Today's number: 107. That's how many rounds of golf Trump has played during his second term. He's been in office for 456 days. Ed, what's the difference between a golf ball and a woman's G-spot?
A man will spend 10 minutes looking for a golf ball.
Claire's nodding her head. I've got approval. All right. We were talking about the Pope earlier. All right. How did the boy save the priest's life, Ed?
He found a lump on his scrotum.
Oh, that's wrong. Now Claire's head is in her hands.
I don't really get why it would save his life.
Oh, yeah. There we go. Got it.
Our little head's growing up. Our little grown up.
That just salvaged the whole thing. You're not understanding. Makes it funny.
My stupidity makes it funny.
I'm doing very well. Um, yeah, I'm excited about this live tour. Tickets are flying off the shelves. It's all selling out. It's almost too late unless you go right now to profitmarketsour.com. Everything's going well. How are you doing?
I'm good. Except people keep calling me and asking me for a free ticket. I'm like, it's a hundred bucks. Just get on it.
You know, they don't give us that many. I mean, I'm sure we could just solve that ourselves, but we haven't been given that many friends and family tickets. I think we only have like 10 between us and then we've got a whole production team.
Yeah, but fortunately, you don't have any friends, so I'm... What are you doing this weekend, Ed? What are you up to? Not that I care, but I'm looking for a banter here.
We could always just skip the banter. We don't have to do this. We can do whatever we like. It's our show. If you hate talking about people's weekends, we can skip it.
I like the banter. It's my opportunity to [__] with you. What are you doing this weekend?
You're not going to like my answer. I'm working all weekend. Except actually I'm having dinner with my mom who's visiting, so I'll see her. Um, and so that'll be nice.
That's nice. I'm glad to hear it.
Yeah. What are you doing?
Gosh, I have strikingly few plans this weekend.
Uh, yeah. No, I don't have a lot going on this weekend.
You hit as well when I make fun of you.
Yeah, I have a friend in town. I'm looking and then I'm headed back. I'm going to have dinner with my son Sunday night. Yeah. I don't got a lot going on. Not a lot going on.
That's nice. Very wholesome. Very wholesome vibes from Professor Galloway this weekend. That's very exciting.
Yeah. No, this is a laugh ride. Should we get on to the headlines?
Is this how you talk to other people? I'm curious.
Pretty much. See above. See above. I have no plans this weekend. It's what a shocker, right? I have no plans. Not a ton of people calling and saying, 'Hey, let's get together.' Yeah. No, not a lot of plans, Ed.
All right, let's do it. Let's get right into it. We have a lot to discuss. So, actually, maybe it's good that we're rolling past our banter section. And today we're discussing why stocks are hitting record highs despite everything that's going on in the world. Rising backlash against AI. And we will check in on your stock pick of the year, the Prof G Media stock pick of the year, which is turning out to be kind of a good pick. We'll see how it goes. But let's start with our first story. It was a turbulent week geopolitically and economically. Peace talks with Iran collapsed. The US blockaded the Strait of Hormuz and surging oil and gas prices are feeding into higher inflation and also weakening consumer confidence even more. The International Monetary Fund warned that further disruptions in oil markets could raise the risk of a global recession. They also reduced their forecast for global GDP growth. And yet, despite all of that, the S&P hit an all-time high and the NASDAQ hit an all-time high. And the question for investors now is why are markets so bullish? Why do markets continue to go up? Why do stocks continue to go up? I have a lot of thoughts here. Uh, this stuff is fascinating. It is kind of the biggest question on every investor's mind right now. But I will start here, Scott, with your reactions. What do you make of the fact that all of this is happening, uh, all of this conflict, all of this war, gas prices surging, and yet the stocks, uh, continue to go up?
Yeah, people often refer to this economy as the K economy, meaning some people doing really well, other people doing not so well. I like the term, or I just made this up, the ketamine economy. And that is, ketamine is a dissociative drug. You literally kind of leave your body and see your life for what it is, and it can be very helpful. That's probably a bad description of the effects of ketamine, but um, it's dissociative. And I've said for a long time, I think the NASDAQ and the Dow are two of the worst metrics or most unhealthy metrics ever invented because they give the illusion that people are doing well. And really, it's a proxy for earnings and a proxy for the wealth of the top 10%.
