Is The Crash Over?

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AI, what's going on, Jonah? Streaming. We're streaming. We are absolutely streaming.

Whenever I say we're streaming, I think of that scene in Old School, which is still my all-time number one favorite comedy, where Will Ferrell says, "We're streaking." And there's no one streaking. It's just him.

I have no idea what you're talking about. No, you're kidding me. I'm not that old, dude. You've never seen Old School? I have no clue what you're talking about, dude. I'm so jealous. I wish I could see Old School for the first time.

I remember the first time I saw Old School. It was 2003. I took my high school girlfriend to the movies and we went to see Old School and it was just sides splitting crying hilarious laughter. It basically ushered in a new era of comedy that movie.

It was like the whole Frat Pack Will Ferrell and Vince Vaughn. It was the first time they ever did that. And so it was totally fresh and new before Wedding Crashers, before that style of comedy took off with the 40-year-old virgin and This is the end. That was the OG hilarious comedy. It was incredible.

I mean, I remember that era of comedy. How have you not seen like is this like a Jud Apatow type thing?

Jud Apatow is definitely inspired by this. This is Todd Phillips, the guy who eventually went on to direct Joker. But basically Todd Phillips's first movie was the first big comedy was Roadtrip. This was his second. And this is where he just took it into the stratosphere. And then Hangover was the series.

Well, obviously I've seen The Hangover. Yeah, but Todd Phillips is a comedic genius. He's basically the best director, comedy director of our time.

Now, hang on. Why do we only have 73 viewers? What the hell is going on?

Yeah, that's what I'm trying to figure out. We have nobody on the stream right now except for All right, Austin, you're on the spot. Austin, you're on the podcast. What is It looks like X changed maybe how they do lives. It's not showing up on our feed. You have to click the little icon. I don't know. Maybe there was some change I don't know about.

Yeah, we got to figure out how to actually share the live cuz nobody's Yeah, if you go on Twitter, it doesn't pop up. It just has the circle around it.

Let's figure this out before we keep going because people are now messaging when are you going live and I'm like well we are live my friends.

Jonah is so OG he had a dino pet. Did you you just read that out as what the hell is it? What the hell is a dino pet?

Jonah I think it's like I think it's one of those like your mama jokes your mama got a peg leg with a fish in it you know like 90s rap me ability. You know your mama's so fat. Your mama's so fat she was swimming in the ocean and got harpooned. Your mama is so big and fat that she can get busy with 22 burritos when times are rough. I seen her in the back of Taco Bell with handcuffs.

Anyway, this is actually pretty solid. It's the dino from the Flintstones. Now that's a TV show I haven't heard of in a long time. You know what I used to watch? It was big on Scooby-Doo. I was a big Scooby-Doo guy. He's a big Hannah Barbara Scooby-Doo guy.

We're keeping everyone entertained while we figure out the technical issues. Austin, do it. All 92 of you that are with us right now. Normally by now it's at least a thousand.

Jonah's going to keep rapping until we get to 200 people. So the basically the entire stream. Yeah. two hours. Hang on. Thousands podcast. Okay, wait. It's going. I'm somehow people are finding me. Something just happened. No, but it's still going slow. It's on YouTube.

I joined I joined for the 90s rap. What are you You got any 90s rap in your back pocket? Can you break out some Biggie? Maybe some Tupac? You got any bars for us, Jonah? Cuz I All I got is Lil Wayne and nobody wants to hear that right now.

Going back back to Cali Cali. I love that song. I'm such a California maximalist.

God, that's another good night. You really are. It's so funny because you're such a Cali maximalist and I'm a hardcore East Coast maximalist. I just don't think any city in the world will ever beat New York.

Okay, that's where you're screwing up. So you're right about that. But I am a downtown Manhattan maximalist, but the rest of the East Coast, you can keep it. Literally, the upper the upper east side is pretty great. And also, what are you talking about? It's coming back. You haven't been there in a long time. It's coming back.

I live in New York. It's becoming cool again because it became Like in the last like three years, it's becoming But you know, this happens, right? Like New York City goes through cycles where Chelsea used to be the cool neighborhood, then it was terrible, then it was cool.

