Welcome. Hey, it's Eric newcomer, I'm
here with dead cat. We've got both Tom and Katie.
We're doing a host only episode. We're gonna start off in disgust
dead cat classic. Yes.
Sort of the real where we really get to fight it out with nobody
interfering and stopping us from just endless endless stream of
take theirs, but oh no, journalism happening.
This is a journalist so we're going to talk about what we'll
get to the market, which I'm excited to talk about in the
second half. But we're going to start off
talking about spotify's decision to keep Joe Rogan on the program
and let Neil Young pull his music and then sort of sub
stack, obviously, close to home for me where I published
newcomer has been in the news since the Washington Post and
the guardian both. Said that you know subjects
making like 2.5 million or some broiling small amount of money
in the scheme of business off, anti-vaxxer sort of
misinformation and so sub stack has been drawn into the Free
Speech fight and you know, sub stack wrote this post.
Basically just anyway, we'll talk about that in a second.
Tom Katie, any initial take on. I mean, the core issue.
I mean, should Joe Rogan be on Spotify, or do you?
Do you have a strong point of view on on the core issue to
start off with? I'd like to stick to the Neil
Young part of it. Well, yeah, I agree.
That's the interesting part like yeah.
Are they losing Crosby? Stills, Nash and Young too
because that's a bigger hit to me, personally, I mean, I like
both catalogs but you know, csny has personal residence to maim,
I grew up listening to my mom was obsessed.
Listen to the deja vu record constant, make sense this all
tracks Tom. Now we do.
My I'm like, yeah. No.
I would heavily heavily inundated by csny and then I saw
Peter. Frampton is also pulling down in
his catalog to, so we're losing the Boomers, but yeah.
Seventies are coming back to attack and Frampton live.
That is too bad weather. It's Frampton over there, still
young. I think the interesting part is
that issues around freedom of expression and when I wouldn't
even call it free speech. Because if you look at the First
Amendment, the way it's written is about whether the government
to prohibit the speech. Of citizens, but I mean freedom
of expression, right? And misinformation these issues
that we would normally look to authorities to resolve or being
resolved in the free market essentially by various actors
deciding, whether or not they want to participate in a
platform rather than any kind of Regulation.
And I think that's what's fascinating to me.
Also, that it's a Swedish company.
You know, like, we're all viewing this through the lens
of. I mean, obviously the first
amendment is misapplied here but The, my understanding and
talking to some folks and I'm not really reporting this.
Just these are casual conversations people in and
around Spotify, is that they actually very strongly believe
in people's, you know, freedom of expression and that is more
important than I would have thought out of a Swedish
company. You would think, you know,
stayed over each. They would love to regulate
these kinds of things, but they're not that bothered from
like, a corporate level. I think by the idea that there
is like, bullshit being traffic to their platforms, I mean, it
is an issue with Rogan Specifically, because he's not
it's not just a platform, right? It's not just Apple podcasts and
distributing it through there. They pay his they'd be you know,
they'd rise checks that you know, he's on there for, he's
their star podcaster that you know your subscription money
goes directly to him. So there is a connection, I'm
not saying that I agree or you know, that's not my stance but
like it isn't purely a platform argument in the same way that I
think a lot of people want to apply it to Facebook or even
apple as like a podcast platform.
I think the Free Speech part of this is sort of a misdirect
right in sub Sachs policy which will come back to.
They were like we will continue to take a strong stance in
defense of free speech because we believe the alternatives are
so much worse and to me that's just like an empty statement
everybody is going to say in the western world that they believe
in free speech to some degree what what they're missing is
really like the case law, right? The sort of, okay, you can't
say, You know, there's fire in a burning building or whatever.
And all of these companies admit that there's some line, most of
them would not host storm front, right?
So the United States as a country believes in free speech,
and we've had sort of a long evolving sort of legal history
to Define what that exactly means and what all the burdens
are. So for these tech companies to
come out and just say, we believe in free speech, often
feels like they've missed just like they're they're behind on
the debate. It's like oh, Find your own free
speech. That that's really not here, or
there. It's how you define all the
narrow points and then it's what is your policy on being anti
vax? Or, you know, is that a red line
or not and what are the lines and how do you do decide what
speech isn't part of this sort of productive debate?
So I just think the statement that your for free speech is
just sort of pompous because it's when you're when you're
also saying quiet, Or quietly we're for free speech.
Except for in the moments were not and we could write our but
we're not going to really talk about it right on sub stack.
A lot of people are dunking on them because they don't allow
pornography. And so it's, you know, you
clearly don't allow free speech in the way of marriage.
You know, America allows pornography and there, it's for
free speech. You clearly have lines about
what you allow and it, you know, on one level of looking at it
seems crazy that you're okay, you're not you're okay with
People leading people to their deaths by arguing that they
shouldn't take the vaccine. I don't really understand.
Thank part of us because there are these really strict Federal
prohibitions on things, like child pornography, for which a
company can genuinely get into trouble, right?
And that is something that would be a disaster for a platform.
Whereas the federal government hasn't really told us where the
lines are around. In your words leading people to
their deaths by spreading this information.
So you can see from right if you were the general counsel you
would say Definitely, no pornography and you know maybe
when the government says that, they'll get there, we'll get in
trouble with this misinformation.
Then we will ban it, right? That's why the free speech thing
is also so frustrating because they're clearly often acting out
of their own economic interests, and have these perogative 's in
terms of what the laws are and what they might get Super Saiyan
4, but they make it seem like it's some principled stance
totally detach from all these economic decisions.
So you're giving this sort of high-faluting, I mean these
companies are basically run by Jerry from Succession.
But what are they going to? I mean, yeah, the honest answer
is like we pay Joe Rogan's. You know, we signed Joe Rogan's
paychecks and he is a huge moneymaker for us.
Therefore, the financial loss that we would take by kicking
Rogan off. The platform is far worse than
losing Neil Young's catalog like 1970s onwards, right?
So it gets different gets more interesting.