So what do you have? All right, so I mean, think about it. If the majority of our markets now are being run by 10 companies that are in the business of AI or online or software, do they care that the gas prices are up? In addition, there's this phenomenon of buying the dip, and that is, if you look at the last three exogenous events in America, you would say the Gulf War, the Iraq War, and then um, 9/11, and maybe let's go four. Well, I guess the Iraq War is linked to 9/11. Basically, there was a dip and then the markets ripped back the following year. The markets had above-market returns the following year, and we did have a drawdown here. We had a 10% decline in the Dow in March at the outset of the war, and it's ripped back. And I think what's happening is the cycle time between fear and uncertainty around a war and the opportunity to buy is compressing, and now people are like, let's move to the part of the program where we make money. I also think there's a bit of, in my view, overly optimistic viewpoint that the war is going to settle down and the straits are going to be unblocked, if you will. But mostly what I think this is about is that the markets have disassociated from the majority of people's well-being and their prosperity.
I mean, just to look at how stocks have performed so far this year. So, we are, as we said, we're at record highs for the S&P. I mean, it hasn't been a tremendous increase in the stock market, but it's gone up. And the stock market was already very high at the beginning of the year. It's gone up, so now we're at a record high. And so you think about, okay, what are the reasons why that's happened. So year to date, when you look at the sectors that have outperformed, the biggest winners have been industrials up 11%, materials up 12%, and energy up 24%. Uh, and the laggards, at least leading up to the war, were things like uh, tech, uh, communication services, and financials. Um, since we hit the bottom from the Iran war, so that was March 30th, that was the market bottom. Thus far, it's been a very different story. It's actually reversed. Energy has fallen. It's down 9% since the bottom. And the winners have been financials up 11%, communication services up 18%, and tech up 17%.
So it's really, I mean, the big trouble here is trying to understand, and this is always an impossible question, but it's trying to understand like what are the markets actually thinking here? Like why, I mean, we had this steady, steady decline where the markets weren't taking an elevator down, but they were taking the stairs down as the Iran war unfolded. We kept on getting this kind of scary news where things weren't really resolved, and then we kept dropping more bombs, and then there was more conflict. Markets went down and down and down, and then on March 30th, something happened. We hit the bottom, and then since then we've basically been shooting up. And a lot of people have been saying, well, the markets must think that the Iran war is over, or they're too optimistic that this thing is going to be resolved. And I think that that's possible, but again, we should sort of remind ourselves like why are they up? It's basically because everyone's piling into tech again. I mean, we had this massive drawdown in the tech sector. Everyone was very, very bearish on the sector. And now we're seeing that actually people are fine again. And so I think the question is trying to identify why, what exactly happened here? What are investors thinking about this? And I think it's a few things. I think that one, investors are recognizing some of your points, which is that I mean, the stock market is not the economy. If gas prices go up, yes, it might have some impact on lower-income consumers, and we can get to that because it is very interesting. But ultimately, high earners are completely price insensitive. Doesn't matter to them. They drive consumer spending. Same thing with big companies. Same thing with tech companies. They're going to be fine. But then the other side of it that I do think is quite interesting, and you mentioned the word dissociative there. You call this the ketamine market, which I think is interesting. I wonder if there's also been a little bit of what I would call timeline fatigue, where we thought we understood what the story of this war was. And there were all of these different plot points. We strike Iran. Uh, we kill the supreme leader. But then the son is appointed. Uh, then Trump says that we've had productive talks, and we think that maybe the negotiations are going to go somewhere. Then they don't. Then he says, 'Open the [__] strait, you crazy bastards.' Then he says, 'A whole civilization will die tonight.' We think that the climax is going to happen, that there's going to be perhaps some event that ties a bow on this whole situation. And then since then, it's just been a mirage of confusion. I mean, they say there's a ceasefire, then they say there's not a ceasefire. Uh, then there's a blockade, then they blockade the blockade. And I wonder if this is investors basically saying, you know what, we don't really understand this. So let's just go back to the basics here. Big tech is extremely good at what they do. They are crushing it on the AI front. Earnings are ripping. So let's just go back to what we know, and let's just go in and buy tech again. And that's the only thing that we know to be true. So, I mean, I'd like to hear a response because there are so many different reasons that you could give as to why markets are behaving the way they are, but that is the closest thing that I can draw to what I believe is the truth about what investors are really thinking right now.
