 I tend to think a social issue usually pushes you into one bucket and now it’s abortion.
0:39:10 But yeah, the numbers bear that out and also, like, CNN’s ratings, and I love a lot of the
0:39:15 people at CNN and I think there’s a lot of really good commentary, but they just don’t
0:39:19 get many viewers technically.
0:39:23 So the percentages of persuadables has to be even less, and obviously they’re going
0:39:28 through a bit of an identity crisis and I think they have some amazing people who are
0:39:32 now anchoring big shows like the Caitlyn Collins’s of the world and Abby Phillip.
0:39:38 But they’re searching for their base and Fox has a conservative base, but we also have
0:39:44 this persuadable base and they’re the people most apt to reach out to me, right?
0:39:49 It will say, you know, I may lean towards Jesse Waters’ perspective or Greg Gutfeld’s
0:39:54 perspective, these people on the five with me, but I really appreciate your fact-based
0:40:00 commentary or that you always come to represent the Democratic side in a reasonable way.
0:40:05 And that’s the key to all of this.
0:40:07 Just be reasonable.
0:40:08 You know, don’t be unhinged and right now the Republicans look unhinged.
0:40:12 So before we cut you loose here, just handicap or give us your best guess or prediction on
0:40:19 what you think going back to Trump happens with sentencing.
0:40:23 So I’m not a lawyer and it’s a tough one.
0:40:27 I’ve tried to ingest as much information about this as possible.
0:40:32 I do come down on the side of that there will be a recommendation for jail time, but I was
0:40:37 listening to Preet Bihar’s podcast and he had a really interesting suggestion for Alvin
0:40:43 Bragg, which was to show the judge how this particular crime had been sentenced the last
0:40:50 five years, for instance, to say, these are the sentences that have been given out before
0:40:54 and then to put it more in Judge Merchan’s court than to make the straight recommendation.
0:41:01 But I don’t expect any serving of time if he’s sentenced to jail and he’s elected.
0:41:09 And then certainly it would be after the election, they’re not going to stop him from running
0:41:13 his campaign, but I think it’s over 50% likelihood and a lot of people who work in the system
0:41:23 and know the players in this really well think that that is the expectation, which is absolutely
0:41:29 unbelievable.
0:41:30 If anything, the Fulton County case was going to be the jail case that we would be hearing
0:41:35 about, but we’re not even going to see that this year.
0:41:37 Sorry.
0:41:38 Well, it feels as if Trump is daring the judge to send him to prison, and I found that it’s
0:41:44 not typically a good strategy for convicted felons.
0:41:47 No, it’s not.
0:41:50 And I don’t think that he’s going to like the result of it.
0:41:53 I mean, it’s a famous germaphobe prison is not nice.
0:41:58 And if you get the best treatment, even if you’re at Danbury playing tennis a couple
0:42:04 times a day.
0:42:05 So I think that he needs to be really careful about what he wishes for and what he thinks
0:42:11 is going to become an electoral advantage.
0:42:13 They clearly think that there’s some possibility that he’s going to be a civil rights leader
0:42:20 in all of this.
0:42:21 And we could spend hours discussing how offensive it is that he thinks that black people are
0:42:26 going to like him more now that this has happened to him, but you know, be careful what you
0:42:32 wish for because the other side of it isn’t just like a night at home alone eating pizza.
0:42:37 It’s being in jail.
0:42:39 Jessica Tarlove is a co-host on the five Fox’s weeknight news program.
0:42:43 She also offers political analysis across the Fox News channel and Fox Business Networks
0:42:48 programming.
0:42:49 Jessica is also the vice president of research and consumer insight for Bustle Digital Group.
0:42:54 She joins us from her home in New York where she is enjoying her maternity leave and has
0:42:59 just welcomed a new seven week old girl.
0:43:02 Congratulations on everything.
0:43:03 Yeah.
0:43:04 Thank you so much.
0:43:05 And thanks for having me.
0:43:07 We’ll be right back.
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0:46:11 Algebra of Happiness.
0:46:12 I went to my first wedding in a long time a few years ago.
0:46:15 I remember I was, I’m now at the point where my friend’s kids are getting married, and
0:46:20 it took me back to this time when I was in my late 20s, early 30s, and your fellow,
0:46:24 you were going, you know, summer was like six weddings, and I had the privilege to give
0:46:30 a bunch of toast at a bunch of different weddings, and I revisited that toast.
0:46:34 And I think it holds the test of time.
0:46:36 And this is the advice I would give to the groom, and that is there are three keys to
0:46:42 a successful relationship.
0:46:44 The first is never let your spouse be hungry or cold.
