Elon and Russia, the Metaverse, the Economy, and Alex Jones

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Hi, everyone.

This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Galloway.

So, Scott, I flew into San Francisco last night and it was six hours late.

Let me just say six hours late.

So, six hours delayed from the ground or getting from the ground.

Yeah, there was some part missing, and they had to drive it from Dallas.

It took them six hours to get, you know, do an hour drive.

So that was something.

So you're feeling awful.

No, I don't feel awful.

I just feel a little punchy.

I'm a little tired.

I also saw you on Stephanie Rule this week.

That's right.

I was on Stephanie Rule.

Me too.

She was back from being sick.

Supreme Ruler.

Now, what were you talking about?

What do you think I was talking about?

I was talking about my book, Adrift.

Oh, Adrift.

American 100 Charts.

You know what?

Stephanie is a good friend.

She's very supportive.

Did you see her picture of her sick and she managed to slip in my book?

Just casually.

Saucy little nigga.

Can I just say she looks better sick than I do on any day I'm well.

Like she looked like totally glamorous with the headscarf and everything else.

She's got that crazy like energy that you're drawn to.

Yeah, yeah.

She's great.

I was thinking about her and you.

You guys remind me of each other.

You're both.

You both kind of work non-stop and are really like super into your kids, super into professional life.

And there's a big overlap and you don't hide the overlap.

No.

You guys remind me of each other.

Oh, really?

Except she's incredibly glamorous and I am not.

Anyway, today we'll talk about Meta's latest steps or missteps toward the metaverse.

Also, Jamie Dimon predicts doom and gloom for the economy.

We'll talk about that and President Biden's response.

But first, Elon Musk says he hasn't spoken to Vladimir Putin about the war in Ukraine.

That's his response to a report this week, claiming that the two spoke recently before Musk tweeted about a peace plan that mirrored Russian talking points.

Scott, this might be your fault.

Here's what you said about Elon last week.

This guy does not want to go under oath.

What happens when they ask questions about, it seems like a lot of text messages aren't in here.

So questions like, okay,

you just put out a tweet last week that feels very supportive of the Russian viewpoint.

Have you had any contact with any affiliates of Putin?

Oh, Scott, that's fascinating.

Musk, as I said, denies the whole thing.

The Kremlin also denies that two spoke.

But Scott, earlier this month, you spoke with Ian Bremer, whose report is at the heart of all this.

Let's play a clip from that discussion on Prof G.

I'm deeply disappointed that Elon would come out publicly carrying Putin's water like that.

I think it was deeply irresponsible.

I know that he's not known for acting responsibly outside of his core areas of business.

But still,

when he starts hitting geopolitics, he kind of makes me want to start designing electric vehicles, right?

I mean, because I'm roughly as capable.

We should note that conversation occurred on October 4th before Bremer's report came out about him talking to Putin.

But there's so much to talk about.

What do you think about this?

Could it affect the board's decision to sell to him if it comes out that he did talk to Putin and then push Putin's talking points or maybe his government contracts?

I mean, it's really interesting.

I still think he can say whatever he wants about the war, but interesting developments.

Could he be trying to get out of it?

I don't know.

So there's a few things here.

The first is anyone who knows Ian Bremer knows that he's a straight shooter.

And

also, he has no incentive to lie.

Someone's lying here, which means that Elon is lying.

It's just, and the question is, which lie did Elon tell?

Did he, it's obvious that he told Bremer that he had spoken to Putin and that Putin outlined his red lines.

Now,

is that a lie?

Did he not speak to Putin?

Maybe he didn't.

And he was just exaggerating his importance or dialogue.

Very viable.

Or he's lying.

Very viable thing.

Yeah.

Very viable.

Yeah.

You can see a guy like that saying, oh, I talked to Putin and these are the three things.

Although it is a little bit eerie that he put out that

tweet

is now being used in Russian media as a talking point that Americans, you know, the wealthiest man in the world and the premier American technologist is in favor of this, right?

Which does not, which does not help us.

That is, in my view, aiding and abetting the enemy.

And so he's either overestimated his dialogue or lied to Bremer, or he's lying now and he's had conversations.

And he cannot go under oath because someone who tells this many lies is going to get picked apart and put themselves in all sorts of jeopardy.

And what he has likely done here, if he in fact had this conversation with Putin, is he's violated the Logan Act.

And the Logan Act is a federal law that criminalizes negotiation by unauthorized American citizens with a foreign country.

Well, if it's negotiation.

If it's negotiation.

But go ahead.

Go ahead.

Sorry.

Well,

by unauthorized American citizens with foreign governments having a dispute with the United States,

you're not supposed to have discourse with

other world leaders who we are in the midst of a war with.

Okay, but we're not, let me just, I'm going to push back because we're not technically in a war with them.

And CEOs talk to world leaders all the time.

It's not even, it's, I mean, I remember.

Okay, it's not even saying, okay, this is the exact by unauthorized Americans.

He's unauthorized and he's an American citizen with foreign governments having a dispute with the United States.

I don't know if that's we are having a dispute.

To your point, the act has never been enforced.

No one has ever been sent to prison because some people would argue the Logan Act is actually a violation of the First Amendment.

Right.

That you can say what you want.

Now,

but what do we have here?