If a contemporary artist leaves it gets more interesting if
Beyonce or Taylor Swift is like I'm out.
This is ridiculous. Yeah, no.
Hugely. So, I just want to say on the
core issue, I think Joe Rogan should be allowed to be on
Spotify, they should pay him. I wouldn't pull my music from
Spotify. We're hosted on, WE publish on
Spotify, by the way, so if you wanted to take a stance you can
put we're on Spotify as a platform.
We get no money from right out of fry whereas you know all of
these artists are getting residuals for.
I guess if I was doing executive we're again Spotify I would have
said oh Rogue. And should be are like billboard
artist. So we're going to pay a ton of
money to come on. They knew what they were getting
into. I mean in so much as they even
pulled some of his older episodes because they're like,
all right Joe, let's give you a clean slate.
You're on Spotify now. Let's see what you give us and
you know probably 85 to 90 percent of the time, they're
completely fine. You know.
It's like when he interviews carrot-top, that's not going to
piss anybody off. I mean I haven't really well.
I don't know about that. Well, yeah, actually watch part
of that interview. Crimes against humor, he's a
dumb guy who talks about MMA like and sort of admits that,
right? I mean, regular guy, he's
already most popular podcast or by a long shot and there's a
reason for it. I just think it's much more
pernicious. If some guys like, I'm a doctor,
here's what you should believe about the vaccine while the tech
platform is providing no rebuttal or like effort to to
say, well, the scientific consensus doesn't agree.
But for Joe Rogan, where it's like, this is some random guy
who has it. Minions and sort of has a
popular show. Are people really that misled
that they're hearing from some dumb guy who interviews people.
I'm sure they have a line with him.
Why is Joe Rogan the most popular podcast or Tom because
he speaks in a you know kind of a approachable affable Cadence
he kind of sees always thinking out loud and just sort of
whatever bubbles up there. He seems like open to it and
then very lightly debates it to himself.
And then moves on also, you know, he's an MMA guy and
there's like no filter. I mean It's all right.
Yeah, I have watched a number of his interviews.
I think they're very watchable and right and entertaining.
And yeah, yeah. I mean it's in the same way that
people in Los Angeles have been kind of like ambiently absorbing
Ryan Seacrest for like 20 years even though they don't really
know why and they don't really have strong feelings about him,
he's just sort of there and I think Rogen's the same thing.
It's he's not a hard-hitting interview, but I don't know if
it's also incredibly long. Each episode is like three or
four hours. H which is like you know
definitely they're probably you know spot at spotify's getting
their money's worth in terms of like minutes from from Rogan.
But it's a huge show and I think it's even grown as he's joined
Spotify. Like this is worked for them.
This isn't like buying something at its peak and then slowly
declining. Like they got, they got a hot
and podcasts, there was actually a good story that Lucas shot at
Bloomberg. Did a couple weeks ago saying
like podcasting as a medium is really hard up on trying to get
Hit shows, there aren't that many things that kind of Bubble
Up and become incredibly, you know, watched or listened to
shows. And so the fact that they have
like a true genuine star, they're like there.
It's going to be hard for them to block away from that given
how much of their, you know, their strategy is about
podcasting right now and there is something annoying about
liberals and the left that they want to try and make spotify's
entire brand about Joe Rogan, when he's one of many people
that they pay money for. And Like appeals to a certain
audience and their, I don't know, it can be a little
Annoying. Obviously there's something very
free-market about people, pulling their content and
protesting and you can capitalism to get that what they
want. And so I'm sympathetic to that.
But then there's also just sort of like a sensory as sort of
attitude where it's like just whining about everything that
people like is that said, there's clearly a lion for
Spotify. I mean if he were to go out
there and say things Better unambiguously racist.
They would pull him, right? I do you think I got spotify's
line? I guess.
Racist is sort of, you know, things get a little muddy there,
but if you were to, I mean, I guess there are and First
Amendment violations or not violations.
But if he were to Advocate violence, well yeah, anything
anything that he could be, that would bring about a criminal
charge, I think is a Ryan. Most companies would tell me
anything. We saw with your mom, you know,
where he was attacked on the China stuff, anything where
Republicans and Democrats have To say he's terrible.
That's, that's the thing you're going to get God.
I don't know if you bring those constituencies together.
Like, I think it's great. That Republicans and Democrats
can agree. That genocide has bad eyes and
she tripped over that line. I'm trying to imagine a scenario
in which Joe Rogan started talking about the uyghurs.
He would just be very off-brand for him.
But you know if you were out there to say like you know,
caring about the uyghurs genocide is below my line, he'd
probably get a Talking to. I don't think, I don't think
your mom canceled. Yeah, I don't know.
Yeah, that's not looking. No, I think it would be like,
weighing in on something like the depth charge Floyd Wright in
a way that people thought yes, like wildly her.
If exactly. Yeah.
Right. That's, that's a good one.
Yes. If at the height of the George
Floyd protest, he was like, you know, guy got it coming or
anything, even close to that. Then I think you would be in a
position or Spotify would be in a position where they were,
like, that's something we don't want to be, you know, assigning
her name to at all which again. I mean, that's not really free
speech. So there's obviously a
squishiness to their statement that they're even trying to
stand behind even if it's irrelevant and we saw this
issue, come up with Twitter when Trump was still on Twitter.
You know, they had all sorts of reasons why they said it was
totally fine to have them on. And then it wasn't until after
you know many, many, many people violently attacked Congress that
they were like, okay, well actually actually think maybe
not anymore. I mean, so I mean at the high
levels, I doubt, Neil Young as making all that much from spot.
If I these rights, but I'm trying to think like, yeah,
Katie you brought it, Beyonce Taylor Swift.
I think, Taylor for a time has pulled her music from Spotify.
Right. I wish you had a whole huge
thing but now she's like all in there's been a right now.
That benefits you a lot Eric? Yeah I'm a top one percent I
think yeah I'm making my way through read.
It's taken me months but you know as I like this in a little
bit and be like I have to remember the song and then I Get
caught. We're the the tellers version.
