E88: First principle politics, China chaos & outlook, state of private/public markets & more

No, I think it's more like 2008, Jason. I think it's more like the financial crisis in 2008 that was driven by the real estate bubble. They've got their own real estate bubble, which is collapsing there.

And these are regional banks, to be clear. This isn't the national banks. And so, at the same time, the mortgage boycotts are happening at 301 unfinished developments in 91 cities.

So a lot of the conflict and the things that are starting to fall apart, which may just be the tip of the iceberg, is a function of a fundamentally slowing economy and the forecast and the outlook for an economy that doesn't have the drivers it's had historically.

Amazon, it makes so much sense for Amazon to expand into built out retail footprints because that business model now gets more and more complete by the day where you become so ingrained and enmeshed in this loop of Amazon services.

What this is really about at the end of the day is the subscription business. Amazon Prime is the driver of Amazon's business. That's going to be the entry point. This is yet another Amazon Prime lock-in.

But I will bet you guys a dollar that within a year after closing the deal, they're going to massively expand the telehealth footprint of what One Medical is doing.

Yeah, I mean, just because we need to on-shore manufacturing doesn't mean that you give Intel and NVIDIA giant handouts, and then you got Paul Pelosi making millions trading NVIDIA options.

Giving a capex subsidy is a meaningless way in which you basically hand out good money to organizations who have otherwise misallocated the money that they've already had.

Yeah, there's a much simpler solution to Sacks' point of like, how do you do this? And giving free money is not the way to do it. The best way to do is to give an incredibly low interest rate loan, like a 30, 40, 50 year loan.

So if the government comes along and says, we will support, we will cover X percent of that investment, I can take on more risk, and I'm more willing to make that investment.

China is in chaos right now, apparently, in terms of slowing economic growth, bank protests, mortgage protests, exactly what I predicted last year when you guys were talking about China was going to dunk on us.

It's really a self-own. I mean, they've moved away from the policies that have made them so successful economically over the last 40 years. And then on top of that, you got this debt crisis and this housing crisis.

They can take a five- ten- and thirty-year outlook and make a plan and invest against it. It's what they did from the beginning. I wouldn't count them out, but there's certainly a lot of challenges they're facing right now.

But generally speaking, technology drives productivity gains, but it's deflationary in the short term.

And that's why you're seeing a lot of folks, I don't know if you're seeing it in your portfolios, but we've seen a lot of folks looking at India, Vietnam, and moving factories there, and obviously Japan has been incentivizing people to move out of it.

China's not going to just lose their manufacturing edge. They're not just going to say, hey, we give up, let everyone go to Vietnam. They're going to try and upgrade the capability of those factories

If chips are the new oil, Taiwan is the new Middle East or the new Persian Gulf, and it is a very dangerous situation for us to be completely dependent on Taiwan.

But if you look at the public markets, which is again the ultimate terminal buyer, they have more cash than they ever had since 2008, which means that there is no reason to buy.

He goes on some podcast, tells Bloomberg that VCs are going to get pinched for insider trading all these tokens. And lo and behold, on the Wall Street Journal, three guys, I guess a guy at Coinbase, got pinched for basically insider trading these token sales.

And I think the SEC, now that everybody's lost their money, is going to just tick off one firm after another. And it's going to be massive settlements. It's going to be three or four years of litigation.

If you were a VC last year, you should have been realizing as much as you can because valuation levels are really high.

If you're if you're a venture investor who took a longitudinal view on public market stocks and then have now seen 60 to 70 percent write downs of those same stocks that you could have distributed, you should still have something to answer to.

What I feel smart about, I'll be honest, is we had, I think, let's just say, I'm making up a number here, four to five times we were offered the opportunity to trim our positions in secondary with our winners from people who wanted to buy secondary shares. I did it probably four out of five times.

It was like 100 times was the rule of thumb. So now there are some where their deals are getting done in the high 20s, I'd say, or even 30, if you believe that by the end of the year, it'll be more like 20

And my lord, people got a lot of credit. I mean, $50 million, $100 million evaluations without the revenue turned on.

Series B, C and D is where there's this whole fight because there's existing investors, existing shareholders who are saying, I don't want to take a 50% write down, a 70% write down, a 30% write down over the last round and fighting and then doing inside rounds and bridge notes and all sorts of other shenanigans to not have to take a negative mark on their book.

And so then they slow down. So all I'm saying is I think that we are at the point of the cycle where constipation is setting in.

I think the big thing that's going to happen right now, I'm seeing it all over the place is M&A I think is going to start ticking up just today Amazon acquired One Medical for $3.9 billion