Welcome. Hey, everybody.
Welcome to Dead cat. It's Tom.
I'm here with Katie and Eric, the whole family is back here
together for Thanksgiving. So exciting.
I feel like Katie like shows up, you know, like MTV's Daria and
Eric's like arguing with like various cousins over like who
can beat who in chess. I have a chessboard laid out on
my carpet right now with a book. Yeah.
It's like it's like the people who only go to church on
holidays. That's me.
I'm just showing up for the podcast on.
Yeah, yeah. And I'm, I don't know, starting
various contrarian arguments with different people at the
table, all at once, but we've got an exciting episode today.
So many scandals happening in Tech.
So many things go unpack. So many people to blame and try
to understand. But basically, as I see, we have
two giant stories. Right now in one, we've got This
cascading series of scandals in a sector that is Rife with scams
begging, for regulatory involvement and maybe even
criminal involvement and the other is ft x.
So tiny, you're going to set it up that way.
Yeah, so the first thing we've got here.
What are things going good? Yeah, so what the fuck is going
on with Taylor? Swift concert?
Well, just got an alert for New York Times that the doj is
investigating Ticketmaster, and Live Nation.
This is something I don't really understand.
I I actually listen to the new album because I knew that Eric
wood and so I wanted what I wanted to have that experience
with him. Yeah.
What percentage of your Millennial cultural effect items
are just like studying but anyway, yeah, I know Eric looks
G like the millennial cultural, you know, immersion program for
Katie without Eric. I'd still be listening to Lou
Reed. Eric you probably were trying to
buy tickets, right? So you've had oh my God, my
stance is like devastated. I mean we both were working
really. Hard to try to get tickets and
like, yeah, I mean it's sour Enos lately on Taylor Swift,
though she put out something on her Instagram today.
I mean, it's it's pretty brutal. I mean it's this solution to.
It isn't clear. I'm much more in the, you know,
free marketer. Like oh, let these things be
sold in the secondary for like a 10,000, Mark.
Oh, no. Don't don't create this
situation where they're so cheap on the, you know, from the
primary seller that they're all these people.
Are basically incentivized to flip them.
I mean I think it should just be a pool of ones that are
dedicated to fans and they need to do a much better job of
making sure those get to fans and then a pool of tickets that
are truly happy to Mark himself and isn't that whole issue,
right? Right right.
That's why I'm like when you say fans, you mean humans?
Yeah. Yeah.
They should hook it up to like Spotify.
They should be like, how many fucking Taylor records have you
bought, you know? Like, I mean, they should and
they should only make People should only be able to get like
one, you know, one, you know, one for each person.
So I think they just need to do a much better job of, you know,
human identification. Here are some sort of a quiz.
Like in the way they do like a captcha to understand dryer, you
may also feel like a fan captcha.
Be like you know like which of these lines did not appear in
ever more those or some songs is about which boyfriend.
Well, that's good. Right.
Oh my God. Yes, Harry Styles.
Yeah. Match the line.
To the boyfriend who fuck the patriarchy is.
You know, you know, five paragraph essay on why Jake
Gyllenhaal's like the worst of these are great ideas.
I would say much more effective than like doj involvement.
I think we can stop. We we already solved it right
here. If the answers Tom Hiddleston,
you know, it's not a real person, right?
We had like Taylor Lautner boyfriend or not boyfriend was
people I think I think boy, By the way, I think boyfriend.
Yeah, thanks. Twilight era.
Okay. I was I was getting a coffee
with somebody who knows, Josh Kushner, and it took everything
in my being not to be like, do you think Karlie Kloss did date
Taylor Swift? You're aware of daylor Swift.
This is actually something I've been supposed to ask you even
I'm aware. I wasn't until roses like
co-workers who is gay and was explaining at length.
The Gaylor Swift conspiracy. Have you listen to the question?
Like I do think she probably dated Karlie Kloss.
Like I think that's more likely than but did she date Lena
Dunham. I'm scared when they're
photographed kissing each other? You know what I mean?
Like that means. No.
I mean yeah you heard of it was the squad Donna and but I think
that whether or not it happened, the way that it has fueled fan
speculation and I think, can we draw a direct line between
something the question. The open question of whether or
not Taylor Swift dated Karlie Kloss to this insane.
In collapse of the Ticketmaster Ticket system.
Maybe, I mean, it's that kind of intrigued that fuels this kind
of fan base, right? You mean, do row her?
Just being able to like play her fans.
Like a fucking violin. Absolutely absolute build up
even more intrigued. So like, oh, maybe she'll have
is a special guest like one of her Gaylor Swift.
You know, conspirators. That would be amazing.
Yeah. Well the thing is I mean, I have
no emotional attachment to her as an artist or as a human being
but I don't think she does either really.
She seems like A purely capitalistic marketing product
to answer. Yes, no.
She's connected to her fans. What are you talking?
Well, in a way, that it benefits, or I'm not even saying
this is a criticism. She is like a pure distillation
of like late capitalism, you know, in like the marketing of
a, you know, very talented artist.
Bailey, I mean, the Pinnacle of that just to give you a little
data is that, you know, like, she somehow got her fans, invest
in her re-recording the album's just so she could make money or
Masters and not so well because he understood that she was a
victim of Scooter, Braun. And so we have We were forced,
we were forced to band together to fight life's all about
cheering for your favorite rich person.
I mean that's exactly it wasn't exactly to the conversation of.
Yeah. It wasn't like, oh, we're gonna
get great new music from Taylor. It's like we're gonna get the
same old music that's going to make you richer.
Exactly. And that's my investments.
Are we need her to be our billionaire?
You know, in a world where that's all the matters, you
know. Well, we're down one musician.
Billionaire with, with ye so I feel like Taylor should more
effectively fill that spot. But yeah.
You know who would have thought that the Kanye Taylor fight
would have ended here. Oh, I assume she's like, that
was what rocket fueled her into becoming even more successful in
the same way that like Donald Trump ran for president, because
Obama made fun of him. And that one White House
Correspondents Dinner. I assume Taylor was like, I'm
going to dominate the music industry because I was
embarrassed once at an award show, by a drunk Kanye.
