The Markets Have Gone Crazy | Ep. 074 Lemonade Stand 🍋

hear that that's me in tokyo learning to make sushi from a master how did i get here i invested wisely now the only thing i worry about is using too much wasabi get where you're going with spy the world's most traded etf getting there starts here with state street investment management before investing consider the funds investment objectives risks charges and expenses visit statestreet.com slash im for prospectus containing this and other information read it carefully spy is subject to risks similar to those of stocks all etfs are subject to risk including possible loss of principal alps distributors inc distributor i'm ida garden and each week on happy hour i invite new and old friends for a drink and a fun conversation at my kitchen table in new york city on this week's episode i'm joined by jennifer garner we talk all about what it means to be a good friend jen's encyclopedic knowledge of my recipes and the paris tour i put together for jen and her daughter new episodes of happy hour are available every wednesday you can watch on youtube or listen wherever you get your podcasts cheers could you pick it up for me please why you i need you to pick it up for me i just it fell closer to you why am i can you hold on hold on thank you thank you could you back up your chair like one second i think your shoes are untied maybe like what are you trying can you look down and check can you look down and check please no don't do it that way like what are you doing i need i need you to pick up my pen i got your pen you're doing it the wrong welcome back to it's good to be back this week there's dire news dire news that's not what it is i heard that's not what it is i'm taking control you're trying you're going crazy you're going you're going to explain how good my portfolio is doing i'm throwing stuff at me ladies and gentlemen welcome to the lemonade stand okay this guy has been squeezed like a tube of toothpaste by his other podcast the yard we get a desiccated husk of a man a husk of a man they drop him off after school he's wiped and tired and we have to tell us about the markets what's the nordic fun fact think about korea to try and harass me i think i'm loaded with pace for you guys you've got a lot of time to do this i'm going to do this i've got a pace i've got a pace left why don't you just tease the paste we're talking about today you gotta go bottom up they squeeze from the middle they would they would they're lazy they squeeze through the middle all right we'll squeeze you bottom up today uh let me just crack open a delicious stop with the red bull guys we're getting off track i don't want to bring you in you know who else is getting squeezed like aiden is like a dude who is investors in this crazy stock market wow that's a transition there that was good um today well you have to you can't perry you got to be on the you got to be on the slides he's on the camera can i be honest with you yeah be honest with me aiden because you're saying the investors are getting squeezed yeah and i opened the new york times this morning yep and the smp's at a record high we had a record high today which means that everybody at home's probably doing fine yeah regular uh regular people rejoice sally's how do you explain the thumbnail that presumably shows a big giant red arrow pointing downwards how do we explain that's a great question how do we explain that we've somehow framed i'll get to that okay so today the u.s stock market hit record highs the smb had all time highs and of course it was due to the greatest reason of all time a deal to open hormuz is imminent thank god finally finally we have this piece of news in this podcast we've never covered this before it's always been something we've been hoping for a highest quantity of deals of any president i know well deals announced um and what's awesome is that the market took this and ran with it and rent record highs even though not but 18 hours before this iran had said there absolutely is no talks on hormuz and i feel like we've done all this before so this is not what today's about today's not about the smb 500 or the broader stock market which again is following the iran war but it is about some really weird stuff that has been happening in um normally very successful sectors of the stock market until very recently and that's like ai tech um magnificent seven companies like memory companies all of them are seeing what you might call volatility a lot more wild swings and that is causing uh weird things to happen like people getting people who are normally very rich and successful to get wiped out or like we've talked about with korea uh a huge part of the country one in 30 korean adults to lose their savings in one day so uh that's what we're going over today literally today amd and spacex to successful companies uh both of which reported record-breaking earnings in any time other than recently both of these would have been surging they both plunged after hours on great earnings it's a weird people are responding to very ai exposed companies a little bit differently mag seven stocks in this last month shed 2.2 trillion combined some did good some did bad but it's a net outflow of mag seven which were dominating in the previous year uh they're ft printed the end of the mag seven and had this fucking uh what is the poem from uh robert frost no that's the only del silverstein no you guys it's breaking bad references it it's got a big statue perry you gotta know it's shakespeare breaking bad one of the episodes i'm not gonna move on until we figure this out it's too it's like uh the gnarled husk of twisted stone and i wrote my name in the sands for i'm just gonna wait until it's not shel silverstein it's not and it's not robert frost so give me one more poem olivia plath sylvia plath no it's pretty sure it's olivia you've said this before ozymandias by percy bryce shelly ozymandias okay uh that's they did an ozymandias thing shel silverstein they just you can't trust these ai overviews um oracle okay by mid late last year i don't know if you know but oracle ceo what i just blinked robert dude you've i got larry larry ellison my god i was thinking robert frost in my damn head larry ellison was the richest man in the world less than a year ago and uh oracle has been cut in half he's been destitute and more importantly as a little bit of a shade of uh you know big short type beat credit default swaps on oracle which basically bets that oracle will not be able to pay its debts and fail have hit higher than the uh great financial crisis they're surging so like all this stuff is happening under the surface of what seems like a calm up green market there's like rampant rotations and this already happened we talked about in the show previously it was like everybody pulling out of um the stafe big tech companies to go into the memory companies like the the the picks and shovels of the race you know like the the sandisk and micron but now they're pulling out of like this ai stuff a lot of it all together and going into things like oil oil has hit record profits exxon i think chevron just had its best quarter in the history of the company uh exxon had like its third best they're all fucking crushing and so everybody is rotating into more commodities and things like that so everything is moving behind the surface but the overall number is saying the same and i think it's interesting and the example i wanted to give is why i thought this was like a story worth talking about is this guy leopold ashenbrenner who's like this 24 year old wonderkind if you haven't heard of him he wrote a thing called situate oh no he wrote a thing called is it situational where is the name of the blog the name of his company is situational when it's such fun he wrote a blog about ai and it basically was like a 150 page blog that said like it's going to change everything it is absolutely going to reach up the world and we're going to just bet everything on that being the case sooner rather than later real quick his thesis is largely he's showing like okay if these if uh the power of let's say these models are growing uh by the order of magnitude every two years and then the power of like the actual like uh harnesses around the models are going by order of magnitude every two years he looked at core aspects of the kind of overall ai market and said if the capability of ai models and the underlying infrastructure keeps going up by an order of magnitude every two or so years then i believe that like you just do a long play on ai and you will win and he's like heavily invested in anthropic and also his wife works there yeah so he's like 22 or 23 the time he writes this he actually his background is he was uh at ftx with sam begman freed oh he was like an intern there or something and uh he got out before everything collapsed but so this guy he writes this piece and everyone's like oh you know what maybe you're right uh you know more about ai than me let's give you some money so a lot of well-capitalized people give this 23 year old kid a ton of money he has no financial experience his background is all in um you know research or ai and he goes okay i'm gonna make the craziest uh leveraged debt-fueled long bets on ai he just bets on there he bets on memory he bets on the ai companies um and he borrows money to do it he takes their money and borrows money and for a while he has one of the greatest returns in wall street history he literally is up a thousand percent he's beating all these established wall street titans and people are like oh i gotta get on this they keep throwing their money at him and instead of taking any of it off the table he just borrows more money and does it again he just keeps tripling down so recently even though Most of these stocks are up from when he bought them. There was a down day in August. lot of these companies, specifically pulling up SanDisk. This is a memory company that he invested a lot in. Now you look, he probably bought SanDisk like down here originally, but he kept buying it and kept borrowing to buy it all the way up into here. So this down period essentially wiped him out. So his bank started margin calling him and saying, hey, you have to put up more fresh cash or we're going to sell all your stocks. And he's like, well, I don't have any fresh cash right now. He called her out. He called her out. A little fun story. You know, the podcaster Dwarkesh Patel. Yes. Not personally. You personally know him and you're best friends with him. Turns out Dwarkesh Patel is his roommate. Yeah. And I'm not saying there's anything untoward here, but the timeline is very weird because right as behind the scenes, this guy is about to get wiped out and is getting calls from his banks. Dwarkesh Patel writes this blog that is like extremely, extremely like AI is about to 1000 X. You need to invest right now to try and like basically Leopold's like, if I have one more down day, the banks are going to take everything. And then right then his partner or his roommate, who is a very notable and influential tech guy, writes a very positive thing. Yeah. It's a little bit weird timing either way. There was another down day and he did get wiped out. He had to sell to the guy from the whole GameStop saga, Ken Griffin. Yeah. To Citadel. Yeah. So wait, actually real quick. Yeah. Brandon, could you explain why? The fact that he's massively leveraged and also like a third of all Koreans. Why does that ruin them? Because if you look at the graph, like a normal person would go, okay, well it's still the amount of money is still way up from a year ago. He should be fine. Right? Yeah. It's, it's, uh, it's pretty, cause this is what's underpinning everybody going bankrupt, right? It's like this, the, the numbers are all still up from where they were, but the problem is everybody was leveraged. So what does that do, Brendan? Well, I do want to say this, but I did just do this on my clip. So I'll just do it. Let's squeeze some toothpaste. Aiden, why does that? Why does that work? You're coming to this empty, empty bucket of toothpaste. You've got paste in there, man. Give us some paste. Okay. I'm just going