When I was in New York up the Upper East Side was just a bunch of hundred year olds. I guess they all died and then Yeah, they all they all died. The apartments all moved on to their children or got left on the open market and now people have moved in and now there's like an article every other day that's like wow the Upper East Side is getting this cool new restaurant.

But obviously West Village is the best neighborhood the West Village the best neighborhood. I lived which is where I live. Come, come, come here and come here and walk around and try to spot me. If you if you find me in public, you get nothing and I will run away from you. So, don't find me in public.

I got spotted. I was walking my I was walking with my one-year-old pushing him in the stroller up like deep into the Hollywood Hills, like way up there in the bird streets. And some guy up there is like, "Are you Jonah from the ThousandX podcast?" It's never women. It's 100% dudes that listen to this.

Yeah, of course. Like it still is crazy. Well, there's there there there there may be one woman listening to this. There may be one, but it's because she knows we have one eirl in the in the group chat. Uh can't tell if it's just a Pakistani spam bot or an actual human woman, but let's assume the former.

Yeah. We you can't you can't go around just assuming everyone's a Pakistani scammer, you know. Yeah, because that that's just a depressing life. That's no way to live.

Speaking of relentless, boundless optimism, I love your optimism, Obby. I love your optimism in general. And there's a big debate going on. Maybe we should just get into it here in a crypto cryptoorm says I'm a girl. I don't believe you. Cryptoorm no girls naming themselves Cryptoorm. I'm sorry. I mean, CryptoCon is a girl. There no there no there are no women on the internet.

I used to play this like I said as everyone knows I used to play this game also. Have we figured this out yet by the way?

No I have no idea. I think X maybe changed something but I'm not seeing anything on it. It's just doesn't show up in the but like you like click on the but like how do I how do I share the fact that we're live that YouTube link and tweet it and then I'll tweet it. Yeah, I guess you could do the YouTube link. All right. Send send the YouTube link in. And then we'll And then we'll get going. Roger. And then we'll And then we'll kick it off. Send. I don't know why I would put that. Hold on.

Yeah, we're have to protest X. This is whack. Totally whack. You just have to click on the icon for each show to open it. Like opens it a whole new window now. I We just figured it out. Wow. Look, in the age of in the age of AI, I can't even copy and paste a link. It's crazy. I'm so bad at this. It's It's actually It's actually completely over for me.

All right, Austin, we're going to remove you from the stream now. Obby, have you retweeted? We are live talking AI dumerism. Jonah, we are liveism. Tickers will be shared. Crypto crash will be discussed. There we go. Okay. Now, now we should be getting people on.

Yeah. You know what? The beginning the beginning of this podcast the beginning of this podcast I think is gonna be go down as one of the most rifts that we've ever had. I think it was good honestly. I think like we are human beings after all. We do things outside of crypto like watch movies and take walks in the hills. It's normal.

You know what you know what I did last night by the way as as we're still getting people on. It seems like uh you know we should here just just like just like another two minutes. Guess what I did last night, Jonah?

What did you do last night?

I went to my first Broadway musical. That's really cute. Mine was back in 03. What What was yours?

I Well, I saw The Book of Mormon as far as hilarious like genuinely. So So I feel like you as a musical talent have been to your fair share, huh?

Yeah. I mean, my favorite play I've ever seen was in in London at the National Theater. It's the Leman Brothers trilogy. That's highly recommended for anybody. Leman Brothers trilogy. Yeah. Best play of all time in my opinion. Doesn't get any better than that. Um especially if you can catch one of the original actors in there. These guys are like they've been kned by the queen. They're that good. Um the best musical like Broadway musical I've ever seen I think is the first act of Hamilton. This the rest of it is

Wait a second. The Lehman trilogy is about Lehman Brothers?

Yeah, there's a play about Lehman Brothers and it's the best play I've ever seen in my life. It's unbelievable. It is unbelievable. Obby, if you have a chance to see it, go see it. It It blew my mind. Okay, blew my mind. I've never had such an emotional reaction to any sort of entertainment. It's like the fact that I work there is irrelevant. like the the uh the the last minute of it is about the crash. The whole thing is more about like it's about like just Jewish immigrants starting a business in America.

Of course it is. I mean that's of of of course they're Jewish. Of course they're Jewish. Well, we we're never going to escape the allegations, Dona. No, we're not. So, let's just lean into them. So, let's let's let's lean into them.

