March 7 2025
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Joe Lonsdale joins the show
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Crazy week in washington
- Epstein files flop
- Zelenskyy drama in White House
- Trump tariffs on Canada and Mexico - then walks it back
- $100B investment from TSMC in american fabs
- Sacks show
- State of the Union
- DOGE blitz slowdown - Supreme court verdict
- We might be leaving NATO
- Shutting down Dept of Education (or not?) — too much news
- Mag 7 compress towards rest of SP500
- Europe issues
- Trump Hamas tweet
- Market chaos
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Tariffs
- Is it negotiation to deal with Fentanyl issue?
- Seems there is the first signs of a real schism with what Trump and Elon are trying to do
- Tariffs allow us to rebase
- long term reliance on the US dollar
- ability to finance our own deficits
- ability for US companies to be vibrant
- Optimistic master plan narrative
- Tariffs are being done with reducing income taxes and reducing govt spending (3 legs on a stool) - not random - they are related to each other
- Build stuff here instead of importing
- Reducing corporate and income tax - that capital instead of going into government, goes into the private sector → growth
- So US can go from income taxation model to consumption taxation model
- Might be more fair and economically viable
- By reducing government spending we are moving workers from government to privates - govt is 30% of GDP today - maybe private industry is better at investing money
- Tariffs make sense when you have local alternatives - its a commodity
- Tariffs are painful if you’re importing something special that you can’t replicate easily
- Be careful to not fall prey to crony model where people are arguing for their stuff
- So create alternative model of slide path - take time for certain items to get tariffed
- Reciprocity?
- Large percentage of US workers are indirectly paid for by the government
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DOGE
- Crazy numbers from DOGE - 35k+ SNOW licenses with 84 users, 10k+ Adobe license with 0 users - this is shocking if true
- 90% of new US power came from renewables in December
- We are not setup for powering AI
- The fastest you can get a gas turbine turned on in the US is 2030
- Nuclear fastest is 2035
- Pop up NGO issue
- Apparently folks got like $6.9B in 30 days or so in 2023
- How to avoid perception of kleptocracy
- Make the criteria open and transparent
- Sacks is missing 4 years of AI and crypto run up - serving the country
- PACs are a form of speech - balance vs celebrity, government workers, etc
- Citizens United seems to have enabled this kind of spending on elections
- But if I want to spend money to influence an outcome - is that necessarily wrong?
- Who decides what is political activity? If I write a book that is related to the election but not explicitly political then who decides its not right?
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Coreweave IPO
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Incredible revenue growth
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Unprofitable so far apparently (interest payments on ~$8B debt - probably to buy the GPUs)
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Seems like what helped them is that they operated without a hypervisor
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These guys started out as commodities traders more focused on crypto, etc and then they pivoted to data centers, AI, etc
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60% of their revenue seems to be coming from Microsoft
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In 2003 there were a lot of companies selling “speed doubler” - basically caching parts of the internet - and their users redirected to there
- That might be similar to this sector - is it transitory?
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Founders still seem to have a lot of control
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Markets
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3 important markets
- US 10 year bond yield
- US stocks
- EU bond and stocks together
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Administration might focus on main street and not wall street
- messaging from both Bessent and Trump seems to be according to this
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If you deflate asset prices you also deflate inflation
- If markets go up, your equity value goes up - you use that to buy other stuff
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This would lead to bonds going up
- If you buy bonds, interest rates go down
- This will help American when they refinance their debt
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Also Trump said he won’t invest in Ukraine war
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This led to Europe announcing investment
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But then bond market added pressure on these governments - making it more expensive
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Ukraine war
- Financial implications - apparently we donated ~$175B - if that was a loan - Trump is asking $500B which would make it a 42% IRR over the last 3 years
- NATO status is in question
- Globalist orgs are probably losing their efficacy - UN, WHO, etc
- Might be a viable case for a peaceful transition to a multi polar geopolitical situation
- Apparently China has 60K years of Thorium that was just discovered in Inner Mongolia
- In a techno optimist future - we might have unlimited energy and resources - why fight with other countries for no-longer-limited-resources
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AI wars
- GPT4.5
- Grok (seems to have gotten a lot better) - and integrated really well with X
- Gemini
- Anthropic - Claude 3.7 is really good
- Might need more independent and changing benchmarks
- Alibaba model seems to be really good Qwen - seems better than even Deepseek
- Google might add an AI button near search, etc
- Facebook/Meta might also do a standalone AI/search/GPT-style app
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Allin Live Miami
- Party around F1 with stage show - also celebrate Friedberg Birthday early - event is in May
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Sacks joins!!!!
- Strategic bitcoin reserve and Digital Asset stockpile
- Bitcoin is special - it doesn’t have an issuer, its the most valuable one - $2T market cap - and most secure, never been hacked
- You can look at $2T as a bug bounty - there’s been every incentive to break the encryption and it has been chugging along
- Its like a digital fort knox - the reserve
- Will also do a government wide audit for these digital assets
- Prohibited from selling the bitcoin
- But not the case for the separate stockpile
- Not a good idea to propose taxes - even original income taxes were only on 1000 people - but they obviously expanded
- Sacks sold all his positions before Day 1 of the administration
- Craft also sold ~$200M of crypto and paid taxes on it
- He also divested from other funds
- Sacks is an unpaid consultant to the government
- Market structure
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