to do this. Can you show this? Aiden, I'll just draw it and you explain it. Okay. Okay. No, I like this. I like this. This is good. Okay. Okay. Aiden, what do we look at this? So if I have taken on debt to, uh, invest in something, I see the upside of that on the way up. Like I, I could like borrow a million dollars and then that million dollars grows. I see all the upside of the profit, but if I keep putting in borrowed money in again on the way up and that erases my returns, then I still owe the underlying loan, even though I've just lost the gains that I made on the way up. Is I'm not explaining this well. I mean, I think he's right, but that's right. It's unrelated to the picture, but that's right. Can I be, can I be honest? The picture didn't help. So like if you bought $10,000 of stock, right. And you put in $5,000 of your own money and $5,000 of the bank's money. If the stock happens to drop from $10,000 to $6,000, you know, some people, if you're not in finance, you might think, well, okay, now I have 3000 and I owe the bank 3000, but that's of course not how it works. You still owe the bank 5,000. So now your equity is down to, you know, a little, all the, all the losses come out of your side of the thing because you still owe them money. And what's most important is if this green part ever dropped under the red part, the bank would be worried you couldn't pay them back. So when it gets even close, they do what's called a margin call and they call you up and they say, Hey, if you don't put more fresh cash in here to top this up, we're going to sell everything you own to make sure we can pay back the red. They say, Aiden, it looks like you're all out of pace. You're worried you're going to run out. You need to put a little bit of your own, you need to put more of your own paste in, in order to prove to us that this is going to be fine. Cause we're afraid we can't squeeze any more out of what you got. Yes, that's exactly right. Banks are not willing to risk an empty toothpaste tube. They do not want to dare. I say you guys margin called me today and I insisted that I had to back it up and we haven't been proven right or not. You do. Uh, so this happened to him on a billions of dollars of stuff. And I want to say, you know, there's this number going around that, Hey, he's still up 80%. That's what he's been saying. Yes. His, his quotes are his fund is down 67% on the month. He had to sell the vast majority of it to Ken Griffin from Citadel, but he's still up 80% on the year. He's not fully liquidated. He's not going to shut down his fund and he's going to keep going. I take full responsibility. He also got married this weekend while this was going on. He got married while it was going on, which is crazy. He's getting calls. That's true. Like every minute. Major bank me at the altar, just, just looking at my wife, like read the vows and then doing a little. Yeah. I think literally during the vows, he would have lost like $30 million during that. Like, yeah, yeah. In that, in that, yeah. 30 seconds a day. So we, yeah, yeah. I'm surprised he was able to keep his cool. You would have been a wreck at the altar. Yes, of course. Billions of dollars. It was getting called from every major bank. Oh, we got to cut that. Sorry. He's going to be furious. Really quick. So 70% of his fund was in a bunch of stocks that he picked. This is what stocks look like. Oh, okay. And 25% was he made an investment in quad anthropic. Okay. So when he got margin cold and they sold everything and wiped them out and Ken Griffin laughed at him and took all his money, they lost everything. He just kept this. And so when you blend that all together, you say you're up 80% because anthropics really up. But just to be clear, all his stocks are gone. Every stock they invested in got margin called and wiped out. So he he's running his phone. There's nothing left, but a piece of anthropic that he owns. Yeah. Yeah. The margin call system. I didn't know much about it before this whole saga either. And just the idea of like, if you have borrowed all this money and then your thing goes down all, it's exactly what you said. You just have to have to go down by like a certain percentage before the banks go, we are taking everything. It's like, it's so, so susceptible to a downturn. And it's crazy that a guy like this is up. How many hundreds of billions of dollars. And then like, you know what? All four X leverage. I guess that's the power of, uh, power or arrogance of youth and experience maybe because you know, all the wall street pros were, were even the riskiest ones were like, this guy's crazy, you know, but you're up a thousand percent. You don't take any off the table. It's crazy. So why is this guy important right now? Like, where does this come around to? Yeah. Well, he's, he is a emblematic of what's going on with the markets. It's getting the, the, the number is volatility. The, the, the swinginess is getting greater and greater. Things are moving. Like every day you'll hear like record-breaking loss, record-breaking gain, and you end up kind of in the same spot, but the swings are getting so much wilder. And so everybody who is, um, using debt in these instances is more and more likely to get wiped out. And that's why it's interesting right now. Nobody is, you know, we're not seeing a crash yet, but we're just seeing people who are on the edge of debt are getting wiped out. So people who have kind of taken the, the AI bull run and been willing to leverage themselves to insane degrees are getting punished by the fluctuations in these. Well, what's crazy though, the number ends up being the same. Just the fluctuation is enough to white people out, which is an unintuitive thing. But what's crazy is you say people that are, so people who are like, I'm all in on the future, I'm borrowing and betting everything. They're getting wiped out for sure. But also people who are like, this shit's over. It's all going to crash. I'm betting everything on the crash. They're getting wiped out because after a huge down day, they're having insanely huge updates. People are borrowing money to bet on both outcomes and all of them are getting shaken out. So it's like, it's just a really weird time. It's a very weird time in the market. Um, and I, it's very hard to be an invest like as a, you know, we sit back and S and B 500, it's kind of fine, but everybody who's a professional investor is like saying it's, we can't trade this right now. We don't know what the fuck's going on. It's just too wild. No matter what you pick, it's swinging. So those are the headlines that you showed. It talked about the magnificence, seven in particular, which all pretty much all have significant connections to the development of AI. Yeah. Maybe minus Tesla for one, but they're already kind of a weird stock and that they're kind of, and then I was going to say Apple because they aren't developing their own proprietary AI. They're sort of insulated from this in a way that these other stocks are not, because my understanding is they have become the number one company by market cap again. Uh, like they've returned to the throne because they're insulated from a lot of this scrutiny that comes with, that's a perfect example of what we're going through, which is like the, it's so over, we're so back market because everything you're saying is true from like a week ago, Apple was number one. Now it's a video again. And Apple's actually down quite a bit. It's like, there's this big war going on between AI is, is incredible and amazing and sure you can make billions. And it's like, Oh fuck, there's not making any money. That's what's happening. And like every week you'll see huge swings in these companies. Um, the mag seven on the whole is down, but it's really diverged. Meta is getting fucking crushed. Everyone's like, you're spending a gazillion dollars and you don't have anything to show for it. Google's getting kind of crushed. They're spending a gazillion dollars. They don't have any free cashflow anymore. Um, but like Apple doing pretty well, Amazon's up in videos up. So it's like, it's just diverging. It's just a weird time. And then Tesla of course is way down worst week since 2022, because people are like, you're spending a ton of money on robo taxis and AI companies. I mean, he's not even Elon Musk's important AI company, Elon Musk's other company. is supposed to be the ai company yeah so why is tesla spending so much on ai is everyone's asking and it's yeah i just think there's finally some punishments for these companies for being like ai ai ai ai 300 billion dollars we're spending on it people are asking where what's coming from that and so there is somebody being punished for that you know what this is a small tangent but you know another company at the top of this like market cap rankings is always saudi aramco and uh the e-sports world cup has been going on and me i think me and slime used to joke a lot about like we'd be working at beyond the summit we'd be like uh what if one of these was sponsored by saudi aramco one day it's like and then we have to do like aramco reads during like a super smash brothers tournament during the e-sports world cup this year yeah the idea of the tournament is that similar to like the constructors championship in f1 there's like an overall team score a lot of alongside people winning in individual e-sports events at the overall event and every time they do an update of like the rankings or leaderboard on broadcast they call it the aramco power rankings and i was like here we are we've come full circle like the joke that we used to make to each other in our office has become a reality the saudi national oil company is doing e-sports ad reads wait i took a transition because i think at least on my stream you know you go back two years we would make a lot of jokes about gambling and prediction markets in that and it feels like all of them have just become true and normal facts of life and it's gotten bigger than we thought and you had a story about prediction markets that's yes part of markets really the same subject um yeah just kind of a little interesting thing which is that you're starting to see a lot of pushback on some of these prediction markets like call she and and poly market and robin hood so a notable interesting story i thought minnesota uh the state outright banned prediction markets in may and so they just full-on said no there's actually a bunch of states in the u.s that are trying to push back against specific aspects of the prediction markets and saying like hey you're basically sports betting here we want to stop that minnesota is the first one that just said full-on like we're done and what that means though like if i'm in minnesota and it's on my phone and i'm betting on whether or not aiden says the word smash bros in this episode or something because i do i it would be illegal for the company to operate in that state okay but they don't right they just like do it it's online kind of breaks everything i kind of but i mean you can still see where people are and then they have provisions about uh vpns so you know i'm sure you couldn't fully enforce it but still the average person you're saying hey it is a felony now to or not felony but you know it's against the law to to do this and then uh the prediction markets and the federal trading commission sued minnesota and this week uh the federal last week the federal judge uh blocked the ruling with an injunction and said no you have to allow gambling wait really yes so you know so at first i was like what the fuck are you talking about what you're forcing them to gamble what are you talking about you have to gamble have you have you ever read the bill of rights people overlook one of the amendments oftentimes it's we have you have to rip a parlay yeah george washington was big on that the ninth amendment if it doesn't say that tell me what it says right now the ninth amendment there will be a man entering his 25th year of the nba the people have to gamble on you have to bet on it the world cup just happened bro you're not gonna not gamble all right so here's why the commodity futures trading commission which is a federal agency