But speaking speaking of allegations, there have been a tremendous tremendous amount of allegations levied recently against this concept of AI D AI AI optimism. All the doomers, all the doomers have come out in force basically saying, "Hey guys, you have you have two years to escape the permanent underclass. And if you don't hyper gamble your way to success, everything is over for you." What do you think of that tape, Jonah? Because this is this has been this has been like percolating. There's a there's an article on Twitter that went super viral about how everything is going to change in in the next two years. Uh what's what's your take is is everything was this the Schumer thread or the mechanism capital guy thread?

This was the Schumer. Yeah, that one went super viral. I So I'll tell you I thought it was AI slop. But I thought so too. But my views are the reason why I thought it was AI slop was because it was so woo woo. There was no conclusion. It was like AI will change everything and they're not telling you and you don't know what's going to change but they do. It's like well tell us the hell's going to change and he didn't say.

So basically I my views on this are evolving rapidly. Basically well okay fine I was I'm not giving him enough credit. There were some takeaways. There were there were there were I I think I think there were genuine takeaways like he he gave you he was like short short businesses that sell human time by businesses that either like own the means of AI production or the commodities that go into AI like power and GP you know compute and then um you know that that was sort of like the takeaway and just and also the takeaway is everyone's screwed but basically my you know in a nutshell my views on AI have evolved at First, when I saw ChatGpt and all of the hype around AGI, I thought, "This is just a fundraising ploy. It's cool. It's a chatbot. We're not going to have technology that's replacing humans on mass anytime soon." And this is just like every other lite um panic attack for the last 5,000 years of human history where it's like um no, we shouldn't invent the the wheel because that will put human like uh chariot uh carriers out of out of work, right? Like so I I just kind of didn't I sort of dismissed it.

Now the more I use AI the more I'm like I think there's kind of you know I subscribe to chat GPT and Gemini um and you know we use claude code for the thousandx terminal that that's the expensive one. Basically there's kind of no reason to hire entry level uh people who aren't utterly elite in some sort of intellectual or talent type capacity. So I think that's going to create social unrest and I I don't expect all knowledge work to be replaced by AI, but once humanoid robotics show up and put a whole bunch of bluecollar people out of work, drivers, cleaning ladies, whatever, uh plus, you know, just a bunch of young young people who didn't go to maybe a top five to 10 university just having a much harder time getting a high quality job. Um, I think there will be some real problems and I think I think ultimately the conclusion is going to be that uh there's going to be redistribution voted into the political spectrum socialism. I think so.

So my my my take on this is sort of nuanced but it it agrees with you. It agrees with you very far out but I think the key is that I agree with you far out. I don't necessarily agree with what you're saying right now. I think for the first uh over time. Let's take a step back. What does technology do? At the end of the day, technology provides leverage to a human.

If you go back a hundred years and you wanted to start uh you know, you you you you wanted to start building a company that produced cars and you were Ford, you needed to hire tens of thousands of people to go assemble your cars, right? And as technology advances, becomes a lot easier to produce cars. And the number of people that you need shrinks and shrinks and shrinks and shrinks and shrinks because suddenly you're able to do with one person what took 10 people or 100 people decades ago.

And that's really what AI is doing right now. It's providing leverage and reducing the amount of people that it takes to produce the same amount of output. And over time, what we found and what we're seeing right now is that productivity is way like highlevel metrics of productivity are way up, right? Like the amount of apps launched on the uh on on the Apple App Store, that metric has gone absolutely vertical. The amount of GitHub commits has gone absolutely absolutely vertical post uh what about the number of meme coins and shitcoins launched? Just kidding. Keep going.

That's also gone totally totally vertical. and and AI shitcoins and and things have gone completely vertical too, right? So, but what I'm trying to articulate very specifically is that we're actually only at the beginning stage of this process, but there are a lot of people that I speak to dayto-day because I'm I'm 30. The people that are going to be the most impacted by this are the ones with low-level skills. It's the people below the age of 25. It's the recent college graduates, those are the most replaceable people by far. And so for them, the crisis is coming very quickly in my personal opinion. For you, the under 25year-old, your crisis is here. For me and you, Jonah, the 30 plus with skills, the crisis is much further out.

