China's AI Threat, SpaceX's Plunge, and Trump's Truth Social Grift

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That's fetchpet.com/save. Support for the show comes from Delta Airlines. Every athlete at the top of her game knows that greatness isn't just a destination. It's a grueling life-long journey. It's built on early mornings, silent sacrifices, and an unwavering drive to outclimb the achievements of yesterday. That is the journey of a WNBA athlete. And Delta is there every step of the way. Delta is proud to host these competitors, providing charter flights for every WNBA team to elevate their travel experience and champion equity on every leg of their trip. Keep climbing with Delta Airlines, the official airline of the WNBA. I think Elon Musk will be remembered as arguably the greatest engineer in a sector. But that sector is not space or EVs. That sector is the financial markets. Hi, everyone. This is Pivot from New York Magazine in the Box Media Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. Scott, how was it? The game? It started off slow. First half was kind of a sleeper. And then the second half was great. And so, yeah, it was great to be there. I took my boys. What was the vibe of the place? You know, the Argentinian fans are incredible. Yeah. And the Spanish fans are hot. So generally speaking, check, check, check. And my life did a good job. I will say this. I thought FIFA put on an incredible tournament in terms of touch points, and graphics, and vibe. It was, you know, typically the final is not the best game. What was unusual about the cup, the tournament guitar was the final was the best game. It's like the Super Bowl usually isn't a very good game. And this wasn't, this was an OK game, not a great game. But it's sort of like quite frankly, I'm exhausted. The World Cup, the tournament itself was incredible. But I'm kind of glad for it to be over. The thing in the middle was a little bit jumbled. It was sort of like-- I didn't think it worked. I was like, where's Bad Bunny? Like, where was the, what was the comprehensibility of it? I mean, when they like yell out Shakira and Elmo in the same breath, you're sort of like, what's going on here? It just felt like a dog's breakfast. And I just, those things are hard to pull off. You got to, you got to try and please everybody and, you know, have somebody set the charts, but it's also ethnically ambiguous. And then it's just, that's a difficult one. But just to put some numbers around it, I think the business story, and I've said this for a while, that's going to come out. You're just going to see over and over. They're an advertiser, but they're going to be-- they're going to get good or bad. They're going to get a ton of awareness. The World Cup will be the largest gambling event in history. Yeah, 5.6 billion. Yeah. And Cal Street did more. Get this than 31 billion in trading volume in June. That's up 87% from May. Right. And the platform is declared 1 billion in daily volume every day since the tournament began June 11. And they say just the World Cup volume, 23 billion, Polymarket set an all-time monthly record of 10.8. I mean, and just one game USA versus Belgium. Jew, 64 million on Cal Street. And what's interesting here is that when you have this much money wagered on matches, they're no longer-- it's no longer a gambling story. It's a capital market story. And Cal Street is at a 3 million users during the World Cup. And it feels like prediction markets are kind of becoming the Bloomberg terminal. Yeah, but is that a good thing or just it is thing? I guess it is thing, but is it a good thing? I generally think that wagering on sports is something that young men need to be educated about. I don't know if you can stop it. I don't know if you can ask someone to go fight for the country and then not wager on the Browns game. But I think there needs to be education, and I think it needs to be regulated. Because it does pray on a more immature prefrontal cortex of a male. It does pray on an increasingly online youth. And there's just not getting around it. If you look at the data-- It's still bet on anything, right? Once they get started, like they were betting on drug outcomes, it starts to get a little-- Well, that's another-- There's just the pure addiction element in the fact that when a state legalizes gambling, bankruptcy's tend to skyrocket. Yeah. And then there's the potential for insider trading. I actually think that'll get arbitraged out when people realize that they don't have insight information. They should not bet. We'll get to that, because Trump-- I mean, I'll just say White House teleprompter operator is being investigated over allegations that he used inside knowledge of the president's speeches to earn over 100K on Calci. And then Trump media is going to sell Wall Street trader's investment firm, as much as $100,000 a month for faster access to his posts on Trump's social, where he talks about what he's going to do, and then he bets against it's all-- he's both insider trading. It's insiderness. It's gaming the system. And then it's possible addiction. So I mean, I think betting can be fun. It's just-- this seems like on turbo. And especially when the president himself and his minions are all doing it. Well, there's-- I mean, a couple of things. So just to wrap up, one of the more-- I think one of the most interesting things that's not covered about these prediction markets is that we used to discover information through traditional media and journalists. Sure. Now we discover it through markets. And when enough people have money on an outcome, markets often become the fastest aggregator of truth. I use data from prediction markets more than I use data from traditional news outlets now. Whenever it's about politics or predicting anything, this tends to be the data source I go to. So there's this weird-- neither good nor bad. It really is the wisdom of crowds has been monetized and has now been leveraged for data input for media companies such as ourself. The insider trading thing. So people on both sides of the aisle engage in insider trading. Trump came in and said, you guys are amateurs. I'm going to make millions, not thousands, maybe even hundreds and millions. And then just the brazenness of saying, this is tantamount. So Republicans will always say, and it's accurate, that Speaker Pelosi up 600% in the past 10 years, the S&P up 200%, that clearly she had access to material non-public information. But she didn't start a wire service selling her inside information. Right. I know. It's like under Biden amplified, right? It's like under Biden selling crack on the White House lawn. It's like being that brazen. By the way, he hands down has the best social in the world right now. Very, very, very authentic talking about addiction. Anyways, it goes back to the basic notion, if you get a commit a crime, don't get a speeding ticket. Don't have an isolated incident. Yeah, just double murder and rob banks every fucking hour. Yeah, I know. And then everyone just doesn't know where to look. Honestly, everyone's looking for an edge. It's such a great story. It's like, are you crazy? Are you nuts? I love it. All the little ones get caught. And then Trump doesn't play in sight. And just steals and steals. And he's just that thief. Speaking of which, he tried to steal the attention from the team. What was that wandering around the stage? Did he get boot, right? Correct or not? He got boot on the way out and he did get boot on the way out. He got boot on the way in. You could hear it. I'm sorry, excuse me. You're right. On the way in. But it was Claudia Scheinbaum. It was Prime Minister Karney or President Schein. You know, they were all there. It makes sense that they were all there. It wasn't as bad as I thought it was going to be. I mean, no one likes to get boot. But I'm trying to remember it past Super Bulls. Are presidents usually applauded? I don't. I haven't been to that many events with presidents. They don't get boot like that. He gets boot everywhere. He goes, but why was he on the stage? Could you even tell from where you were sitting? He wouldn't get off the stage. And then that infantina, his little guy who gives him awards, chased him across the stage to try to get him to move. Because you know, you're supposed to do this thing where you push the. I don't think that was him attention-miring. I think that was him daughtering. I don't think that we're together. I thought that was. I don't know if you could. tell, but that's what was happening. It was weird. It was weird. Of course, he just said, I think he was daughtering. That's what I felt. Everyone's like, oh, he's taking attention. I'm like, I don't think he knows where to go. Like, because the guy ran after him. Like I often do it. Oh, my mom was a bit horrible. Johnny Infantino, like she has a terrible reputation. And it's earned every ounce of that terrible reputation. These international sporting organizations, they kind of operate in another land, whether it's the ILC, even the NC-2A, I think, is not draped itself in glory. Because they have just a total lack of regulation. They have immense power. They have cartel power. They have monopoly power. These stadiums weren't even allowed to say, I'm a Gillette Stadium or MetLife, they had to cover it up such that FIFA would have told monopoly power on all monetization, bad