has said uh that event contracts users can trade on prediction markets fall exclusively under the agency's jurisdiction as in the cftc which is a federal agency says that they have the exclusive right to trade on prediction markets and they have the exclusive right to trade on prediction markets right to regulate swaps and these certain types of betting contracts so because of that the judge in this case as well as the federal government are saying you a united states state do not have the jurisdiction so if every single voter in minnesota right said we do not want gambling to be allowed yes they would not be able to stop it correct because it is a federal ruling that's crazy and because according to the judge there's several contracts on calisthenics polymarket that fit this definition of a swap yeah they're not regulated by the state and she's she did say i mean this is a democratic judge she's like appointed by biden i'm pretty sure and she said like maybe joe uh right who was asleep at the wheel clearly couldn't have made a good pick couldn't have made a good pick and uh she said maybe she'll narrow it to be like we'll ban certain parts of the markets but not the others but ultimately this is going through uh a bunch of court cases now so call she said you know today's decision makes it clear states cannot ban things that they don't have jurisdiction over meanwhile minnesota attorney general said prediction markets are gambling plain and simple and minnesota has every right to keep predatory gambling out of our communities so this is uh this is wild so there's a bunch of states that are now trying to do this and push back against that there's 14 states according to rooters which are pushing back against this right um and again they're more going for specific angles but the cftc the federal agency for trading is counter suing them to make sure that the gamble our government is suing our government to make sure that the gambling okay there must be a connection right so well it's you know it is it is under the executive branch i know but just knowing with this administration there's probably who's so it's it's it's donald trump i think it's donald trump jr is on the board of polymarket or calci and uh or he's considered he's one of their advisors excuse me and uh this has already fallen under scrutiny it's like why do you need the president's son to be like one of your advisors at the company there's this really funny interview of the owners of again can't remember it's calci or polymarket where they're it's both i think he's he's a he's an investor and one and a board member on the other okay uh and i can't remember which company is getting interviewed but their answer is they're they're the interviewer is like so why is the president's son like one of your advisors what sort of advice is he giving you and they're like well we have a lot of advisors they give us a lot of different perspectives and she's like well this isn't any advisor this is the president's son and they're like again we have a lot of advisors and they just repeat that talking point like four times i think what is also interesting here is there's there's an effort this is kind of the the crypto era president right for for his term there's a lot of like ties to cryptocurrency either like trump or his sons or people adjacent to them making money through cryptocurrency that we've talked about on the show and there is a push right now to remove uh remove the responsibility of regulation of cryptocurrency by the f sec and hand it over to the cftc because the cftc has few basically less uh is expected to scrutinize crypto less than the sec does now i mean clearly they're not this kind of seems connected in that here are these massive gambling companies that the president's children have connections to swaps companies excuse me swaps companies i got a real quote from the head of the cftc michael selig who was uh set up for this job by trump in december of last year these are not casinos they're not sports books they're markets and the bottom line is we're going to defend our authority in court so yeah i guess here we go so okay let's go great i do see the connections that we're talking about well before we broaden out to other prediction market news okay three fun facts one france uh they blocked polymarket completely in july so that's a battle going on now spain blocked polymarket and kalshi uh in may and that's estimated to go for multiple months while they do an investigation block it before or after france lost the world cup because this is july um and so you know what i don't know i don't know we need the date wouldn't because it would be so funny if they did it right after because a bunch of french people lost a ton of money i heard the world cup was the biggest uh revenues those prediction markets i've ever had yeah yeah and then the fact of the matter is there's actually a statute from 1849 that says you can't vote in any election in which a person quote has been made or become interested directly or indirectly in any bet or wager depending on the result so wisconsin has come out recently and clarified if you bet on any prediction market on the outcome of a political campaign and you then go vote that's a felony and your ballot is thrown out and it's election fraud so now there's going to be an increasing movement that if you do go gamble on the election you're going to be able to vote on the election and you're going to be able to vote on the election and if you do go gamble on political events and you're going to be able to vote on the election and you're going to be able to vote on the election you can't vote which is like obviously i well i don't know i was gonna say obviously i haven't thought about it for more than 10 seconds but like that's it's fucking bizarre that is bizarre because they did not intend that when they wrote the law for what we're in currently it was clairvoyant back then i mean it was like not good to have anybody betting on political outcomes but really it's me you couldn't you can't run it should be you can't run and bet on it not you can't like if i bet on trump biden and then i vote for my local wisconsin state senator it shouldn't be like uh i don't know i don't know i'm trying to equivocate it to like sports or something i think it's one of those things where maybe there's just no reason it needs to happen do you know what i mean like like maybe we could craft the scenario where it's acceptable but it's like i'd rather just be safe with this one it's like money monetary incentives should not be tied to voting and there are monetary incentives incentives because i'm gonna do my transition well i mean that's i guess there's broad monetary incentives tied to voting in that who depending on who you vote for there's financial and economic outcomes Are you tired of hearing about business, tech, and finance from the bros? We are the Tiger Sisters, a top business podcast with the Vox Media Podcast Network. Tiger Sisters releases every Monday, and we decode money, power, and love. And who doesn't love all those things? We are the internet's Wall Street and Silicon Valley big sisters. Tune in every Monday for late-night sister talk meets boardroom strategy. Check out Tiger Sisters on YouTube, Spotify, or wherever you get your podcasts. Welcome to the Tiger Fam. I'm Bridget Reid. And I'm James Walsh. The Alexander Brothers moved in a world of multi-million dollar homes, exclusive parties, and powerful people. Behind that glamorous lifestyle were years of rumors and allegations that they were committing sexual assault. In our reporting for New York Magazine, we investigated what people knew and heard from women who came forward to tell their stories. Now, that reporting is the basis for a new three-part docuseries, The Wool. It was a real estate, The Alexander Brothers. You'll see exactly how privilege protected them and how they were finally stopped. Stream all three episodes now, only on Peacock. But as I was saying, Robinhood, you guys know Robinhood. You love Robinhood. Love it. Maybe you've traded on Robinhood. We love it. Robinhood got into prediction markets not but two years ago, and as of today, they now make more money. They make more money from that than from stock trades, which is what the whole company was founded on. It has eclipsed both stock and crypto revenue for the first time. They are basically a prediction markets company, and of the prediction markets, it's pretty much all sports betting. So Robinhood has seamlessly transitioned from being a stock investing app for your phone to being a sports betting company. I think Wisconsin should go further. If you trade on polymarket, you shouldn't be allowed to work at a company. Okay. You know what? For a lot of young men, that would be a plus. That's a win-win. They already want to opt out of work because it's like a bad, you know, you buy NVIDIA, you're banned from a job search. Mom, I already, I got to be a trader. I might, I might do my job differently for the outcome of my bet. If I knew maybe this is time to make our big announcement podcast, I think we've been thinking about winding it down. Yep. And if you head on over to lemonade dot stand, you can start betting on pretty much anything. Oh yeah. Yeah. We're going all in on. We're going all in on prediction markets here on the show. I said we wouldn't take a prediction market sponsor. I'm telling the truth. We just simply turned our brand into one. And we're going to bet on the results of other podcasters. We're going to bet on, and you've got some info on the yard, so it's going to be good. We're going to bet a lot on whether or not slime farts, but I saw this number and it kind of shocked me while I was researching about this Robin hood thing. Actually, wait, I need one more thing. Uh, there's a quote from, uh, uh, the information that was talking about this. This is Dan. Dolev, who's an equity research analyst. He said the people on Robin hood love gambling and the prediction market is right up their alley. It's the perfect replacement for crypto because it produces a faster reward system in your brain. You don't have to wait. So this is a guy who has no soul just commenting on the true raw reality of it, which is that people play Robin hood for a dopamine rush related to money and they've evolved a better one, which is just gambling straight up sports. Gambling is better than crypto, which is better than betting on GameStop. Which is the evolution. It's just funny that everything can, like, it's like every social media company eventually ends up being short form video that you scroll. Yeah. Every single other financial company. It's up being sports gambling. What was the Chudder, the Chudder app like Chudder used to be like a TV network of sorts. Oh my God. That can't be how you say it. Are you saying Chudder? He's saying Chedder. Like the cheese. Chudder. You said Chudder. Like, like a Chud. Yeah. Yeah. Yeah. That Chudder sounds like Griter, but for like conservatives, I guess no difference. Huh? Chudder. You're saying Chudder. Chudder. Like a cow's Chudder. Like if a cow ate so much cheese, it came out of its udders. That's a Chudder. You're borrowing so much of my time right now. Chedder. Yeah. Chedder. Chedder. There you go. Yeah. There you go. whatever cheddar tv network of sorts pivoted into some weird tiktok sports gambling app like it was supposed to be pulled please pull this up please pull this up i actually think this is worth showing okay so i think this is the same company as that tv network the only reason they are spelt differently this doesn't this is spelt c-h-e-d-d-r no vowel at the end of it and uh but it's the same logo so i always assumed it was the same brand correct me if i'm wrong on that but this got announced like last year i don't know if the platform actually launched successfully but i remember seeing the trailer and it was basically here is a short for free with cheddar coins yeah this is just cheddar coins future of sports gaming is here and you could watch like short form video about sports while live sports betting on things and i was just like you you know that i i've seen this sketch where it was like getting caught