I mean, they're worse, reasons? Sure.
All right, so here's what we got on today's episode.
It's time that we do a Recapping of where things are with FTX.
And I've spent a lot of time in the last week reading.
All the stories I even read the entire milky eggs, post what
you're talking about? No, there's some blog called
milky eggs in which there's like a 10,000 word unwinding and
speculation on where all the money went over.
These like things will probably not be relevant the you guys
didn't see that. Anyway yeah, all these things
will probably be irrelevant once, you know the full order
of, you know, the internal mechanisms or put forward in the
The courts. But for the time, you know,
there's been a lot of speculation.
Anyway, I read all of that. Yeah, it'll be good for you to
explain because I mean, obviously, we joke on this
podcast sometimes about not bringing people along, but I
think even sort of the most hardcore sort of tech readers
Among Us would benefit from a little bit of a, sort of
summation, of, of the Scandal. So follow, this is the nation.
This beautiful stay one, but no, okay.
Well, basically where we are right now, is that the FTX
unwinding since, you know, the Finance selling of the ftt
tokens revealed that FTX was highly over leveraged, its main
token collapsed and value. There is a huge run on the FTX
Bank, essentially by all of its depositors.
And that revealed that the company had basically and Sam
bakeman freed had taken all of the assets that were in there
and tried to cover up. All the losses, that his related
hedge fund Alameda, had been using to cover all of their
losses because they had been taking incredibly risky.
A bets, not just to cover their losses but to trade, to fund the
entire trading arm. Yeah.
Because they had so many losses, right?
I mean, I assumed they were only dipping into the FTX piggy bank
because they were down so much in all of their investment.
That was something it was unclear to me.
Whether it was something they did out of desperation or just
something that they did to feel that to feel the trading
platform and success of it. Well, I think Matt Levine made
this point. But like, what's funny looking
back on this is that I think while Sam SBF was sort of In his
prime and like everybody worshipped him.
The Assumption was that he was sort of improperly using
information from FTX to become a really good Trader at Alameda
and that's why he was so rich. Like, he had this sort of inside
information but in fact, he was just using customer accounts
from ft x and he wasn't like a great trainer at all, and he was
just siphoning all the money to blow it on Alameda on failed
trading strategies. It's the very fine line between
like a high-frequency Trader and A Ponzi scheme, right?
Right, right. So that's you know, a very quick
and dirty explanation of why FTX Unwound and then what happened
since then is they broaden a, what's the term?
I mean, like an interim. CEO, a ward, a cleanup guy.
A cleanup guy in a cleanup guy. Yeah.
They brought in like the adults in the room who basically, you
can imagine the picture here. You know, they fly in the sky
into the Bahamas. I imagine he's like walking up
into like the F16 and of like the Pelican Brief.
Yeah. Exactly.
He walks into the office. He like takes out his briefcase.
He tells his right-hand man like schmidty.
You know how this goes? I need two gallons of coffee.
I need, I need protein, I need carbs, every 45 minutes.
Let's dig into this thing, and then he liked it and goes, holy
shit. Yeah, he opens up the file.
Not like a zombie. He throws up.
I mean this guy dealt with Enron.
This guy always the cleanup great for Enron.
Yeah. And then Tom do you have in
front of you, eat like a statement?
Well, it's out of savings in the chapter 11 bankruptcy filing
which these Things. I don't know, Katie.
If you've read these before, when you were covering the 08
collapse, but these are pretty dry documents typically.
Yes, very lawyer. The, there's no color in a
chapter 11, filing, there's no killer quotes that come out of
it, but this was one of the lines is pointing directly from
the chapter 11 filing in Delaware.
Once again, Delaware is one of the most interesting states
because of a scandal, I have over 40 years of legal and
restructuring experience, I have been the chief restructuring
officer or chief executive officer and several of Largest
corporate failures in history. I have supervised situations
involving allegations of criminal, activity, and
malfeasance in parentheses N, Run.
I have supervised situations involving novel.
Financial structure is parentheses Enron and
residential capital and cross-border acid recovery, and
maximization, Nortel and overseas ship holding.
I don't know those, but they were bad too.
Really every situation in which I have been involved.
Has been characterized by defects of some sort and
internal controls Regulatory Compliance, human resources and
systems. Items Integrity.
Next paragraph, never in my career.
Have I seen such a complete failure of corporate controls
and such a complete absence of trustworthy, financial
information as occurred here, from compromised systems
integrity, and faulty regulatory oversight abroad to the
concentration of control in the hands of a very small group of
inexperience, unsophisticated, and potentially compromised
individuals. This situation is unprecedented,
he doesn't say they're all fucking each other or like,
well, you know, that wasn't in the books.
Vlog that now. Yeah.
He's like also, they were kind of was no HR department, right?
Yeah. Like also these beanbags smell
but I'm not going to guess what? Yeah, this is basically like the
cleanup specialist like the garbageman comes in there and
it's like, what the fuck is that smell?
And I mean, as I read through the bankruptcy filing, which I
actually did read through most of it because it is pretty great
reading. One of the biggest takeaways
from it and I think maybe the most shocking that I saw a lot
of, you know, analyst Reporters pick up on.
It doesn't seem like they have any idea where the money went
and more. So they don't even know how much
money they had. They have no records of the
liabilities in there. So when it gets to a point,
where the people who had their money stored in FTX will
reasonably ask, hey, where did my money go?
There doesn't seem to be any accounting for that.
No, so this is always gonna like, yes, just imagine being
the type of person they can just be out and about with the
knowledge that This is all gonna come crashing down someday.
Like I there. I mean, maybe I don't want to
jump ahead, but like I've seen speculation we all made of 5,
right? This is where I think that that
sort of like Bernie Madoff, feel really takes hold.
No one has any idea. What's going on?
Nobody knows where the money is. It's really just all been a hope
and a prayer and like kind of preying on people who have who
are other crypto Believers. There's just It's a lot.
We don't slay, star codex, Scott, Alexander.
Yeah, yeah, he had a piece basically like analyzing the
medicine, the drugs that SPF is taking and just sort of
wondering whether perhaps like a side effect of these drugs was
like a gambling Iraq. These it is it's a new argument
against Adderall. Is that like it's not Adderall?