We have, as always, he finds a way to be in the headline every day.

In addition, it looks like he's flipping off the switch for Starlink and communications over Crimea.

In Crimea.

He was reportedly refusing a Ukrainian request to activate Starlink in the area because he's worried it will escalate the war.

He's being paid by.

So he's making these decisions now.

He's being paid by the government.

He doesn't have to sell that stuff.

He's selling it.

He gets paid by the government.

He can sell it or not.

But this is where we are, Kara.

This is where we are.

We have, like them or not, we have an enormous infrastructure called the federal government with some very talented people, and we elect them and they get to appoint incredibly impressive people like Secretary Blinken, who devoted their entire lives to try and figure out foreign policy and the relationships and the nuance.

And now we have people that, because they're wealthy and innovators, believe they have license and jurisdiction to potentially, and we don't know if it happened, start having conversations at the highest level and entering into negotiations and parroting talking points to the American public.

And it's not just, well, it's free speech.

Okay, fine.

I get it.

I'm not denying

his authority to say these things, but he has a lot of impact on people.

I mean, a lot of people, a lot of of tech bros now will say, oh, that's what we should do.

Well, they're already in that camp.

The David Sachs is of the world were already in that camp.

They are all in that camp.

Lilon's the newest member, actually.

It's not.

But when they start echoing these talking points that we should recognize Cremea and go to the peace table, I just, I mean, talk about the mother of all, like aiding and abetting and being unproductive.

And then he's deciding warfield technology.

Do we want him deciding that?

All right.

He's not deciding.

The U.S.

government has plenty of opportunity to get it from another vendor.

That's another one.

He doesn't have to.

I'm not defending, but he doesn't have to.

Second thing is he can say what he wants if we're not in an actual war with them, which maybe we are behind the scenes, but we certainly aren't that I've heard of.

What I think is really interesting is what it does to the Twitter deal.

Also, I think he probably, look, look, I think he definitely either exaggerated Ian, which would be my choice of the things he did, or he talked to him, right?

It's one of those two.

It's not Ian's Ian's lying.

The third is not, it's just not true.

But one of the things that's interesting is having just watched Ken Burns's documentary on the Holocaust, when we weren't at war with them, which was before we were at war with the Nazis, there was a great long period and there was a struggle about whether to get into it or not.

Obviously, some very influential people, including Henry Ford and Charles Lindbergh in particular.

That's exactly the right analogy, Charles Lindbergh.

It's interesting, would the board of the New York Times at times sell the company to Charles Lindbergh on the eve of World War II, for example?

Now, that's where it is more.

Like, is it a Charles Lindbergh or a Henry Ford kind of situation?

He certainly walked back to the Kanye remarks.

He said, Welcome, friend.

And then afterwards, he said he spoke to him and thought it wasn't cool.

So he knows when there's a line, speaking of red lines, although troublesome, right?

He didn't, it took him a minute, took him a minute to figure out that what Kanye was saying was anti-Semitic.

So where do you imagine this going?

Well, there's two things.

There's geopolitical ramifications of whether it makes America less safe or makes our negotiations negotiations more difficult or emboldens Putin to be increasingly aggressive, thinking that our most famous citizens and our most successful citizens are on board and believe.

It happened in World War II, but go ahead.

Okay, so I agree.

And Lindbergh is the right.

There's no one more famous than Charles Lindbergh.

That's exactly the right analogy.

Famous, heroic, incredible accomplishments.

Well-deserved admiration globally.

And was an apologist for Hitler.

And

in retrospect, it's easy to play.

It's easy to play Monday morning quarterback, probably thought he was doing the right thing for America, but we look back on it now and think, okay, that was not a good look.

The geopolitics aside here, I mean, the question I would just ask, I don't think anyone's going to pursue the Logan Act here.

I think they're not going to do that.

There's been some, you could also argue, well, maybe he was authorized to back channel.

I find that highly unlikely because the people I know in government don't have a very high opinion of Elon Musk.

No, they don't.

The The question I just put forward is, I think these individuals in tech have benefited more from America than almost any cohort of any country in the world in terms of the huge infrastructure investments that they buy the middle class and the government that they put build a thin layer on and they become magnificently rich and magnificently powerful.

I would just argue, I don't think he's done anything illegal here.

That's my guess.

I just would ask, he continues to demonstrate what I would call really poor citizenship and also really reckless.

I don't think that he should be having these, if he's having them, these types of conversations, thinking that his judgment

well, I've experienced it before.

So he told me he was going to convince Trump around immigrants.

And I kept calling him Jesus, Tech Jesus.

I said, you're not Tech Jesus.

And so let me see.

Nothing happened to Henry Ford.

Nothing happened to Charles Lindbergh.

They just, except for history, happened.

I'm not suggesting we put him in prison.

I'm suggesting we look back on Charles Lindbergh and say his legacy is deservedly diminished substantially.

It's diminished.

It's completely tarnished.

Okay, fair enough.

Diminished, tarnished.

That's what's going to happen here, I suspect.

But let's go to the second part of your question.

Okay.

The effect on the Twitter deal.

Okay.

None.

Because in a capitalist society with private companies, the shareholders, whatever we talk about, whatever blah, blah, we talk about trying to move to stakeholder capitalism, shareholders are kind of the first nine of 10 considerations usually.