It was version, Taylor's Rich. Oh yeah, I know, at least which
version to listen to. Yeah, I'm trying to think who
would take for me if they got pulled, it would be more, just
like individual songs, you know? Like if I couldn't listen to, I
don't know. C&C Music, Factory everybody
dance now, right? If all of the Consortium of your
favorite artists took only, they're like top two hits off.
Yeah, it has to be like deep cuts only.
I couldn't do it. It oh well soon, see Music
Factory deep Cuts. I don't think they had any.
Yeah, I would I can't think of a second song by them but yes, I
don't, I don't even think there is somebody who have paid all
their music. I'm actually an apple music
person stupidly, so I'm not even really relevant to this
discussion. When I need to dust off my CDs,
which I'm looking at my kajillion CD.
I actually this this isn't. There's no segue here.
It's just something actually wanted to bring it to you
specifically. Katie.
There is a Spotify. I have been obsessed with over
the last week, it's called the 60 songs that explain the 90s,
and it's this music critic who works for the ringer who goes
song by song and explains why each song like it was emblematic
of the ninth. When was the last song he chose
I'm behind. I just found out about this
thing like sugar but what was the last episode you listen to
what was the song? I listen to A Tribe Called
Quest. Absolutely 100%. 100% that was
like yeah suddenly Hip-hop is okay for everyone, right?
We can all like it and it's good and it's happy.
It was so happy, it was like, it was right.
But it's also stupid and kind of profane.
Best episodes have been for rap, took a turn.
Anyway. All right.
Funs over? Yeah, sorry I think this is
essential listening, but yeah, sure.
They want to make a point on I know I've talked about.
So I mean I'm Sub-sect. So I care and I just thought
that the statement they put out was a little was just sort of
naive to the whole debate around.
Moderation on social media platforms that's been happening.
They like they didn't like to me, the key distinction is what
you allow on your platform versus what you're Distributing.
Right? What your so what drives your
business, right? What that, that matters but I'm
saying in terms of ethically, ethically, like there's a It's
between hosting something and pumping, something out to a
bunch of people. And right now, sub stack just
relies on their Publishers, people like me to build an
audience. And so, if they host bad stuff,
it doesn't bother me that much, right?
Because it's like those people had that audience, they probably
have it on some other on a WordPress site, it doesn't
matter that much. That it's unsub stack, but if
sub stack ever succeeds it building distribution, actually
building audience, then the position will matter and right.
They they just failed. Basically.
It building distribution, right? They launched a reader app.
If you're a writer on subsequent, they show you
metrics. The try to emphasize the extent
to which they're helping to build your audience, but they're
not, everybody knows a not really building audience right
now. So there's sort of a okay?
Because we fail to building audience, no one's really going
to complain that we're hosting people.
I mean, people are complaining, but it's not as a sort of
punishing critique. But obviously if it becomes the
case that they're driving a huge, Audience to anti-vaxxers
in are responsible for those that that was the critique of
Facebook. That Facebook is finally started
to recognize then it becomes more of an issue.
And so I just feel like that they put out such an
unsophisticated statement was really annoying because it's
like this has been, well, discussed.
There are lots of like experts on it and to just be like, oh
no, we love Free Speech, just makes him seem sort of dumb.
I mean, I like the people over there, but I'm like, come on.
It's like if your whole point. The were a nuanced platform that
hosts sophisticated debate, your own statement about it should
like indicate a level of sophistication.
I agree. But I think Jerry from
succession. Probably had a lot of hand in
that that it's just pure cynical right?
That it's that it's like, okay. People like I mean, that's all
we, that's I guess what I'm trying to say, people who are
not following this closely like how Free Speech sounds.
So if you make your point Free Speech, a certain segment of
people will be like great but like that's Not a really
sophisticated position. And so either, this is extremely
cynical in that they don't want actually weigh in to the sort of
thorny actual smart discussion. And of course, they don't want
to this, that sucks. They don't want to be involved
in, I mean, old into a debate in this paragraph would make your
blood boil. They're like, in a pernicious
cycle, these Dynamics in turn. Give each group license to
point. They're just sort of.
He's saying how those thoughts today.
Yeah, they're both sides. Here, it's the It's like, I'm
just like, good bad. What's the difference?
You know, it's just like classic like, oh my God.
Just like total both sides doing.
It's just like the dumbest sort of shits.
Why don't you just have a mandatory?
Why don't they just have mandatory vaccinations for sub
stack? That would be so funny like,
yeah, this is ended there. Just like we have 100%
vaccination everyone that rights results so just be a good troll,
you know, it just like totally out of nowhere.
We're gonna go right in the oven on, you know, mandatory Evac
Splat forms. Be my guest.
You know do stuff. I oh maybe they're vax.
Maybe they're not. You know she drivers beware I
don't want to get involved in this at all.
This sucks for them isn't how experienced an unsub stack.
Yes. Yes I'll be, I mean, he's
terrible. Yeah.
He's certainly the extreme of that.
I'm sure they'd rather him not be on there but you know it's
just not like you said the numbers are very large audience.
I mean, people people say that he makes like Dollars a year, I
think I saw. I'm not that he's he's kicked
off Twitter, right? I think so.
I think his stick, that's what I haven't really kept up with
who's been banned from drought in the New York Times, alumni
group. I mean, this is kitchen that
what I'm This that's slack. Yeah this fits into I mean the
fact that Twitter is basically doing distribution for sub
stack, make sub Stacks editorial challenge much easier because
the people driving audience to sub-sect are these social media
companies which have had to think about this for a while and
have stricter rules, whereas sub stack, which is just a like
basically a hosting platform and sort of a sort of tool for
writers can sort. Of play naive for the time being
but obviously, if they ever succeed in building the business
they aspire to then they're going to have to grow up and
have a more sophisticated point of view.
What would your ideal statement be from them, though?