So when you have hard skills, you know, let's say let's say uh you know, you you built a you've built a career for yourself, you built a network, you know, people. That's valuable in itself. And so obviously you're going to have an easier time navigating this world than somebody fresh out of college that just got their CS degree. Now, maybe you graduated college as an electrician, and that job is going to last for a really long time because there all these regulatory hurdles, and it's it's a it's a it's a physical job. But basically like the what we've referred to in the past as the laptop class bgeoisi they are in the most trouble. The people that would have graduated college and gone to work at Bane or BCG or McKenzie and then 6 years later try to start their own company. The people that were business analysts at Capital One.

I was one of them for about three and a half seconds but still what's in your wallet? What's what's in your They were always They were always so proud of the Jennifer Gardner commercials. They were always

Were you the Sorry, quick interjection. Were you the business analyst who decided that we're going to receive three pieces of spam snail mail per week at every home in America?

Uh trying to but they were not about it. Too many. Exactly. Okay. Keep going.

So, so, so, so the question is right. Uh what do you tell those people? Like what is an actionable thing? Let's say you're listening to this podcast and you're just hearing this dumerism and you're like what the do I do?

My take is that basically you should be saving every dollar that you possibly can. Like you should be reducing your spend as much as possible and you should live like a bug person for the next three to four years that you can and shove all of your money into the markets. Because my take and this is this is where I differ from the doomers. The doomers always go straight to AGI. The doomers go straight to hey uh if if AI really takes off in the next 2 to 3 years then that means that unemployment is going to explode massively and things are going to get really bad and politically the environment is going to get horrible.

But my take is different. I think AGI might be let's say let's say it's even seven seven years out the next three years of our life which it's a long time even one year is a long time two years is a long time the amount of productivity gains and the amount that these large businesses that are producing AI and selling and providing the infrastructure for AI and building data centers and the hard assets that are needed in order to provide this energy and build these uh build these monstrous warehouses. The amount of capital that they are going to accumulate until AGI is is is released and the political environment shifts is going to be astronomical.

I 100% agree with Andrew Andrew Kang's article in this case where we're reaching we're reaching a point of massive exponential growth and basically up until AGI really really really displaces a tremendous amount of people uh it's going to impact the lowest spending segment of society first anyway so it's not going to impact the bottom line I mean if you look at general spending 50% of all spending is done by people in the top 10% and the people in the top 10% are the people least likely to be impacted by AI. And so I don't buy the argument at all in any way, shape or form that we're going to have a massive collapse in earnings because of high unemployment because the people that are going to start being unemployed over the next two to three years are the people that aren't spending money anyway.

Right. Right. And so my take on this is that you need to be invest as invested as possible in the markets. you need to be as invested as possible in hard assets. Uh otherwise, you're going to be left behind. That's and I and I hate to say it that way, but I I do think it's true. And and this is it does require a bit of shift in shift in mentality and behavior which is why you know the the the article uh that's going gigafiral I think was too long candidly for what it was but it did have some very good piece of advice in there which is that if you're young or if you're coming up make it your goal to know and learn as much about AI as possible so that you can leverage yourself in the next two to three years and make yourself so much more valuable to that company. Build that network. Get that coffee with that person. Like become an indispensable part of your company so that when everyone's indispensable, at least you've proven yourself more competent than the rest and somehow maybe you you you'll get to stick around, right? That's really what it is. But I'll I'll I'll stop my I'll stop my monologue there.

No, no, no. It's a great monologue. I I mostly agree with your take. I have a few things. The make yourself indispensable thing is precedes AI. But yes, if you're not actively figuring out how to make how to use AI to make yourself indispensable, now somebody else will have that leverage and make you dispensable. So I get that point. I think it's kind of a tired trope though. Um the the beauty of being young like I guess my first year as a professional person out of college was at Leman Brothers. Leman Brothers went bankrupt. So my second year was at Barclay's Capital because they bought Lehman Brothers assets including me out of bankruptcy and then Barclays proceeded to fire 15,000 people going somewhere like this. Firing 15,000 people is a big job, right? So they basically had the Bobs from Office Space like consultants reintering the entire workforce every Friday. So I have to rein for my job every Friday. And my my quote was like I'm young. I'm the most technically capable person on the, you know, credit trading floor. After you fire somebody, who would you rather have figuring out their spreadsheets? Like the old guy or me? Like, obviously me. So, I'm indispensable. Oh, and by the way, I can do everything from answering the phone to doing actual trades and making you money because I'm young. I'm not going to be too good to go do back office work or answer the phone for people, but I can also make you money. Like, it's a no-brainer to keep me and I'm the cheapest, right? So that making yourself indispensable was something that was ingrained into my mind early in my career. So when it's like the special advice for the era of AI is make yourself indispensable with AI, it's like I I kind of I kind of feel that preceded AI.