It's some weird. You know.
I thought that was it. It was not even that we do.
It's like some rule is some patch, we can look it up well
because he failed. Miss Lee s BF.
This is was famously only sleeping like four hours a night
because when he was not the psychopharmacology of the FTX
crash. Yeah, yeah.
So there was just all kinda know is that he was designer
laterals, it's called Sela Jolene, em Sam.
I mean I'm I don't take any stimulants, I people have come
up to me, people come up to me and they're like, oh yeah, I
just I take, you know, the way to do a cross-country flight is
like taking An Ambien and then take an Adderall and their side.
I'm like I'm not living that life.
I'm not, I'm not living that gambian lifestyle.
It's about you. Even if you might be like
marginally happier, like, I don't want like, I don't know,
well my few times taking Adderall, my experience at
typically been that I just felt like my brain was functioning
differently. Like I wasn't thinking in the
same way. I was definitely awake friendly.
Yeah, but it's like my thought processes were not like the
train wasn't going down the track in the way that I was
comfortable with. And I was definitely alert and
very awake, there was no denying that but I never really thought
like boy, if I had access to like a trading terminal, I could
the billions right now. Write what, you know, I already
think every idea that I have is like gold.
So imagine on cocaine, you know, just sort of like the right.
That's like, let's just pull it through and let's go like me.
I have a lot to have a lot to say right now.
Like we could barely keep you on track during the podcast.
Be taking notes on this. It's like that Billy crudup from
America from almost famous scene, where he screams, I'm a
golden god, that's Eric, just unkind.
That's just Generally. Yeah.
That's before the Ambien. Exactly.
I that's just me on a scoop like get a scoop.
I'm like all right just yeah. It what were most reporters are
like you know scoop coming Eric's is like I'm a golden god.
Anyway, so yeah, he's not sleeping.
Yeah, it's not sleeping when he feels guilty clearly but
continue. Well, I want to get to that in a
second, but yes, what. So when he's not sleeping he's,
you know, he's on the he's on the grind and apparently he's
really shitty at League of Legends which is my favorite of
all the twists and all of this. Because there is this kind of
like ongoing theme that he was like playing League of Legends
in the background while speaking to reporters and his investors
and shit like that. And then you know I think it was
the Ft or something. Has revealed that his ranking on
League of Legends is actually extremely mediocre.
He's a bronze something or other.
Yeah yeah. So this like the fraud goes
incredibly deep with this guy's but apparently he had taken out
a 1 billion dollar loan on some of the assets here.
It's not really clear where he spent the money on, although FTX
had bought houses for some of the people at the company.
But what's clearly going to be happening over the next couple
weeks is trying to answer the question of like, where the
money went Oh, that's also interesting because in that
report that you referred to, there's also indications that he
was taking the money even as he knew, his firm is collapsing and
safing it out through different entities in the Bahamas.
So nobody knows if he was taking things on his way, out the door
either. Yeah, right.
I do think people, I mean, I think we're going to get into
the interview with Vox, but there is a little bit of It's
like, he probably took the money, you know, he's like he's
not admitting special people, even though this guy is like
clearly lied every, which way there's still sort of a desire
to assume, he's telling the truth in any given interview.
Even though it's like at this point, how can you trust a word?
This guy says, right? And so at this point, aside from
these apparent, tweet threads, that he's been putting together
in which the first one was, just the spelling out of the word.
What? And right, and then followed by
some sort of a thread that maybe tried to give some explanation
as to what went down. He first gives an interview to
the New York Times, David yaffe, Bella knee, who's like the
crypto reporter over at the Times.
David got a lot of shit for this story because people felt that
they were not pressing him hard enough.
And there was kind of a quote in there, in which they were like,
how are you sleeping? Well, these days I don't know
how you guys feel about that story gets Katie, you know, you
know, David so you know, I do want to put you too much on the
spot here, but I thought the story was fine.
I thought he came off like a psychopath with was my
interpretation of it. It's like I don't know how much
more the fraud and malfeasance is so evident here.
I don't know how much browbeating right.
Like journals begins to do like a certain type of person who is
so mad at Maggie Haberman, because they just wanted to put
after every line. She reports.
And that is very bad. You know, it's sort of like
Can't the reader read it and be like, oh, this see, I mean I do
think the New York Times could have been a little more - and I
think that sometimes you can get lost in like, well, we've got we
put out a body of work. There's several different
stories is one story, doesn't sum everything up but like
overall I do think it's like yeah obviously, you're supposed
to read this interview, me like this guy is like fucking yeah,
he gave him enough rope to hang himself.
I don't know how else to say like right, you know, it starts
off with like, you know, Sam you just lost people.
Nine billion dollars I'm actually sleeping better than I
ever have before dated the lamb. Stop crying, David more
billions, I lose the better. I sleep David like it's all
right there, right? Like you don't need like a body
language expert to come and analyze the person who confessed
to a murder like, right? It's bizarre.
I mean people just want to eat. I mean obviously you know the
people should on the New York Times wrote like the Kraken CEO
and the coin. A CEO who both had negative
coverage from the times and I guess to the extent, I would
defend them. You know, it's just like people
get almost like more mortally Angry in some ways about, you
know, coinbase not doing enough to include sort of minority
employees then, you know, maybe SBF, sort of defrauding people
of billions of dollars. And so I think it's just sort of
the tenor and tone of different types of stories and sort of how
Twitter can react. But obviously, So, my point is
just, these are two CEOs who were covered negatively by the
New York Times and they're happy to look for an excuse right to
dunk on the New York Times. There is certainly a huge media
aspect to the SBF story and a failing on the part of the media
in the way that he was covered over the last couple of years.
This is not a good example of it.
There is a Feeding Frenzy right now on this guy, every single
aspect of this person's life is going to be mind into content,
right? Because it's an incredible
story. If I don't know, they were
scandals of our time. Crypto, people want to play it.
Like the media is not going to willing to go after him but
really it's like no, it's like the media is happy to go after
one of their own if there is a case, it's right for a great
story, it's a great story, but anyway.