revenue. Interesting. Yeah, it definitely feels as if, and I'm a capitalist, I don't think there's any better way to leverage the most powerful instinct than a self-preservation in capitalism. And I do think it's, it's just proven over and over that creates a growth in need for social services. But it does feel like it's just gone too far. Yeah. Yeah. I think you've tried too much World Cup. But speaking of grifters, I have to tell you something that hasn't gone too far. Andrew Tate and his brother Tristan had been arrested in Miami after British authorities issues, 38 new charges against them, including allegations of rape and trafficking. These guys, I mean, there was obviously a big meme about his outfit, which was very strange. It was the strange sort of, you know, lady outfit. It was an odd outfit. But I'm very happy they were arrested. For anyone who wants to read about them, you will understand that these people need to be thrown into jail and never let out again. I'm so happy. I hope Trump doesn't try to stop them from being extradited to England, which is where these latest, they were, of course, jailed in Romania. Do you think he'll do that? I hadn't even thought of that. Yeah. Trump could, he did. That's how, how do you think up back here from Romania? I would Trump put the, put the pressure on Romania to let him out. God, I think with all the shitties under with, with Epstein, that's the last thing. This is a, you know, Amanda got this right. This is Epstein in real time. This is Epstein in real time, like in, with the government letting these people off all the time. That's how they got back here. That's why they're reparting the main in their lady outfits. But these two are rapists and sex traffickers and they, and, and child monsters. I just, this is just the fact that the Trumps are so tight in them with them. JDMance follows them. It's not, there's one, there's Mana Sphere is one thing. These two are, are predators and should be thrown into jail. And I'm glad Britain came after them. I agree. And I don't, I know it's 38 new counts. I'm glad that the justice system is taking over here. But the good news in the lens I look at this through, you know, to a certain extent is that young men have moved on from the Tates. They're no longer a thing. The media has not. And I think it's good that they maintain coverage and that they're brought to justice for what would feel like just so many allegations that, that they're going to spend, you know, it's probably a pretty safe prediction that they may spend a decent part of the rest of their life. In jail, the Crown Prosecution Service has added new charges, rape, human trafficking and decent images of child and, yeah, this is their thing. This is their, and it brings their, it bring Andrew Tates total charges to 42. They found additional alleged victims in Bedford Sure and Herf Fischer bringing the total number of accusers in the UK case to seven. Both of them had dual US UK citizenship and are now waiting, um, extradition. The thing that doesn't get a lot of attention and I think might be the reason they end up in jail is people don't talk a lot about the actual business model. Um, and that is, Andrew Tate didn't get famous from kickboxing a big brother. He may have gotten famous doing that, but he got rich teaching men to get rich teaching men to get rich. Right. He basically hustlers university and he had this bogus subscription remind me of like Trump University, this bogus subscription education platform. And at one point, they think he had 100,000, uh, people almost all men roughly, roughly $50 a month at its peak. So $5 million a month in recurring revenue from basically an affiliate market pyramid scheme where the product was mostly more affiliate marketers. And, and the pitch was never subtle dominance, submission, and this thing called the matrix is a world view where women are property and violence against them is a lifestyle brand. They, they've really set young men, the, the few, and I want to give more, meant young men more credit than just believing everyone was a tape fan. But the scary thing about that part of the manosphere and what was so mandatious about it is it would start off, okay, be fit, be action oriented, take control of your economic life. And then it just became about dominance and misogyny and crime. Yeah. Right. Right. Really. Let's just just call it what it is. I mean, they, they like sell rape as a product. Um, I just, I, I think that they, they should go to jail and stay there. And I would agree that like all kinds of young men have rejected that my sons years ago had rejected them had looked at them, looked at their stuff because it was really popular when they were teenagers. And I was sort of disturbed by that because I had been very aware of his messaging. And I had rejected it. Um, that said, he had enough followers to be able to party on and among the followers, apparently are Baron Trump and others. Um, and it just, it's, you know, in this case, I don't blame Baron Trump. This is grotesque, but it's very attractive in some way. And they are essentially rapists and sex traffickers and, and now, uh, pedophiles and the Trump administration better remove itself from any, because it is. It's Epstein in real time. These guys at the end of the day, I believe they're going to be found guilty of a lot of different crimes and spent a lot of time in jail. The thing I find most interesting is that how were obvious grifters like this in such a vile people able to get so much traction and get so much influence 100% care. They're very close to the Trump people. And I, I go back to what Peter Drucker says that every business success can be reverse engineer to a changing demographics. And so what's the demographic here? What's the market that opened up? And I believe that it's millions. It's a cohort that unfortunately has exploded. And that is a cohort of loneliness and downward mobility young men. And they created demand. And guys like Tate supplied it. Right. I must be girls fault wrapped in Bugatti's and grievance. This isn't your fault. And, uh, this, the thing that he has kind of in common with Trump was the persecution or grievance complex that they leverage his, the tape brother standard response to every legal action across countries that accuse them of crimes has been the same script. This is a conspiracy against me because I speak the truth. Right. Exactly. And does that remind you of anybody? Right. Mm-hmm. So they, they take a specific evidence based allegation and they reframe it as an attack on the truth or on an idea. And, and it's, it's effective because it's flattering to the audience that if you believe him, you're not defending an accused rapist. You're defending free speech in a movement. Uh, so I, I find it, like how did this happen to me will be written about in, you know, sociology books? I, I agree, I agree. I, let me tell you, there's a story which I mentioned a couple of weeks ago in June called Andrew Tate's Empire of Abuse by Heidi Blake from the New Yorker. You need to read it. It, it is just, she, in, every one, it's an, it's an incredible indictment on a lot of people that facilitated it. But it, you'll get, it'll give you a primer into why these people belong in jail and should stay there for the rest of their lives. And I'm glad. And I'm glad they got arrested in such an embarrassing way to, you know, the, when they're weird little outfits. Oh, by the way, the, the silver lining here is Scott Galloway has his Halloween outfit. I know that. Everybody was talking about. Oh, my God. They're just, except they're rapists. God. You could do better. Well, I'll take the gay prostitute. Yeah, gay prostitute. Although, no gay would dress like that. Sorry. They're no gay. It's like a, like a midwestern lady paralegal. Anyway, um, okay, let's come up on a quick break. When come back, uh, SpaceX stock has taken a die. Support for the show comes from Odio. So why make it harder with a dozen different apps that don't talk to each other, introducing Odio. It's an all in one fully integrated platform that makes your work easier. CRM, accounting, inventory, ecommerce and more. And the best part, Odio replaces multiple expensive platforms for a fraction of the cost. So why not you try Odu for free at odu.com. That's odo.com. I've got a text. The summer might be almost over, but a new bombshell is entered the villa. Meet the voices of deep gram flux TTS. I'm Drew. Low key casual. I'm Alexis, an upbeat morning person. I'm Haley. Always cheerful. Flux TTS has some real personalities that are ready to speak. You can interrupt, pause and keep talking without losing the plot. Fancy a chat? Come try all the voices free through September 12th at deepgram.com/keeptalking. Terms apply. Support for the show comes from Harvey AI. The future of law is agentic. Not just tools that assist, but AI agents that navigate complex matters. That's why Harvey created agents that can do the work from end to end. They build a plan. Pull from secure data sources, run sub-agents in parallel, and draft the work product ready for your review. So you delegate the work and on the judgment. Trusted by more than 60% of the AMLA100 and leading Fortune 500 legal teams, Harvey is the AI operating system designed specifically for legal work. Harvey, AI, tailored for law. Learn more at Harvey.AI. Scott, we're back. This is an interesting