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You're watching TVN. Today is Friday, January 30th, 2026. We are live from the TVPN Ultra Dome, the temple of technology, the fortress of finance, the capital of capital.
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Anyway, we have a fantastic show lined up for you. Let's pull up the linear lineup. The linear lineup, meet the system for modern software development. 70% of enterprise workspaces on Linear are using agents. We have Jim Lanzone, the CEO of Yahoo, coming in person to the Ultra Dome. We had breakfast with him today. Super fun story. Tyler Cowen's joining to talk about the Fed and economics. Jason Lemkin is going to talk about how we're going to transform SaaStr into the next Davos. We were going back and forth about how Davos is absolutely printing and we all need to step our game up. We're going to have fun with him. Alex Roy just broke the autonomous record for going across country on the Cannonball, and then Bobby's coming on to talk about housing. So, tons of interesting stories today. Of course, the top story is Kevin Warsh has been selected by Donald Trump as the next Fed chair, and he still needs to go through Senate confirmation, but it's looking really good, and so everyone's doing deep dives on Kevin Warsh. Many people weren't familiar with him, so we wrote a little write-up in the newsletter, tbpn.com, of course, if you want to sign up. He's the new Jerome Powell. He's the new hand on the printing press, but he might be running them a bit quieter. He actually said on a panel at Stanford last year, if the printing press could be quiet, we could have lower policy rates. And so this is something that we're going to have to... it's a little bit wonky. We're going to talk to Tyler Cowen about it, obviously. We're going to have to work through some of the trade-offs here, but you can think about many different Fed policies. Expansion of the balance sheet, they're buying more Treasuries, they're buying more government debt, they're creating money, they're expanding the monetary supply, expanding the money supply, creating more currency, right? Why are you laughing?
They're printing money out. They're... no, they really are printing money out of thin air. But they also do have the ability to destroy money. They also have a furnace that they can pour money into. No, no, no. This is the Warsh platform. Are you anti-Warsh?
You're washed up. Um, but I...
Should we watch this video, by the way?
Yeah, I just posted it.
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Yes. I not only have 12 years of experience in government and six at the Fed, I've got some knowledge of Fed history. What the Fed needs is more robust discussion of ideas, less groupthink. I don't like it that everyone's following the same model.
I actually don't know this song.
We're fans. We're fans.
We had a lot of fun with that this morning. Probably Michael started cooking. I came in with some ideas and we're pumped up for a potential new Fed chair. New blood, new person to understand new policies potentially, maybe some good policies. We'll see. Everyone will be giving their takes on what they think will happen and then what the impacts of those decisions will be. So, Warsh has a complicated history with... what are you laughing at now?
I just think that video combines all of my interests.
It's a perfect encapsulation.
That's great. That's great. You threw some AI ice on the wrist and...
Yes, the ice on the wrist.
But he does look fantastic. And he was actually complimented by Donald Trump as having like great looks or something like that, which is a very funny comment. And Trump also at one point said like he's very youthful, but he couldn't get his name right. There's a bunch of funny things we'll dig into. But so he has a complicated history with Jerome Powell. It's very friendly. He never engages in ad hominem, but they are competitive in terms of the roles that they could potentially fill, and they do have policy disagreements. So Warsh was a finalist for Fed chair in 2017 during the first Trump administration. It was between Jerome Powell, Kevin Warsh, and a couple others. And at the time, Treasury Secretary Steven Mnuchin went with Powell or endorsed Powell, and it's potentially that Warsh's relative youth was a factor. He was just barely over 47 at the time, which is funny because it seems like very mature, like you know, you're certainly old to have a serious job at 47, but there's a lot of Fed chairs that come in. Janet Yellen was 67, Jerome Powell was 65 at appointment. Now, Ben Bernanke was 51 before that. So it's not always, you know, super old people, like people that are past retirement age, I guess. But now he's ready. He's 55. He's ready to rock. He's still young relative to the other Fed chairs that I mentioned. And he's had a great career. Stanford undergrad, Harvard Law School, Morgan Stanley.
Sort of a non-traditional background.