Yeah. So so that was that was the
first interview that he gave and then I guess the real coup de
gras was he had an interview with Kelsey Piper who is a ruse
herself like an effective altruist person and right
Porter, there is so this was, he slid into her DMs. And had an
hour-long conversation with Kelsey Piper in which and it
seems like they were friends in some way or they had a reporter.
I certainly had a rapport trusted her enough to have this
totally insane back and forth. I mean yeah.
Truly one of the most self-destructive things I've
seen on Terry what do you mean Katie if you still billions of
dollars? And I check in on how you're
doing? Asked what's going on?
You need to at least say we're off the Record.
All right. Look, I feel like call me.
I don't care how good of friends, we are really a billion
dollar like I hear you. Should at least like be like,
Eric, I just want to be clear where this is not report, you
know, it's just like there's, there's got to be a threshold.
I don't care how not, I wouldn't, you know, I don't
know. There's some limit of just like,
if you become a criminal, you know, like, I don't know how
much really to return your call Eric, right?
Exactly. You might be hearing from my
lawyer and right. Yeah, I encourage readers to go
and read the article because there was a kind of funny back
and forth between them in, which he has like a very casual style.
So when she's DME him being like like what was going on, I'm not
calling her out for saying, like I'm just saying that this is the
kind of smart as usual strategy. Yeah, it was a very yeah, I
guess he was, she was really luring him out but he also
seemed like he was desperate to talk, right?
You know, the idea that he was, you know, had his confidence
completely. You know, subverted by this
reporter here just doesn't really align with the fact that
this guy's desperate to this. What kind of crazy people do is
they want their, you know, Tales of derring-do, a manipulation to
be out there for people to admire We've lost Katie Because
by the time this episode comes out, you will understand.
The reason why just I guess I'm maybe pointed a special counsel
because they're chickens but or whatever Katie thinks they have
a good reason but she has to go report on that.
Yeah, so we've lost K throughout the episode, Happy Thanksgiving
Katie will. So, you know, effective altruism
obviously, is this philosophical movement, based in
utilitarianism, where and largely funded by Sam Bateman
freed, that was sort of donating with an eye.
Towards sort of the future worrying, about pandemics
worrying about things that cause the most human suffering.
So that's that's effective. Altruism and in this exchange,
he's sort of plays it off like you is never a True Believer.
And that it was all just sort of a PR stunt.
He disappears people of the notion that he believed in any
of the things that he had been saying.
And I mean the one that includes his belief in regulation of
crypto. And then also that just general
philosophy of effective altruism both of Is he kind of says, for
PR stunts, but yeah, on the matter of, you know, regulation
he texts the reporter, it was all just PR, fuck Regulators,
they make everything worse and then actually I didn't pull out
the specifics around effective altruism but I guess his point
was that the idea like you're saying, the argument effective
altruism is that in a situation in which there is a good usage
of money and a bad usage of money.
I guess all things considered you should be spending that
money on people who know how to spend it on good things, right.
There's so much more to it than that.
I mean effective. Altruism has one key component
of it. Is that while like a lot of sort
of charitable mindsets might say you should like you as much of
your money as quickly as you can effective.
Altruism can allow for the idea that you should try to make a
lot of money so that you can then give it away.
Anyway, I SP have sort of disavows.
It's um, and I think they're going to be all these questions
around and we're going to get way too in our heads about it,
whether he's trying to protect effective altruism by sort of
slowly distancing himself from it.
So this doesn't become the sort of case study that ruins
effective altruism or if he was never sincere.
And then, I mean, there are ways to read, you know, I think we
talked about this on, with a little bit in the episode with
Teddy. You know, going for broke or
like trying to get, you know, flip keep flipping coins, right?
And gambling. Everything that there are some
people in the EA world, who thinks you should just keep
flipping because, you know, the world really requires huge sum
of money to save it. So then you just like go For
Broke and try to get as much money as you can.
So there's a certain lens in which effective.
Altruism itself is the motivation for sort of Gambler,
what he did, right? Because anything below that
level of money is Is ineffective, right?
And you're not going to be able to achieve the results that are
necessary to improve. You're not willing to you know,
like we've talked about before you know these moral intuitions
are sometimes about biting the bullet and saying like no, like
it's not about like sort of, you know human beings want to
minimize risk, right? It's just sort of in our
evolutionary psychology. It's well you know, you don't
you want to, you don't want the downside to be too bad, even if
the upside would be revolutionary.
And so some of effective altruism is saying, No, I look
at the world, clearly I'm doing the calculus clearly and clearly
the risk is worth the reward. And so I'm going to do it.
And so there's this, there's a sort of view of the whole SPF
Saga as him sort of. And now, the guy clearly, I
mean, once everything fails, we start viewing him much more
psychologically and less is a rational actor.
And so I think now the lens is going to be much more like like
we are referencing sort of drug use like how koujun was he blah
blah blah rather than This is the ultimate rationalists who,
you know, pursued sort of a great strategy.
I mean, if he was he would have at least on his accounting
right, you know, right at there's no excuse for that.
You can say it's important to take big risks, because that's
the only way to achieve the results.
Required to make substantial agenda book should be clean and
it should be like well on this day I like put it all upside to
the risk of having shitty book, right, right.
That's just careless. And I think that's kind of what,
you know, the the new CEO and arbiter of FTL.
Is trying to deal with here. But look, I think there's a part
of his entire unraveling that is a pure distillation of the
utilitarian mindset, right? It's like better for me to have
had this money and try to funnel it towards good.
Then the people that had this money that would have known what
to do with it, right? I mean I don't know how cynical
all the people that movement really are but it's within like
the spectrum of their belief system that this type of action
was like within the bounds right.
I mean it's like it's And owned by a kind of utilitarian set and
you know, they're you know, somebody who is writing to me
and reminding me of my own old like philosophy classes.
I mean there is you know like rule utilitarianism this sort of
belief that you can't just abandon ethical precepts because
fundamentally adhering to those moral rules, will create the
best good. And that, if you totally abandon
any sort of like, oh, you should be honest you Steal from your
customers in, you know, chasing some great outcome that
maximizes for utilitarianism. That is sort of the thinking of,
you know, a fraudster where you're like right, you know, I
alone can sort of see the great outcome and therefore I should
break all these rules in favor of the outcoming and clearly
human beings just aren't really equipped.