0:46:48 And everyone would laugh at that and say, “Okay, that’s funny,” but I actually think
0:46:53 that’s true.
0:46:54 I do believe that there is a difference between the gender, and for some reason every woman
0:46:57 I’ve ever hung out with is impossibly cold all of the time, and that the majority of
0:47:03 really big fights when I look back on it, the individual was either very cold or very
0:47:09 hungry.
0:47:10 So, I literally used to have in my trunk a pashmina and protein bars and invest in
0:47:13 dual climate technology.
0:47:15 Never let someone you care about be hungry or cold.
0:47:19 Two, express physical and sexual desire as often as possible, and I know that sounds
0:47:27 very base, but I think the thing that distinguishes you from a friend is sex.
0:47:33 Sex says, “I choose you.”
0:47:36 And I think it is wonderful to be in a relationship with someone, and I encourage people, especially
0:47:41 as they, you know, some of that “lust” wanes, to every time you have physical desire, every
0:47:48 time you feel romantic, every time you want to express affection, which oftentimes I think
0:47:53 is more important than sex, that you do it, and that you have an inclination, especially
0:47:58 as a dude.
0:47:59 I think affection maybe doesn’t come as easily to us, to grab their hand, to express desire.
0:48:05 Like, I just don’t think there’s, let me get in more trouble.
0:48:08 I think women want to be wanted.
0:48:10 I think we all want to be wanted physically.
0:48:12 I think it makes us feel good.
0:48:14 You know, make that person know that you choose them.
0:48:17 You choose them physically, and that you want them.
0:48:20 And then finally, the third thing, put away the scorecard.
0:48:24 And this is the most important thing I have learned in any key relationship, and that
0:48:29 is your natural inclination will be to register the contribution and the reward you’re getting
0:48:35 from your partner, your colleague, your spouse, your boyfriend, you know, whatever it might
0:48:40 be, your coworker, your co-investor.
0:48:43 And here’s the problem.
0:48:45 Sometimes you will inflate your contribution and overlook or not notice their contributions
0:48:49 or minimize theirs.
0:48:51 And if you were stupid like me, you would inject anger and disappointment into the relationship
0:48:55 based on the fact that you didn’t think they were living up to their end of the bargain.
0:48:59 I’m not suggesting you let people walk all over you.
0:49:02 On a regular basis, I shed people, I shed friends.
0:49:06 If I’m not getting something from a relationship or someone I feel, especially professionally,
0:49:10 has not treated me well, I don’t get angry, I just cut them out of my life.
0:49:14 But for the most part, what I do in the majority of my relationships is I ask myself the following
0:49:18 thing.
0:49:20 What kind of son do I want to be?
0:49:22 I used to dwell on the fact that my father wasn’t very involved in my life growing up.
0:49:27 In my mom and dad got divorced and he immediately moved to Ohio.
0:49:31 And I think deep down, I’ve always held him responsible for that and I’ve always been
0:49:34 kind of angry at him and have questioned the extent to which I should be involved in his
0:49:40 life now.
0:49:42 And then I put that bullshit score card aside and I said, okay, what kind of son do I want
0:49:47 to be?
0:49:48 And this is the reality.
0:49:49 I want to be a loving and generous son.
0:49:52 That’s it.
0:49:53 That’s where it stops.
0:49:54 That’s the only question.
0:49:55 And so I try to be that.
0:49:56 I am a loving, generous son.
0:49:58 Am I there for him as much as I was there for my mom who woke me up or who every morning
0:50:03 with a soft voice or stayed up all night telling me math problems because I was so anxious
0:50:07 because I had these, these radically scary nosebleeds for some reason in my teen years.
0:50:13 No, I did make more of an effort with my mom, but, but I am a loving and generous son because
0:50:20 I’ve put the score card away.
0:50:21 Decide what kind of partner you want to be.
0:50:24 Decide what kind of spouse you want to be.
0:50:26 Decide what kind of girlfriend you want to be and just be that person.
0:50:30 Put away the score card.
0:50:32 Never let anyone be cold or hungry.
0:50:34 Express physical desire.
0:50:36 I want and I choose you and put away the scorecard.
0:50:42 This episode was produced by Caroline Shadron.
0:50:44 Jennifer Sanchez is our associate producer and Jew Burroughs is our technical director.
0:50:49 Thank you for listening to the PropG Pod from the Vox Media Podcast Network.
0:50:52 We will catch you on Saturday for No Mercy, No Malice as read by George Hahn.
0:50:57 And please follow our PropG Markets Pod wherever you get your pods for new episodes every Monday
0:51:02 and Thursday.
0:51:03 Our PropG Markets Pod is already the number one pod in business in America.