story. Ed is all over this, man. I've been following Ed. He loves this story. SpaceX stock is no longer blasting off. Let's use a rocket term. Shares of the company are down almost 23% wiping out. Almost a trillion dollars in market value. One could say that it was overvalued and it's not really wiping it out. It's just coming down to where it belongs. As we taped the market cap for the company is 1.63 trillion and going down. The short squeeze is quite heavy on here. Let's listen to what you said about the stock in early June. I think SpaceX is about to hit a 10-year high on the minute it goes public, meaning it'll be all downhill from there. Yeah, I think you got this. And so talk about what's happening here and the short squeeze with what's occurring. I think most of the float, which is very small at this moment, is devoted to short sellers. So explain the situation. I think Elon Musk will be remembered as arguably the greatest engineer in a sector, but that sector is not space or EVs. He is engineered in concert with Goldman and JP Morgan. A means of creating demand, whether it's just this'll be a good trade or it's Elon. Elon OS gets his investors back or look at all these pictures of rockets. Look at all this flowery. We work like language about the world being an interstellar species or an interplanetary species. Constraint supply and then unprecedented valuation. We've never seen anything like this. Call the president or call whoever get included in the NASDAQ 100, get demand that no IPO has ever been fortunate enough to register. Now everyone talks about, okay, they've lost a trillion dollars in market value, but it's still worth 1.6 trillion. This isn't 35 dollar stocks. It's not a broken company. It's a reminder that gravity eventually applies to stocks too. And this is, this is what IPOs have become. And that is there no longer an opportunity for retail investors to participate in America's greatest companies. They don't create value. They transfer. They no longer create value care at. They transfer value from optimistic public investors to early private investors. Because if someone who's on or been on the board of a lot of private companies, there's so much capital available in the private markets. That if the people who really know the company and the sector well think you know what, there's still a lot of growth and value here. They keep it off in themselves and they find their own capital and they invest. And they don't need to access the public. If you wanted to raise a couple hundred million bucks, like Google did back when they went public in the 90s, you had to go public. VCs and institutional investors didn't have that kind of capital. Now, the only basically have said this for a while, the IPOs have now become the last stop on the chump train. And that is okay. We don't think there's upside anymore here. Basically, it's a means. It's like showing up to an IPO right now. It's like showing up to a poker game after everyone else already knows each other's cards. And then you're the chump. And it's like that whole thing. If you don't know who the dumbest person in the room is, it's you. Now, having said that, if you can get in on shares at the pricing, like from your investment bank or your social investor or whatever it is, there's these guys engineer a one day pop. If we had a real SEC chair coming in, I think a really solid review of the IPO process of this company, or even tokenization, even let's throw a bone at the crypto guys, maybe they should tokenize private companies, put it on the blockchain and create a level of transparency and disclosure using AI that more people can participate in these companies pre IPO. But the IPO process itself is now transferable. Well, and only that. It kind of defines the term rig. Explain what the short sellers are doing here. And why this float is so they kept the float tight in order to create the pop, correct? Well, as a percentage. So first off, okay, the way of the role was included in an asset 100. They also waived another role. Typically, when a company goes public, it has to float a certain amount of the company with this. Although they raised $80 billion on a $2 trillion market kept company, that means only 4% of the firms shares were available. Right. And they have they have all sorts of staggered lockups. They have effectively soft lockups that if you buy through certain platforms, you get banned from the platform. If you sell sell the stock, which is they don't want to call it a lockup because that would violate certain. That's you see conditions and create a different class of stocks. They created aware a workaround that's effectively a lockup. But people basically this is one of the most shorted stocks in history now because people are betting it's going to go down. And what people do is they borrow stock and sell sell it back to you at the same price for a fee. And they're hoping that it'll go down and they have to they get to sell it back to you at the price when they initially shorted the stock. It's dangerous because any move up creates a short squeeze and it can you know, can create velocity on the way up. Which Elon has battled before with Tesla and other things. That he and sort sellers have been a lifelong fight over the valuations of his companies. Yeah, this is like this is a company that is and every time I say this about must come wrong and to be fair, must get delivered in spades for his investors. The people who invested in Twitter, it's like they must have thought I'll write this thing off. And he's like figured out a way to stuff it into SpaceX and talk about rockets. And those people now have a chance to get their money out of it. But here's the thing I believe they're going to get their money out. And there's going to be an enormous number of investors who've made a lot of money to be fair, a lot of private investors. And it will create some economic growth. I got a friend of mine for one of the investment banks said that there are 12 new billionaires just in Texas. You know, the IPO market and capital formation in the US and SpaceX is part of this is a marvel. Except they way not be stay billionaires, right? Elon's no longer a trillionaire now okay, but still the amount of well created. I get it, but it's on the backs of Dupes, right? Someone's going to be at the short end of the stick and that's going to be fair. Okay, I don't think we're out there telling people it's overvalued. I mean Goldman Sachs and Morgan Stanley putting a price writing on it at 205 and 300. That is an exercise and creative writing. And I wonder if we're headed back to again, 99 remember when people were saying analysts were saying, putting out buy recommendations and then private emails saying this is a piece of shit. There's just no fucking way. I don't care who that Morgan Stanley analyst is. My guess is he or she is a very bright person. And in exchange for the feast or underwriting this company and exchange for the opportunity to manage the wealth of the of the shareholders post the IPO, which is actually a bigger business for these investment banks that people don't talk about. There's a general onus on the analyst not to say this thing's overvalued. It's worth 40 bucks to share. That deals back. Right. And Sarbanes-Oxley, I think was supposed to cure that and it has not. The only difference is it used to be if you had a certain type of company, the analyst writing it up was the most important thing and the analyst used to show up to pitch the IPO. And they're no longer allowed to do that. You're supposedly not talking to each other, but there's no fucking way. Anyone with half a brain would put a $300 price target on this thing. What would you do here? What is the investor? Yeah. Just sit quietly. If you're in a, do you mean a shareholder or just a investor? Yeah, if you're a shareholder now, is it going down? No. Are you kidding? Yeah. Yeah. The, the, the, the love it was the way I look at it is I just look at the asymmetry of potential upsides and the underlying valuation. The asymmetry here is is very dramatic that if this stock was at seven, it's much more likely what is it now? 140 or something? I don't know. It's much more likely this stocks at 70 than 280. So you have asymmetry to the downside, which means sell. Now you've got to look at tax ramifications if you got into the IPO or whatever, but also if you're a private market investor, you might be up 10 or 20 X on this, which again, credit and space X credit, you long credit the markets for trading that. Get out. Oh my gosh. I've had calls. I haven't had a call from anyone at space X. I've had a calls from employees at open AI and anthropic that are being pitched to buy their shares in the secondary market. And I would say the same fucking thing sell at least 50% and hope and call me. I hope I'm wrong. Lock in most or all of those. Lock it in. All right. And that topic China is once again staking its claim in the AI race. This is a really interesting story, something we've talked about a lot. Chinese startup moonshot AI just unveiled a new open source model called Kimi K3, which the company says can match top models from open A and anthropic and important benchmarks. Moonshot is priced the model at $15 per million output tokens. That's cheaper than anthropics, Fable 5, which costs $50 for the same level of output AI and semiconductor shocks dropped