So, I'm much more of a rule, utilitarian, just a maximizer.
Which, by the way, is a side point to all of this is why it
is pretty hysterical. That it's possible that Kelsey
Piper the reporter at vaux betrayed or had like a breach of
trust with right. BF.
Exact, because that was a purely utilitarian, like, look,
alright? Given this information Capital,
right? Right.
The best amount of good I could do with that is to disseminate
widely because I believe that what you've done is wrong.
So no I don't think she'd live by the sword die by clear to be
clear that it's funny what you're saying but there's no
allegation that Sam said it was off the Record so it's just did
he betray a friend? So that's basically where we're
at with SPF. There's going to be, you know,
like I said, Feeding Frenzy of reporters examining every aspect
of how this company was run. Saw there was a profile in
Forbes of the CEO of Alameda who's an interesting character
and all of this potentially his girlfriend, you know, as more
filings come forward will finally start to learn more of
like where all the money went which hasn't been fully
disclosed. I really want to hear from his
parents. I mean that's his parents are
like legal experts. Their law professors at Stanford
and they did help him set some of this up, right.
Why should we care if they come up in the filings actually?
So no, you're not too far. You're not going too far with
that one. I know that as things began to
unwind. He did consult his father that's
a that's a tough call to make to tell you right, I really fucked
up. I got nine billion in
liabilities that I can't really account for but yeah I know his
dad is going to be for sure called into you know, whatever,
whatever Iram aching, the TV show.
I mean that would be the central conflict.
I mean on the one hand, I don't know anything about his parents
so I can imagine them. I mean, very sort of
establishment or I mean there's Stanford people and I am
skeptical like it if you like Stanford is an Institutional
like Stanford exactly. You're talking about is that the
Peter teal Stanford is right. Exactly.
Stanford or is a School founded by a robber barons?
You know, it's like it, there's a reason Silicon Valley is much
more aligned with Stanford than sort of the ivy league, which is
more sort of institution. Maintaining state does have an
incredible history, they have a real, you know, ghouls list of
alumni that That I mean, SBF dropped out of Stanford, right?
So I guess they can disown him. As far as that with us, there's
nothing more Stamford. You could be than a Dropout.
Yeah, especially if you're in the Peter.
Teal mold. Oh, speaking of the Peter teal
world. What aspect of this and this
goes a little bit back to effective.
Altruism is I saw that, you know, one of the people trying
to make a real hey, out of this whole Scandal are David Sachs
and people in his orbit and I did pull a few wants to talk
about everything but the midterms right now, but, but the
midterms. Yeah.
But, but yeah, Tweet that I contacted me.
Which was that the biggest con man, since Madoff, just
admitted, that woke is virtue signaling game quote, where we
say all the right shibboleths. And so Everyone likes us.
How stupid does the New York Times feel now?
I understand that everything through this guy's worldview of
Saxon talking about is about woke and and it's the only, it's
like the laziest term. But he just assumes that
everything that is like altruistic is woke.
I really don't refer. I wouldn't refer to effective
altruism as being woke right there like barely.
It's I woke. Yeah, a lot of the woke people
hate it because they're like I let everybody now die.
Because people's lives. You know, we have to worry about
all lives and future lives would be saved by deferring the money
to do it. You know, there are lots of what
people hate it, a lot of ways also, So yeah no Wolk thing is a
scam you know like they're barely any woke people anymore.
I'm also like after the midterms in which like people that ran
explicitly on the anti woke agenda just got like creamed
right. I don't know how much I would
like spend. I don't know yet just in that
stuff. David Sachs is out there acting
like the fact that the Biden in administration wants to resolve
the Ukrainian Russia war is like some victory to him.
Like I used, tried to set it up, I don't know.
I don't want to go down this whole rabbit hole but Just want
to put it on the record that I think it's absolutely absurd.
That David Sachs thinks he should get credit for any sort
of like, you know, like like what they were just going to
blow rush off the map. Like obviously it's some level
like there would be a negotiated settlement and that that might
not include Crimea, anyway. Sorry this is this doesn't drive
you insane. I did.
He's so disingenuous about what he gets credit for you.
Don't think the defense department is listening to all
land and his fucking at his tweets.
And like deciding, you know, with all the like Chiefs of
Staff, try to stab whether or not liking how can you finally
arms to Ukraine are not. So you didn't persuade them.
So it's more, just like he's annoyed that he basically he
wanted to voice it earlier whereas other people were a
little more deferential to the US state department to just
figure it out as this was a live situation, I everything now
especially if you'd through Twitter like the people that
respond to your Tweet is a battle between you and your
haters right time. So I'm assuming I don't follow
him but I'm a You mean that every time he tweets out, you
know, that there should be like a truce negotiated between the
Ukraine and Russia, he has like an army of people in his replies
just like shitting on him for it.
And certainly, I mean, the great thing about Twitter is you can
bait, people who hate you into over, extending their own
position by sort of articulating, a repetition that
people want to share that, like his replies is the discourse
like he really thinks that is the national conversation he's
just a disingenuous, are you are an well in Fury, okay?
So all of this This then is actually a perfect transition
into the other thing we're going to talk about on this podcast,
which is Twitter. Oh, yeah.
Because everything devolves to a conversation, about your Twitter
thinking that the people that are in your replies, is the
world. And that is like, how business
works. That is how politics works.
That is how like the economy Works seems to have been the
main miscalculation that Elon Musk had any but sweater.
So let's just give a quick recap on where things are right now
because it is fairly and I want to read the Fresh off the
presses. He tweeted this 30 minutes ago
this is Elon Musk. Okay.
Yeah. Elon Musk.
New Twitter policy is freedom of speech but not freedom of reach
- hate. Tweets will be maxed he boosted
and demonetized so no ads are other Revenue to Twitter.
You won't find the Tweet unless you specifically seek it out
which is no different from the rest of the internet.
So basically he's ended up to where things already were but
like well the ultimate question is just what our - hate tweets.
It's and it's just but he said it's not going to be boosted,
right? Isn't that the exact complain
about Matt O'Bannon? He boosted.
