Red-pilled Billionaires, LA Fire Update, Newsom's Price Caps, TikTok Ban, Jobless MBAs

except the governor just said, we can't pay people 10% higher than what they were getting paid right before this happened on an indefinite basis. And then Karen Bass created a hotline. ... There is not enough service providers down there. You're going to end up waiting six, seven years to get your home rebuilt.

If you don't pay a premium to get somebody to leave another market to come to this one, which is what's going to be required, there are simply not enough construction people in any state.

when it comes to service providers, yeah, you have the opposite problem right now, which is like you're saying, you need to incentivize a huge construction force to come to LA. And the cost for them to get there, to find housing themselves, is going to be even higher, or the amount of distance they're going to have to travel every day. So I think this could have real unintended consequences and just stop the wheels from turning on rebuilding all these homes, or just make it way more complex.

Even if you get a permit within six months, and this is where I do agree with Friedberg, like getting service people in and being able to build something to spec safely is going to take three, four, five, six years, and it's going to be insane.

the class I taught on Monday at Stanford, they said, everyone wants a job at Meta or Google, and that's the get rich quick place. And it's, I don't even think that's necessarily true anymore. And they can't get those jobs because those companies are now trying to get rid of middle management. So those jobs have dried up.

I think what companies are internalizing slowly, that the first place that AI disintermediates is actually middle management. You thought that it was the customer support person, maybe you thought it was the engineer, maybe you thought it was the designer, maybe you thought it was the product manager. I think those are less true. I think it's the middle manager, it's the functionary that basically is acting as essentially cartilage inside of this organization, has less and less to do in a place where AI-enabled systems are making a lot of decisions on behalf of businesses.

I just had Arush Selvin, who is the PM at Google doing deep research on This Week in Startups yesterday. And this product is nuts. And they designed it to basically be one of these like million dollar or five million dollar reports you pay for from these consulting firms. That MBA is right. And it does a better job. It's more accurate. It's done in five to ten minutes.

It also probably is going to reduce the demand to go into these MBA programs, because if you're thinking, well, that's not going to be my risk off trade, and I'm not going to be guaranteed. So why go in the first place?

But I do think that this is a warning sign that people should not go and pursue these degrees, because I think, as Pincus said, you're not taking the trade of least volatility. You're actually taking on a lot more volatility than you probably thought you shouldn't be taking on by going to a place like Harvard or Stanford.

And I think that that's what AI is going to take us to, which is basically going to destroy much of the value of higher education. And I think that this MBA piece is probably just the first step of many. That's going to ultimately erode the value.

they're all wood built, you know, none of this is concrete, none of it's brick. California is all wood, and so they probably should add some regulations about building things that are fireproof, because if you had a hundred homes that were all fireproof and built to withstand this, that would act as a natural break. And if you didn't have as much vegetation, so there's probably a series of things that should be added here in terms of regulations while you're getting rid of some of the ones that are slowing you down.

And then the last chart goes through and it actually does, CoreLogic does an assessment of the value at risk. So in California, it's three quarters of a trillion dollars that are at about 1.26 million homes that are at moderate or great risk of fires. In Colorado, it's about 141 billion. In Texas, it's 88 billion. In Oregon, it's 45 billion. In Arizona, it's 36 billion. The point is that everything you said, Jason, now needs to get scaled out, meaning there needs to be a national level conversation. This can't be a bunch of city planners making code and making laws in a little municipality. Because that problem, what that shows you is we have a multi-trillion-dollar risk to a lot of people in the Western United States specifically around this issue that has to get dealt with by code.

And so I'm, the best outcome, I think, would be forced to divest and sell to another American company. But if that doesn't happen, I'm kind of nervous about a real backlash.

So I do agree with Mark that we have to find a suitable home. And I think that we'll probably find one. And I think that it probably happens under the Trump presidency. And whoever gets their hands on it gets their hands on an incredible asset that they will be able to buy extremely cheaply. Because there is no way that there is a fair market value here deal for that asset.

if you think about the two biggest imports from China right now, it's fentanyl and TikTok. They want to make us addicted. They want to impact our society. They want to divide us. This is a massive psyops that's going on. It is a psyops, and it is a spyware, and it's been proven they spied on journalists. These are bad actors. It has to go.

Seems like they're going to strike a deal. Chuck Schumer today is calling for a delay in the ban. I'm sure by the time this episode airs, something will have been worked out to create some space for them to get a deal done. But I think they want to get a deal done and keep TikTok active in the US. Seems like both the Dems and the Republicans are pushing for it.

So this kind of also leads to what I think will be the grand deal with China, which I think will happen in the first six months of the Trump administration. I'm obviously speculating, but it feels like there's going to be some work out here. China is like in a lot of economic distress. I don't know if you guys have followed much on the stories of the deflationary challenges that China is dealing with. Chinese bonds are trading at a below 2% yield now, which is kind of unprecedented.

Trump is a great negotiator. It's probably his greatest strength. And he's great at saber rattling. And we're strong. They're weak right now. A grand deal could be an awesome.

I I've been loading up on Alibaba, a couple of Chinese names with the same bet.

There is a home building dearth right now in the United States. So this is an amazing opportunity because they can now move to LA, build homes.

You thought that it was the customer support person, maybe you thought it was the engineer, maybe you thought it was the designer, maybe you thought it was the product manager. I think those are less true. I think it's the middle manager

if you look inside of any org chart of any company, you can map those jobs to some clunky old piece of software that was sold to them. Maybe it was 10 years ago. Maybe it was 20 years ago. But that's why orgs are this bulky. And now when you have all of these new next-gen businesses that are ripping all of that software out, the middle management layers that used to manage that software are no longer necessary. That's why you're not hiring MBAs. And I think that this trend is only going to grow.

Well, California has got, at this point, price controls or a mechanism for controlling the change in price on insurance, on housing services. And now they've got this non-solicitation rule. All three, I think, are very challenging to, I think, an appropriate market recovery. ... But I think it's going to be one of the biggest burdens going forward and it could actually lead to a pretty significant effect in long-term housing prices in California. Because of the way that the insurance market is structured and regulated in California.

I think it's great that Daniel Lurie is mayor of San Francisco, and he's putting smart people around him. And they're trying to rethink, first some attacking these core problems, but also how do we make San Francisco fun again? So I love things like congestion pricing. I think now is the time to try every new innovation that you ever thought of and see what sticks

I just think that the city is very poorly managed. And just the quality of many cities are poorly managed. And I think that there's a common through line in these poorly managed cities. All the things that you say, there's no will to do. There's no will to keep crime at bay. There's no will to make usable spaces for people. There's no will to invest in the arts. So what do you expect, right? There's more money collected by these cities, but there's just more total grift, corruption and waste.