on this new similar to what we saw with DeepSeek last year. Scott, before we discuss this, I'm going to play a prediction. You may last December about China AI and Trump. Let's listen. I think China's about to go for the juggler here and I think that they're going to to massively engage in what I'll refer to as AI dumping. And that is these open, open weight models, including QN3 max, these models are just much cheaper, lower power consumption and everyone from Airbnb to other Fortune 500 firms are starting to recognize that these things are lower cost. And I think essentially China's gonna say, okay, the fastest way to kick this guy in the nuts is that he's made a giant bet on AI, including the S&P and his entire economy on AI. And we're just gonna start dumping AI into the US market. - So great prediction. I wanna talk about how concern your US companies. They're of course calling it AI communism. One of them, one of the top people about what China's doing. - Who's that essentially planned AI? - Well, no, they're giving away for free, everybody, in benefiting society. - Yeah, it's called dumping. - Yeah, exactly. - There's nothing more capitalist than trying to consolidate what they're doing here. So Trump's former AI's, our David Sags, called this a new model concerning an argued US is setting itself back with regulation saying, this is how you lose the AI race. There is no regulation, David. So I don't know what you're thinking about. - Why are you talking about the data center? More trying to do it. - Oh, the data, whatever. It doesn't matter. This is not the problem, David. The problem is these costs. So Scott, go for it, 'cause you really did. This has stayed with me when you started talking about it last year, and I remember thinking he's dead right about what China's gonna do here and you're right. It's not AI communism. It's AI capitalism is what's happening. - This, Kara, this is the biggest story that's gathered. This is the business business, the biggest business story that is getting the least coverage. And that is, everyone thought the AI race would be won by the company with the smartest model. And increasingly, it's looking like it'll be won by whoever can drive margins to zero the fastest. China isn't going to be open AI in a frontier model, a premium AI. That's not what they're trying to do here. They're trying to make premium AI economically irrelevant. And that is exactly correct. - Moonshot pricing AI at roughly 70% below comparable frontier models. It's not competition. It's, okay, used to the word exactly, it's AI dumping folks. And this is what China has done. This is just like, for God's sakes, if we had a secretary of commerce who didn't have his head up as us, God, for God's sakes, just spend an hour with Jean Riemundo. - Yeah. - For God's sakes, just-- - I just did. - Get Justin Woolfers in there and say, and just listen to the people. They'll tell you what is going on and what you can do about it. - Yeah. - This is what China did to solar panels, steel, EVs, and batteries. First, they match Western quality, or they don't even match it. 80%, 90%. - Cloth. - Cloth. - Actually, they match it. With cars, they've matched it. But go ahead. - Then they cut the price by two thirds, then they own the market. Investors should stop asking, who has the best model? The salient key question is the following. Who still has pricing power in 24 months? - Yeah, so what do the Trump will do? We'll try to keep them out of here the way they deal with EVs, but it doesn't matter 'cause across the globe, China will own the markets everywhere, like they do with EVs. Like that is, if you go anywhere except the United States, their EVs are everywhere, everywhere. So what happens here? 'Cause they're gonna try to keep, they'll keep it out of this. This is what these companies are freaking, and they either wanna be bailed out or they wanna be protected, which is of course, typical of them, 'cause they're communists. So what does the Trump administration do since, as you noted, they're banking, as you completely presently notice, they're banking on this. They've stake their entire market upon this. I think that's exactly what you said. His entire communion AI, and we're gonna start dumping AI onto the US market. So what did the Trump administration do, especially? 'Cause they're in there, especially after the midterms. They don't have a lot of moves to make here. - When you make unilateral, non-market decisions that are caked in bad judgment, you end up in a quagmire. You end up in a corner with no good options. - Sounds like they're wrong. - Whether that's exactly right. Whether it's going into a round without consulting Congress, your allies having a plan around the state of hormones, you end up with no good options. By deciding to no regulation, making a huge bet on AI infrastructure or making an enormous bet, the market has just gone so crazy, so concentrated around small number of companies. And what you have here is, he's gonna be in a real quagmire. 'Cause you think, well, okay, he's just gonna regulate and tell these companies they can't use, tell American companies they can't use Chinese models. But the most frightening graph for the American economy and the global economy is one of those mountain graphs. And it shows it in the last 90 days, token usage of Chinese models is gone from like single digits to 53%. The majority of AI consumption now in the US appears to be coming from Chinese open weight models. And here's the problem, whether it's David Sachs or whoever it is that has an enormous investment or just the economy has an enormous investment and it's dependent upon the growth of open AI and a drop back and envision all these companies. The chip guys, the infrastructure guys won't be hit as hard, but the front end models, if they get hit hard, the whole thing could, those dominoes are already starting to tip. But the problem is every VC and all the other people that he caters to are gonna call him and say, I can't afford to build this new insurance AI company. If you all of a sudden overnight decide I can't use Chinese open AI models. So he's surrounded by a lot of donors who are making a lot of money arming down the application layer to a cheaper LLM layer. And then there's the cyber security exposure. I mean, it just goes on. And he doesn't surround himself, he surrounds himself with people who wanna make money in the short term but don't think about the long-term ecosystem here. So this is, I call this, okay, two things. AI dumping and next quagmire. He's gonna be in a box here. He's gonna be in a corner here. He doesn't even know. I don't think he understands AI. I don't think he cares. I don't think he's on his way out and he's trying to grab from whatever he can. You know, like, remember those things where they gave you a cart and you ran around a supermarket. You had 10 minutes to take everything. That's what it feels like. Like he's running around. Not that he could run around. I forgot about that. I remember the sketch of the meat. This is, so I was a macro-micro-economics graduate fellow in business school. This is literally gonna be the most exciting, fun period to look at just how people, it's like smooth holly all over. We used to just talk about how stupid tariff store and there was different historic events. The oil shock of the sevenies would be talking about how stupid they were in the 20s during the Great Depression to actually-- - How could they do it? How could they do it? - How could they do it? This era is just replete with head up your ass decisions that illuminate economics and markets. And then they blame some housewife in Utah. It doesn't want a data center. I think you're absolutely right. The focus on data centers is probably too much, but at the same time, it's not enough because the ones that they stick right in front of people or right in the midst of people, they couldn't have done it well. They had to do it in the most aggressive tone-deaf way. I've been talking to a lot of people who are building these things and they're like, we can show that we make money from it. I'm like, oh my god, they hate you. You really have lost the narrative here so badly that you need to recalibrate what you're doing. - So I never miss a chance to intellectually virtue signal. I think being a critical thinker means that on a regular basis, if you do what we do, you inflame the people who think they know you and trust you and like you. - Right, yeah. - And you say something because you think it's the truth. And knowing that people are gonna get angry. I do this like every couple of weeks. I say something that people think is stupid or wrong and they let me know via email and social. And that's fine. I think that probably means one, I get it wrong and two, I'm doing something right. And the latest one, people are inflamed that I said the data center pushback was populous bullshit. - No, you said some of it was. If you were less people. - Well, let me be clear. Whether it's a chicken processing plant a nuclear power plant or the Ford factory, generally speaking in every economic progress involves just very understandable nimbyism. It's like no, I don't want the chicken processing plant next to me. I don't want three mile island a mile from my house. The charge of local government is to weigh the externalities versus the upside and make a thoughtful decision