I buy all of that, but I see it just again as a symptom of income inequality. Like, does it really matter to you? I mean, you may not feel rich, but you are relative to your peer group. You're already in the top two, if not 1%, in terms of income earned. Do you give a [__] that gas is at $6 a gallon?
The people driving the Dow are unaffected by uh, oil prices. And you know, again, everything gets outsourced in our country. Basically, we're becoming a country where the whole bottom 99% are, we optimize the bottom 99% and treat them as nutrition for the top 1%. And the reason the bottom 99 put up with it is that in America, the bottom 99 all thinks at some point they'll be in the top 1%. So, but all of this pain is outsourced to lower and middle-income households. Lower-income households spend 22% of their income on energy costs. So, this really, I mean, this really whacks them, right? So, but the people responsible for 50% of consumer spending, the top 10%, AI, like what the [__] does AI care unless they start bombing the data centers in the Gulf, but they have redundant um, infrastructure. And also in the US, it's a bit, I don't want to say it's a wash, but we're net exporters. We have a lot of energy companies that I can't imagine what's happened to the stocks of the companies that build the materials for pipelines. We have Exxon and Chevron. I mean, you know, those companies are making a lot of money. Those companies are actually doing pretty well. So, and then when there's, it's almost, you know, it's unfair, but it's true. When this type of insecurity hits the world markets, there's a flight to safety or the least unsafe place, and that's the US and tech stocks and the dollar. It's sort of like, well, where do we go? We don't know. Okay, let's go back into tech. Also after the drawdown, after the kind of SaaS apocalypse, there is as a multiple on cash flow, some of the tech stocks right now look to be decent. You know, when you can invest in Nvidia at 24 times forward earnings or something, it's like, it's just not a bad store of value. When Microsoft is trading at its lowest multiples and you're going to talk about this in a decade, you think, well, maybe that's not a bad value. So I, it's sort of the sum of all fears of what it means to have a bit of a hegemony, at least from a financial standpoint, and that is the US, and that is, okay, let's outsource all the pain to the rest of the world, and within the US, let's outsource all of the pain to lower and middle-income households.
But what's interesting is that investors for a brief period of time did away with that notion. I mean, the reason that we hit the bottom is because investors were worried about what this war would do to oil prices, how it would affect gas prices, how those gas prices would trickle into the rest of the economy. And as I said, we went down and down and down and down, and things did not look very good. And so, I mean, I'm in total agreement with you, and we've talked about it a lot on this podcast before. What is the economy? It is increasingly reflective of the spending habits of the top 10% of earners. It literally, their spending literally accounts for a third of GDP. And so when you think about it logically in your head, like what would rising oil prices do to the economy, the only real systemic impact that it will have is on the consumer spending habits of lower-income households who, as you said, in the lowest income spend nearly 20% of their total uh, expenditures on gas. But other than that, it's not going to hurt the top uh, the top quintile very much at all. It's also not really going to hurt tech companies that much. I mean, there was some concern at the beginning that some of the materials that go through the Strait of Hormuz are used for chips, but eventually people started to be a little bit less worried about that. Perhaps they're not pricing that in enough. But ultimately Nvidia is still creating a ton of chips and Nvidia is still just fine. So I, it's an interesting dynamic where these are sort of the fundamental truths of this market now that it seemed that most investors were pretty much on the same page about the things that you're saying right now. And yet there was a moment of actually, no, maybe those things aren't true anymore. Maybe this thing is going to shake things up in a really big way. But then I think as you say, you look at the multiples, you look at the general confusion in the headlines, the fact that you can't parse out whether you don't know if we're going to stay in Iran or if we're