Larry Fink and Vanguard want their 54.20.

Yeah.

He is up a river.

He doesn't want to go under deposition.

They have already marked it.

They want it.

They're going to get $54.20 for a $12 stock.

Yeah.

And they're not going to let him out of this.

And the Chancery Court is ready to enforce it.

I was fascinated by what happens once he gets it.

Bill Cohen had an amazing piece about what happens.

You know, there was all these, Apollo pulled out.

Apollo wasn't ever in, really.

But they will be in.

They love a cheap debt, and they will buy this debt at 50 cents on the dollar.

And then Elon's in a world of trouble.

This, this company, he lays out a scenario where this company becomes worth nothing.

It is.

But like less than nothing.

Like he's going to owe money on top of it unless he wants Apollo and the other debt hedge funds to get in there.

What a, I'm not a Wall Street person, but boy, that's something else.

But let's talk about that because Bill's article is outstanding.

Yeah.

The enterprise value of a company is a function of its debt and then the equity makes up the difference.

So if a company is worth $10 and and has $5 in debt, it owes $5 to banks and creditors, that means the equity value is worth $5.

So the reason that Warner Brothers stock has gotten so hammered is it has $55 billion in debt.

So if people go, this company is worth $70 billion, they let the equity trade a valuation of $15 billion.

On day one, let's look at this company.

When he made the offer to acquire it, the stock was at $32 billion.

If you believe that Twitter has not outperformed Snap or Meta, which it has not, you could argue it's under reform, that means the natural value of Twitter without this exogenous action of musk means the fair value the natural value for twitter right now is 12 or 13 bucks or about 10 billion dollars they're issuing 13 billion in debt which means day one when musk shows up with 33 billion dollars in equity 23 from him 10 from his buddies they're they're burning it The equity values were zero the day they take it over.

Less than zero.

And then he has to pay the debt down.

And of course, the debt holders could force it into.

It could be owned by Apollo.

I just was like, oh, 100%.

We could buy it.

Scott, I keep telling you this.

We should buy it.

And not only that, what they also haven't started talking about?

Do that.

The interest on that debt, that $13 billion,

is going to be greater than Twitter's free cash flow.

He's going to have to call his buddies and go, oh, hey, remember me, I talked you into this terrible deal that's now worth zero.

Not only is it worth zero, but if you want to hold on to any chance of having equity that recovers.

He might have to buy the debt so that he doesn't lose control.

Anyway, before that, he's going to have to call all his buddies and say, we got to put another billion dollars in this year.

And I'm going to call you back in another six months and ask you for more money because we can't afford to make our debt interest payments.

And Apollo and a bunch of people are about to come in and seize the company.

You win, buddy.

You have caught the car.

They certainly don't stay bros.

You know, they're all loving to hang out.

Like, hey, man, I was all the time whenever I was with Elon this week, or I was with Blank or whoever.

Supposedly, some of his buddies are already trying to get out of this thing.

No, they can't, though.

They're literally, whatever money they put in on clothes, it's worth zero.

Yeah, the only one who could give a fuck probably is Larry Ellison, but the rest of them, that's a big check they'll just throw into this incinerator.

How does Sequoia Capital, Sequoia Capital committed $800 million to this because they want to be close to Elon and in his deals?

How do they go to their limited partners?

How do they go to the University of Michigan and CalPERS and the retirement fund, Ottawa Teachers, and say, we're burning your money because we want to stay tight to Elon?

You know what I have to say?

This super app better work.

That's all I got to say.

I hope it does.

Honestly, I hope it does at this point.

I really do.

I'm like, go for it.

Anyway, but not with my money.

Up next, Alex Jones owes Sandy Hook families almost a billion dollars.

That's the verdict from a Connecticut courtroom where Jones stood trial for defamation.

This is Jones's second loss in court related to this Sandy Hook conspiracy theories.

He still faces a third trial, which could come later this year.

Of course, the right-wing erupted saying that he had First Amendment things and they don't understand

legal things about defamation.

And this guy is getting just what he deserved.

He knew it was a lie.

He kept repeating it for profit.

And he damaged these people, these poor people who are already damaged.

I couldn't have happened to a bigger piece of shit.

Yeah, this is really heartening.

I mean, it's kind of a uniquely American thing in a bad way that we are one of the few places in the world

where we argue with reality this hard and this long at such a cost to so many real, decent people.

Yeah.

And we let an argument take place here and a dispute take place

and ignored the truth and engaged in mendacious both sidism at huge cost to people who had already endured what most of us thought would be the ultimate cost.

And it wasn't.

That's right.

We let a guy weaponize media, weaponize conspiracy theory, weaponize social media platforms.

That was what got him the most jump.

And why did he do it?

Because he's crazy.

No, because he's smart and saw a profit motive.

And so

there's something very upsetting here about American culture that we would let this happen for so long.

But there's also the arc of American justice is curved and jagged, but it does bend towards justice over the long term.

Over the long term.

Let me say one thing that's disturbing is some of these right-wingers, they're like, I was like, can you just stop?

Like, stop, stop.

Everything has to be about,

you know, oh, they're trying to quash our speech.

They're trying to, the regime is trying, this and that.

You know, I have to say, I was reading a bunch of them on the plane last night, and I literally kept saying, fuck you.