Other than, like, not as not as simple, my ideal statement would
be, you know, inherently, we have to draw lines and we think
we should have a pretty permissive attitude towards
hosting people. Personally, we find anti-vaccine
At abhorrent. And we understand that as we
grow, we're going to try and direct people to sub Stacks that
we think are interesting on a whole range of subjective
factors like their ability to build audience in our own
sensibility and brand. And we certainly don't want to
drive audience to things that we think are morally reprehensible
like anti-vaccine statement. So while we're happy to let a
range of debate, we believe in free debate, we don't intend to
drive audience, right to the These people Beyond Today to
thinking attract platform, that drives audience less.
So is one that is an economic vehicle for just like draw a
strong distinction between the different types of that,
understand that people are have different opinions about when
you're driving attention versus when you're just hosting and
make your position clear on both fronts.
I mean, I was surprised that Casey noon on platformer sort of
applauded sub stack for having a very Here position, which is
like, we like free speech. I thought their position was
simplistic. I also just don't think Clarity
is the number one value. I think not promoting and
distribute not drawing new attention to anti-vaxxer
terrible speech. The outcomes matter more than
sort of the tightness and Clarity of the the position I
got to say, the only thing that's drawn my attention to the
anti-vaccine people on sub, stack have been people learning
about the anti-vaccine total unsub's.
I mean that I've never would have even known that.
Alex Barron sand has a sub stack or the, you know, the fact that
there are two point five million dollars worth of value, being
created from from these writers. So yeah, I don't know D
platform, those people, they drove my attention.
I mean, the other boy people made about sub stack is just,
you know, it's sort of so people's opinions grow by being
indirect like confrontation with each other, but subsets not
doing anything to like surface rebuttals to these anti.
X sub Stacks to those people. It's not like, oh, you're
getting anti-vaxxer sub stack. Here's like the other side of it
and why you should listen to that name though.
I mean, like that, that was like the suggestion for Facebook for
a while to be like, you may be interested in another side of
the statement. It's like, come on the people
that are DieHard anti-vaxxers or any of the misinformation on
Facebook. They're not going to be swayed
because there was a little like suggestion box saying like you
might want to read Vox for another perspective.
I really think that's what You want there at the bottom?
Alex Berenson, someone who just got through, you know, hearing
that like mRNA is gene therapy and, you know, you're going to
die of cancer in the next six to eight weeks being like, you
know, Eric Topol from the Scripps Institute, has a
different view on this. There are core product failures
at the heart of a lot of this, right?
Like some crazy guy comes up to you on the street and like
starts ranting about ants, you've acts and you like, see
they're sort of hiss, they're troubled.
They look they're a lot of Things off the internet that you
can receive about someone to understand them and assess them
that the internet obscures, in that these platforms, help
people hide. And by not like, if you're
experiencing that, no one sort of take seriously in the
mainstream sort of medical authorities or anything.
The failure of social media platforms, to let people really
understand this person and have any sort of history on them and
just get this sort of snapshot window into them.
I do think it's their design choices about how social media
platforms are built and sort of the sort of total abandonment of
any sort of credentialism or yeah, I guess I mean like at the
earliest days of the fake news debate.
Remember the issue wasn't so much that there was an accurate
information but that it was being presented as coming from
an authoritative Source, right? Member like the pope endorse
Trump was written on some site. That was like the the Colorado
registry. Or something like that and and
you know the argument there which is what I'm more buys like
oh there could be well-meaning people that for some reason
think that you total asset on this site is is legitimate here.
And if that's the only news they read that day, then they could
think that. You just, you know what you're
getting with sub stack. If you're if you're signing up
to read, sometimes I agree with that statement so yeah, I don't
know, I don't know. Do you want to join them over to
the markets? You agree that this sort of
distribution versus hosting? Yeah.
Does think I should get? Yeah, I think it's a slightly
different debate. I think when it becomes to
distribution substract has more responsibility than simply
being, you know, an economic platform or, or, you know, like
basically a payment platform and web hosting service.
Well, stripe is a payment, a facilitator of using Straight.
You know, there? So that's interesting though,
right? I mean, like, that gets to like
the real, like the, you know, the backbone of the internet
when people like that start making distinctions and I know
Christ and that would be, that would be pretty bad, right?
I do think it's like a Scale, you want the infrastructure
layer to be the least restrictive in the distribution
layer to be the most that makes sense that's like TV shows in
the past. You know you choose your brand,
you play TV, you decide what's on the show?
That makes sense to me. Right?
Look, I'm on the more firm side of just not believing that any
of these people should be pulled down under under almost any
really? That's yeah, yeah.
I might just like this people pretend it's so hard to say
what's bad and what's good? It's like you read this fucking
terrible thing. You talk to a bunch of X.
I understand that there was an Impulse to like sensor the lab
leak Theory which I believe I was very suspicious of the
origins of the coronavirus. I was listening to Steve
bannon's podcast but I was able to seek it out and find it on
whatever like platform it was on because you're still allowed to
have like, meta conversations about like, oh, there are people
who believe that, you know what I mean?
It's so that. So the interesting thing is that
for broadcasters TV, L, there are certain kinds of things,
they just can't put out to the public because they don't hit a
standard. So platforms are relatively new
in the history of like news distribution information,
distribution, do you think that there should be a standard
imposed on platforms? Akin to a broadcast standard.
And if not why, why not? Just because it's user-generated
for things like, trending topics distribution, right?
For things were like, if you're on the Book profile very low
standard. But if it's being pumped into
the feed and being, you know, given virality, then I think
there should be a more similar to a broadcast standard.
And the other thing is, if you look at Australia, they did just
post laws about distribution of certain kinds of harmful
information. And it means that Publishers in,
not just the platforms, but Publishers in Australia.
So if you're a newspaper and you have a comment section and, you
know, inappropriate under this law, On 10 is post in the
comment section. Well, the newspaper could have a
legal issue. And so I think that there are
going to be countries that take a firmer hand in terms of, you
know, the distribution of content that they think that's
harmful to society. So I mean it's hard for me to
imagine that Australia goes there but the EU doesn't go
there. And then eventually, I mean
other countries will have to consider it and they'll be a big
dividing line between the countries that do in countries
that don't seem like they're. I want free debate.