going to leave or if we're going to uh, make any decisions there. You can't figure out anything from this market. And I think that what you see then is then you go, okay, let me just go back to the very, very basic fundamentals of investing. Let's look at the earnings. S&P just posted fifth consecutive quarter of double-digit earnings growth. That hasn't happened in almost a decade. Earnings grew more than 12%. Earnings guidance is extremely strong. Multiples have contracted. Microsoft, Nvidia, a lot of these companies are trading at some of their lowest uh, multiples on a forward earnings basis in literally years. I mean, there was a point there where Microsoft was where it was post-liberation day. And that feeling when you suddenly look at all that data and you realize what actually matters most to markets, which is literally just earnings. It seems like basically every investor woke up basically last week and looked at the fundamentals at the same time and decided, you know what, this is fine, I'm buying. Corporate America is doing just fine. And it's fascinating how quickly that happened, especially considering how long the trek downward was uh, until we hit that bottom basically just a couple of weeks ago.
The only caveat here is, you know, the story isn't over, right? Markets don't go straight up or straight down, and you know, all it takes is one inst- or one geopolitical incident or just the markets decide it's time to sell in 2022. So yeah, the markets are back. We'll see how the end of 26, you know, we'll see what happens in the end of 26.
Yeah, I mean, that's worth talking about. Like, what do you think that would look like? People seem pretty confident right now, at least just from a purely sentiment basis. Like, people are just like, you know what, this war, I don't, it's odd to even understand what investors think, but what do you think? What would it take to go back down again to approach what was getting close to a bear market?
It's just so hard to make the kind of prediction of what's the trigger that sends the market down. It could be a geopolitical event. It could be, quite frankly, it could be a company announces that they're dramatically scaling back their spend on AI because they're not registering the ROI they'd hoped. It could be private credit starts to throw up. I mean, but anytime you, the list of things I list are almost by virtue of me listing them and them being present on my radar means that's probably not what causes a market selloff because the things that people are expecting, they adjust for, they prepare for, and are baked into the market. It's the [__] you're not expecting that gets you. So, you know, the answer is I don't know. But what you do is, per your advice, you look at fundamentals. Is the market in the US expensive relative to other markets? Should you be diversifying? Do you try and time the market and think, I have it in, I feel it in my bones that the market's going to go down? No. You can't time the market. Warren Buffett says he can't time the market even though he's gone to a third of a trillion dollars in cash, which says he believes he can time the market, but...
Anyways, what you do is you look at valuations, uh, you try and find good companies and try and find, you know, and personally I don't even think you find companies, you find index, low-cost index funds and you invest. And quite frankly, unless this is something you do full-time, you go back to your life and you focus on how you make money such that you can continue to invest in low-cost index funds. But this, I mean, this is a lot of fun. It's like playing, you know, it's sports. It's fun to try and bet on stuff, but you know, after spending the majority of my life looking at economics, being fascinated with the markets, the conclusion I've come to is nobody has any [__] idea. And what you do is you stick with truisms. You look at valuations when things look cheap or look relatively speaking at a trading at low PE. You dabble in them. Put some money in them. Don't buy anything that you don't want to hold for at least a few years because you are not a trader. And then two, low-cost index funds and figure out a way to consistently save and focus all of that energy on time on two things. Improving your currency in the marketplace such that you have more leverage and money to invest into your relationship such that you're happy regardless of whether the markets go up or down that day. Uh, but God, what could happen to send the markets down? Jesus Christ, Ed, you tell me. I, you know, who knows?