Yes. Yes. I mean, truly, I actually know someone in Stanford undergrad, Harvard Law School, now as a VC. I don't think he can beat the allegations of the traditional background. But after 9/11, you know, this was kind of a formative moment for him because he was in Wall Street. Now, Morgan Stanley at the time was in Times Square, so that building was unaffected, but there were Morgan Stanley employees in the towers, and he sort of sees, you know, according to some reporting, that as like a call to action to like go work with the government, work for the government. So he joins, he moves to DC, gets involved in politics in 2002, and he joins the Fed in 2006 at 35, and he was the youngest governor in the Fed's history. So clearly on the fast track, and it was a crazy, crazy time to join because in 2006, you're like, everything's going great. People are buying houses, people are buying third houses, fourth houses, fifth houses, they don't have employment, they don't have income, they don't have assets, but they're still able to buy houses. It's amazing what could go wrong. And of course, it went terribly, terribly wrong. There was a massive global financial crisis, and there were tons of emergency interventions. A lot of them were inventions of the time. There were a lot of novel solutions. Ben Bernanke was leading the country through the crisis along with Tim Geithner and the Obama administration. Quantitative easing, money printing, bring liquidity to markets that had completely seized up, like the money markets had seized. There were lots of markets that were just not moving, and basically every bank was going to go bankrupt or shut down if something wasn't done. So of course, the Fed opens the discount window, allows money to be lent to the banks, and then the banks can continue to do business. He was involved in a bunch of different aspects of that that we can go into. He actually got an ethics waiver to go and advise Morgan Stanley because he formerly worked there. So there's a worry about, okay, well, are you still buddies with these guys? Like, are you going to give them like extra help? But they were like, 'No, you're straight up. You're a good guy and we trust you, and really like you've been working in the government for almost a decade at this point. Like you're probably not really trying to put the, you know, the thumb on the scale towards Morgan Stanley.' So he helps with Morgan Stanley. He helps with Goldman Sachs. He actually worked on two unsuccessful mergers that were proposed at the time. So B of A merged with Merrill Lynch. There were a number of other bankruptcies. Bear Stearns, of course, Lehman Brothers went down. There were some other assets that were... everything was like consolidating, trading hands. There were conversions of banks to different structures so they could actually take money from the Fed. And he worked on a proposed merger between Citigroup and Goldman, and then another one between Wachovia and Goldman. Goldman wound up not doing either of them. I think Goldman was like pretty stable the whole time. But he still had like a ton of experience, and he was basically a bridge between DC and Wall Street because he wasn't this pure academic guy who had come in. He had the pedigree, but he had some chops and some connections. And so Bernanke would kind of dispatch him to Wall Street to say, 'Hey, go actually get this deal done. Convince these bankers to do this. See what they're saying. See how bad it is there. Take the temperature. Boots on the ground.' And so people really like that. Now, digging out of the 2008 financial crisis, it was immensely difficult. Do you remember that time at all? 2008, 2009?
So I was in college, and every day I'd open up the Wall Street Journal and see like the absolute turmoil, but then also like the build back from the crash. It was not... in the modern era we're very used to like these like terrible... Yeah, seriously, like...
No. Oh, and the crazy thing is like as a 30-year-old, my entire life as an adult has just been you were just constantly rewarded for buying the dip. Just like pure loyalty to the market, like never... the team's dropping and buying the dip.
No, no, seriously. Like you just get rewarded for being...
2020, the 2020 selloff during COVID, like the market was down 30%, and like it would open on Monday and it would just immediately hit circuit breakers and be down 10%, and you'd just be like, this is the end of the world, and it really felt like that. And then very quickly, if you bought the dip like a month into the chaos, it was just boom, right back up because there was a ton of liquidity injected, tons of stimulus, and you know obviously even the unemployment rate it like spiked really, really high, and then everyone got their jobs back. And then post-ZERP, you know, like it was like tech is over. It's done. VCs are out of business. And then we got the AI boom right there. And so we've had these very quick corrections. We haven't really lived through a recession or true like financial collapse, depression in our life. And there's always been this worry about, oh, well, COVID causes depression, or will this, will the...
Producer Ben says every time I didn't buy the dip, I was severely punished.
But so there were lots of emergency interventions, and there was always this question about, you know, okay, the first batch of quantitative easing where the Fed is going to increase its balance sheet significantly, buy a bunch of government debt, buy a bunch of mortgage-backed securities, bring stability to the markets. That's good. Everyone's like, yes, we need the bailout, sort of even though like we're not just giving the money away, but we're creating money. There's risk associated with that. If you do too much, you could get inflation. Do too much. There's a lot of things that could go wrong, but the first one everyone's sort of thumbs up on. The second one, he's like, we got to be really careful about this. Now, he never formally dissented. Like he never actually said, 'I'm voting against this.' But in his comments in the Fed meetings, he would say, 'Yeah.' Yeah. He would just say like, 'Okay, guys, like I'm gonna say yes, but everyone should like we should be really careful with this. This could go far. I don't want to see another one of these.' And so he was pretty skeptical about the second round of bond buying, and that was around 600 billion, which at the time was massive. And I see that number now and I'm like, okay, so that's like half of what OpenAI needs to build data centers, like that's not that much, but...