On the internet. Like I don't want to be in a
case where you can't even make an argument and publish it
somewhere. It's just, I want people who are
just like, so I want, you know, if you're really seeking
something out, you're arguing something, there are more ways
to share, you know, you can text people things, you can have
group there, more ways to share your ideas, now across the world
than ever before. I just don't think you have the
right, just because an idea is like catchy and people reading
it sort of believe it, without any other information to get it
distributed, widely beyond your In audience.
I guess it's not really about a matter of right or not.
Right? I mean obviously we're not even
talking constitutionally, right? It's just like human law or
civilized, you know, right society that people should say
things that you disagree with and have harmful effects because
they are, you know, getting wide distribution for it.
I, I guess it's just hard for me to get past the like, what is
the n stand? What did people ultimately want?
Because what they're mad about is that there's a lot of
anti-vaxxers, right? That there's a lot of people.
Out there have the decided one will reason or another, they
don't want to get this vaccine and that is prolonged.
The suffering. That we have all been
experiencing for the last couple of years.
I don't think it's going to make a huge difference.
If sub stack, kicked off the anti-vaxxers of Joe Rogan was D.
Platformed in terms of the number of people.
I think in the countries where they do have stricter laws about
distribution, there are still huge swaths of people that are
protesting locked down there. Anti-vaxxers that are all these
things. What I'm about to say, should be
the refrain of every Conversation like this Fox is
still worse, that's a problem, right?
As long as Fox is pumping out with an editorial agenda stuff.
That's as bad or worse than anything.
You're going to find that were complaining about on the
Internet. It's sort of a dumb argument
because you have this super terrible broadcaster.
That's just, you know, intentionally delivering the
message to, you know, the Republican Party base and Sprite
and they're theoretically regulated by, you know, The
broadcast standards and it's still getting out there, right?
Same way, and I'm not calling for the government, really, to,
like, crack down more. I'm just saying, in sort of the
elite discourse, sort of what what we should ask for in sort
of these policy positions. And how well-intentioned people
should think about sort of correctly moderating?
Yeah, yeah, the market you want to go to the market?
Let's go to the market what the song is called unfun.
Mi glad ya Bitcoin unhappy is it down right now?
I mean it's down overall but I don't know today whether it's
our who cares? It's going to come out a couple
days from now. I mean Robin Hood is what it's
ten. Ten point five billion market
cap right now II keep taking a Victory lap because rivi and
that electric car company. I called a Horseman of the
Apocalypse is way below its IPO price.
It's now only worth a self-driven horse thief billion
dollars as like no Revenue basically, it's worth He billion
dollars. So to me, plenty of air, I mean
test a respek, right? No.
I think it was a traditional IPO Tesla is still an eight hundred
billion dollars. I'm pulling it up, eight hundred
thirty, five billion dollar company and what Ford is
probably what a tenth of that. What is it?
Yeah, for it is is 77 billion dollar company.
So I do think there is a plenty of room to come out, but we saw
lots of great companies like snowflake.
You know, a lot of sad Zoom is way down.
I think, you know, companies that just had high Revenue
multiples, you know, corrected to sort of like pre-pandemic
levels, right? Netflix is down below.
Its pre-pandemic level. Then they were one of the
winners and the first year or two.
So, yeah, it feels like we've kind of reset everything back to
2020. I mean, I, we need a bear
Market. I mean, they're, I mean, they're
clearly companies that are ridiculous, right?
And because there's, A set of companies.
I think a lot of the EV company. I mean, I'm glad electric
vehicles exist, but the multiples that they're trading
at the absurdity of some, I mean, I would say on-demand sort
of the go Puffs, the world. They have the ability of like,
absurd businesses to do. So, well has meant that even the
sort of the normal software businesses then, got insane
multiples. And so now we've seen
everything. Correct, but we have, we're not
seeing like the truly ludicrous business.
We haven't seen like bankruptcy attorney.
Thing I don't and I'll say that, I just want to the SNP, it's
still up more than 15 percent from a year ago, right?
So even though it's come down a lot, like, overall, the market
is up you on this year, just over the last 28 days.
It's down a lot. It's down like nine percent.
But if you look at the chart for a year it's not like we're in.
It's not like we are in huge trouble.
I say that. Like we're going to go to a bear
Market. Yeah well yeah, I mean.
It's really do you think we recovered?
You think this is just a teaser and we're going to have real
real paint so I don't two things.
I don't make predictions that you like as reporters we're just
reporters are generally about it predictions and we're pretty
much all those wrongs. I don't like to do that.
And the other thing is they think that the market and the
real economy are two different things.
And so I'm I feel like the markets kind of an indicator of
what like kind of a subset of the country.
Is doing, you know, it's like, they're all sorts of forces that
have kind of made that sharp decoupling happen, right?
So, like high-speed trading, Etc, you know, all sorts of
things but I think that if you look at the economy, that is
something that people might want to pay more attention to if
they're trying to figure out whether or not we're going to go
into a recession and I'm going to hitters like unemployment
number of people leaving the workforce like consumer, you
know, consumer activity and that is I think Start is what
starting to get wobbly in a way that I find possibly more
interesting, but that's just what the other employment rate
is low. I watched Jerome, Powell the Fed
chair. Give his sort of talk on what
they plan to do. It's super funny to listen to
not, you know, not being sort of a Fed reporter.
You know, they speak in their own sort of little Arcane
language and they don't want to give anything away but I mean,
basically it was very clear that He called like the stock market
like a market, you know what I mean?
It was very clear that they're not orienting around the stock
market, that fundamentally the mandates are unemployment and
inflation. And they only really care about
the stock market to the degree to, which it would derail, you
know, cause people, you know, the stock market plunging could
cause people to lose their jobs and I think that's right.
It would have been funnier if he was just like, fuck the stock
market, but but yeah, there is a degree.