Now you're not wrong about the fact that AI is going to create wealth for asset holders. I actually tweeted this, right? I tweeted buy hard assets yield curve control is coming. The implication there is that AI is probably going to acrue value to, you know, a like AI native companies that are already running the S&P 500. That tweet went viral, right? Like it got 120,000 views. Not like crazy viral, but viral enough. And by the way, I can hear you slamming away on the keyboard. Sorry. My bad. Um, so basically my point here is you like I during COVID when COVID first broke out once they started printing money I said the best thing you can do is take out leverage and buy hard assets buy I bought a house back then. It was the best trade uh one of the best trades of my life were not for the fact that you know somebody who maybe is America's biggest unconvicted white collar criminal became my tenant but other than that um the asset value it was great bought bought it with leverage. I took out more leverage and bought Bitcoin. I bought S&P at $2,400 uh you know the index and it's just it's all been an amazing trade. Everything's like tripled. But the thing is we're in another one of those times except there hasn't been a the the market psychology of this is that there hasn't been a huge crash that gives you the dip to buy. Instead, there's just like some Tinder has just that has been dowsed in gasoline and lit on fire in the form of this new technology. And so now's kind of the last I if you could even call it a plateau before I think assets go really parabolic and labor goes south.

Now the ultimate impact of that as we've seen through you know name your historical revolution that creates inequality is socialism redistribution of wealth but I I actually take your point that that's going to be a knock-on effect of the trade the clear and present trade which is borrow money buy stuff right like if if you don't you know don't I mean you're you're not supposed to I don't think you're supposed to take out too much leverage but right now money is cheap relative to the amount of capital that's going to be consolidated by the things that are building our future. And when I say by the things that are building our future, I mean very specifically energy because the demand for energy is going to go through the roof. Be careful buying energys commodity energy though because there's a ton of supply. There's there's there's there's a ton of supply, but energy usage is going to go through the roof. And companies that benefit from energy usage going through the roof, I think, are going to do well.

Personally, I just I got to say something on this. I'm commodities guy. The worst thing you can do as a trader, especially a commodities trader, is h is be right and make no money or lose money. Like if your thesis

Well, I think I think that's Yeah. Just just as like a like as traders in general, right? like would you rather be right or would you rather make money? That's always like being wrong and losing money is actually way better than being right and losing money because if you're wrong and you lose money, it's like it's because my thesis was invalidated somehow and I I learned from that and move on. If you're right and you lose money, like shame on you. And there are so many opportunities in this market to be dead right about AI, dead right about energy consumption and lose money. So if you're like energy consumption's going up, I'm gonna buy natural gas on the highs and then like the cold snap ends and natural gas plummets, like shame on you. So basically what I'm saying here is like the way you express the energy trade. Some of these trades are extremely hard to express like oh demand for compute is going up. How do I put that on? Right? Maybe Bitcoin, you know, like you have to really think through these things. So my point here is like be like expression of the trade is so critical. Go on, Obby. I'm sorry I interrupted you.

I I agree. So I guess the question is let's say so so my expression of the trade personally uh is I want to buy I want to buy assets that are as close to that fire hose as possible and I also at the same time have held thesis for for months and months and months and months months now that at the same time that we have this AI massive productivity boom that's going on and this massive capex spending Uh that's that that that's about that's about to happen from from all these from all these uh you know companies like Meta and Amazon and Google. They're spending a ton of money on building out these data centers data centers in house.

We're have we have a fundamental shift in geopolitics away from the unipolar world of the US to the multipolar world of today right to the China sphere of influence the Russia sphere of influence the European sphere of influence and the American sphere of influence right and that's really why like if you just take a step back for a second that's really why we're spending so much time on our hemisphere is because we've decided to give up on the rest of the hemisphere on on the rest of the world. We're spending all of our time on the Americas now, right? I think I think that's why, you know, may maybe that's even why Bad Bunny was the performer at at the Super Bowl. We're trying to appeal.

