September 22 2022
- Friedberg likes Daniel Plainview
- SPAC updates
- Chamath is winding down SPACs
- 10 SPACs from Chamath
- 6 in tech - 4 in tech, 2 in biotech
- Getting harder to find good deals
- Chamath thinks its better to give people their money back instead of letting it sink in the market
- Chamath clip from E55 in November 2021 that you should sell was prescient
- Going public seems like a fantasy right now - IPO is frozen for 2 years at least - that’s what people are thinking right now
- Smart strategy is to use war chest to grow into your valuation and cut burn
- Fed raised interest rate another 75 bps - expect to raise another 1.5% - they said earlier it would be 75 + 50, now they are saying 75 + 150
- Fed is revising their trajectory - they are throwing in the towel, not saying there will be a soft landing - will be hard landing
- This week was hard for stock market
- Byju’s is losing crazy money - lost $600M this year from $33M last year
- Sequoia, Tiger, UBS, Blackrock, Chan-Zuckerberg - all kinds of investors
- There is a sliver of retail investors and private investors who don’t want to do the work - they will just follow the crowd
- US VCs have $290B of dry powder
- They raised $121B in first half of this year
- Fed said it will be a double dip recession - Sacks called it
- Chamath also called the rates will go super high to 4.5-5%
- Bad news is that next 18+ months will be hard for US consumer
- Unemployment will go up
- Inflation will be sticky
- Consumption will ebb
- Earnings will shrink
- Silver lining is that we are starting a bottoming process for the equity markets - by end of this year or early next year - most of that will be done
- Reason = Equity markets do a reasonable job of looking at bond markets and looking at 6-9 months into the future and pricing that into current price
- Stock drops 50%, then it goes up 50%, its still 25% down from original price
- To solve inflation, you need to see change in unemployment
- Russia and Putin
- Apparently nukes might be on the table - like tactical nukes
- Alex Karp said in the West when leaders fail, they get voted out, this is not what happens in Russia with Putin - its zero sum, he has never acquiesced in the past
- India and China are the 2 biggest purchasers of Russian oil but both won’t be on Russia’s side if they go nuclear
- Russian moms are getting activated again
- West has stated the policy of regime change - backing Putin into a corner
- It doesn’t seem like there is going to be a golden bridge to Putin
- Putin has taken out all the liberals, he will be replaced by a hard liner
- Putin is under pressure from peaceniks protesting in the streets but also from the hardliners who think he is being soft
- If people think nukes won’t be used:
- US used nukes against Japan
- US was going to use nukes in Korean War - Macarthur was going to - he was fired by Truman who didnt get re-elected because MacArthur was most respected American in 1950
- Cuban missile crisis - Kennedy sent Bobby to cut secret deal with Russians that US will pull missiles out of Turkey if Russia pulls it out of Cuba - and lied to American public about it so he isn’t perceived as soft
- So if US can use nukes, why won’t Russia
- Economy is bad so US thinks fighting a war will help
- If the foundation of the house isn’t strong - you will look at neighbor’s house
- Coming out of 2008 GFC Obama re-committed to Afghanistan
- Coming out of 2000-2001 did Iraq war
- The safer America has become, we have become more involved militarily internationally
- Multi polar world coming - China, India
- War on terror - 1M lives lost, $8T dollars spent
- Killed Bin Laden in Pakistan without occupying the country - Killed another radical in Afghanistan with a drone after having left the country - so why do we have to occupy the country for 20 years
- US has used military too much and not used diplomacy enough
- Trump was right
- No wars
- Dictator whisperer - North Korea, China, Russia
- Government heavy climate policies
- CA electricity rates are double other states, $5.8 per gallon gas vs $3.68 rest of country
- Rashida Tlaib is so clueless about her own district’s requirements - her constituents are ~40yr old people with $37K income - her district needs cheap LNG and don’t have money for solar projects - she is either power hungry or scientifically/numerically illiterate
- Awesome retort by Jamie Dimon when he refused to not lend to O&NG companies
- CAGRing utility rates in CA by 7-11% every year
- Last week there was a large fire in CA battery installation - scaling renewable utilities is much harder - every homeowner in US should use IRA backed govt incentives to have their own solar panels
- Dilbert got cancelled by going after ESG in his cartoons
- ESG makes sense but v1.0 implementation has become financialized by consultants
- ESG today is broken and largely meaningless
- Poker
- Game theory optimal (GTO) - live playing vs people who play with computers
- Games might be useless if AI goes ahead of human potential
- Chamath met Demis at start of DeepMind
- Sacks is a big chess player
- Chess cheating scandal
- Carlsen is accusing Niemann of cheating implicitly
- Niemann has had highest rise in chess world in last few years
- Iran protests
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