jerking off in 2050 or something and it was like the guy like his parent like opens his door and the kid's like in a rig that takes him like fucking like two minutes to get out of like he's in a like walking machine vr headset like and and i feel like that has gooting not gone too far yeah like the whole combination of dopamine chasing has gotten absurd we're very far from did they get the ball in the hoop a human being a human being in the year 1500 went an entire lifetime without feeling the dopamine on cheddar uh so anyway it turns out that delivering this rush of dopamine is a good business whether or not it's good for society because polymarket and calci alone this time last year combined for about five billion dollars worth of trades this time today it's over 25 billion so it's literally just as unbroken for once this was released into the population it has just doubled every few months it's crazy people fucking love this and the the backlash obviously you talked about the state's backlash yeah people are also seeing rampant increase in gamblers anonymous from younger members rampant increase in i don't know you know i don't want to get too dark with it but like suicides from financial law all this stuff is having consequences that are like it's happening so quick that nobody can absorb it and certainly even states that try can't see it and they don't seem to actually get anything done so um not their jurisdiction yeah so their citizens lives and finances are their problem uh it feels so sad and rooted in that like financial nihilism that existed right now and i i go back to that idea a lot of before i was doing you know before i started the yard and i had like my normal salary for my normal job i think the pathway of like turning that salary into something like that is not going to work like owning a home seemed so far-fetched even though i had a pretty good job like i you know making like sixty five thousand dollars a year i was pretty happy with that and i was like in my early 20s that's a fucking awesome job but the amount of savings i had it's like the the idea of getting a home out of that especially in the places i lived in which were like seattle and southern california it's just it felt unapproachable so in order to i feel like you need you get this sense of needing this massive financial breakout in order to make anything significant change in your life while you're constantly scrolling through videos of people's like luxurious lifestyles and like influencers doing things that you want to be a part of but you could you don't have access to like it's this terrible environment for you as a young person searching for a job you can't get maybe applying for sending thousands of applications in on linkedin not getting anything maybe at best having a job where you can only put a limited amount of savings away you can't take any of these steps you've been told about your entire life you spend all day scrolling fucking tiktok and reels showing people's lifestyles that are unachievable at the salary so you fucking all in what you have and hope you get a huge payout because you saw some crazy thread on wall street bets or or something like that then you get a promo because some people do that and it works that's they post it on social media and you hear all the stories of like the guy that hit crypto or and then it's like oh well that i have to chase that i think about the that trip uh we went on this trip to italy the yard did like shortly after covid restrictions had started lifting yeah and one of cutie's friends came on the trip and he had just earned a bunch of money through that nft year because he bought like a rock and the rock him and his friend poured their savings to split a 20k rock and an image of a rock and then it it like uh it over 10x like and then they just sold the rock and then were millionaires and that was the guy i was on the trip with but like we're saying don't listen to stories like this no it's not gonna happen to you okay i i think i i think this is actually again this is a good example of like this it's a good example is it trying to convince them wait i just said people get fooled by those stories you're like yeah i got a story about a guy who had a great trip to italy no no no no he 10x to rock and made a lot of money that was pretty cool Okay, so he has this dream vacation in Italy. Keep going. He's hanging out with influencers. I see the issue. I see the issue. He's a one in a million guy. And also, on top of that, he's got a smile that knocks your socks off. And he gives you kind of an air of anybody can do it if they try hard. No, what I was going to say is those people also, they only share the ups. Even the people who do win big or won big at some point aren't itching to tell you about the follow-up week where they lost most of it on something else. Nobody is happily sharing that story. So you get this really distorted vision of all of the successes from a limited number of people, most of which haven't even actually found that much success. Yeah, I mean, especially on Polymark and Calci and these things, just to be real. Like, their record revenues are because. Because of customer losses. Customers have net lost billions of dollars in aggregate. So on average, if you play the Polish and British markets. But the problem is, I've said this in my chat, and the first thing they say every time is, I'm different. They say those guys are. I'm not like, they're joking, but I think some of them are not joking. They're like, nah, I'm built different. I have an edge. Wait, I actually think this pivots well. Because the guys who actually are different are the people that are getting headhunted by these hedge funds and organizations. Like, if you are built different. This is what I actually think, is if you are built different and capable of beating the system, what's happening to you really? You're getting, you're a quant at like a hedge fund. And you're crafting the algorithm that like beats the game. And that's not most people. That's who you're playing against. So yeah, it's actually a good transition. So I saw this article, the million dollar talent wars for 20 something math geniuses. And it turns out there are a select few people who are. I'm not good. At math, but there's people who are incredibly, incredibly good at math. And for the longest time, they actually, let's do this picture. Where do you think this is? Well, he's wearing a shirt. This is Harvard. Okay. So is it Harvard? It's not Harvard. I mean, narrow it down. Do you think this is a tech company in Silicon Valley? Or do you think this is a financial company in New York? Okay. Let me look at the details. I'm going to say it's not a tech company. Because. The type of. Snacks they have don't look like the type of like extremely hippie, way too expensive snacks they have at tech companies. Damn, that's actually a really deep cut. You got it right. So that is normal water. It's not hint water. Hint water is tech company water. For the longest time, these extremely intelligent math graduates, which there's a very small percent, would mostly get headhunted by financial firms in New York like this. This is Jane Street. And they would pay them really good. Salaries to be quants. Like you said, that was their thing. And they would trade against retail traders and beat their ass. That's essentially what they're used for. But now, much like sticks of Ram, the price of these commodities is getting bit up by Sam Altman. Okay. You and Sam Altman and are the AI companies have realized that quants are also exactly what they want for their don't finish the blank linear algebra, linear algebra, token machines. Yes. Yes. Yes. Yes. And so what was already a pretty lucrative spot to be in Wall Street quant is now the spot to be in of all jobs. And basically, they are being bit up by both sides of the coast of this country with absolutely astronomical salaries. And people are saying a million dollars for someone right out of college is something people don't even bat an eye at anymore. They're getting, you know, like one point five million dollars with huge signing bonuses. They're getting insane, insane amounts to either go to. Again, like Jane Street or Citadel or Open AI and Anthropic, and that's the that's the bit up. And so people are saying the current hiring climate is like bidding wars for professional athletes to basically the Luka Doncic of fucking math, and they're getting life changing money. I mean, and they're getting stock packages, too. They could literally change their life. So it's just a weird time. And I thought, you know, this was interesting. And they say they interview these people and a lot of them come in with ambitions to become an academic. They love math for the math of it. And then they do one internship where they get paid 30 racks a month and they're like, I'm never once they have a taste of what it means to work for these firms, they the majority of them would rather go into industry. This is this is like I apologize because I'm forgetting his name, but he's like fabled as one of the greatest modern mathematicians right now. Terrence Tao. Yes, Terrence Tao. And he works at UCLA, which publicly lists the salaries they pay. Yeah. And this is like he's a you know, he's a prodigy and I mean, I mean, not a prodigy anymore. He's. He's well into his career. I guess he's a 40 year old prodigy. Yeah. Yeah. And and you're talking to Terrence. Not to you're better than. No, no, no, no, no, no, no. No, he he is that he is a wicked smart. What's your numbers? He's making like seven hundred sixty thousand dollars a year working at UCLA, which is, you know, pretty insane for a professor. But considering his stature and he's working at academia like that is the ceiling of academia for for his background. Legend at the at a great university. The top of the top. And then these kids who are just finishing college, not to say that they're not extremely intelligent because but they're making more than that signing on to these companies out of college signing bonuses of his full salary. It's like, OK, ideally, we'd want these people in like research and academia. And yeah, that's yeah, it's just an odd and you know, you don't know if this will last or whatever, but right now has never been a better time to be a math nerd in college. So all of you pivot your majors right now. All right. Yeah, I think it's kind of cool. I mean, this is actually I think it's great. I'm not saying people are really good at math, have more opportunities or getting more money to go do things. I think that is broadly a cool thing rather than just like, oh, go be an iBanker and otherwise you have no options. Yeah. Well, you know, those are financial firms and we could slide on over to more of a tech firm flock. I've heard really only positive things about them lately. OK, I'm surprised. I'm surprised that your pace at the end in a run of show. We had South Africa as our next story. And as you were saying that I was like, South Africa is a house. You know, like, how are we getting to South Africa dodging his pace being squeezed? I did fuck this up a little bit. I thought I saw the perfect Segway to that topic. And then I forgot which one of ours was this and we're going to have four Aiden stories in a row stories in a row. We're going to squeeze you. So, you know, I'm a second half guy. I'm just going to walk. I was going to flock. All right. Um, let's see. Let's see what we think first. Me and Aiden about flock. Yeah. I mean, I love let me set it up for you. There are you love more than you more than me. Actually, I don't even like that much when I think about it. I'm not even a big fan, but you are mostly me. Yeah, you've been pulling me into it, but I kind of a backing away. And yeah, I pulled up that Ben Jordan video where he's like showing how easy it is to like hack flock cameras and spy on your neighbors. Like and I was like, we should do this. We should spy on me. All right, as of this month, there are now one hundred and twenty thousand. Thousand flock cameras in the United States flock camera. If you are not aware is traditionally it is a small camera. That is all about license plate is