Well, I think the thing that we should be focused on is will we see an actually large drawback in consumer spending because of the gas prices. I think that's the thing that would trigger it. And I feel like maybe 50 years ago, this would have been far more dramatic and had a larger effect on the stock market because you would have had a combination of higher reliance on gas in America, which just isn't really the case anymore because we have electrified ourselves a little bit more, but still we are still pretty reliant on gas. There's also the argument that we're more gas uh, independent now. But also, as you say, the K-shape having this weird uh, insulatory effect, not on all of America, of course not. But it does have that insulation effect on the stock market because, as you say, if the gas prices go up, the rich people are not going to be that affected. They're going to keep spending and that's going to contribute to the consumer spending. But if for whatever reason that doesn't happen, uh, if for some reason it does uh, impact rich people, I don't think it would, but if it did, or if there were a really, really sizable drawback in consumer spending among the rest of the population of America, there's your problem. Because as we've said, consumer spending does matter. Contrary to what Kevin Hassett has said that, oh, we're not worried about gas prices affecting consumer spending. Consumer spending is extremely important. It's two-thirds of GDP. If consumer spending goes down, if you see a drawback in that category, then you are going to see a drawback on the income statements of a lot of these companies. Earnings will go down. It will affect tech companies because tech companies are largely reliant on ad spend and ad spend is largely reliant on consumer sentiment or more specifically consumer spending. That is what we saw in 2022. And so that's the question. Will it actually mean that people spend less? And so far they're still spending or the spending is still on aggregate high enough and the earnings do continue to grow. And so I mean I think a lot of people get frustrated hearing this kind of analysis where a lot of people feel strapped and they feel that they are struggling and gas prices have risen 20%, 30%. And they say, well, you know, how could the stock market not be reacting to this? How could people say everything's fine? And the reality is that on aggregate when you look at all of the dollars put together reflected on the income statement of the biggest companies, everything is fine. And again, it's not fair. It's because the rich people are doing the heavy lifting here. But so far, that is what's happened. Um, and until that changes, and maybe it will change next quarter. I don't know. But until that changes, stocks are going to continue to go up. That's just what's going to happen.
Also, there is, when there was an oil shock in the 70s, it hit pretty hard. But since then our economy has tripled in size but our consumption of oil is about the same. So oil is three times less important to the economy or the impact it's ripple, it's, you know, it creates ripples. It used to create waves and so it's slowly but surely just becoming, and this is a good thing, it's becoming less important to the overall health of the economy. Um, but again, I just think it all goes, I think all roads lead back to the same thing. Uh, as long as the wealthy are doing fine, the Dow and the Nasdaq will do fine. But because the Dow and the NASDAQ are doing fine, that does not mean America is doing fine.
Exactly. Which is why it becomes almost increasingly difficult and dumb to talk about markets in a lot of ways. If you're having a big picture perspective, the name of the pot, right? Exactly. Provity, prop anxiety has ear anxiety. [__] sucks. How does ears... Yeah.
I'm sure you saw, I don't know if you saw that clip on CNBC. I think it was Sarah who, I mean, it went totally viral and it was such a great moment and it reflects the ridiculousness of talking about markets. But she says, so this threat of nuclear warfare and destroying a civilization. How does an investor process that? Is it a bigger upside risk or downside risk? Is that a buying opportunity? Yeah.
We'll be right back after the break. And if you're enjoying the show so far, send it to a friend. And please follow us on YouTube, Spotify, or wherever you get your podcasts.
This is advertiser content brought to you by Virgin Atlantic. Again, a couple weeks back, I got you a birthday gift. Not to pat myself on the back, but it was a pretty good one.
It was indeed. You surprised me with Virgin Atlantic upper class tickets to London. So, uh, tell us all about it.
It was pretty incredible. From the moment I entered that upper class cabin, I have to tell you, I felt like a VIP. Anything I needed, a drink, snack, assistance with the seats, flat seats. Flat seats. Exactly. Had the four-course meal, got my champagne, very delicious. Enjoyed the food.