Yeah, so it's not even Shadow been.
He's basically saying we're going to be shouted Banning.
Yeah, exactly. Congratulations you right?
You ended up is to wear Twitter was before you bought the
company the thing, right? Forced you to buy the company is
where you've ended up. Okay, let's see him.
You stated Babylon be okay. His work here is done.
Okay. So here is my understanding of
where things are at Twitter over the last week or so.
And this is clearly a, you know, a quickly moving story earlier
this week, which is going to be last week by the time people
listen to this episode, he laid off half of the company.
So 50% or so. The a 7,000 people that worked
at Twitter were given notice marching orders.
And honestly, I mean, Without elon's price, still gonna lay
off like 30%. Yeah, that's economy with meta
and Amazon, and everyone, everyone, but Google.
And apple laying people off. Yes, there were probably layoffs
to come but he laid off 50%, which is pretty dramatic.
Now when it's good, it is good to do it all once.
I think there's good, it's good to have a sense of realism.
Anyway, idea, I don't want to just and people are experiencing
that people were expecting that there was a complete debacle
with Twitter blue, which was a subscription service that he was
going to make. I even want to go into Twitter
blue. It's kind of old news now but
that, that didn't work out. Well, reporters are salty,
right? And then, and then, so, the most
recent, at the time of recording, this podcast,
controversy has been, he basically gave an ultimatum to
the remaining employees saying, you're either in or out.
He gave them like the Jerry Maguire.
You have to you have to testify the you're willing to be
extremely hard core otherwise we'll give you three months
Severance and you can go on your way and turns out three months
Severance sounds great. Like I know.
Yeah. It's just like yeah better than
most of the way. Alright companies doing.
Yeah and so hundreds of people took him up in the three months
offer it was way more than he was expecting there.
Sounded like there were emergency desperate meetings to
keep some of the essential, you know, top Engineers, top product
people, I don't know, some, some marketing, people keep them on
board. It's unclear how that played out
there is like this cascading series of like salute emojis
inside the Twitter slack, I love you.
Yeah, people were signing off and this was not a guess what
you I was expecting. I want to say, I want to have
according to the line New York Times, right?
Well, but I do want to say, and I said this probably still in my
tweets somewhere when it was coming out that you, I was
buying a company, I put out a poll and I said, what percentage
of Twitter employees? Do you think you're going to
quit the company? And it was like a ten percent
when I was in for free? The lowest responding answer was
50% plus and I guess you could debate, you know, lay off versus
like people. Her leaving, but like there was
a huge fucking issue with people.
Not wanted to work at the Iran, must go and Twitter.
And I don't see why more people weren't willing to expect that.
I don't know. I don't, yeah, it just like it
seems. So clearly obvious that anyone
who is going to come in and buy this company strictly for
ideological reasons was going to run into this problem.
Well, there is a great tweet Storm from of recently departed
Twitter employee. There was just like Elon didn't
articulate sort of a Grand Vision.
You know, it is not. Tesla and SpaceX, right?
You know, so it's like, what are you fighting for?
What am I going to be hardcore for, right?
And, you know, it's there is sort of like, which political
Vector is Elon really aligned with and like, what are the
goals of Twitter? And like, what does it stand
for? I mean, his this is where his,
like, incoherency about free speech.
And like his mind, moderation policies.
And whether he's trying to satisfy the middle or sort of
The Joe Rogan class or what What what exact constituency does he
believe with believe in an aligned with, besides his own
off-the-cuff control. It's hard to get people to Rally
around you who want to believe in a cause, you know, and his
inability articulate, this has actually been a major major
problem with, with his ability, to get allies.
Yeah, because he wasn't able to answer it.
The central question that people had, which is why are you buying
this company? Because there were two
arguments, one, is that it was an underwhelming underperforming
business. That is totally true.
Twitter has been like an absolute mediocrity as a
business for as long as it's been around.
And then there's the like this is an essential part of free
speech and it's shirking. Its duties by Shadow Banning cat
turd, or whatever, and these two visions are potentially in
Conflict. Like I think he and the
billionaires and non billionaires in his, you know,
text threads truly believe that this was an entire company made
up of like Tucker Carlson's. And of Taylor Lorenz, right?
He was just a bunch of like, weepy woke snowflakes just
seeing, you know, - tweets crying about it and banning
people. And and that was the entire
company. It wasn't full of Engineers or
product people or people trying to keep the business running.
It was just, you know, woke idiots.
And I just he he one that's not a great reason to buy a company
anyway, but also clearly he was wrong.
And once he realized that people didn't want to work there
anymore, he realize that they actually did have a central
value, right? So I mean, I will say we kind of
touched on this a bit with the teddy episode, but I'm dying to
know the other side of the story here because in one sense this
is a reporter's dream, right? It's incredibly dramatic.
We have this character and Elon Musk who reporters don't like,
you know, just generally politically, they're not aligned
with him. And so it's, you know, it's like
a fucking keep using the term, like, Feeding Frenzy,
especially, with sources that are dying to offload.
All the bullshit that's going on, inside you two coming, but
Elon doesn't have any PR Beretta surround him, right?
From what I read the New York Times story.
They do not have a comms Department right now, so there
is no contrasting narrative to what's going on right now.
So that's sort of the reality that's going to get out there
because no one is able to push back on it.
Well yeah, it's all right. It's so negative about Eli on
Twitter right now, right? There's a mood on Twitter as if
there's going to be sort of a fail, whale this evening and
that's what I'm going to be the end of it.
And so, I think empirically I am interested in How likely We is
Twitter really to crash without sort of the Staffing.
I think there is an argument that the left is being a little
history Raonic on that history on it and like maybe it doesn't
crash and it keeps operating and I mean if the worst that happens
is Twitter is slow to, you know, improve that will be just like
the old Twitter. You know, I was thinking back to
Barbarians at the gate and the whole era of leveraged buyouts
is essentially This is right. It's, you know we make it into
something kind of mysterious and and whatever evil.
But in fact, this is kind of a standard right in process, like
a leveraged buyout. But during a leveraged buyout,
the new owner of the property who let you know, lay it up with
debt and all that stuff. They typically work with
Management in order to kind of keep some semblance of
transition Before ice goats, you know, start going through and
like ripping out all the, you know, drywall and shit.