often called. Oh my God, a P license, a LPR, an automatic license plate, an Alper. Sorry, is it a hundred twenty thousand or a hundred two thousand? Okay, so there is a hundred twenty thousand reported by flock, but this is a map called D flock. And there's two open source projects that are basically trying to track this. So you can go and like look in America because people have found these so like if we go here to La right, you could actually look like okay. So we'll go to a trucks home here. There is you can see a truck. Oh, well, this house is like south of four of these cameras, right? But you can actually look and go. Okay, if I were to drive to work, I could do a route that avoids them because they're all tracked publicly. And what I would say here is like if you come from the south, there's no coverage at all. And if you were to then leave East, there is no ability for the police to track. What you did is please just the whole screen blur and so consider the idea. Don't even put it in Los Angeles. No, also, you know, so then we don't have to work. This is not a truck's address. Brandon leaves his home unlocked. Most of the time, he does not have a ring camera. No cameras, but yeah, no. So you can actually look and see in any city in America. The of the one hundred and twenty thousand. There are about a hundred thousand that they have tracked and added to this database when you're looking at it. Is a lot and so what the you know, what's happened with flock? Well, there is so much the short version of this is that it as it is grown absolutely massively to cover so many different cities and states and jurisdictions. And there's like it's not just police departments who want this stuff. Who are the you know, the primary use case to be able to track criminals or stolen cars or whatever, you know, an abduction happens. They can quickly find whoever did it. It's also like homeowners Association. It's like various groups or schools that want to be able to set these up and then say we will be able to rapidly get information about like any license plate of any car that goes in our area. That's the that's the business proposal. Yeah, can I ask you? I don't understand because I'm not a flock expert. Is it what is the difference between flock and like CCTV? Like if I was a homeowner Association and I get a bunch of flock cameras from my neighborhood, what is there between that a regular camera? Is it just that it AI tracks the license plate or what? Yeah, so the core product is I mean, it's kind of the camera. But really we've had license plate tracking technology for decades, right? You know that that's a thing. like police have had the difference is that now it is a software company that is installing all these cameras where all of the data gets sent to a centralized database that can track it all against each other right so that's really the product you are purchasing access to it and this is where it gets controversial to all or some subset of the data and that way you can go to flock and say hey i need information about this thing and you pull it against all these different pieces of data that they have right so it's really the network that pulls all this information together on top of they are the ones you know putting these cameras all over the place interesting as you can imagine a lot of people aren't stoked about this and so according to la times this uh this past month lapd announced they are pausing their flock contract uh after a three-year contract with flock which los angeles has been using that's done and they are saying that their main concern is actually not really about mass surveillance it's about data privacy so there's two problems that people have with flock primarily one is the concept of mass surveillance it's kind of creepy uh we'll get into that second is the idea that if you're a little city or a big city like los angeles you want these things for your local pd to you know help with crime or whatever you don't want federal agencies to be able to track what everybody in los angeles has been doing so in theory when you sign up for flock you are signing up to have uh you know a certain areas information shared and tracked but there have been many many instances where flock even though they say they're not sharing whoopsie daisy a state department or a federal department does end up getting access to it right so this keeps happening over and over and sometimes it's they they don't actually they don't directly give access but whoops the people running ladp or lapd excuse me like sent some of the data to this agency or gave them permission or said hey ice you can come in and this is particularly becoming contentious because ice has been shown now to access like both lapd and san francisco pd's database to find where people are despite on paper that's not supposed to be the case um and so this is you know this happened in la which is a pretty notable case it's happening in actually a lot of cities now so like santa cruz el cerrito santa clara county mountain view all california cities are all stopping their contracts or turning off flock because of the data like saying hey our data is you know going outside of our network we are not okay with this there's 53 cities last year that quit flock uh that's from tech times but then at the same times tech times uh reported that nearly 800 cities approved new flock contracts in 2026 alone so it's interesting that some major cities in california and other ones around the country are starting to say no we're not okay with this using the data distribution as like the main thing uh but it continues to just absolutely balloon all over the city get out of it let's say i'm a small town mayor and i have to spend a fuck ton of money to pay this software company to come set up cameras all over my city what am i what am i getting out of it well so the pitch is and it's worth i look i know everybody's gonna fucking quote do the ben franklin quote okay and they're gonna post in the comments and show how smart they are and i and i get that all right but let's at least make an honest argument for why you would care about this and actually san francisco is a good example so they started pushing this a couple years ago they've now installed about 400 cameras in san francisco and you can go look at it and san francisco had a major crime let's say either perception or problem depending on how you look at it post-covid and certainly everybody i knew there was having cars broken into constantly massive property it was very very bad from first-hand experience or my friend's experience not from twitter yeah you seem like no that was that i i feel like it by the by the last like couple years more people i knew in san francisco had had their car broken into than hadn't yeah like it they got insane good at it it was an insanely polished system of it was polished and just like wanton destruction it was like they were just breaking everything and like every friend i knew had it happen it was like you didn't you couldn't park a car anywhere near any popular area because they were the tool and you shattered a window but they would shatter regardless of whether there's something in there it was just to check so it was horrific on top of all this property crime whatever else so crime really did get horrifically bad according to many people i've spoken with in san francisco so then they do this big anti-crime push and as part of that uh mayor london breed at the time starts pushing for this program of we are going to install these cameras that will help us track criminals faster these guys who are coming in smashing a bunch of windows and driving off before we can get anything like a police report hours later doesn't really help them the person's already gone right so uh they've been installing a massive amount of flock cameras and their other tools like drones and reported this is from flock that in 2025 crime in san francisco fell by 25 percent in a single year homicides are the lowest it's been and mayor daniel lurry has said that flocks combined tech is quote a turning point for public safety in san francisco so both flock and san francisco the pd and the mayor are saying thanks to these tools we have massively reduced crime this was last this was last year right i think 2025 they yeah okay so is it kind of it kind of it's just a big interesting question right because you know in china this is not par for the course we walked around there was a camera every damn three feet they didn't even think about it wasn't even like a and i it's just a question of i mean i really don't know if it's true or not but i really do think hearing this story i am the most concerned similar to this with data privacy where it's the idea of whatever they're collecting being used for uh or being just put into the model and trained and used on things way later for way different purposes yeah that's that's a scary thought because these things always seem to evolve and grow past what they say they're going to be used for yep i think and actually let me just let me say this first because i know people this happened the last time brought up flock you know there's no we can't prove that flock is the thing that caused crime to go down right it's one of many factors maybe not even a factor at all right it's hard to know they're obviously biased in this um and the second is uh it turns out sf standard and 404 media reported that whoops the sfpd let out-of-state cops run i think millions of searches on their license plate database including on behalf of ice and so now they're talking about like we're gonna be stricter about it but it does come back to this you have a city where there was massive crime where people were really really upset about crime and we're looking for a solution and this is being attributed to one of the things that is allowing police to respond to things much faster and there are real examples where you report that somebody broke into your house and drove away you give a license plate to the cops and they can within 10 minutes locate the person that is cool to stop crime that's also means that cops can track you in 10 minutes right it's obviously good you know it's obviously horrible for privacy and tracking and government surveillance yeah you need to you need to have faith in like the institutions to effectively use the tool uh not have like third parties misuse it and like have respect for for privacy and i don't think there's any like i cannot imagine kind of across the board right now there's that really that trust in government to like use the data appropriately confidence in u.s institutions near all-time low i think it is actually an all-time this is an all-time low so that yeah i just think people don't have the trust in this being used correctly right now it is the same thing it's like if someone asked me uh in the government like hey can we raise 10 billion in taxes to build i don't know a train or a bridge i'd be like in theory i very much love that but i'm very worried that i can trust you yeah take this money and not build it it could be 10 years later you haven't built it yeah it's a lack of trust yeah it's weird to you know again when we were in china and you talk to somebody who's like oh it's great crime is way down yeah you know i to be explicit here i do not like this world where flock cameras can allow you know companies to track what everybody is doing i don't i'm not a fan of this but it's also it's hard to go to somebody in san francisco and be like you're giving up your privacy and they're like yeah but my car doesn't get broken into anymore it's it's it's tough i think um when there are people that feel it's greatly benefited them yeah i think that it's it's ultimately like a personal question right i i think about the china trip all the time because like bringing up the point of your privacy being lost and the onset consequence consequences of having that information available or accessible by the government and those people being like hey this doesn't matter to me because the difference in crime between now and like 10 or 20 years ago is like night and day and this level of enforcement through the surveillance state is