The journey home was great. I went to the Virgin Atlantic LHR clubhouse. That's the Heathrow clubhouse. Heathrow clubhouse was awesome. Got myself a coffee, headed over to the meditation pod that they call the Soma Dome. Kind of felt like a sort of spaceship where you relax and think nice thoughts. So, I did that for a little bit. Then, we went over to the wing, which are these acoustically sealed booths where you could do some work. Uh, you could even record a podcast. I didn't do that, but maybe I should have. It was a very enjoyable experience.
So, Ed, the real question here is what are you planning to get me for my birthday?
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We're back with Prof G Markets. If there's one major constraint on the AI buildout in the US, it's public backlash. Americans are making it increasingly clear they're uncomfortable with where this technology is headed. Last week, there were three AI-related acts of violence. One targeting an Indiana councilman who supported a local data center project and two targeting Sam Altman. That escalation underscores how quickly anti-AI sentiment is intensifying and it is starting to shape policy. Maine just introduced a bill to ban data centers altogether and it's not an outlier. 14 states now have active bills proposing restrictions or outright bans. So Scott, uh, this is something I wrote about in my newsletter about two months ago. This idea that the biggest obstacle to AI isn't energy, it isn't compute capacity, it's its own popularity. Since I wrote that, some crazy things have happened. There were the attacks on the councilman's house. He supported a data center. Someone shot at his house 13 times and they left a sign that says no data centers. But to me, the big wakeup call that we should all be talking more about was the attack on Sam Altman. A guy shows up to his house, throws a Molotov cocktail, an incendiary device at the house, it explodes. He's arrested for attempted murder. He has a whole manifesto about how AI is going to be detrimental to society. Two days later, some people show up at his door and they shoot at his house again. I mean, unbelievable how quickly this happened and literally within days of each other. Um, what do you make of this news and this growing backlash and just general sentiment against AI in America?
Well, first off, there's just no justifying this type of violence. These people, uh, the councilman and Sam Altman are all operating within the confines of the law. They deserve to live their lives with some reasonable semblance of safety and there's just no excuse or rationalization for this type of violence and those people should be brought to justice. Uh, I don't even like it when people yell at JD Vance when he's out skiing with his family. I think a certain level of civility and safety in a society. I think this is more an indication of how frustrated people are in society and also income inequality because in terms of the vibe. Uh, so there's vibe and then there's mentally ill people. I think you're going to probably figure out that these people were loners who typically shooters or people who commit this type of violence are typically young men who believe that a heroic act of violence is going to restore their social capital. And these are mentally ill people who find famous figures come up with a reason for why they think they're justified in this heroic act of violence. But this also relates to, I mean, on a broader level, this doesn't justify the violence in any fashion, but a lot of towns are wondering, let me get this, my electricity bills are going to go up 20 to 40% such that Nvidia stock can go up? Like, I don't own Nvidia, I don't have the money to invest in stocks, I'm just trying to figure out a way to pay off my medical debt from my wife's chemotherapy. So there's a ton of resentment here, a ton of it is understandable. There are few brands that have had a greater decline in the last 18 months than not only AI, and you wrote about this, but specifically Sam Altman. And the hero's journey here, or the Greek tragedy, plays out in technology, and that is someone comes along and becomes, through the idolatry of the dollar, this religious-like mysticism that is technology, and we find someone who's super attractive, super compelling, great communicator, we need to do better. Oh my gosh, he cares about gender politics. Jeff Bezos, he should run for president. Sam Altman, look at that nice young gay man who just had a baby and he speaks in hush tones about his concerns about... You know, Sam Altman was the gay son we all wanted, right? He just seemed like this lovely young man and then you figure out they're like everyone else in a capitalist society. The only reason you become the CEO of one of these companies and you work all day long and get everyone hectoring you from the cheap seats and have to put up with the most awful species in the world known as a venture capitalist is so you can make billions of dollars and that every day in order to win. And it is a thunderdome. You make incremental decisions regardless of preventing a tragedy of the commons and usually that march from Anakin Skywalker to Darth Vader takes about seven or 10 years. With Sam it took 18 months. I mean, you don't remember 18 months ago, Sam was the new type of tech CEO. He was the tech CEO we all needed. And now people have just had it with him. And so, but I think you need to separate the two. There's vibes and then a mentally ill person will decide, okay, I need to shoot at Trump or I need to, you know, for whatever reason. And this is a real problem. It's about mental health. It's about incendiary online rhetoric that gives people what they feel is license to commit these terrible acts of violence. It's access to assault weapons and guns at every [__] corner. So I don't, you got to bifurcate the two. There's the decline in AI's brand which is real and extraordinary what's happened here, uh, as embodied by the decline in Sam's personal brand, and then there's random acts of violence which are just a larger societal problem across a number of sectors. You know, remember when that healthcare executive was executed in New York?