You know, how can you, how can,

it's shameful.

It's shameful.

Like, it's defamation.

It's in the law.

It's been there forever.

It's not a new, fresh thing.

This guy cynically and

egregiously violated every tenet of decency.

That's not illegal to do that, but he certainly defamed them and caused injury.

And they proved it in court.

And now he's going to keep trying to like going, but the full-skill bear hug of this guy by Trump and others is really like

you would think they go, okay, just no, we're going to walk away from Trump back to the point.

Trump, Joe Rogan.

Yeah.

Yeah, I know.

He hasn't had him for a while, but yes.

I would argue.

that most people on the left and and on the right realize this is just beyond the pale.

That same phenomena you're describing, though,

when Musk started parroting Putin's talking points and you got huge blowback,

all of these sycophants, some of whom we've already mentioned on this show, immediately go to their go-to, and that is, we're not allowed to have a conversation anymore in this society.

The woke mob wants to shut down every conversation.

It's like, no, we're having a conversation.

Your guy is aiding and abetting the enemy.

That's our view as part of this conversation.

We're not shutting you down.

We couldn't get you to shut the fuck up if we tried.

But they immediately want to create a distraction of, oh, this is about free speech.

And the woke doesn't want to engage in a conversation.

It's like, no, we're engaging in a conversation.

You just don't have a leg to stand on.

Also, he's lost in court.

And

he's going to try everything.

And he's demonstrated that he's trying not to hiding money all over the place.

I mean, it's just, it's an assistant.

He declared bankruptcy based on the debt owed to a company he controls.

That's correct.

He said on his show right after,

they think they're going to get my money.

Like, you know what I think?

I think they're getting you.

And again, and I will not stress these tech companies that did nothing about this at the time when they absolutely could have done it relied on this ridiculous.

I remember that conversation I had with Mark Zuckerberg, I had it with all of them.

And it's on tape where I'm like, are you kidding me?

This guy is defaming them.

And well, you know, we can't, you know, we can't all agree.

I'm like, no, no one agrees with this.

Like, or anyway, and it's not a a bigger principle.

He defamed them.

And in court, it was, it was just, they need to, they need to really look hard at what they did here and think very hard.

Look, my, my dad used to say this, America almost always gets it right over the long term.

You know, and I think that's what happened.

A billion dollars sends a strong message to people who want to engage in conspiracy theories and lies so they can profit off of other people's pain.

We'll see.

Anyway, we're going to get to our big story.

Meta unveiled its long-awaited mixed reality headset this week, the latest step in its march toward the metaverse.

The new Quest Pro VR headset costs an eye-popping $1,500.

By the way, Apple's reportedly is going to be $3,000.

But that is more than three times the price of Meta's last VR headset, which I have, which is a quite good one.

The new gear is getting favorable views, even if the market for it is unclear.

Again, I like the, I like it's a good piece of equipment that they built.

But one group that's apparently not sold on the tech, Meta employees, the New York Times reports that Meta is pressuring staff to attend meetings in virtual reality and forcing them to buy headsets.

The Times Cashmere Hill spent more than 24 hours in Meta's Horizon Worlds and said she found a somewhat vibrant community that reminded her of early AOL chat rooms, but was not a great.

She kind of was like, what is this?

What is going on here?

Anyway, what thinks you?

So the reviews are pretty good.

It's supposed to be a really elegant piece of equipment.

It's supposed to be, you know, visible odds when you put it on and see what it can do.

Or I think the right metaphor would be the laser disc.

I used to rent a laser disc player in grad school because you could get the criterion collection of Blade Runner, and it was amazing.

I have one still.

This is a niche audience in gaming that will never get any sort of return on investment on the $65 billion they're supposedly going to spend on the metaverse over the next several years.

My only hope,

and I'm going to start talking up Meta or the Oculus and the new quest, because the best thing that can happen in business is success.

The next best thing is that you fail fast.

I really hope there's enough signs of life here that they continue to invest in this and that they fail slowly.

I hope that this is.

I see what you're doing, but go ahead.

I hope this is a slow death.

So I think it's a really elegant device.

I think they should stay the course.

I think they should show the world that Meta is, in fact, a very innovative company.

And I think Mark Zuckerberg is, in fact, at his core, a genius.

He's had some issues, but he's a genius care.

And they should continue to make massive investments because they need to reinvent the company.

And

I think they're on the right track.

I think they need to stay the course.

Yeah, they should stay the course.

I don't think so.

Wall Street don't think so.

I mean, it's really interesting.

I think he gave some interviews this week, which are actually pretty good.

Of course, not to me, but, you know, where he's talking about these issues.

Two things.

He won't talk about Elon and he doesn't say much about Apple.

I think when Apple wanders in here, they have just the right approach.

It's 3,000 bucks.

It's a niche product.

We'll get the price down eventually and everyone can have it.

I think he must be terrified about what Apple's going to introduce.

It'll probably come in just like it did in lots of markets and just suck it up.

It's just going to go from bad to worse.

And it won't be Apple that freaks him out.

It'll be massive amounts of evidence every day that his huge vision, his kind of bet the ranch thing,

was and is the biggest mistake in technology, or maybe even the biggest corporate mistake of this decade.