But that wasn't the case here. Right?
He comes in day one and fires. The CEO fire is the CFO like a
popular head of legal. All the kinds of people that you
probably would have needed to have like an orderly transition,
right? Our because he wanted to be, you
know, like a new page and dramatic new ownership.
And that that's just not how these things are typically done.
Like there is a Playbook of leveraged buyouts, and he just
decided to abandon it in favor of what he thought Twitter
needed, which was like dramatic action, right?
And it just fucking blew up. I mean, I don't know, there's no
other way to really see it, right?
And I think, Is an argument that elon's management style works
for SpaceX and Tesla because people are True Believers.
You can sell them on the mission.
They know what it's for, you know, become sort of a kalt
whereas, you know, Twitter, Twitter exists.
So you need to really give people a vision of what, what
they're building for sort of different than today.
So, a lot of White Collar jobs, right?
Like these people have skill sets, right?
Pretty easily. Transferable to other companies.
And they have more money so they're not as desperate to
stick with the job because they don't, you know, they don't need
it as much. And you know, I've seen the
argument made out there that the people that are staying or
staying because they have to pay bills, you know, like they don't
have that much money, right? Well, in the worst case they
have visas. And so they're sort of, I mean,
this this speaks to some of the problems with the VISA program
that, you know, people can't walk with their feet, which is a
key part of capitalism. Like, you should be allowed to
leave your job and go to another one when you don't like
management, There's something abusive about employees who are
on visas being trapped that a particular company and it goes
against right? Sort of the freedom that's part
of capitalism, right. So I guess I can closing out
this episode and it's an impossible question to answer
but it's really the only question asked which is like
where does this go at this point?
What happens because because I see like a couple of paths I
mean one possibility is that he just unloads this thing he just,
you know, somehow, you know who well, I don't know, some sort of
private Equity Firm that probably should have been
responsible for the elbow in the first movie, such a loss.
Like I almost think the opposite that he is tanking the
reputation he gets the debt down the like 40% or something.
Then he buys you been more of it and he owns it and then on a on
the cost basis of the his new ownership he could actually sort
of I'm out. Okay sure.
If you manage to make it a purely profitable company, I
mean the typical way a leveraged buyout works is that you slash a
ton of costs. You lay up with it with a ton of
debt and then you re listed as a public company and like this new
leaner, meaner version of the company is more profitable and
maybe you can make it you know up all you know right Public
Market evaluation hit has just been so bad it's such a terrible
time. Well I suppose you're surprised
that he paid for it but I can see like idiot logically where
he's going here which is that he had a great plan.
All of the woke, Twitter employees ruined it for him.
I want to read a tweet that I think is emblematic of the, I
don't know. Certainly the mark in but this
guy is citing a book. Mark injuries and loves at the
moment, so that's why I'm connecting to him.
But Antonio Garcia Martinez, the author of chaos monkeys and I'll
sort of a July Ally of the no dark and light Mentor.
I don't know if you would agree with that, whatever he's on
often on the right though. He's been aligned with the left
on Ukraine. Anyway, it doesn't matter.
He's one of them. He says what Elon is doing is a
Revolt by the entrepreneurial Capital against the professional
managerial class regime that otherwise everywhere dominates
including an especially large tech companies and that same
PMC, professional managerial class, which includes the media
is treating it. As an act of last matches.
Stay Majesty less Majesty in Burnham's formulation, this is
James Burnham. The author of The managerial
Revolution and Burnham's formulation New managerial class
would supplant the former business owning Bourgeois, and
even Capital itself. As the elite ruling class, most
woke, labor scandals and Tech aren't entitled middle
management class at odds with Founders.
I think that's very true. You know, most woke, labor
scandals and Tack are an entitled middle management class
at odds with Founders. I mean, the media is basically
talking to employees and parenting them now.
Partly because Founders have decided to talk to the media
less. But yeah, I mean this is sort of
what's Opening or what do you make of these tweets?
I but I would buy that argument as true but also entirely
avoidable, because if these guys are so tapped into the mindset
of the PMC and their woke agenda, they could have
anticipated all of this. They could have had a honeymoon
period coming into the company in which they, you know, yes,
lured them into. Yeah, it wouldn't have been that
fucking hard. Regulate them, aren't you
supposed to be the winners? Yeah, because like, this is the
fucking free market that you're defending here.
It's like, if There is a great business beneath all of it than
it should be able to withstand all of these you know, woke
pmc's. Alright.
If the problem that Twitter had was that there were too many
people at the helm that were thinking about, you know, the
emotions rather than like the cold hard facts of what a great
business is. Then this shouldn't matter.
You should be able to Route these people out and bring in a
new group of, you know, based Engineers, who can bring Twitter
to where it should have been, but you also shouldn't have even
gotten there. You could have eased these
people out of the company with A three-week honeymoon period that
would have gotten rid of a lot of these or that would have done
away with a lot of these issues. So no II totally reject that
argument because one I just don't think it withstands any
sort of economic test because if there's a great business model
here, I don't see it yet and it just doesn't seem like there was
a plan but yeah, sure, I do agree that like woke scandals or
the results of, you know, middle-management stirring shit
up. But like a scandal is not the
same thing as a business problem.
And right now he has a business Problem.
Right? I mean like he's actively
alienating advertisers right? Well, that sure the argument
would be advertisers are in cahoots, cat.
I mean, they're trying to sell their products to as many people
as possible. I my objection to our.
First of all, it's just setting up a case where we're supposed
to some out route for like the capitalist class.
You know, it's like, oh, we called him entrepreneurial
Capital, you know, it just like Founders, whatever, you know,
they do represent their the ultimate Elites who Trying to
pretend like they're not, I don't know.
We should bring him on. I'm happy to have my lunch.
Yeah. That bgm on here.
And argue this case, he likes directly, maybe, maybe I'm
surprised you haven't asked him yet.
Honestly, he he might be the one, you know, non coward among
them. Well, I'm dying to hear more
people defending Ilan because I certainly sympathize with any
perspective that is like, boy. This is a very one-sided story
right now? Yes.