Yeah. But this is just to push back. Sure. That makes me think it's not random. I mean, I don't think it's random. I mean, that happened and then followed by this and then the guy's attacked by a different set of people two days later. At a certain point I'm like, no, this isn't random. And sure, it's crazy people, but there are a lot of crazy people and it's a pattern that continually happens and they are directionally feeling similarly to a lot of people. And also the response that we saw to the attacks online to this attack on Sam Altman was similar to the Luigi Mangione response, which was people kind of supported it. Like people, I mean, just some quotes from the Instagram comments we have here. Quote, 'Is the Molotov cocktail okay? Where can we support the bail fund? What do people say about women? Oh, isn't he just asking for it with what he's doing?' Like, it's reflecting a feeling that a lot of people have and obviously it's terrible and obviously it's crazy and obviously we don't condone it whatsoever. But I think when we call it random and we say, 'Oh, he was a crazy person,' I don't think that addresses the problem because I think there is a systemic problem here which we have talked about related to wealth inequality and AI is part of that story because the wealth of the billionaires during the AI era has absolutely exploded. Elon Musk is about to become a trillionaire essentially because of the bet on SpaceX which is basically an AI company at this point. You could argue the same with Tesla. I mean, all of these things are related. And then it's basically just like a crazy guy shows up and does the thing that is directionally what a lot of people are feeling, but obviously takes it to an awful and disturbing place, which we should not support. But also, it's something we've seen happen time and time again throughout history. And you've pointed this out before as well. You look at the Gini coefficient for wealth inequality in America today. It's higher than where it was in France during the French Revolution and people cut people's heads off at that point.
Well, there's a few things here to parse out. One, if you have a mental health crisis, especially among young men with a lack of male mentorship online that makes them feel insufficient, poor mental health infrastructure, they're going to have psychotic breaks. And then the chaser to all of this is we don't have a monopoly on young men struggling with mental health. We don't have a monopoly on young men who lack male mentorship. But what we have a monopoly on is young men who are failing, a mental health crisis, and then access to guns. But my belief is that these individuals would find another vessel to place their rage and mental illness even if AI wasn't in decline or people thought that health care costs were hurting America. I don't, I think you have to bifurcate the two. They would find another reason to commit acts of violence against others or themselves. I don't think what's going on now where you do see a connection is the following. When you have people writing love letters, Luigi, and there's like a free Luigi, that's an indication of a real issue where people have had it with income inequality and that's very, very disturbing. And then this notion, and to your point, income inequality always repairs itself. The problem is the means of reparation are war, famine or revolution. But revolution takes on different complexions. It can be a guillotine. It can be, you know, north versus south. I find what we're having here is a series of small revolutions. And that is we're going after Black Lives Matter and the Me Too movement were both righteous movements, but they weren't targeting the owner of a taco truck. They were targeting generally speaking rich white people. And you're going to see more and more, I think, legislation and anger towards rich people because they've had it and also corporations that they feel are making all of this money at potentially their cost. People are looking for reasons to be angry. Now, there's different levels of that, but with AI, they've done a terrible... And also look at the figureheads of AI. You know, when Marc Andreessen says that he doesn't ever reflect, he's about moving forward. It's like, Jesus, dude. The whole point of being a human and the whole point of education and empathy is such you can reflect and decide where you made mistakes and be a better person. I mean, they just don't have a lot of positive spokespeople out there, you know, like making them seem more likable. When Sam Altman says, 'Wait, stop bitching about the amount of energy this takes. Do you know how much food a kid takes to get to a point of critical thinking?' It's like, 'Oh, fuck.' Three weeks later, attempted murder. The collective world of AI went, 'Oh, fuck.' Um, you know, and then when Marc Andreessen makes this head-up-his-ass comments, it's just they have not managed the brand well. And now Sam Altman is shitposting Microsoft and they're making so much money. Uh, and you hear about this war on talent where if you're in the AI economy, which most people are not, 99% of people are not participating in the AI economy, and so you can understand the resentment. But there's a difference between resentment and vibes among the general populace and legislation and media feeling sorry for people or whatever and what I'll call a group of people who become violent. That is the number of shootings...