like what improved my life and like i wouldn't make that choice i don't want that personally but you know for certain people like they're willing to make that choice and they're willing to make that choice and they're willing to make that trade-off because of the because of what it was like before and i i think yeah i think that's just what any question we have we talked about yeah we could talk about we could talk about uh another crazy situation don't transition out this is a aiden story next guaranteed what's crazy tell me about it what's your guys what's your guys's next one again okay okay wait hold on i'm remaining between me and a truck i think it's literally just ai insurance fraud and then it's so if you can transition harder to my story than any of yours we can do that one next your last one is so tough from here we might have to go to south africa give me some pay state and travel south africa uh okay so i saw this story crop up at the end of june and uh basically a unique unique movement at least from my perspective talked a lot about on the show about how anti-immigrant sentiment has risen across the world. And I remember our Japan trip especially because there was this rising criticism of immigrants within Japan and admittedly as an outside party, I thought this was kind of hilarious in like a very bird's eye view because Japan is almost as homogenous as it gets. There's just not a lot of immigrants in Japan, period. The number of immigrants there has increased over the last, you know, the last few decades. But ultimately, this is a country that is pretty much all Japanese people. So to see the pattern of country encounters economic problems, blame immigrants, happen in a country like Japan, it was like, it was almost so absurd. It was just funny because not that. And you can win an election on it, which is great. You can win an election even there. Yeah. It just is a golden standard. So that apparently like this, this like political strategy is like you can apply it at any time. And I think people have an understanding of parties around the world right now in Western countries, especially pushing back right wing parties, pushing back against immigration. And I saw this story in June about South Africa, where a similar sort of thing is happening. So I imagine you guys understand this to some extent, but South Africa has not been doing particularly well. particularly well. And like the early, like to late two thousands, there was kind of this surge in South Africa changing and the post apartheid era. And it looked like it was in that kind of developing to developed countries sort of stage. It was, it was going to become one of the next like big countries on the world stage. Uh, but as time has passed, that hasn't really come to fruition. South Africa is maybe the most unequal country in the world, an enormous disparity between the richest people and the poorest people in the country, incredible levels of government corruption, incredible levels of unemployment. I had sort of a jokey story earlier in the year about how South African unemployment had fallen, uh, from, I think like 38% to 35%. They did it. Uh, but this is, you know, when we talk about unemployment in like the U S for example, we're looking at an unemployment rate of like, well, like four. Uh, or if things were, if things get to like, if things got to 10, that would be really, really bad. And this is a country with over 30% unemployment and has had that for quite some time. It's funny. You mentioned them like in their rising phase. Cause I remember thinking when they first made bricks, it was like Brazil, Russia, India, China, and then South Africa felt like the, I was like, are they really like one of the, we're in there, but they were in there. They were like, they were, yeah. Like you said, they were like this rising economic star of Asia. Yeah. And they had the world, they had the world cup. And I think there's, there was a lot of spotlight on the country to succeed. Now we're in a position where the country has been doing quite poorly for quite some time. And there are huge populations of immigrants within South Africa. A lot of people from other countries in Africa that have immigrated there over the last few decades, people from Nigeria, people from Malawi, people from the Congo looking for opportunity in South Africa, which is relatively better than like the area of the country that they might be coming from. And in recent years, there has been a huge rise in anti-immigrant sentiment among the like poor populations of South Africa in these like areas or like slums in South Africa, basically, uh, taking issue or accusing foreign born individuals of you came here illegally. Uh, trafficking drugs, you're at the root of the crime. You're at the root of the unemployment. You are stretching social services and education in ways that make it worse for us South Africans to live here. And, uh, the, there has been a rise in basically vigilante groups, uh, really like some community leader will, uh, start gathering like support and people and, uh, advocating for the exit of these immigrants. And have begun pressuring people to leave the country if they are foreign born, because they are at the root of the, these problems they are accusing of. And, uh, like how, uh, they're threatening, like potential are sorry, threatening them with violence. Uh, or, uh, earlier in the year, they had set a deadline of like, you need to leave the country by June 30th, or we are going to come raid homes and businesses as groups. Right. To physically remove you, uh, also sounds like violence through, through, sorry. Yeah. Through the threat of violence. I think prior to be clear, prior to this deadline, it had been more like community demonstrations. Maybe there had been like smaller one-off incidences of, uh, attacks or intimidation, casual racism on Xbox 360. But the, the big thing that was happening is there was this issuance from a, a variety of groups that if you are not leaving the country by June 30th, then we are going to show violence in order to remove you from then naturally, a lot of people within the country are very fearful of their position because of these threats. Right. And the government, because of the overall state that it is in, it is not necessarily endorsing any sort of like policy or backing these groups, but they are often like standing by or not really enforcing or policing the way these groups are interacting or threatening immigrants. They are in some cases, uh, but largely the government is very out of touch with how these communities are like being threatened. And these vigilante groups have been able to posture these threats without facing many consequences for it. Um, so in the buildup to this deadline, I thought it was crazy. Like this Ethiopian store owner and his brother have lived there for 11 years and they're interviewing some of the people that come to his store, some of his friends. And they're like, we can't do anything. Like they're going to come with guns and they're going to, uh, and I, I don't want my friend to have to leave, but I think he should leave for his own safety. And in the buildup to these threats, uh, tens of thousands of people start to leave the country, even if they have the papers or documents. So the, the thing about this, like vigilante sort of system, not to say that it would be justifiable, justifiable to like, you know, well, they're not checking their boxes. Somebody that doesn't have papers is, uh, nobody like the vigilante group. Isn't like kicking down the door of the shop and saying like, show me your visa. They're kicking out people based off of their foreign born status, or even if they like people who have been born in South Africa, but are parents of those immigrants. And so naturally a lot of people fled in like fear of this happening. And as more and more people have begun to leave at the same time, uh, these massive like camps have begun to form at like certain borders or in certain cities where multiple, like tens of thousands of people are congregating in camps, waiting to be like repatriated back to their country, their original country in, in order to just stay safe. So it gave, uh, sorry, go ahead. I was going to say, but now the South African economy is thriving, right? And everything's great. This, so I've been told this works. You just, you violently, it's crazy. People who are different. It's not violent. They pick people up. The other option, the other option, sorry. One of the two, there was no, and now South Africa is thriving and everyone is happy and everyone has a job. It wasn't violent. There was the threat of violence, but they had to do it because this was the problem. And believe it or not in July, the country 180. I, I, I, I think the, the thing that gets noted over and over again is when like experts weighing on the topic, like I was reading some articles from like a South African newspaper where like people, you know, they're like, Oh, I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. People are writing like, uh, like in, in South African, like academia, like weighing in on this issue. It's like, these are people who are engaging with very real problems in their country. Social services do stuck. The countries is incredibly corrupt. There is a lack of opportunity for people, but ultimately the same story is playing out here where, uh, they are scapegoating a population that has very little to do with the material, uh, challenges that the country is facing right now. But I, and look, I don't live in South Africa, so it'd be crazy for me to just like go up to a population podcaster. I'm a fucking, but I read through the, I think it was like YouTube video comment sections of like an Al Jazeera piece and like a DW piece, which are very much taking the angle that I would say I'm taking right now, which is that immigrants are probably being unfairly blamed for problems that they probably have very little to do with. Uh, and the argument from the South Africans in those comments and, uh, it is basically, we are like stepping in where our government refuses to step in. We see that there's like a lack of like control at like the border, a lack of like oversight over immigration. And we are like taking our country back and in like enforcing the laws and the capacity that they should be enforced. That's the way these vigilante groups see it. Listen, I don't know enough. I literally don't know enough. I'd have to learn more about it. I do know, or at least my history has shown that on economic problems, specifically this type of action is not, it was not going to change. It's not going to suddenly make the unemployment rate fix and it's like, that's, that never happens. sad stories in the basically the last few months like over i think over 50 000 people uh had like left prior to that deadline and then tens of thousands more have like gone into these like uh these temporary like basically temporary refugee camps before like transport comes to like bring them back to the like their country of origin um and it sounds like the government has stepped in there to like manage those so there's like this tacit approval from the government about like all this happening while like not being the initial vehicle for it happening in the first place i just thought this was an insane story uh because the scale at which it's happening it's like you know one camp has like 20 000 people from malawi that have many of which have like lived in the country for for years and years and years just have to leave their home or separate from their family uh because of these like movements going on right that is a truly insane and dark story coming out of south africa and it reminds me so much of another story about bud light sales by the exact same person aiden there's no i can't do transition okay you know what what are i get it yeah i get it yeah i reap what i sow i i i fucked around with the run of show and now i have to talk and now after talking about families in south africa being split up by vigilante groups that's right i now have to talk about how bud light isn't the best selling light beer in america anymore yeah was it a mistake to