It's going to be difficult to find another example of a company that spends, if they in fact end up spending $60 to $70 billion on this for this kind of thud.

I mean, this is a really interesting device.

Remember Magic Leap?

I mean, the bottom line is.

It's around still.

It's run by a former Microsoft executive who's quite competent.

They've moved into, speaking of which, they've moved into like surgery and enterprise.

Now,

Nadella made a surprising appearance at Meta's event this week.

Shotsacha Nadella, Microsoft CEO, he announced a ton of integrations with Meta'Quet's devices.

Why not?

Including Microsoft Teams and Windows 365 and Xbox Gaming.

At the same time, it also announced a new team that will create Metaverse apps for industrial use cases.

He's being quiet.

He's doing the right things.

I think magically I saw some fascinating things around surgery.

The device is still ridiculously heavy and onerous.

Microsoft had been in here with HoloLens, but they certainly didn't invest this much in that.

And they didn't, they had devices.

I just have this feeling that Apple will come in with mixed reality rather than fully immersive, although I suspect you'll be able to do fully immersive virtual reality.

Mixed reality uses, say, a camera to reproduce what you see and then adds graphic layers or different layers on top of it.

You can even go full gamey.

Your living room can turn into a game landscape.

It's augmented realities.

Tim Cook talks about it a lot.

It's helpful.

Like, I'm in the airport.

This is where the taxis are.

And then it shows you the way, that kind of thing.

And Microsoft has thought about this for years too.

I've seen, they used to make these really cool future videos that were talking about ideas like use cases like this.

So I think, look, there's going to be...

There are going to be these glasses and people will be wearing them the way they wear AirPods now or something like that.

And they will be augmented reality.

And there will be some virtual reality and eventually eventually they'll be very cheap, but $1,500,

not today, my friend.

Yeah,

I don't think Apple's is going to work either.

The difference is it'll be a $2 or $3 billion write-off.

It'll barely be a speed bump for Apple.

And for Meta,

it'll destroy 70 or 80% of their equity value and is going to, in my hope,

basically hamstring the company.

I'm hoping this is a career-ending injury for the good folks at Meta.

I personally believe it's anthropological.

People won't put anything on their face that doesn't raise their cheekbones or make them look younger.

I think we're only going to put things on our face that make us more attractive to potential mates.

And these things basically say don't have sex with me.

And I don't think they work.

I don't think they're worth the utility.

Yeah.

My kids are not interested in them.

I've tried to get them to use our current Oculus.

I think they will be gimmicky.

I think people like me and you, mostly you, will wear them, report on them, and then no one will use them and no one will be caught dead wearing them out.

All right.

Though I do love my AirPod Maxes and I could see them adding stuff to it.

I could see them.

That is elegant.

Let me just tell you, Amanda Katz, we were going, I'm replacing everybody's technology because most of my families back in the 1950s, they refused to get new iPhones and I took them all to Apple stores.

Next out phones.

I'm on my Next Del back.

That was a good phone.

It was a good phone.

So I had these AirPod Maxes, which I love.

And Amanda Katz, who does not like technology, is like, I'll make do with the tin cans I've used for years.

That's the kind of attitude she has.

She wanted a pair of them because she's like, these are the best.

Like,

it was fascinating.

I was like, huh.

So something, so you do like it when it's good.

Very expensive headphones.

Anyway, something else Mark Zuckerberg was talking about was he gave an interview to Alex Heath of The Verge.

Good job, Alex, by the way.

Of course, I asked for an interview.

He said no.

At the time of launch, he asked Mark whether TikTok should be banned.

Good question, Alex.

He wouldn't answer about Elon, but he he answered about this uh and between us he has told me he thinks elon's nuts but essentially nuts are just like what's going on with that guy zuckerberg pointed to different ways business is conducted in us and china another thing he talked about with me several years ago trying very hard to focus me and others on china let's let's listen i don't know what the solution is even though i do think it's a real question in the u.s There's such a clear distinction between the private and public sector.

But when I travel overseas, one of the things that's surprising to me is in most other countries around the world, those sectors are blended so much, they almost don't believe that America operates the way it does.

And China, more so than any other country that I've been to.

The notion that like an American company wouldn't just obviously be working with the American government on every single thing is completely foreign there, which I think does speak to

at least sort of how they're used to operating.

So I don't know what that means.

I think that that's a thing to be aware of.

That was an interesting answer, don't you think?

Of course he knows.

Of course, he's talked about it.

Of course, he's attacked Chinese, attacked TikTok.

It's very, I love the smooth glove thing he's trying here, but whatever.

I don't know.

Do you have, you don't have this feeling?

I was not expecting a clip of his voice.

I hear his voice.

I'm like, who is that?

And then I realize who it is and I literally recoil.

It's not nice.

He's fine.

He has a fine voice.

I'm about to hear something that's a mix between sociopathy and just total bullshit.

And that's what that was.

As soon as I caught up to what he was saying, it's like, oh, he's clearly now

going back on everything he's ever said about corporate strategy because he would like to see

Calgon take me away.

All right.

Take me away.

What is going on here?

I would actually advise you to listen to mine two years ago.

He was quite strong on China.

And now I don't know how it works.

I've been told on my many travels across the globe that the government works with the companies.