representing their community. And if you just go item by item here, some are very real concerns. I think they're probably the. - This would be one thing. - Probably the most significant is the idea that it would strain the grid and send up electricity costs on middle-class households such as the time all of them can get richer. That is a very legitimate concern that should be screened for. But what gets missed is that many, if not the majority of these plants will be off grid empowered by natural gas. - No, that is perfectly fine. I just think you have an Elon in Memphis, like poisoning people of color, poor people of color. You've got a Kevin O'Leary in Utah, like accusing people of. - I think people of color is a pretty charged statement. Why do you say that? - Because there's lawsuits right now. Methane, 'cause he has a methane. There's a lot of. lawsuit. Well, there's a lawsuit happening where he opened the thing where he's releasing all levels of methane and it's causing pollution and poisoning. That's what that's all. Like whether it's whether it's whether listen, it'll be in court. This will this will have been in court. And I'm just saying this is what it looks like is that they they cannot help themselves or you have Kevin O'Leary accusing people of being Chinese communists in them. They could not have picked or spoke first. They couldn't have picked or so or putting them even close, but when people are paying more for electricity and it looks like, you know, it looks like local officials are on the take or or, you know, there's a lot of controversy about the Louisiana plant. I don't know, you know, that that should be litigated essentially. This is my fear. My fear is that because people are quite frankly, this is the newest vessel for understandable anger around income inequality, that blue states are going to pass these moratoriums rather than saying, how could we make this so lucrative for the the citizens of Minnesota in terms of property taxes and an entity that does in the short, the grant in the long term, not a lot of jobs in the short run creates some vocational jobs and we get property taxes from an entity, reliable property taxes from an entity that doesn't tax our social services almost at all. They have closed loop water systems and uses their own energy that's off grid and pays a lot of property taxes and if I were these guys, I've told you my idea, I would try and get those payments locked in because I don't think as many of these things are going to be built. Right. No, I get that. I think that more dreams aren't forever. They are, let's have a figure out get this to do this in a right way, but that's that's what hearings and public hearings in our legislative officials are supposed to do without a government, a governor weighing in and just doing a blanket moratorium. Right. But a lot of these tech companies are jamming these things through. I mean, that's, this is the issue, is that they want to take a minute so they can do things like that. And just, you know, I think it's actually an interesting business because Meta's in talks to least computing power from its data centers to Anthropic that could be worth $10 billion over two years, similar to a deal, Anthropic just made with SpaceX for computing power. But only a third of the size, you know, Meta is, is wants to use this compute, this, these infrastructure computes to get the cloud computing business to offset the cost of AI gap X, you know, there's all manner of things working out here. And certainly government should be part of it. I think it's just a manner in which several of the most high profile properties are going in that creates this hatred essentially. This is techno narcissism, income inequality. I don't give a flank fuck about you. I say tone-deaf things. I think that humans require too much power. I think there's a genocide against White Afrocon. This is, there's, oh, and by the way, I have a tendency, the people I cohort with have a tendency to go to islands where there's underage girl. There has never been an easier target right now than the tech brothers. And some of it is well earned. At the same time, a public official's job is to balance it. Here's, here's what I fear. Blue states will fill political pressure to make long speeches and put on moratoriums on data centers. The Republican Southern states will say, come one, come all. And they're not stupid. They're not going to let them just like soak up all the water. I think they're smarter than that. And what I worry about, Cara, is that while Democrats in blue states will fill righteous, we won't have as much tax revenue to pay for snap benefits and pay our high school teachers. I get that. But the actual backlash is happening in Tennessee. Right. Let me read this from Roy. That's a good point. That's a good point. Is that Colossus? Is that where Colossus is? Yeah. Elon Musk's X AI has installed far more gas turbines without federal permits at its Colossus to data center project in Tennessee than it publicly acknowledged that pollution is hitting predominantly black neighborhoods, the hardest and Reuters analysis found. Like this is just, this is just like a layup for any reporter. And this potential emissions from the turbines are far beyond the threshold that require federal permit and would release in near predominantly black communities already estimated to be suffering disproportionately high rates of lung disease, according to Reuters. I mean poisoning. Yeah. And that has a, that has a consistent and rough history that the corporate America tends to go into. Exactly. And if they had done it in the right way, and we're going to help the community, we're going to give it your absolute, but they couldn't help themselves. And they of course, I personally, I think Elon does more damage to these people than anything else. Like in terms of the way he behaves. And then you have, you know, the, you know, the moron, Kevin O'Leary coming up the side, calling people Chinese communists because they object, like every single thing that gets built gets objected to, but the way they handle the objection is, anyway, I would agree. I think you were absolutely right. And I don't think you're wrong. I just think the way they did it in high profile places creates this. And it is an opportunity. It's just a question of how much an opportunity, how much a state or a, a local area should get. Anyway, it's a really interesting story, but it's, you're right. You've got this 100% right along with you. The Chinese dumping to me is one of your greatest calls. It was a long time ago. Go on. That's the way I want to start the week. People are going to just use these Chinese models. And there's all manner of cyber issues around that security issues too. And now that I trust these American companies much either. All right, let's go on a quick break. We come back. Why Netflix latest earnings has investors concerned? Support for the show comes from Core Weave. Everywhere you look, AI is expanding what we thought was possible and at the center of it all is Core Weave. Medical research and diagnosis, education, complex visual effects for movies, science and technology breakthroughs. Core Weave powers AI pioneers around the world with purpose-built tech, building what's never been built before. Core Weave is the essential cloud for AI, ready for anything, ready for AI. To learn more about how Core Weave powers the world's best AI, go to coreweave.com/readyforanything. Scott, we're back. Netflix shares just hit a 52 week low after the company's latest earnings report, revenue and income are roughly in line with expectations. But investors were spooked by a third quarter revenue forecast that raises concerns about growth and other red flag engagement. This has been really the talk of lots of people. Ted Cerandos hit back at those sophomore slump viewership drop-off reports saying it's very common in the industry and season two fall if is actually improved this year. Netflix also says subscribers watch 97 billion hours in the first half of the year, up 2% from last year, not 2% is not that great. But the company is cutting back on what we watch reports now releasing data only once here instead of twice. Obviously thinking about live TV channels, they got podcasts on there, they're doing short-form stuff, subscription bundles, they're thinking about which thing never thought they would do. They're looking like TV to me or whatever. They're looking like YouTube is what they're trying to do. So talk about what's happened here, because they were sort of on a high, like they could do no wrong, and now people are sort of slapping at them pretty hard. I didn't see this coming. It's a big, big story. I thought the company was going to be well-positioned benefit from not spending $118 billion such that they could have Scott Pele like get angry, or maybe they would, I mean, I think they don't. Well, they wouldn't have ever had. They wouldn't have handled it that way. They wouldn't have gotten CBS. Yeah, that would harm out. That was Skydance. You see what I'm saying, though. There's just no way you could have pulled off a big aqua. I think they showed the board and Ted showed real discipline walking away. I got to a point where I was like, okay, we're going to be house poor here. We're going to be trying to figure our ways for 10 years to figure out a way to show return on this. So