put the bolt on the sheet no maybe we can do this we can transition it okay um yeah so is there a lot of humanitarian aid that the u.s is sending to south africa no doug we're selling the all the leftover bud light that is fucking selling okay whoa that's interesting tell me about that you're saying it's not selling that's selling what's happening okay i this is a small story that i saw that i thought was kind of funny which is that bud light has really been surpassed as america's top selling light beer let's guess who beat it who do you think who's taking the crown number one light beer oh it's gonna be somebody i'm gonna guess no seltzers right it's we're talking light beer light beer i'm gonna guess corona heineken nope michael love ultra oh hot dog maybe i'm just out of the game i don't feel like i've ever in my entire life heard someone say hey get me a michelob ultra i just like well the interesting thing about this ab in bev which is the overall holding company for not only bud light and a ton of other beer brands including including michelob ultra including budweiser which had had the crown in the past uh this holding company just owns all these beers all beer in the world almost they have they have like a third of all beer consumed yeah it's insane it is funny because when i clicked on this article like i think in a passive way i i knew that these companies weren't directly competing with each other but it i was like i opened the article and i was like wait this company just owns all these things it's like this is a fake battle and wait i remember this because there was the big kid rock like cancel bud light like shooting the cans thing and then it was like yeah bud light got dethroned because they got dethroned back then too and it was a different abm by a company so they just moved the dollars from a different all the consumers were buying the same company's beer from a different brand it's so what's kind of interesting is there's a huge huge fall off of light beer sales like if you in general like if you look at bud light but wise budweiser and michelob over time and you look at where all of these brands stand for this year compared to previous years there's just this gigantic trend of like light beer consumption in america falling off wait i i have the i have the chart that he's looking at it's so funny because it looks like a ray dalio rise and fall of empire it looks like great britain america china okay so the era of bud light peaked in 2010 yeah michelob ultra is now the king which is a fraction of the light beer sales in 1990 yeah damn we used to drink and the store the story that is kind of told here is that in 2023 uh bud light did that uh ad campaign that they got a lot of flack before where they worked with a trans influencer and she was like drinking you know the drinking on her uh on her instagram story or her in an instagram post and immediately there was this huge like right wing pushback and uh supposedly bud light sales did fall and i'm not denying that they did but as i dug into this article there was a couple interesting things that i saw which is that not these brands were all on a huge fall off already this entire category of drinking has been declining and also abm bev uh dropped the marketing spend for bud light in recent years they just cut the marketing budget huge so they weren't spending as much as they used to whereas with michelob they just started spending a bunch more money on that brand so it's a like michelob was the the beer of the world cup right right at least uh was it just in the u.s or is it the whole world cup no matter what um and they've increased the marketing spend on that brand a ton and then also what's kind of is if you look at their uh there was you know the claim of like losses around that time because of the backlash to that ad campaign which uh you know i won't deny that like the backlash in america like existed but they are now 30 if you check the market cap of ab in bev compared to what it was during that time to now the company that is now worth 38 billion dollars more by market cap even with the decline in sales of bud light and these drinks hey we won we won we won we won and uh so the the the new it's like the the the mountaintop is lower than ever but michelob's the new king and all of the competitors are just owned by the same guys yeah no joke which based on this chart like bud light has been in free fall since 2010 like it's not it no individual thing stands out in this chart other than the fact that people have just been drinking less of it every year since 2010 no way that i look hey i'm happy to be wrong here there's no way that i there's gonna be a big resurgence of light american beer i just feel like this right you never know did you see i don't have the like statistic in front of me but like very recently it was announced that americans are now doing cannabis more than any other substance yeah yeah zoomers zoomers don't drink and they smoke weed way more i think alcohol yeah alcohol's as an entire industry is kind of in a rough spot compared to its historical position right like people aren't people aren't going out in the same way i also think like the public rhetoric especially in the u.s around drinking has just completely changed like i feel like it's way more mainstream to be like completely sober uh to talk about the negative consequences of alcohol on your body and just be like nah that shit's poison man and like have that be there i heard uh you know like back in the day since i'm a freaking unk you know you would talk about going out and dating at like bars and clubs and like that would be the the party area yeah and don't go to bar bars are not a thing and like the nightclubs is way less of a thing many nightclubs are closing people are now doing like fitness clubs and run that's how they meet members of the opposite sex just interesting they're lame it became lame they gotta be they gotta drink more dude that's the coolest thing to do unhealthy like you're not crushing bud lights you're not cool you want to be like us come on we're cool are you gen z get a bud light get back out there get it back out there and pipe this is their marketing strategy they paid us for this ad you might think might take a sip and go this bud light tastes like shit and then think ah surely michelob ultra is better because it's doing better and you'll take a sip and you'll be surprised as well but it's cool we told you these we told these guys you were cool all right drink more michelob or whatever you know what's cooler than bud light what's cooler than bud light is it trump's irs immunity no it's ai insurance fraud i don't know i think we could let's try a couple transitions okay you know what's cooler than bud light you know what's very cold you know what's very cold you're making me do three in a row yeah aiden not only are you doing three in a row we can squeeze it i'm telling you right now no you want to hear about insurance fraud that's boring bro this is not beer in sweden sickest nordic fun fact i'm gonna be pissed you promised us a full toothpaste of squeeze and this nordic fun bring the fucking heat shake your body here it is okay okay well i have a question for you both do you like war i want to be brave i like okay no okay cut that you're not cut that you might not like this one then wait wait wait wait there's no way did they come out and denounce war or something like hey in the ukraine yeah in the ukraine mark carney said the war is bad how quickly can i pivot this to ukraine no this is about uh denmark and i i promise you nordic fun fact listeners i will give finland a bit of love very soon don't you worry i will but we're clamoring for finland specific nordic fun there is it's so important sound off in the comments if you're ready for a finland finnish nordic fun fact i know you've been dying for it uh okay there was there's interesting changes uh the danes are changing some of the rules around conscription oh uh so in 2020, you're going to be able to do a lot of things you're going to be able to do a lot of things Before, something that they changed was that not just men. are eligible for conscription. It's been in women or it's applies to women as well. And that was a change they made back then. Aren't Danish women like average six feet tall or something? They're warriors. You're thinking that you're thinking a good point. I think you're thinking of Dutch, but I'm not the right front back guy. I don't have any facts. Netherlands is not Nordic. It sounds like it is. It's like it's in the club. It's adjacent. The big change they just made is that that service that you were put into when you were conscripted before was a four month period, unless you chose to stay longer. And they have just recently expanded that time to 11 months. So everyone that is conscripted has a longer base amount of service that they have to do required mandatory. I think this is required in Denmark. How do I get out? How do I, if I'm Danish, I think there's ways out of it. I think Danish people weigh in on this for, but I, my understanding is that it is required, but there's a lot of ways for you to get around the service. And this expansion to both including women and this raising of a change to 11 months is especially in reaction to the threats to Greenland. The, the, the invasion of Ukraine, just this dynamic of conflict, like changing in Europe where they feel threatened and want to prepare in a way that they haven't in the past. And there is like a decent amount of feedback, even from young people in the country about this, where that four months is just like a very short period of time to like be able to really learn anything. And Lester abroad. Yeah. And this 11th month, 11 month period gives you a lot more time to like, learn things while you were in the military. The expectations of this program is by 2033, they're hoping to raise the annual number of conscripts that they have from 5,000 to 7,500 to increase the size of the military. I'm looking it up right now to see how you can get out of it. I wanted to see if I was a Denmark citizen, Dane, and I wanted to get out of conscription. It is saying that they have a certain number of slots they want to fill. And most of the time, all those slots are filled by volunteers. And if that happens, nobody, nobody gets called no matter what lot you draw in the fucking conscription. It doesn't matter. You don't, you can, you can opt out, but if you drop below like a certain percentage, you get margin called, you got to go in margin called. Yeah. Yeah. And you start taking the lottery numbers. So if they're increasing the number of slots, the volunteers have to also go up. Otherwise you start actually getting interesting. Interesting. And a lot of these initial people being pulled in are, you know, one of the places they're getting sent to is Greenland for like initial, like training or like stationing. But they, the military wants to increase the recruitment to 13,000 people per year overall. So the expectation is about like half of that is going to be coming from conscription. Wow. That is a lot of people to suddenly start. It's also saying that people were find a volunteer when it was four months, but they're way less likely to volunteer now that it's an 11 months. So the number of volunteers actually dropping. So yeah. So I think that I assume I would guess as a young person, the positive feedback about being a volunteer, I think it's going to be a lot better. And being able to learn more within that time period is the minority of people. It's one of those things where, you know, something that's like 1999 as a price feels a lot less than or whatever, like $6 feels way less than $9. Like four months just feels like it's kind of like you can do whatever that's fine. Long vacation could do that. I could fight in Greenland against Trump for four months, but I think, you know, the idea in on Denmark's part is not necessarily to have this like massive standing, standing army, but to have this larger portion of the population that is available to be called upon if a conflict were to actually happen. You have a bunch of people that have gone through like 11 minutes