During my sojourns, I've made the observation

China seems to be a little more down that highway of meddlesome highway but who's to say I just don't know honestly he knows

whatever you think of Elon's intelligence around this Mark is knows it he obviously doesn't make political pronouncements but he understands what's happening in China really well I give him the compliment because he was quite good in my interview and now he's like as dumb as a box of hammers.

I just want to finish where we started.

Mark,

the Zuck, and Meta employees, regarding the metaverse, you be you.

You just keep on keeping on.

Way to go.

This will pay off.

Keep investing.

Stay the course, my friends.

Let me say something that's going to make you angry at me.

I.

I kind of hope it works.

I'm like, oh, God, it would be kind of interesting if a really creative person got here.

I kept, was, I was watching a bunch of Steve Jobs videos the other day.

I was like, I'd love to know what he thinks of this, right?

Like he was a great thinker.

Same thing with Twitter.

Like, what would he do?

I'd like, I kind of wish they could fix Twitter, right?

And in a way that's profitable.

That'd be great, too.

I'd like both of these things to work.

I just don't think either of these people can make them work.

And listen, Elon's probably this.

Hold on.

The metaverse is working.

It's called Epic Games.

It's called FIFA.

It's called the App Store.

You know, we're getting this vision, this vision of headsets and this and that.

That's what I mean.

You want headsets?

I don't know.

I don't know.

It's getting there.

It's getting there.

All right.

Okay.

All right.

Well, we'll see, Mark, but you really do know a lot more about China.

Anyway, Alex, good interview.

Anyway, let's go on a quick break.

When we come back, we'll talk about what's coming in the next economy and take a listener mail question about the best mattress for stashing your cash.

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off.

Scott, we're back with our second big story.

Once again, it's the economy stupid.

Inflation rose more than expected in September by 0.4%.

The SP extended its losing streak on the sixth day this week, hitting its worst day since November 2020.

The one thing everyone seems to agree on, more is coming.

JP Morgan Chase CEO Jamie Dimon warned that the the recession is likely six to nine months from now.

Meanwhile, the park investment CEO Kathy Woods says the real risk is deflation and warned that the Fed is making a mistake by raising interest rates.

The president has milder views.

Biden said this week that he doesn't think there will be a recession.

If there is one, it will be very slight.

So what thinks you?

You have said that inflation will fall faster than anyone's expecting.

Please unpack this.

Well, people in elections tend to overestimate.

So we call it, Margin, they call it consumer dissonance.

People say one thing and then they behave differently.

And I think people talk talk a big game about social issues and then they go into the voting booth and they pull a handle or fill out a bubble based on economic issues.

So

I do think that I think the election is going to kind of come down to two things.

I think the Roe issue has really

energized educated women and Democrats that, wow, we didn't think this could happen and it has.

I also think we'll probably gain some moderates who think this is just a bridge too far.

But I still think the overriding issue is going to come down to the economy.

And the quickest signal around whether we're getting things done under the economy will be inflation.

And I've been wrong so far.

The first signal is that inflation is not waning.

But I just don't see how the dollar can be this strong without the prices of products coming down.

Also, there's an X factor here, and the X factor is

Ukraine.

And I believe that the majority of scenarios are going to reflect reflect really well on the Biden administration.

I think when we get to a situation,

if it gets hotter, I think people are going to be glad that Biden and Blinken are in there.

I think they're going to say at the end of the day, we feel pretty good about having this guy with this experience, the way he's handled it so far.

I mean, if you think about what FDR did, FDR was sending armaments over the Atlantic to help support Europe as they were pushing back on fascism.

And Biden, and he doesn't get enough credit for this, they're sending a lot of natural gas over to Europe in hopes that they can get through the winter and push back on this tyranny.

I think there's a lot of parallels here with World War II.

All right, but the economy itself, our economy, because it will matter from an election point of view, but just from an economic pain point of view, what is your thought?

We're going to go into a recession.

Recessions typically happen every seven years.

It's been 13 years.

It's overdue.

It's like enough already.

Bring it.

And Jamie Dimon's interview, when he was asked to define what a recession is, he had the best answer.

He said something that happens every seven years.

But anyways, you asked about the economy.

A dollar that is going to be amazing for our ability to control inflation, unfortunately, is wreaking havoc around the world, especially for developing economies that borrowed in dollars and now have to pay it back.

And it's going to crowd out every other piece of discretionary income that they have.

You're going to see tremendous.

havoc.

Our dollar is literally fucking with the world right now because it is so strong.

But in terms of the american economy yeah i think we're going to go into a recession i think we'll see inflation come down and i think that our inflation will drop faster than it will anywhere else in the world interesting there's a lot of pushback from china around covet restrictions they're tired of the restrictions they want to get back to business get back to work when people sit down if they really i mean again we're asking people to be rational but okay the pandemic we've walked back we're 400 people a day are still dying the pandemic is not over but it looks like we've come back from the precipice.

It looks like that

we are, for the first time, have real unity in the West and it's working.

It really is working.

It's extraordinary what's going on here.

And I believe that inflation will come down.

And there's a chance that if the market perceives this recession is coming, but it's not going to be terrible, and they see an end to the interest rate increases because inflation starts to come down, you'll probably see the markets come out.

I mean, it's impossible to time this shit.