Like you're saying that the stock market is not the economy.
And it's healthy for, I mean, you talk to most investors Savvy
ones and they think we needed a correction that the valuations
even in great companies, where a little were unsustainable, but
where it goes from here. Yeah, I think we're all set on
time when interest rates are so low that any investment, no
matter how risky seems totally fine, especially if you're using
borrowed money to do it, it's just everything.
Kind of felt free and easy, and if inflation Rises and interest
rates, rise, Won't be the case anymore.
So I think that again like I'm not a predictor but I am less
concerned about what's happening in the stock market.
And I'm more interested in kind of what happens with interest
rates. And then there's all this, like,
weird stuff happening with Supply chains that it's sort of,
it's sort of interesting, but people not being able to get
stuff people, nothing to move things around the world.
I have no idea how that will affect the economy, but it is
fairly new. I mean, for decades, we ran on
this weird just-in-time Manufacturing.
Fracturing economy for almost every product that suddenly we
can't and that's going to create cost and companies to write
right? Well, there's so many pieces
that are like to some degree, a bad supply chain.
Problem could be seen as reassuring, because it means
fundamental and flick that sort of the inflationary forces are
the FED aren't the real problem, but it's actually supply chain
problem. So there's a constant sort of
what's good is bad and bad is good, right?
So that's why, you know, people like David Sachs who I saw
tweeted out and I don't follow him but I said this came to me a
different way that like, you know, inflation was the result
of government, you know, stimulus checks that were given
out to families that that is directly the cause of inflation.
And we did this to ourselves I think was his point there, which
of course, I mean, there is a possibility.
Well sure. I mean, look, I have not read a
single good but one that I felt confident about explanation that
holistically explained inflation.
I think the I think the checks the people were great.
I mean I Believe in them. But yeah, I mean putting
government money behind a roaring economy can cause
inflation. I mean, yeah, I think we've done
that before. We put a lot of government money
behind, like all of Wall Street, right order to recover faster,
the try this, and it didn't, it didn't lead to Runaway inflation
one and it also did not lead to like any Equitable outcomes
whatsoever. So, yeah, that's like, well,
let's take the money and see what happens.
We put in the hands of the American people.
Everybody goes out and buys a used car.
Awesome. Like we have now have a used car
shortage and inflation in the used car market.
But you know, people is there's not going to be a perfect
solution, but I do think it was possibly worth trying the
alternative rather than putting the million dollars behind 10
rodeo bull put a good jillion dollars behind like, just some
people, well, I think that the challenge we face right now,
right there in The Savvy, investing world, the line is
always, you know, buy the rumor sell the news right.
When you think something's going to happen, you make the trade
and then when they actually announced it, send the market
the other way, when Regular Joe consumer is reacting, right?
So, right now, people sort of the inverse people are selling
shares ahead of fed raising interest rates when the FED
raises interest rates. Will the markets actually, you
know, how will the markets react will it get worse or if they
already priced in those decisions, right?
That sort of the unknowable thing.
What's your sense by the way? On the impact of The crash in
the crypto Market on. I mean, water, a cup crypto
Market, what at its peak with something like three trillion
dollars and now mean it's like, it's 1.5.
So Paul Krugman just did a column and I like Paul Krugman,
I don't know. Yeah.
I really enjoy his writing and, you know, he was sort of
comparing it to like a past crisis was a credit default
swaps, or I forget what, and it was just like a sort of a dumb
call him that he acknowledged in some ways, just because the
Bitcoin Market is just not large enough to Cabbage side some sort
of shock. Where's the only reason that, I
actually think there's some Merit to the crashing of the
crypto, you know, like coin values.
And any of those things is going to have impact is.
I think they're, I understand that.
Like it's a small number of people that control a huge
percentage of all of the existing, you know, coins and
ftes or anything and that space. But anecdotally talking to a lot
of people in the ride-sharing, you know, the gig economy space.
There's a lot of people that put their money into crypto I think
for a time that was that was Suggested as a smart, hold and
investment value. Sorry, hold a value or
investment. And, you know, with and I don't
know specifically what coins they always put their money
into, but there will be impact on regular folk, right.
And I mean some ways, the regular people are the ones who
eat it because they come in right later, but I just don't
think it's enough. It's not enough to go puff
drivers talking to you would put who put her like a bunch of her
savings into some like Shiba Inu NACA, right?
Yeah, like that. A terrible idea, of course, I
didn't say that to her but like, no.
So don't worry. Knock off the shiba inu.
I think, raises a no, no, it wasn't.
It was an on Sheba. It was like, yeah, yeah, yeah.
Which is like, that might be the most volatile pump-and-dump of
them all, you know, just it is a little bit like all of the IPOs
of the 90s where you had completely untested companies
pumped up by Silicon Valley, money hitting the public markets
and then investors retail investors getting Completely
screwed by this. Even as like institutional
investors were like, actually we're probably not going to buy
these things anymore, it isn't that one of the tenants of why
web three or crypto door going to call?
It is good. Is because it like offers access
to you know unaccredited investors to put money into a
potentially. It does in a universe created
and controlled by a few rich people.
Yeah. Right, I really you guys are
saying, but if the point is the stock market is not the economy.
Bitcoin is not anything. Like I just think.
It's just like, we do. You still think that like the
actions Financial actions of companies and real consumers,
probably is them. I mean, the two most important
inputs in the real economy, right?
That's it. I'm sure we are about to be
flooded with stories of people who lost everything.
Sure, on first, the coins, cash is on there.
Any parties, you know, being scammed through enough to use
all of that stuff. And yeah, I guess yeah.
Like as a smart reader, we should remind ourselves that
isn't necessarily the economy, but that is, I mean these are
people's lives. I do think there's some
Innovation innovation. In crypto, the speculation is
fueling super smart people to try to invent a use case and so
I don't think the government should stop people.
I don't, I don't think the government should have stopped
people. And so, then it's part of the
free market. And that's right.