it's starting to say if you look at the earnings call, they become victims of their own success. Wall Street's no longer asking, can they win? They ask, can they keep winning forever? You talked about this, 97 billion hours watch. That's unbelievable, but it's up 2%. People are used to double-digit growth from Netflix. The problem is it's not a startup anymore. It's becoming cable with a much better interface. Every media company eventually realizes the same thing. That is attention is finite. The next story growth is netting subscribers. It's owning more hours of your day, but they've made more progress against that than they get credit for. They're going into live sports. They're going to have NFL games. They're actually bidding, which I care about, on the 2030 World Cup. I just did that Brian Williams thing that you did. Yeah. You know, we started talking about when we're going to hang up our cleats and he's like, you know, when the fastball is no longer fast. I'm like, go Brian. Oh, Brian. You know, he's like, let's put those horses away wet and tired. Yeah, he's got this. He's like, well, that's like having a moose and a convertible. I don't even know what that means, but it sounds very down home. He does. Yeah, he's a very, anyway, he's an affable handsome guy. Yeah, just a nice handsome guy. But look, the bottom, this company, Netflix is almost been cut in half, and I like a bottoms of valuation. It's trading in its lowest p in a while. I think the company's a buy here solely because, yeah, I would agree. Well, two reasons. One, it's the operating system for non-work hours, and every time, and this happened in Netflix four years ago, the stock was way down. And right now, the fear is the clip economy that we're. YouTube. Yeah, YouTube is the fear. We have a new generation of people that don't want to go longer than two or three minutes, and that YouTube and that clips on instant reels are going to begin to soak all the time away. Their ads here has actually done really well and is responsible for a lot of their new startups, which by the way, I thought was a bad idea. And the reality is, Ted and his, God, what's the Coseo's name? I don't give him credit. Greg. Yeah. Coseo of Netflix. The bottom line is every time people talk about this coming over valued and the stockets hit, Greg Peters, that it ends up being a buying opportunity. Yeah, I would agree. Although they do have risks from, I worry about some of them being a little jumpy with the podcast with the, like, and they're just sort of trying everything and maybe they may need to be a tiny bit more. Yeah, but they're very analytical and they can cool stuff. They have, they're using AI and analytics to look at what should be on the home screen, what shouldn't. Yep. Yeah. I agree. I think of any media thing. You don't want to bet against Ted and Greg. I really do. Yeah. I'm actually looking at the stock for the first time. I told you my Netflix stock story. I bought it at 12. That's the good news on a risk-adjusted basis or split-adjusted basis. It's now at 700. The bad news is I sold it three months later at 10 to take a stock loss. I want to find a time machine so I can go back in time and kill me and then kill myself. Well, I wouldn't, I wouldn't be doing this, join Bagadona's podcast. Well, you know, it's a question of what, what, what you do, like, and I think they were smart not to get that. As you said, and speaking of which, we got Eric Gardner from Puck. The other story is, of course, the Paramount, Warner Deal, and the AG's, which have sort of stopped it in its tracks for now. But let's listen to Eric Gardner from Puck about what's happening in Paramount because this also slows down a competitor of theirs. Let's hear his summary of that. The first time Paramount's people are starting to talk about the Supreme Court. So what's going on there? Well, you have, of course, the Supreme Court could eventually factor maybe if an injunction is issued, and Paramount appeals it up, but I think there's more going on here. I think it has to do with bargaining positions. I think that the state AG's know that if they can drag this case on, it will cost the elephants a lot of money, $1.2 billion if it's, you know, delayed a few months. And you know, so what are Paramount's people doing in response? Well, they're talking about the consequences of pursuing this fight on and on and on. They're talking about how the Supreme Court has conservative justices who might change antitrust standards, who might make it tougher for future mergers to be blocked. And so they're pointing out the cost that way as well. And in Junction, rolling will come soon, and after that, both sides will assess their options, maybe look into a room and start negotiating what a deal could be. And so they'll have these kind of future considerations in mind. So interest, another interesting, immediate question, like it's, it's, I personally would be a Netflix side on this kind of stuff in terms of figuring out how to get back, you know, how to get back in what they're doing. I guess they eventually will solve the problem and then have to deal with the next problem, which is the debt that they have, which is enormous. Away from all the other noise about that merger, the debt is the biggest story there. Yeah, I don't, I was against the consolidation here. And then I spent some time with two economists that I really respect, NYU and Chicago. And they both convinced me, just in a very sober way, that this does not even the combined Warner Brothers Discovery doesn't qualify, or excuse me, Paramount doesn't qualify as a monopoly. And then the industry needs to consolidate and you don't get to pick the political leanings of the consolidator. That's not, that's not reason for blocking a merger. The, now if I were, the unions, if I were Sag Aftra in California, I'd be going ape shit crazy and using whatever leverage I could because I do think these guys are going to be more of a threat to employment at this price and with their backgrounds and AI, then another acquireer would have been. But again, that's not a reason legally to block a merger either. We like consolidation, we like efficiency, that's part of capitalism. I think this is mostly political and I understand that, okay, if you're going to weaponize attorney generals and, and AG's in, in, in the DOJ, we're going to do the same thing against your donors. I get it. I like hitting back. At the end of the day, maybe California gets some consolation or they have to spend something, but this goes through. This goes through. But again, these guys might be the dog that caught the car. That's correct. That is correct. Then what? Then what? Then what? Then what? The dad here and Oracle, dad, he's, dad, he's piggy bank is off 44% because everyone realizes, no fucking way, open AI can buy a trillion dollars in Oracle. It is really something. Yeah. For a hundred billion in Oracle compute. Yeah, to me, Netflix is the one I would focus. I, I still would be bullish on Netflix compared to this. No matter how this turns out for Paramount, it's not good going forward because they're going to have endless things to deal with, along with the political stuff, like along with it. It just goes. It's much more trouble. I think what Netflix is doing to try to figure out what works is actually a great idea. Like even, even if I think all the half of the things won't work, I kind of like that they're actually out making things and that's what Paramount needs to focus on is what can they do to re-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e-e- They're going to be stymied by the politics, they're going to be stymied very much so by the debt, which is what everybody should be focused on. So in this case, Netflix, to me, is the one that's doing the most interesting, I think, person. Yeah. The stock's off 50%. I don't think you want to bet against this management team. I think, let me put it this way. I think there's more, again, going back to asymmetry. If the stock doubled and just went back to where it was, I think people would say, yeah, that kind of makes sense. If it got cut in half here, that would be exceptional. So again, asymmetry versus, to the upside, versus asymmetry to the downside in terms of, like-- Is our word for the day? Well, it is. Oh, my God. You want to talk about the new defense department, which is asymmetry over and over. But anyways, I like-- I think this is actually an opportunity. Yeah. Yeah. Anyway, it's an interesting time in media. Anyway, all right. Scott, one more quick break. We'll be back for wins and fails. Okay, Scott, we're going to do wins and fails. I shall-- I don't know. I have two. I'm going to have two. Well, no, actually-- You're show. You're show, lady. You do you. I do me. And Griffin put out this great thread showing the picture with her in this 23-year-old. She said, "Internet, have out it." And I'm like, and I wrote back, "Cathy, have out it." Yeah, have out. You're consenting adults, enough men are doing the same thing, enjoy yourself, enjoy your money. You're going to be dead soon. Congratulations. Do what dudes do. Have out it. Anyway, as I predicted, speaking of good predictions, the Odyssey did a crazy number of the box office and sort of knocked off the anti-woke people-- Oh, my kids weren't sorry. Yeah, pulling in 124 million for opening the US, 250 million across the-- Yeah, huge. --of