of 11 minutes, 11 months of training in whatever capacity so that if a conflict were to break out that involves Denmark, you're able to access like a larger portion of the population that has been trained in some capacity. - If you're from Denmark, very curious what you have to say about this. I'm sure your experience in the Danish news about this is quite different, but this is just what I had seen. - If they're from Denmark, they get this news from you. - Some of them do. - I know. - Which is, if you're Danish and you're getting it from me, please get it somewhere else. - No. Use the Nordic Fund. I've seen so many comments being, I'm a Nordic citizen and I get my news from Ed. - I pulled up our YouTube demographics right here. So I look after the United States, Canada, UK, Germany, Australia, you know what the next ones are? The number of most people, Sweden, Netherlands, Denmark, Norway, Finland. - Wait, really? - Which are collectively about 5% of our audience. - That's great. That's definitely because of Nordic Fund. - Sweden is like the biggest chunk of that. It's like two, I think, 2%. And I had to send all of our viewership data across all of our accounts for Swedish viewers for my immigration application. - Hey, that's great. So it's good that we're collecting them. - We literally are 2% Swedish. - I'm not even kidding. If you're Swedish watching this show, you had a hand in me getting accepted into your country. - Quit watching. - No, no, no. I need you to keep watching. In fact, if you're American, change your VPN. - It's 90% Swedish. - And don't do that because- - And send that clip to the immigration lawyer right now. - Because I wouldn't want you to do that because that would be fraud. - Because of Trump's immigration fraud. - That would be fraud. - Oh, wait. Hold on, hold on, hold on. - It's a good transition. - Are we talking about AI insurance fraud or about Trump not being eligible for fraud claims because of the IRS immunity? - That's also fraud. - That's also fraud. Which one did you mean? - He counter-transitioned. - Which one do you think? I meant AI insurance fraud. I meant your story. - Oh, okay. - All right, Doug. - Boring. - AI insurance fraud. What's that? Oh, wait a minute. Can I guess what this is? I have literally no stories, but I'm already thinking of how I would defraud an insurance company with AI. - Yeah, go ahead. - You could break your car or pretend to break your car, right? You could just like send a photo. They asked for a photo. Am I- - Hey, go ahead. - Go ahead. - I'm sorry. - No, deliver the story. - Cut it out, cut it out, cut it out. - No, no, no, I mean it. - That was legitimately, I was literally just guessing. - I'm not giving you shit. So this is what is happening. And I think everybody's aware of AI scams that are like, you know, somebody calls you and it's a fake voice or whatever. People are hearing about that. But Simon, one of our lovely viewers who works at a German insurance company and is like involved with a lot of this stuff, who we've chatted with actually a couple of times now, is saying something I didn't even think about this being the case, which is, "Hey, you know how when like you get in a car accident, you break your glasses or house or something, and then you send photo or video evidence to an insurance company to tell them that something did break and they owe you money? Well, it turns out AI is really, really good at this." And so Simon was saying, actually, I sent you, yeah, if you scroll down, Perry, on this, there's these examples, keep going, you'll see it here. So where people can just, you know, you take a real photo of your car and you could put yourself in a car accident, sure, but you could also make the damage and the damages look worse. You could, you know, remove buying standards or do whatever else. So I thought it'd be fun if we do a little game show and see if you guys can tell, Perry, if you pull this up. - Oh, we have to be auditors? - What's the difference? And so I added a couple of different photos. - Why'd you delay this? This should be at the beginning of the show. - Okay, okay, okay. So the question is, I'm going to have a photo that you might send to an insurance claim and I'm going to make a difference and we're going to see if you can tell what I did and if you'd be able to see if it's fake. - Okay. - Okay? So here's the first one. Car accident. - This looks bad. - It looks bad. You know, there's like a bystander in the back. - Well, okay. - Wait, what is that? - Are you noticing what I'm noticing? - Yeah. - Wait, does it feel like there's a bumper, but- - Why is it stuck to the- - This is the original. - No, but isn't the foot still on? - This is the original. This is real. - This is real? - Yeah. - Okay. - And then here's, see if you can notice the change. And- - I was so excited for this segment. You really haven't- - I'm glad we all hyped up. I was so excited. - And that's the end. That's the end of the- - Doug, I'm thinking- - Doug, I was so- - So if I had to point out the difference, could you go back? I actually want to make sure- - Yeah, pull back up. Pull back up. - No, don't go back. - I think it's like, you've taken most of the car from the first image and you've put it over three men having sex with each other. - Yeah. And so basically, this is an example of what people are doing. - Do you think they're getting this? - Yeah. - Do the insurance analysts are getting a lot of this? - And you can go ahead and pull this down, Perry. - I kind of get the idea. So Simon was telling me all about how this has become a major, major new problem that insurance companies- - No, that's not what he was telling me. - Well, not that specifically. That was my- - No, but I think that was your interpretation. - I tried to create an example for you guys. - Yeah. - I just feel like it- - Appreciate that. - Works better if you see it. So why is this stuff so hard if you're an insurance company? Well, the problem- - I imagine. - Is that, you know, like I don't know if you guys could tell, I didn't even use AI there. It was Photoshop. - Yeah. - But you can use these AI, AI models to create images and videos and change images. And every single model now can like do it in different ways. - You did that with AI? - No, that actually- - It was just pure Photoshop? - Yeah, it's crazy. - Are these all AI? - Okay, so these are examples where somebody is using AI to modify photos. - Audio listeners, for the segment that you just didn't see, be happy you didn't see it. And for the segment we're looking at now, we're looking at AI photos of car crashes. - Yeah. - Yes. but they've altered them to make the damages worse. - Right, so there's multiple options here. so this is because it reminds me of like you know how they'll give you a free water cup at a restaurant to go get but you can't get the soda you're not allowed to get the soda but it's nice people cheat and they take the water cup and they get spider and if enough people do that they just don't give the free water cup anymore and they change it it's like this is actually a pretty convenient tool where i can send a photo and get an instant insurance thing but they're gonna get rid of it now because everybody is gonna defraud it with these ai tools and now it's gonna be a huge it's already a pain in the ass it's gonna be such a pain in the ass yeah i'm in real time i'm very frustrated with this this is very annoying yeah i don't think you know any of us are stoked about the average insurance company but if you're in their shoes and you just genuinely want to make sure hey there isn't like an insane amount of fraud it's actually it's getting incredibly hard and it's again it's not so this is what simon was giving some some internal details about it's not just oh these ai images are really good because what's the obvious way that you counteract it and ai that can detect whether it's ai but then if every new image model that comes out from all the different companies with all the different variations all have their own way to sort of hide it and do a spin you have to train a model on every single one of those and somebody finds a new way of slightly altering whether it's a model or whatever it instantly goes undetected now if you get a false positive and someone takes a normal photo of their car wreck and you go that's ai you're open up to a pretty big fucking lawsuit yes yes shoot the shit out of you because i mean that you claimed it was so now people are gonna be like you know you're gonna get harassed even more by the insurance company but i mean hopefully not obviously but like now they're having to be far more careful aviva insurance the uk company said that in 2025 the fake insurance claims that they had were worth more than 230 million pounds there was over 18 000 suspect claims as in like these are fake claims that people are sending in to try to scam them and that it's a record level like this is skyrocketing and even even simon was like are there do we have like exact numbers from a lot of different companies and he's like they don't want to share numbers because this is what they're aware of what's happening the amount of undetected cases that they don't even know about could be absolutely massive and a lot of the apparently a lot of the things that people are catching are because they're using the same photos to do scams multiple times so this photo you can pull this up perry this is not this is a real photo don't worry this is glasses and apparently on german imagine if you did it again that would be wild now see look at the reflection of the glasses so this is if you google german glasses this is like the first image so apparently this image has been used for just for him dozens of times for people trying to scam them for free glasses from insurance claims but these are famous glasses from jurgen klopp who's the national soccer team coach people are so fucking lazy and so in the point of this is not always very stupid to google broken glasses and use the first result apparently these glasses are so famous they're in a museum not only is that stupid the the the fact that there's this much fraud being detected right now and a lot of the reason it's detected is because people keep trying to do it repeatedly with the same images is crazy and so like insurance claiming my broken bell and you liberty liberty bell it got a big crack in it i need to be fixed and you can do it with images and so and there's a whole weird thing where now insurance companies are having to figure out do we can't send a real person to go check every single claim so then you're trying to figure out which claims to go for and there's these there's companies that i looked at like verisk that are trying to sell products that are like we're gonna figure this out we have have your customers only take photos with our app and then we'll tackle check all of these things and it's like dude maybe that's where it has to go but holy shit i'm gonna print out a picture of the german glasses and i take the app and then i'll take a photo zoomed in on it right right so this is a i i hadn't thought of ai scams and insurance what a what a crazy no it's a crazy story world and it's like this is one where it doesn't feel like people are benefiting like nobody i guess like some fraudsters but just broadly this is just gonna suck they'd be able to detect dog's image i mean it's not ai you have to give him that yeah i don't know if they'd give you a refund on your three gay man having sex but well no it's the car the car is the car happens to be there if they get it mixed up it's the wrong refund they send me three new gay old men those men are too old they're too old uh what a auspicious note to end our episode on gentlemen we learned a lot about the markets today we learned about a lot about ourselves did it and you could learn even more in our hour bonus patreon that we're going to record we're calling it 10 hours of aiden only aiden stories it's going to be all the aiden stories that he's fit to be squozing from uh come squoze me if not we'll be back next week with our covering of the news here on lemonade stand thanks guys for watching close me bye everybody on the patreon