And I have a tendency to talk my own book because the idea of Trump getting back in office scares the shit out of me.

But I think the economy, I think the market's going to fall pretty dramatically from here and nobody knows.

But everybody complains that the market's dropped so much.

The market's back to where it was just two or two and a half years ago.

Time thought 20% more.

Yeah.

So, and still that takes it back not that far.

I mean, I just, it's so funny when I talk to people under the age of 40 and they're like, oh, the economy is bad or the stock market's bad.

I'm like, you don't know what bad is.

I mean.

Were you doing that grandpa thing?

Oh, in my day, we had to like.

Well, okay.

From 1999, from 1999 to 2001, you were around.

Cisco, which was considered the old stalwart, amazing network infrastructure tech company and Amazon, the hottest new company, lost 90%

of their equity value.

Amazon.bomb.

If you put $100 into Amazon and Cisco, it was worth 24 months later, it was worth 10 bucks.

Amazon.bomb.

The majority of what I'll call the real pain has kind of been sequestered to the really growthy stuff and crypto we haven't seen like what i'll call like i mean in 2009 do you remember the the way stocks went down i don't know if you checked your portfolio back then it was crazy anyway i don't think it's overdue you know i don't ever look at it ever that's the that's arguably one of the best investment strategies one of the one of the people i work with was like have you looked at it i'm like no I said, I'm not going to.

If I turn a certain age and I need the money, I'm fucked, but I will just not look at it until I need it.

To that point, there was an analysis done.

I think we mentioned this a few weeks ago.

And the best performing cohort of investors, dead people, because they didn't trade.

Their accounts just stayed, no fees.

That's carousels.

And they just left it alone.

And over time, the natural trajectory of the market is up.

People having babies, they're more creative, more intelligent, more productive.

The economy's natural trajectory is up.

That said, and I will end on this, the people who are going to suffer are people who live paycheck to paycheck.

And the prices of these things going up is going to affect them rather dramatically.

It's not everyone who owns stocks, which is a lot of people too, but everyone is going to feel the pain, but the pain will be more abrupt to people who it matters, food and gas prices.

But one of our failures as a society is we studied to the wrong test.

Everybody knows that the NASDAQ or the Dow was up or down today, but we're not spending enough time talking about we're back to record levels of opioid overdoses.

I wonder, did you write a book called A Drift about...

We're all obsessed with the NASDAQ.

Who gives a fuck what the NASDAQ is?

54,000 people are going to die in unmarked graves, basically, from opioid overdoses.

We study to the wrong test.

Speaking of people that deserve to go to jail, the Sacklers, let's bring that up again.

Okay, Scott, let's pivot to a listener question.

You've got, you've got, I can't believe I'm going to be a mailman.

You've got mail.

All right, this question comes from Jess.

I'll read it.

I'm a mid-40s single mom with a VP job in tech.

I have a great salary, own my home, robust 401k, savings, and trade accounts.

My question is, in this economy, should I temporarily reduce my 401k contributions in lieu of holding more cash?

No investments seem to be giving a great return right now, and rumors of recession and more credit Suisse type problems make me think I should increase cash reserves.

Bottom line, where should I put my savings now?

Love all you do.

Thank you.

Yes.

There you go, Scott.

You have another minute to go on, to bang on.

Is it gold in the safe, money in the mattress?

What?

What?

Well, first off, just let me say that this woman is what makes the world go around, single mothers, and who's working and managing all that.

Like that.

Two,

it's impossible to time the markets.

And a 401k is an amazing way to save money because it's tax advantaged.

Stay the course.

The only thing, the only thing you might want to consider is that in a 401k or most tax advantaged investment vehicles, you get some influence over how it's allocated.

And they've always said over time that generally speaking, the mix should be 60, 40 equities to bonds.

And most people have gone to like 80 or 90

equities because there's been such a run-up in equities.

What I would just consider doing is speaking to your financial advisor or someone at Fidelity or Vanguard or someone who is knowledgeable and try to speak to more than one person because there is a collective wisdom of crowds and say, should we consider increasing our allocation of fixed income?

Because for the first time, fixed income credit investors are getting the yield they deserve based on the risk.

So for the first time, I'm looking at bonds.

I haven't invested.

I've bought like one bond in my life, but

this Twitter paper that's going out, it might go out at an effective yield of like 16 or 20%.

Yeah, 50%.

50 cents on the dollar.

And if they're $13 billion,

the company is probably worth at least $10.

So the creditors would get almost all of their money back, even if shit got really bad, and they're going to get paid well.

So I would say that

buy Elon Dett.

That's what you should do.

That's probably a good ⁇ and someone else will probably be owning the company if he continues to be our national leader on foreign policy.

Just to wrap up, stay the course.

Don't try and time the markets.

If you're smart and you're already doing the right things, which clearly you are, but you may want to talk to whoever's managing your money and say, should we be thinking about increasing allocation to bond funds, low-cost ETFs, index funds, and then focus on your work and your kid?

That would be nice.

That's what Kara Swisher does.

That's what Kara Swisher does.

I make some money in cash and stuff like that.

And I'm thinking of buying Scott's house in London at some point at this reduced rate.

It's worth 20% less.

I know.

I'm waiting.

I'm waiting.

I'm waiting.

It's all cash.