What did you think about that? We we'll get we'll get there. But we're trying to appeal to the

But you're the Puerto Rican on the podcast. What did you think as the

I am no longer Puerto Rican. I have I have left my Puerto Rican days behind. But uh I do I do I do go back there and I do love it and I do love my fellow former Puerto Ricans. But as as of as as as of today, I am a I am a happy and proud East Coast Jew in New York. I wish I wish I wish I was there during the Super Bowl. That would have been that would have been awesome. But to go back to the

I thought you were dancing around at halftime and we're doing we're doing the weave. We're doing the we're doing a little Trump weave here. Yeah. Let's let's let's weave it let's weave it back to the original point which was you have these two mega trends that are occurring right now. You have this AI mega trend and this geopolitical mega trend. And then the question is like how do you fit your how do you fit your allocation in there and how do you make as much as as as as much as much money as possible. And I think one thing is to have you know 12 to 18 month time horizons on a lot of these trades and be able to stomach some of the volatility around those trades is very important. Uh, and maybe you can even find things that are crossovers. Like I've I've talked about uranium. I've talked about rare earth minerals, but and those those are good crossovers because uranium I think is going to be very critical to powering the next stage of energy production especially especially in Europe. Uh and then you also have things like who's going to consolidate all the power and I think people like Google, Amazon, maybe probably not, but probably not Facebook, but maybe maybe just Google and Amazon candidly uh because they're they're they're at the forefront. And then if you can uh potentially get some private investments in, you know, robotics companies or maybe maybe you can take a chunk of uh take a chunk of anthropic if you can get an SPV in it. But really, I think most of the opportunities here are are in the public markets. And then you want to say, well, what else benefits? And it's it's energy, um, industrials, I think, as well. And that's and that's really my portfolio right now. That that's that that's really it is is who's who's who's gonna be needed, right? If you're building if you're spending if you're spending $500 billion on building data centers, you're you're going to need some people to build those data centers for you and those those people are going to benefit massively, right?

Yeah. I mean, I think I I disagree with one I agree with everything you said except for the fact that most of the alphas in the public markets, I think I think the trade expression needs to be a little bit more elegant than that, frankly. Um, I think if you, you know, if you want to, like, let's say you're a young person and you're looking for a way to benefit from this trade with zero effort and maybe make 50 to 100% over a two-year time frame, which is would be an awesome return. Yeah, I agree with you. Public markets, but I think if you're trying to turn this into like the kind of wealth creation event that crypto was maybe in 2017 or, you know, 2021, I think you got to go private. And what I mean by that is like okay so how does a commodity how does a so data centers need energy let's just examine that thesis and break it apart for a second okay so you know there's a big spend coming you know that spend is kind of fragmented right because a data center being built in Virginia isn't going to impact the price of gas in Vermont so you know let's let's just break it down how does it there are three kinds of commodities there are commodities that are mined from the earth literally dug out of the ground with holes like oil and gas. Then there are sort of manufactured commodities. Uh like when you take oil and put it through a manufacturing plant called a refinery and you create gasoline. There's no gasoline buried underground. You have to make it. You have to manufacture it. Then neither oil nor gasoline is particularly useful in and of itself, right? Oil you, you know, Native Americans used it as tar to put together canoes, but other than that, there's really no use case. You have to manufacture it into gasoline. And what what are you gonna do with gasoline? Light it on fire. That doesn't help. You have to put it through another refining process, another manufacturing process in a portable manufacturing refinery system called an internal combustion engine to turn gasoline into the useful commodity called locomotion. All right. So data centers need the useful commodity. They drink that up. It's called, you know, electricity. Um I think I you know I don't necessarily think that the right trade is to invest in the mind commodity which is natural gas which is powering most of this stuff because natural gas is largely driven by other factors. I think you want to focus for most of this AI I think you want to focus on the manufactured commodity node in that system that I just described. So, like maybe it's public utilities in the locations where there's a big data center build or maybe it's um maybe it's literally you you go you go out and buy shares in construction companies, larger construction companies that do data center builds. Or maybe if you