Crime is at an all-time low. We actually, in terms of violent crime, it's gone down. Now, unfortunately, really rich people are having to hire their own security because...
That's what I was going to say. I mean, if we're looking at that, that's up more than 50%. I mean, literally CEO executive security has gone up more than 50% in two years. A third of CEOs today have private security, which makes me think they're all worried. Maybe they're overestimating it because it's newsworthy, but that's what we're seeing from them.
My dad said something that always struck me. He said, 'The key to happiness in America,' and he warned me of this a few years ago when I started getting a footprint. He's like, I said, 'I'm worried about you.' And I said, 'Well, what's up?' And by the way, Dad, the time to worry about me was when I was eight years old and you left the house. But anyways...
Little late. Yeah. Thanks. Quite frankly, I'm not sure I need you to worry about me now, Dad. I'm worried about paying a quarter of a million dollars a year it costs to keep you in that Ocean View senior's home. That's my worry right now. Dad, the cat's in the cradle. Anyways, where were we? He said to me something. My dad occasionally had some insight, and he said to me, 'I'm worried about you because the key to happiness in America is to be rich and anonymous,' and you're losing one of those things. He goes, 'A lack of anonymity in America when you're rich always leads to bad things.' He's like, 'You become a target. People resent you. It's just not a good idea. You want to be rich, but anonymous.' And it kind of chilled me because I've always said, 'I have just the right amount of fame. People come up to me and they're really nice, but I still feel like I can be somewhat anonymous.' And lately, I felt like I've started to lose that, quite frankly. Anyways, what if you look at what's happened with these guys because Texas John Lennon was shot. He was famous. The number of people actually murdered, murder rates have gone down dramatically. But the difference is CEOs are now famous. No one used to have any idea who CEOs were. When I was a kid, when I was your age, and you said, 'Name the CEO of a company,' I would have been like, 'Uh, Jack Welch.' I could name one or two. And I was in business. There just weren't that many CEOs. But now our CEOs are the new figureheads for the US and our economy.
And so if people want a heroic act of violence, they used to go after the president. One in three presidents has been shot at because they're the most famous person in America. And someone who's struggling with mental illness conjures up some notion that if they kill the president, they're going to restore some sort of social capital. So when all of a sudden these people are famous, I think they become targets. And you're probably right, some of this is anger around technology and income inequality, but for the most part, it's that they're famous. There's dangerous people out there that target famous people, but this isn't because I just don't like connecting with the downside of AI with these acts of violence. I think it's something more systemic in our culture.
It seems to almost be like a justification or something. It's like Sam Altman's fault. No, it's not. Sam Altman should be able to walk down the block and feel safe. He shouldn't have to...
And by the way, I'm not a huge fan of this guy, but I would like to think he can live his life. I can't stand JD Vance. It bums me out when I see clips of JD Vance skiing with his family in Vermont and people yelling at him. I just don't think you do that. I don't want to be that nation. All right, then go vote for whoever runs against them. And we need to take the temperature down. But if you look at the actual data, a lot of this also is these moments are so cinematic, they get so much recirculation online. But if you actually look at safety, New York has had the lowest number of shooting deaths last year than I think it's had in its history.
Yeah. But we got to distinguish between general crime and crime targeted at powerful corporate leaders.