Sort of buyer, beware, and they're sort of that fringy
behavior. We saw like in the housing
market in 2007 and six as well, you know, so like every year,
the real problem Market, the government back something up or
whatever. But like Mark is apperance
always And of the outer reaches of it, where it gets the most
dangerous. That's almost where you see the
most risky consumer investment Behavior.
So like whether it was super speculative stocks, whether it
was insane, housing speculation, and now, if it's crypto, that
will be this booms sort of defining asset class.
But that doesn't mean that there were no other contributing
factors to the room or that. The bust my Chicken Little case
is not. Cryptic it would just be Index
funds are driving a ton of money blindly into stocks, like if
Tesla was to fall to Ford's valuation, it would lose more
than 700 billion dollars in market cap.
And it is a huge holding and most of the major index funds.
So I think the much more risky scenario where the economy is
impacted by the stock market is people lose face, faith and
Tesla. Tesla is basically propped up
most of this back Market the hole.
Sort of belief system around how these companies are valued
collapses. That has a major impact on index
funds that has a real impact on the economy.
And to me sort of the index funds support of Tesla.
Just proportional to the amount that retail wants to drive it up
is much more worrying than the entire crypto Market at.
That's my point of view. Yeah, I guess I think see the
crypto Market is like kind of Fringe behavior and maybe my
analogy. Maybe my comparisons are totally
wrong because like housing, And stocks were both things that
both institutional investors in large swaths, looked at invested
in and supported. And then later the highest risk
retail investors. And then with crypto, you did
not have like sort of broad by in.
It's truly, truly a kind of like this fringy Fringe a thing.
Yeah, it's not foundational to the economy in the world real
estate. Or now, you know, mutual funds
or index funds. I take it back and it's very
Global. It's it wouldn't necessarily
have America specific my point with bringing it up is just
that, you know, the egalitarian nature of crypto has taken in a
huge amount of people that otherwise would have been barred
from extremely volatile stocks. And I'm just, you will see a lot
more people losing their shirts than it would have happened, had
they not been. So I lost some Bitcoin so don't
do that. My whole portfolio just has to
continue to be worth more than like, In dollars and I'm doing.
Okay. Yeah, to be clear.
I am very small percentage of my assets and crypto.
Most in index funds, I'm pretty stressed by the rising interest
rates, because I'm probably going to have to refinance
actually think that in July a mortgage Bond marker are the
most important thing to watch still.
I'm sure a ton of people are on adjustable-rate mortgages to
that will at some point be kicking into an awful.
You know, an awful rate and the ability to refinance is
basically not there if the interest rates are higher.
So, It's it's pretty heroin. Yeah.
Yes, we'll do a whole episode. Just on how terrifying is to own
a home. It will just be Tom.
Yeah, I figure I could patch it and I can pack it.
I'll patch on my mortgage broker and you guys can see me cry live
on air as he tells me what my race.
Can it be owning a home is supposed to be smart in a period
of high inflation? I guess your issue is that
you're mostly financed. You are and if you only read
yeah. Yes.
If you are, you know stuck into a 30-year fixed-rate if you're
like me, and you're going to have to refinance when
Conversion goes. What's what decides?
Whether you're a variable or fixed?
Well, it's just a teaser rate. I mean, you can just buy into a
rate that's like, you know, first five years two and a half
percent, then it kicks up into like three at your shoes when
you talk to the bank. Yeah.
But you can you can get a fixed
rate at the beginning. It's like a church or hi.
Rick. It's there and you have to
qualify for it. Usually have some sort of income
qualification. Then you also need to be able to
put down so much on the house to get a fixed rate and often times
with adjustable rate mortgages Has one of the reasons they at
least used to entrap people is that you did not need as much
Financial Security to get one because you could make the
payments on the lower rate, right?
But then when the rate change dramatically, those people are
really vulnerable, is the prospect of a downturn.
Something that is being discussed with any seriousness
in the tech industry. And is it something that is
having any kind of ripple effect?
So I've been talking To a lot of investors Venture capitalists
and some of the crossover people.
I mean I think right now in Silicon Valley were still in the
price adjustment period. It's not like Panic.
It's not like oh, I'm worried Mike.
This company is about to go bankrupt.
Like so many companies raised so much more money right now.
It's just how do we get private companies to match?
You know, the public markets, who reorient strategy, I think
if you know the stock market fell much more be a different
conversation but right now it's more price adjustment, maybe
some companies, wait, you know, we've seen companies raise two
or three times in a single year, right?
So some of these companies now could just sit out 2022 and say,
okay? Actually we're not fundraising
this year and funds that had been raising from their LPS
every two years might Deploy Capital more slowly to make sure
that they have more proof points so that they can raise, you
know. So, maybe we'll see sort of a
Slowdown in the Euphoria. But I don't see sort of, you
know, we need like Peloton or Robin Hood or something, to go
bankrupt, or like something like that, where these stocks are
falling. And then there's no bottom that
I think would be, sort of, totally a game changer.
And I think talking to people right now, the conversations are
much more sass multiples were at Sex on the private markets and
now they're coming back down to earth.
And, you know, I think that's the type of conversation at the
moment and not sort of existential dread.
What did you think? I thought the information had an
interesting story about tiger glow.
Yeah, super jealous. I'd heard about block Damon.
I mean, basically Tiger Tiger Global, you know?
And they also said, alky on had these agreements with unicorn
startups to invest. And then when the market
corrected, they said, oh, actually, we want About tweak
your valuation down 20%, or whatever.
Because of the correction, you know, basically clawed back
their terms sheets to like, revalue the company's right.
Which is very hedge fund behavior and not very sort of
Silicon Valley, good standing, VC Behavior.
But my question about that was, you know, like the angle for
that sort of a story is like, you know, the froth is off and
you know evaluations are coming back down to Earth.
But these are all companies that still raised at higher
valuations their last run around like we're Talking about flat
rounds or down rounds from just like maybe not quite as frothy,
which sure that is Meaningful, but it's not totally thing.
Is that it? That's why I'm saying it's much
more about. Where did the hedge funds?