the globe. Huge numbers. People were just not stopping, nonstop talking about it, which was interesting. Huge sales of the Odyssey itself, the Emily Wilson edition, which is considered much better translation, which he based it on just all over the place, just doing really well. And I appreciate it. It's a great film, and it deserves it. And it shows that if you make really great blockbusters that are interesting and challenging and a great movie, people will go to them and gets people back in the theaters, which is great economically speaking of all the knock-on effects. And I love that they just-- nobody cared about the stupid woke stuff that they thought might hurt it, and neither did Chris Nolan. I think they thought Chris Nolan was conservative. I don't think he's anything. I think he's just likes to make good movies. I thought that was great. It was a fail on behalf of the anti-woke people, which was great for my thing. I think I'm going to do a fail-win kind of thing. Mark Warner, who was at-- I interviewed Gina Romando at Johns Hopkins this week, which was a great interview to go up soon. And Mark Warner came to the dinner, center of Warner, and then he had to leave, because he had to go on TV to talk about Trump's crazy speech, which we're not discussing at all, because it was insane, which I think was a big-- turned out to be a big nothingburger, his election security. He said, "It's his attempts to slow the election." The mid-terms down in Apple. There is an election interference. It just was from Potos when he tried to get votes out of Georgia. It's called January 6th. Yeah, and Af Pros. So anyway, so Mark is very much-- I have to say, I give him great credit. And he pilloried CBS for running the Trump speech for, I don't know, 17 minutes without any comment, especially given Trump's record. By the way, MSNBC did it for 10 or so. I have to give credit to CNN, which I thought did the best job of the handling this, because they had a lot of the digital stuff to do so. They did not run the speech live because of Trump's record, online, about election interference, like very clear record. But they did keep feeding Caitlin Collins. I thought she did a great job. Clips. And then they would comment on them and fact check them in real time, as they were happening. And at the same time, they did avail themselves. They did put the speech on the streamer live. But next to it were reporters commenting on commenting and fact checking in real time next to the stream, which was great. They used digital means to do this, which was great. They should do that at debates. They should-- We have this idea two years ago, we have a chiron. with a bipartisan committee, doing pants on fire or truth or mostly true, and just fact check them. - But they allowed people to watch it, which is like on the streaming where it belonged, but they didn't do it on broadcast television, and then they had reporters reading the documents and commenting on them in real time. I got to say, apparently from what I talked to people at CNN, Mark Thompson was behind that. It's exactly how you handled that. And I think Mark Warner was absolutely correct to Pillary CBS for just putting it out there without any kind of fact checking. For as long as they did, I think MS should not have done it either. So I'm gonna be equal time there, but I thought Mark was great. And he was very concerned about what Trump is trying to do. And it was a real fail on behalf of several news organizations and a win for CNN to be doing it that way. Others did not, I think ABC didn't run it, NBC didn't, but I thought they did the best job because it did provide the speech in real time, but put around the guardrails that reporters are supposed to do. So I was really kind of pleased to see that done so well in the CNN as it currently runs. And so Kudos to for them and Mark Thompson for doing it and Mark Warner for morning about it. Go ahead. - Yeah, there's very few people you meet and you think this guy would be a great president right now. I think Senator Warner would be an outstanding centrist president. - Absolutely. I really, he's so, he just had the tragic death of one of his kids. But he's just keep, he keeps going. And I really appreciate his public service. - Yeah, well, there were a lot of calls to the Democratic Party for him to run. People saw him as very electable, but he's had a lot of struggles with it or he's had real tragedy and he's always, as one should opted for his family. Anyway, okay, so my loss is, again, and we have to point this stuff out. And I always promised myself I'm gonna be more focused on business and tech and less part of the rage cycle. But I do think it's important we continue to point this stuff out. Trump media is building a paid subscription product out of insider trading. And that's not hyperbola, that's the actual SKU here. The offer is the following. For a fee, Wall Street firms or investors get Trump's true social post delivered in milliseconds ahead of the public feed. - I know, it's insider trading, that's what you think. - It's front running insider trading. The launch is August 1st. Clients are already signed up and Trump owns 41% of the company and he's selling, or you know. So like, let's strip the euphemism. This isn't a data feed. It's a front running service and the product being sold is an information. It's the ability to trade on insider information before the country reads the same sentence. And so why does this matter? And April Trump posted that Iran had fully reopened the straight of our moves. It was false, oil moved anyways. The post was the event, the truth was optional. So he can move markets if and when he decides it's beneficial for him or the people paying for his insider trading API. Trump has used true social to move markets on tariffs, Fed personnel, military strikes. Every one of those posts is now a product with a millisecond paid tier. And every rule in modern securities law, reg FT, blackout windows, insider trading statutes exist to prevent one thing. Someone getting to trade on material information before everyone else does. And the reason we do that is the reason capital formation is unparalleled in our society. And companies get access to cheaper and cheaper capital, which means crazier and crazier ideas deeper in the barrel get funded. And occasionally those deep in the barrel batch had crazier ideas end up being alphabet. And we end up having more tax revenue and more jobs for our kids. Is because the 99% of investors who don't have access to inside information or the 99.99 still feel like they have a fighting shot. Russia has absolutely no stock market despite being a real economy and having a lot of firms that create a lot of cash flow value because the populace believes and knows the game is rigged against them. And so they don't invest in it. And if you continue to have a small group of people who can engage in inside it's getting to the point now where everything's gambling and someone else is the house because you don't have inside information. - No, it's just so blatant, it's so crazy blatant, it's nuts. - Well, it's a logical endpoint of a pattern that's existed for a while. 2.2 billion of Trump's disclosing come during his time in office, 1.4 billion of a crypto, more than any public crypto company made last year. - Also, it's stock trades also. - 22,000 of them in 2025. Biden made 13 in his whole presidency. Nvidia shares bought a week before commerce approved and video chip sales to China. Palantir bought nine times before he publicly praised its war fighting capabilities meanwhile. SEC enforcement actions against public companies 80 a year under Biden. - Yeah. - Four in the last year. - The enforcement is down at FDA and well, that's why we have suddenly legionaries as he's back, why we have the dirty, let the poopy let us. The, this is, he's trying to take out scientific things on judges today, like every day it's a different thing. This is like a removal of all government regulation in order to help people make money. - Markets functioning markets of which we have the best in the world and again, people don't, people take for granted how incredible it is for small companies. I was able to raise hundreds of millions of dollars in my thirties for Batchhead crazy ideas and some worked and some didn't. Where else can you do that? Where else do the most talented people in the world want to come to business school here and then head to the valley so they can start these crazy fucking ideas and they can find capital to do it. The difference between us in Europe or one of the biggest differences comes down to risk. People who are willing to bet their human capital on something and capital willing to risk their own money on those crazy risk takers. And if the game is rigged, that capital starts to go somewhere else. They, they markets run on one assumption. Price reflects information available to everyone at roughly the same time. That's the whole shooting match. And truth APA doesn't cheat on that assumption. It sells tickets to that cheating. And once Wall Street has a fiduciary reason to keep him posting, you haven't just corrupted the president, you've made corruption a casual positive business model. This is putting in place structurally corruption and seeds of doubt around the market. And why wouldn't Wall Street buy it? I mean, it's a chance to make