E51: Supply Chain Shortages, Inflation, DeSantis, Ted Sarandos Netflix Memo, Cancel Culture, Fan Q&A

Oh, my God.

How much did lose?

What was the big winner in big loser? How much?

I'm not going to say.

Just tell us how much out.

800. I put at. -800 -700 don't say these fucking names, bro.

Come on.

How'd you do, Chamath?

I did okay.

You can tell that Chamath lost because when you ask him, how'd you do? And it's like just, he goes from this super effusive talking about the game to just like one word. Fine. Okay, fine. Okay.

How was your night? Good.

He's like, look, I shit $42 million for breakfast. It was fine.

Here we go. Three, two.

Let your winners ride rain man David satisfy. And instead we open sources to the fans and they've just gone crazy with it.

Love you, wet ice queen of Kinoa. Hey, everybody. Welcome to another episode of the all in podcast. 50 episodes down, and yeah, we'll definitely get three or four more in before the band breaks up with us today. Again, from an undisclosed location, David Sachs, the rain man himself, Chamath Polyhapatia, the dictator and the queen of Quinoa, David Friedberg. How's everybody doing? How's everybody feeling? How's everybody's week?

Really great.

Yours? Just great. Awesome.

I feel really good. I feel super grateful.

Really.

Poker game last night?

Yeah.

Stock markets up today.

Feels grateful.

It's been a good week.

I feel so much. Equanimity. Markets up 4%. Freeberg, how are you doing?

My wife went to the hospital three times this week, all three times thinking she was in labor.

Hey, we're 2 cm dilated. We're still waiting here.

We are there too, and we're just waiting any day, like, literally any were.

How do we get action on this? Can we bet who's going to come first?

I think Friedberg is going to come first because it's his third. It's Allison's third. It's Nat second.

Yeah. So we can lay ods two to one. What do we get?

I'll take the over under. On what day is it today? Today is the 15th. We're getting induced on the 26th. That's eleven days from now. I'll take the over under on the over under on the 21st.

That you're setting the line.

I'll set the line at the 21 October.

I'm going over. I'll go over for a thou.

This is for Nat.

Book it.

Okay. Yeah. For net.

Got the over. You got the under? What do you got? Sachs? Over. Under. On the 21st, 26th is the expected date.

What are we betting on?

Some people pay attention when their children are born.

When their children are born. Aren't you guys a little too old to be having kids? Are you even going to see them graduate?

You got a vasectomy.

I mean, sacks, some of us are a whole bar mitzvah younger than you.

If anybody was snipped, I would guess it would be sax. Are you snippy? Snippy?

Is this the type of vital information you think the audience wants to know?

Yeah, I think they do, actually. I think that's a yes. I think he's been snipped. Chmoth is definitely not snipped.

No.

You want to come over here and inspect? Conduct an inspection?

I don't think you can visually understand. It's not visually understandable.

Yeah, Friedberg's definitely not snipped, as proven by his wife being pregnant.

I don't think you say snip, bro. I think you just say vasectomy.

I think you say snip, snip. I think Sachs has been snipped. That's actually a good bet. We could book it on Sachs being snipped. Okay, listen, a lot of topics to get to. I think we were trying to get to this topic last week. There's been a supply chain interruption right now. There's some shortages, obviously, of key components like microchips. We all know this. According to car and driver, the top three models impacted by the chip shortage were the Ford F series pickup trucks, Jeep Cherokee suvs, and the Chevy Equinox suvs. Basically, a lot of the cars that have advanced driving systems are now removing them. I was looking at getting an suv for the winter, and I was looking at the Cadillac Escalade, and they took self driving out of the 2022 model or the autopilot, basically because they can't get the chips. And we all know why this is happening, obviously Covid and then also on top of it, demand. So people are buying second computers, third computers. Places like Dell are having an apple are selling a lot of desktops, a lot of laptops, and there's also a labor shortage. So the labor force, obviously, here in the United States is much smaller than it was. We all know that people are raising salaries to try to get people to come back to work. They're turning off the bonus unemployment early in some states. We're here in October. This is all supposed to be turned off by now. So I guess I'll start with you, chamath. In terms of the markets here, what do you think is happening? And is this an acute risk or just something that will pass?

Well, this is where I think, I kind of generally disagree with the market. I think that most people are under the impression that these are short term kind of contractions and expansions and that this is just a thing that needs to get worked through the system. As we readjust to a post Covid world, blah, blah, blah. I think it's different. And the reason I think it's different is if you just look at one thing and one thing only, which is that we have a massive labor shortage in America. And there is an incredible stat that I saw, which was the average hourly earnings of non manager people in hospitality and travel. And the average salary, the mean salary was around 20 some OD dollars an hour and it's now $33 an hour. And so what that to me says is that we are going through a really sustained period where you cannot get people to do the work that needs to get done. Biden had to call the port of LA and try to get these guys to be open 24 hours a day. The president of the United States is calling a local port trying to get it to stay open. But why can't they stay open? Because you have long, Sherman, you have all these unionized folks who will expect to get certain levels of compensation which they deserve in order to do that work 24/7 but then all of that is going to get put through the system. And if you still have millions of jobs that needs to get done in order for the economy to function, the only efficient way that that's going to get resolved is by raising salaries. And those are consistent and persistent. Those things are not just like, oh, you know what, I gave, yes, I did save $50 an hour, but now I'm taking you back. That's one thing. And then second, so there's people, right? So labor capital, I just think it's getting more and more expensive to get folks to do work. And then there's the raw materials that you use to make anything. And everything that I see is that stuff is going bananas. And so I put these two things together and I'm like, I think this stuff is here to stay. I'm really kind of a little bit of a, and I had not worried and you can see in every episode before this, I was always consistently like, there is no inflation. You can fade the inflation trade. Now I'm kind of positioning myself to hedge myself in this situation.

All right, Freeberg, we've seen the pictures of the Long beach and the Los Angeles ports. There's just ships out there like I think 70 or 80 is where it peaked at in July. I don't have the latest data here of when it updated. But is there not a silver lining here that if people are making more money, then we're going to increase the size of the middle class and we're going to increase upward mobility? And that is a double edged sword. It's great that we increase the middle class, but then they're going to want to buy stuff. So people are now making $35 an hour and they were making 20. Now they got more disposable. Now they're going to go on Amazon and buy more stuff. And it's going to accelerate this problem, is it not?

The challenge is the rate of change. This is what the Fed tries to manage. And there's a White House economic advisory committee that's involved in trying to figure out what's going to happen here because the current estimate is it's going to take at least a year or probably a year to work through the current log jam in the global supply chains. And during that period of time, as chamath points out, what's happening is the cost for goods is climbing because people have to charge more because there's limited inventory and people are bidding up the value of that inventory. As they do that, the businesses end up needing to get more labor, and so they have to pay more to hire people. As they pay more to hire people, those people end up demanding more. And the cycle can actually go the wrong direction where you have an inflationary spike that persists. How do you taper that inflation? It's not necessarily great for economic growth if you can't produce the stuff. And it can actually cause these runaway kind of effects in the dynamic system of supply and demand when you have these things clogging up the system for supply. So it is a real risk. And it is the biggest