Say, in Silicon Valley in 2022, like he's tiger going to shift
its strategy to be much more public focus and pull back on
private investing. Do they still seem?
I mean, the Venture Capital firms.
Want tiger to look like a bad actor here, right?
I mean, there's a strong. Incentive to say tiger is gonna
play by different rules. Don't trust them because in the
bad times they're going to screw you.
But like your point. Exactly.
I mean, these are questions about tiger.
That's not a question about like the overall sort of Market or
the sustainability of technology companies.
You know, it's still about individual players and not sort
of a huge risk. I don't know.
Do you think it's going to get much worse?
I don't know II mean. I mean again I cover probably
one of the stranger parts of right.
Going on right now though. Those companies I mean they
should eat it in bed in a sort of high interest rate like that.
That's a bad time to be sort of these costly has a ton of money
and they're reliant on a gig labor force.
That is pretty volatile and has been throughout the pandemic.
So I'm I'm always worried about what want worry babies in the
right word but like, you know, I think you should be wary of
where any of those companies go and like what trend they're
drafting off of in order to justify, you know the valuations
are going for but you know, dope of is a company that also It's
to go public this year. So like, they're going to really
test this, what a good year. I mean II.
Yeah, I definitely think we're going to see fewer.
IPOs people are going to try and hold off.
I was back Market as so weekend, now, that if they can't get out
in a traditional IPO, what happens, right?
Well, yeah, I mean, I guess you look to the private markets
again which, you know, they're not dry, but I guess they're
what you're saying a little bit less exuberant than they were
last year. Hmm.
We haven't seen any down rounds yet though, right?
I mean, we have Seen, you know the kind of mini correction that
we thought we were going it's so early.
I mean honestly at this point in the year some of the deals
getting announced or still deals, there were probably
raised before the market turned so on the private markets it
just takes a while for a sort of the publicly announced deals to
come out. And then also hopefully you're
not in a situation where you need to write raised right after
the correction. So might not be till late much
later in this. Year that we see truly desperate
companies raising a Down Round so that can take time to hit the
news stories. I do want her.
So it's let me know. How do you think about?
Let me back up. So, a few years ago when it
looked like there was going to be a Slowdown in the public
markets and exits were grinding out hard.
It seemed like these were really incentivized to continue to fund
startups because those startups seem to continue to serve some
sort of Market. There were still people out
there who seem to want me. Deliveries of warm chocolate
chip cookies or, you know, these ghosts kitchen companies to
deliver the meals everyday food boxes sent to their home, so
they can make their own dinner and not have to measure anything
I guess with the big innovation there anyway.
Whatever it seemed like you of the Mockingbirds seem like the
consumer was still interested in at least experimenting.
With these companies. I wonder though, how consumer
patterns changed so much since the pandemic that it wouldn't
make as much sense. Or a VC to continue to help
these companies float along with no exit in sight, if we're in a
world where there just is not really a consumer with the
desire or the or the disposable income to get a box of clothing
to look through once a month and keep some stuff and send some
stuff back. If there's not really a consumer
desire to have a meal kit because they can't figure out
how to measure something, especially if they don't have
money. What you saw, you saw a Robin
Hood. The ultimate retail investor has
money. Story was down, not even growth.
Slowing their revenue was down. I didn't see that.
Yeah, which is like terrifying for a growth stock so that that
fits into your thesis, I mean, but overall consumers, don't
seem, I mean the unemployment rate is low and that's in part
because a lot of people have left the workforce to, right?
It's like the pictures, the consumers.
It is muddled. I think I just think it's mostly
an inflation story right now. I think the economy is good and
in stocks are getting hit because of inflation for because
because the FED will raise interest rates and then there
will be less money that needs to flow in to the stock market,
more will go into debt and, and I don't know.
So interesting. I feel like also because we're
coming out of the pandemic, like just intuitively, but I'm
thinking about the people, I know, Like who don't live in DC
or New York or SF like the people.
I know like where I grew up, they're not economically
thriving. I guess it's hard to put it.
So again, it's like which part of the real economy and consumer
economy? Are you focused on to like kind
of like the upper middle class part of the economy that is
going to get Stitch fix boxes? Right?
Here are the big man these Services.
I mean, Lauren are you talking about?
Like the kind of probably more, I don't know.
But in terms of Like their total income or there, but in terms of
just total number of bodies in the United States of America.
I wonder if they're more bodies in the United States of America
who are not economically thriving, not doing well done.
Don't have tons of expendable cash aren't really buying very
much, which is possibly why holiday shopping numbers overall
were down even though we all have friends, who knew we're
buying lots of stuff for the holidays, you know, sort of like
I just don't under there. I think there's sort of like in
the data Real disparity between different groups of people and I
don't think it's very well understood.
And then how does that impact? Something like Silicon Valley,
if the valley is really only making products for like, you
know, the upper middle class. Right.
Maybe it doesn't affect Silicon Valley at all.
Right. Right now.
So and then that makes a very interesting 2024 election.
Oh you know what another good episode was another.
Good episode was remember ska member thus Cabo Boom in the 90s
a fucking horse. It was like Ska and then like
the 1950s dance Revival. Oh yeah.
Yeah. It was like swing Revival that
Gap commercial and then like scar, I'm sorry, Papa gladion.
Yeah. Like totally traumatic, like
musical advertising blob and my mind.
Yeah, any dark, the No Doubt episode really dives into that.
Yikes. Ah yeah.
And those low waisted jeans are back so there's a lot happening
sort of like I feel like there could be a huge, no doubt
Revival or ask our Revival. Oh wow!
Wow, it's suspenders ready. I got a you know this is just
like another reason for me to tune out.
Any waves, go away, pop culture. Good good episode everybody.
Thank you soon and tough. All right.
See you Silicon Valley, goodbye, goodbye.
Goodbye, goodbye. Goodbye, goodbye.
Goodbye. Silicon Valley, goodbye,
goodbye. Goodbye, goodbye.
Goodbye.