Well, part of the reason that feels like a small number is because of all the QE.
Yeah, exactly. All the numbers got bigger. All the numbers got bigger for sure. So this is why a lot of people like Kevin Warsh. They like him because he was very much a live player during the global financial crisis. He was going out there and meeting with the bankers, doing deals, but also pushing back and saying, yes, we need really aggressive intervention because the whole financial system is going to collapse and it is collapsing. We got to step in. He's not a, oh, the Fed shouldn't exist, we shouldn't do anything, but at the same time he's not, oh yeah, we got to keep doing and pump, pump, because at a certain point it just starts benefiting asset holders. It just starts benefiting the rich, and it puts more pressure on the average American household, and that's a lot of the rhetoric that we're hearing here. So he was very much a live player during the global financial crisis. He was in the room with the bankers and Fed officials. He understands that aggressive actions are necessary if there's a complete...
meltdown, but at the same time, he's just not super happy about the fact that the Fed's balance sheet has expanded 10x since he joined. And so he's looking at the massive balance sheet, 7 trillion, something like that, and he's saying, is there a way that we could trim this down while still achieving the rest of the goals, keeping inflation low? He said 2% should be the upper bound. 1 to 2% is more of a realistic target. And, you know, he wants to bring down the cost of housing. He wants the economy to do well, but he's very careful about saying, 'Okay, the Fed should focus on inflation, but not get too in the weeds on, you know, are we moving the needles on environmentalism and where certain programs are going and how all that fits together. We should stay really, really focused just on the quantitative stuff.' So, he has a hawkish reputation. So the expectation is that he might be pro-rate cuts but still wants to shrink the Fed's balance sheet. And so that could mean what's called passive quantitative tightening. So after the 2008 financial crisis, we went through quantitative easing, easing the money supply, increasing the money supply, printing money, the money printer was working. Now you turn... he's had this quote, you know, a lighter touch. He says, 'If the printing press could be a little quieter, like we might print, but it's going to be quieter.'
It's maybe not even humming, it's rumbling over there.
Yeah. Yeah. And you see Jerome Powell pumping the money, you know, during the COVID crisis, like, you know, printing, printing, printing, and a lot of people love that, but there is risk associated with it. So, passive quantitative tightening. What would that mean? So you don't... it's not that the Fed... they own a lot of treasuries. They own a lot of mortgage-backed securities. So a lot of, you know, you buy a house, you get a mortgage from a bank, the bank sells that mortgage, it gets packaged up into a mortgage-backed security. It's billions of dollars and then the Fed comes and buys that and that brings down rates, brings down yield rates. Now they don't need to just go and market sell those. They have those. They could do that. If they did that, that would be very active quantitative tightening because they sell them, they get the money, and then they just destroy it. They send it straight to the money furnace. But passive means, hey, we're going to let the bonds mature. We're going to get paid back. So 10 years ago, we bought a government 10-year Treasury. They've been paying us our interest, and now they're going to pay us back the full amount, and we're just not going to buy anymore. And so when that money comes back, we'll put that money in the furnace, just shrink the balance sheet, but we're not actively going out and selling in the market. And so that's what's called passive runoff. And it's already happening. It's slow. But it could continue and you could sort of continue that policy and then that tightens the balance sheet if you're not buying more and every time you get paid back, you throw it in the furnace. And so you basically just let the bonds mature and then instead of reinvesting the money, you extinguish the reserves. It's the money furnace to counterbalance the money printer and the money is literally effectively deleted, like it's just deleted. And so combine that with a rate cut, proper communication to the market saying, 'Hey, we're not going to be super active market participants anymore.' And then you also got to coordinate with the Treasury, Scott Bessent over there, on debt issuance to say, 'Hey, we're not going to be buying as much anymore.' So, if you go and issue more new government debt, you got to get someone else to buy it. And maybe that's international, maybe that's domestic people, maybe that's investment funds. There's a whole bunch of private market participants who can buy that government debt, but it might be at a higher rate, might trade differently. And so that's all different elements.