money. You make money. I'm tempted to buy it, Cara. Right, I know. I thought, okay, it's a hundred grand. I'll trade on it. And if I make make money, I'll donate a democratic candidate. And then I thought, okay, is that a good or a bad idea? I don't. Yeah. It doesn't care about people. Maybe it doesn't amount to anything. And also I don't have the infrastructure to trade on more stuff. They literally, they are going to be selling the silverware from the White House before they go. They're going to put it on eBay. They're going to put on plates on eBay. But this feels like it was tailor made. And I have no evidence of this. But Citadel is some of the brightest minds in the world. They built, they spent millions building just a wire to their headquarters where they would get information and millisecond faster. And then they have the technology to trade on it. And by the way, it's perfectly legal. This feels like a client or an elect, a quantum trading, whatever the term is, went to him and said, we have an idea. Yeah, of course. No, he's done this over and over again. Selling access. Selling access is what it is. This is, this is point operated presidency. This is not only corrupt. It is going to cost entrepreneurs and the markets. And it's going to, it threatens this unbelievable thing that is not parallel in that capital formation. All right. My win is what I'll loosely call Gen Z's band of brothers. And that is military recruiting, or the military recruiting crisis, at least in the short term, appears to be over. And Gen Z has ended it. The Navy Army Air Force and the Space Force have all hit their 2026 recruiting goals nine months ahead of schedule. That's the strongest recruiting class in 15 years. It's a testosterone, isn't it? Yeah, God. Three years ago, the services fell short to their goals by as much as 25%. ROTC is surging. Dartmouth program grew from A cadets to 35 in three years. And this is happening despite a very unpopular conflict in the Middle East amongst a generation skeptical of America's role in the world. And everyone, of course, is claiming credit. Secretary Hague says the military stop being woke. Recruiter's point to prep courses and modernize outreach. But the best reporting on this has been from the Wall Street Journal and they talk to the recruits themselves. And it's a much simpler story. Well, the military is selling with the rest of the economy stop providing. And that is purpose and belonging. One sailor, and I thought this was very moving, said he joined because he wanted to find my place somewhere. That's what young people want. They just want to find their place. Economics are playing a role here. full tuition ROTC scholarship. is college, college, or plus healthcare and education benefits, rights, they're offering this just as the entry level job market appears to be softening. Also, I think it comes down to one words and that is trust. Institutional confidence is collapsing everywhere. You have the military ranks as America's second most trusted institution behind only small business. So I've also said, I think the armed services are, I think there's a lot of young people, especially young men who are really untethered, wandering and lost. And I believe that the service is, it's obviously not for everybody, but I think for a lot of people, it's a fantastic means of marinating, feeling a sense of purpose, meeting other people. I would agree. You know, I wanted to go with the military, as you know. And my dad, let me just say my dad went into military right after college. He's a doctor, right? He sent him to college. It sent him to medical school. And he served for 10 years and then he died, right? When he got out, but he, he, this is how he did it. You know, he was from a family of limited, more limited means. And this is how he got, you know, he got out of West Virginia essentially. And one of the only problems that I have right now, it will besides headset is a moron is that is, is, is withholding promotions from women and people of color or scrubbing the name of gay veterans off of ships. Like unfairly not promoting women. Like he has a thing out for women and people of color in the top ranks. And that's grotesque. Like that's supposed to be the fairest place in the world. And the fact that he's a withholding this is not, they didn't get their promotions because it's woke. It's just gross what he's doing at the top in terms of withholding those things. And that's not what the military is about. But I do think it's a great alternate. And the question is, are they really screening people? That's the thing. Look at what happened at ICE. This guy who just murdered someone I think was was never vetted. Like the vetting has to happen because this one guy who shot turns out he is very severe mental illness. I think when they go through the ice vetting, when this is all cleaned up, it's going to be pretty repulsive. The kind of people they let and handed a gun and told to get out there and chase immigrants are military rangers are clearly doing something right. And that is if you look at leadership, if you look at elected officials, if you look at successful business people, if you look at some of the most successful people in business school, we have a wonderful program at NYU Stern, where we're bringing veterans. If I was at my company and it's not, it's not, I mean, it's a little bit of patriotism. But we always interview veterans. They're very impressive people. And as a matter of fact, until this year, 70% of the men showing up to recruiters office didn't qualify because of obesity or they were unable to pass a mental health test or education. So Gen Z signing up not only reflects more patriotism on their part and different things. Some good, some bad in the economy. It reflects the young people. It reflects well on young people. And also there's nothing. There's not, there's no greater leveler in the United States so far than the military because nothing like being in a foxhole or counting on someone for your life or the life of others puts race, how rich their father is, their sexual orientation in a fucking backseat where it belongs. It's like, can I trust this woman with my life? And I don't care who your daddy is. You didn't want to go into military, right? You didn't have an interest in it. Oh no. My dad took me to Annapolis. He was in the Royal Navy. And it was one of those moments. Kara, we went and we toured in Annapolis where it was clear my parents lack the sophistication to know what was going on because we toured in Annapolis and my dad wanted me to go and we were pretending that I was going to apply. I didn't have the grades. I didn't have the SAT scores. And then they said you have to get a letter of recommendation from one of your senators and we're fairly lower middle class. We didn't even know how to go about that. The tour cry, frankly, was one of those moments where you realize you're unremarkable and you have no business being there. And it was just sort of, I just remember the trip with my father, quite frankly, being quite depressing. Like I'm not. I'm not almost ill and my parents don't even realize they're so unsophisticated. They did no homework on what's required to get into Annapolis. No, no, no, no. I feel bad for young Scott. Now I feel pain for a young Scott. I would have been an admin. Oh, yeah. So instead I went to like crazy fucking fraternity parties and made out with hot women at UCLA. I did things worked out, Kara. Anyway, we want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nmymag.com/pivot. Just submit a question for the show. We're called 85551 Pivot elsewhere in the Kara and Scott universe this week on on. I'm talking about the rise of insurgent progressives with a panel of political experts. One of them is Amanda Litman, co-founder and president of run for something a great group attracting young people of all kinds to public office. Let's listen to a clip. If you don't like DSA, it is possible for the establishment wings of the party or the old guard such as it is to offer a different vision. They could avail themselves of selling something that would solve the problems and speaking to the anger people feel. The fact that they have instead chosen to punch left or to blame the young people who want these wild and crazy things like make an argument. I think she makes a good point. Make an argument. It's a great. It's a really interesting organization. Okay. That's the show. Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back on Friday. Today's show is produced by Larry Neiman, Zoe Marcus, Taylor Griffin and Todd Weisman, earning a tie to the end of the episode. Thanks also to Dubro's, Mr. Varion, Dan Chalon, the shot crew as Fox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from Fox Media. We'll be back later on the week for another breakdown of all things tech and business. Congratulations to Team Spain, beating Argentina 1-0. In extra time, Golden Ball, Best Player, Roadtree from Spain, Golden Booth, Killian Mambafe, incredible 10 goals, edging Messy's 8. A wonderful career from Messy. This is the last World Cup. The Golden Glove, Best Gold Keeper. What a wonderful tournament. Thanks to everyone who came and well done America. Support for this show comes from Odoo. Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? Introducing Odoo. 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