Literally, I thought it was a fucking genius.

I'm like, I'm going to buy all cash because the pound's at a record low of $1.26.

I move in and it's a buck three.

I've lost 20%.

The only thing that makes me come on once again, rich people's problems.

The only consolation I have is that when Musk moves into this house called Twitter, he's down 70% on this.

All right.

Schottenfreud.

All right.

Anyway, if you've got a question of your own that you'd like answered, send it our way.

Go to nymag.com slash pivot to submit a question for the show or call 8-55-51-PIVOT.

All right, Scott, one more quick break.

We'll be back for predictions.

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Okay, Scott, let's hear our prediction.

Let's make it tight.

So, this is just sort of putting a fine point on everything we've been talking about.

The Twitter transaction is going to close, and it's almost immediately, it will probably not be the worst acquisition in history.

Time Warner or AOL's acquisition of Time Warner is probably the worst.

But, I mean, people call out Google's acquisition of Motorola where they lost $13 billion.

On day one, let's look at this company.

It has a billion dollars in EBITDA, and right away, it's going to have 13 billion in debt.

I was on the board of a publicly traded media company, and whenever our multiple, our debt to EBITDA went over three,

equity investors got scared.

This starts at 13 times debt to EBITDA.

In addition, by any sane metric, these people are paying $54.20 for a stock that's worth $10 to $15.

This deal closes, And on day one, the moment it closes, what's unique here is when AOL bought Time Warner, it took everyone a year to recognize that this was the worst acquisition in history.

Within 60 seconds of closing, the world is going to realize that this is the second worst acquisition in history.

Which means Elon will do something loud.

I don't know, something.

He'll like marry Kim Kardashian.

I don't know.

Something like, oh, yeah, because then Khan, he would be mad.

Oh, God.

He'll try to do a lot of hand waving.

He's going to have to wave those hands.

There's going to to be a lot of jazz hands coming out of this closing.

Payments.

We're going to do it.

Let's annex Canada.

Oh, good.

Sure.

Why not?

I have got to go off.

I've got to interview.

You know who I'm interviewing today?

I'm at Lesbians who tech.

That's why I'm in San Francisco.

I'm going to be interviewing.

Who did that with you two years ago?

And was the second heterosexual male to be on stale at Lesbians who technically?

They were the hit.

This one's in San Francisco.

Can I just relive that moment?

Sure.

We're about to go on stage.

They go, and ladies and ladies, please welcome Kara Swisher and Scott Galloway.

And you turn to me and in the most stern, like mom-to-son voice, you go, don't make fun of the disabled or transgender people.

And then walked out.

And I'm like sitting there, I'm like, you, I'm like, this person thinks I would make fun of disabled or transgender people.

You said those exact words.

You were like very serious.

Don't make fun of disabled people or transgender people.

And then we walked out on stage.

You did a good job.

They loved you.

Anyway, I've got to interview Bryan Chesky, who is very excited.

I'm going to interview

a congresswoman who's doing a data act around women's health at Sarah Jacobs.

But then I'm interviewing Chase and Buttigieg about gay parenting.

It's going to be complicated.

Oh, he followed me.

He followed me.

Oh, see?

I want to roll with that guy.

Ask him if he wants to grab dinner.

You know what?

We can do it in DC.

We're going to have a play date.

You always say that.

But to come to D.C.

or like, I don't know where you are.

It's a rabbit coat.

My dad's third wife.

He used to promise her a rabbit coat and it never happened.

okay anyway we're gonna miss you at lesbians extend you know speaking of things i'm gonna finish on i was talking to someone who did some investments got some investments by one of the billionaires i'm not gonna say which one and things went didn't go well as i and i said i didn't i tell you that and they they said this is what you told me you said do you know the difference between billionaire owners and terrorists and He said, what?

And I said, you can negotiate with terrorists, which was another good one, just like that.

I don't believe I said that to you.

I don't even remember saying that, but see, I had your best experience.

Oh, you were very serious.

And you were very worried that I was about to

mock the disabled.

Well, I didn't want these lesbians to take the stage and kill you.

I thought that would be bad.

I thought it would be bad for my career, really.

Yeah, no, I realized it was out of concern or protection, but anyways.

Yeah.

Anyway, you did beautifully.

I'll say hi to all the lesbians from you, but that's the show.

We'll be back on Tuesday with more pivot.

There's so much more to come.

There's so much out there.

There you go.

Scott, thanks for for waking me up here in San Francisco at this very early time.

Here, you're very welcome.

Today's show is produced by Lara Neyman, Evan Engel, and Taylor Griffin.

Ernie Intertot engineered this episode.

Thanks also to Drew Burroughs and Miel Severio.

Make sure you subscribe to the show wherever you listen to podcasts.

Thank you for listening to Pivot from New York Magazine and Vox Media.

We'll be back next week for another breakdown of all things tech and business.

Meta employees stay the course.

This will pay off.

This month on Explain It to Me, we're talking about all things wellness.

We spend nearly $2 trillion on things that are supposed to make us well: collagen smoothies and cold plunges, Pilates classes, and fitness trackers.

But what does it actually mean to be well?

Why do we want that so badly?

And is all this money really making us healthier and happier?

That's this month on Explain It To Me, presented by Pureleaf.

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