I mean, but I, the media was desperate, like, I'm sure they
would interview Elin. That's, that's the one thing I'm
I get that the media would probably interview them under
their frame but people are hungry to still to hear from
these CEOs, and but if you listen to these people,
especially ones that are on the all in podcast, they argued that
talking to the media, isn't it is of itself like an act of
treachery it's pointless to do. And so it's just not very, it's
not fair, if you're like, well, the media is dominated by
workers. It's like, well, if workers are
the ones talking to Media, then, that makes sense.
You know, this is a topic that we may be revisiting.
In future episodes because whether it's a GM or other
people that are in that orbit, I'd love to hear.
I'd love to hear from them because I personally, as a
reader of these stories, I'm not done any sort of reporting.
I do feel like it is incredibly one-sided but unfortunate that's
the one side that's talking right?
And I don't know what else a reporter can do.
And there are way more of them and an employee's believe, all
sorts of different things. I just think reducing it's
convenient to reduce workers to a class because then he'll on
who is one. In is on equal footing with, you
know, the thousands of angry employees, you know?
And and hundreds are more of angry.
Advertisers, you know, it is like they're your these masses
of and then there's also the public right?
That has its points of view and somehow given the Elan embodies
the single class. He's supposed to count, you
know, for so much. If he merits his placement in
that class, you should show it by being an effective manager.
Like if you deserve all of the The Privileges that come with
being in the entrepreneurial class, show it, show me how
you've managed to will navigate this controversy in a way that
proves your point. Because right now, it doesn't
seem like there was a fucking plan.
Like, I'm not sure that's the same big winfried ideology that
comes through in the DMS. It's like, people are chill with
by Nance now because he's a winner and I'm a loser and
ultimately people like winners and they don't like losers and
like morality is almost like subservient to that.
It's like you can say Shibboleth the people want but ultimately
you know you need to, you need to win.
Yeah. I mean I don't know that I think
by Nance is going to continue to win.
I think people have been a little too probe Finance lately,
but anyways, I mean being like the last person standing in a
crumbling field, doesn't mean you're in a great position.
No, I look, I actually think in in so many respects, I know.
Like as the, the Twitter you'll on Twitter thing was closing in
on taking place, your argument had been like, let's put the
right ideas to the test. Yes, Let them rule, let's see it
like right, especially on Twitter where it's like, okay we
can give that up. It's not like all of America,
you know. I'm not saying let the right
rule the United States but I am saying, fuck, give them Twitter
and let's see it. Let's run it, run it, you know,
like and so I'm actually willing to like, let's let this
experiment run a little bit longer.
I think people that are talking about the death of Twitter right
now, are probably jumping the gun.
They're seen by the enough money questions on this is the
question for the right if Twitter dies because like the
left abandons and everybody, Using like the managerial class
doesn't do the work. Whose fault is it?
Like, I feel like, they somehow believe that it's still the left
fault, even though they're in charge of it, they had to pull
the levers to make it work. If basically they lose because
the left like mounts, a resistance does the right and
Ilan sort of get off scot-free because right is going to blame
the left. I think I'm saying that's what
they're clearly starting to coalesce around that argument
which is absurd right? Okay now Now, yeah, I mean,
ultimately, you're in charge you, you're supposed to be Savvy
enough to know the psychology of the left and manipulate it and
get your ends. Like, you can't just whine and
say, oh, these people are irrational like that.
All you humans are rational, you know, you have to navigate that
that's part of part of leadership.
Yeah. Because the prevailing sentiment
ality and posture that people want to take these days is the
victim, doesn't matter what position you are in class and
you know, in your business and your class you want to be the
victim. It's the it's the Fault, Place,
repeat, nobody wants to be the elite.
You are literally running the company.
You were signing the checks and yet you were the victim of a
system that you have just now, declared or prior to now,
declared as being anti Capital as an anti market.
And I don't know what to tell you, buddy.
You just bought the store, right?
It's your problem. Yeah.
Figure it out. Stop whining.
You know, like, pull yourself up by your fucking bootstraps.
Yeah. So let's just let this play out
a little bit longer. You know, if Twitter Goes down,
it would, I guess, prove someone's point, right?
But, you know, I guess my my perspective is that Twitter will
probably be around for another couple of weeks, you know, the
worst of the bloodline that will pass.
I think people's expectations for the implosion or too big.
Especially the people who are leaving because they probably
want to think man and masses of people around me, it's like,
people should on the United States and then they go to Paris
and it's like it's dirty and they only have one Cuisine, you
know. It's like New York's great.
Like Twitter is better than the alternative unfortunately.
Like that's the reality in the world in which you have to
participate in these things, right?
Well, don't go live in fucking Macon, Georgia.
You know, I don't even know where to leave this one other
than. I think this topic we extend an
open invite to anyone who wants to explain elon's managerial
style. I know, we like to fight I you
think the cowardice from some on on the right is z reached out to
not a small number of people. For this episode and we'll
continue to going forward because I do believe it is a
one-sided story. Being told right now, I'd love
to hear the the pro Elon side. We maybe have some guests coming
up, that can help a little bit on that perspective, but to all
listening out there, if you have some people that, you know, that
can speak positively and with personal anecdote on elon's
leadership style, and why? It's great that we're open.
Please email us. You know, DM won't, you can DM
Eric, you can message me dead cat.
Show at gmail.com. We want to hear from you.
Great. All right.
This is fun. Thanks a bunch.
Thanks, before we go, we do want to give credits to the people
that make the show possible because we do not do it enough.
But engineering, the show is our great new sound engineer, Tommy
Heron, who is making this thing sound very professional.
And then we've gotten can continue to get a lot of
positive feedback on the theme song for the show.
I agree with you. It is awesome.
It is the work of young Chomsky who is a producer and audio
composer. He is the producer of the
excellent podcast. True.
And on which I do listen to, and I don't want to get cancelled
for that because I know they end up being controversial times.
I think it's great. But anyway, young Chomsky has
the awesome theme song for this and we think both he and Tommy
for making the show. Great, goodbye.
Goodbye, goodbye. Goodbye, goodbye.