Marc Andreessen responded, just jumping in to the news, and said, 'This is a fantastically good choice. I've known Kevin for 30 years. He combines great insight in economics and finance with keen understanding of technology and business. There's nobody more qualified for this job at this moment of profound technological and economic change.' It's exciting.
So, yeah, interesting moment with AI. So much uncertainty, so much... I think some people are really feeling the acceleration. Also, you have the sort of de-dollarization or this sort of like debasement trade, the flight to gold. You have stablecoins, like really, really, really insane moment. So, you want somebody that's tapped in.
Yep. And can fully, you know, has a network in DC, Wall Street, and Silicon Valley.
Yeah. Yeah. So the sort of like, if the plan goes to, you know, if what we think might happen, if some of the signaling plays out, you could see sort of a normalization of the Fed's footprint while providing rate relief to American families and businesses. Now, will markets accept this framing? It's sort of too soon to tell. If the Fed isn't buying new debt from the Treasury, private markets need to absorb that and foreign buyers have been reducing holdings. 10-year yields could rise depending on the sequence and magnitude of events here. And that's the trillion-dollar question, is what does the yield curve look like if the Fed funds rate is low, but we're going through a period of quantitative tightening? Do you see higher 10-year rates, higher 30-year mortgages? Because I think when people think, oh, rate cut, they immediately think, oh, my mortgage is going to get cheaper or I'll be able to refinance. And that's not always the market dynamic that plays out. So, we will continue to monitor the situation. And let me tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working.
So, really wild time. I don't know if you saw this. Silver's down...
Down 35% today, somewhere in the range.
I think it's actually recovered a little bit. It bounced, but...
Really, what a wild week.
It's so interesting. The precious metals, they've been such a non-live player in the financial markets essentially throughout my life.
Exactly. It hasn't been like Bitcoin has been something that's been new and interesting and it moves all over the place. A lot of discourse around it is a store of value. Is it a transaction medium? Like, let's understand Bitcoin, whether you're long or short Bitcoin or you want to sit it out. Like, everyone went through that process at least of like understanding the fundamentals of Bitcoin, understanding that it's a fixed supply, you know, what are the pros, what are the cons, the quantum stuff. Everyone understands this. I feel like with the precious metals, it was just such a stable, you know, curve for so long that no one really woke up to be like, okay, I got to understand and figure out my personal strategy here. But now, I'm sure the gold bugs are back. I'm sure. I mean, they're clearly taking a huge victory lap right now, but it'll be interesting to see if more people are like, 'Yes, I'm like actively trading. I really care about that. I'm watching it very closely.'
We shall see. But the other interesting fact is that Scott Bessent and Kevin Warsh both worked for Stan Druckenmiller.
Well, they didn't just work for him.
They studied. They studied. They studied. Yes. And Stan Druckenmiller says, 'Kevin Warsh is not a permanent policy hawk.' What did the Financial Times have to say about this? This is published five hours ago. Kevin Warsh is not permanently hawkish on monetary policy despite his reputation for a conservative stance on rates. According to Stan Druckenmiller, the billionaire investor and longtime mentor of Donald Trump's Federal Chair nominee. The branding of Kevin as someone who is always hawkish is not correct, he said in an interview with the FT on Friday. I've seen him go both ways. Trump has relentlessly called for the Fed to lower interest rates, calling Powell a stubborn mule for not reducing borrowing costs. Some analysts and investors had questioned whether Trump would give the top Fed job to Warsh, who has advocated for trimming the central bank's balance sheet, which could increase long-term rates. Warsh has also earned a reputation for his hawkish stance from his time as a governor at the Fed from 2006 to 2011. Transcripts of FOMC meetings from one of the most turbulent periods of the financial crisis show that he reiterated concerns about inflation just days before the collapse of US investment bank Lehman Brothers. Interesting, not exactly the... I think what they're trying to say here is that not exactly the time to be worried about inflation when the economy is melting down. Warsh, who has worked as a partner at Druckenmiller's family office since 2011, was eventually all in on lowering interest rates during the financial crisis despite his initial skepticism, and also supported cutting rates at the beginning of the pandemic. He added, in 2018 the pair wrote an op-ed arguing why the Fed should not lift rates immediately before the central bank decided to do so. The Fed was later forced to reverse the decision after markets fell apart. That was the taper tantrum. Warsh is very open-minded to the monetary policy approach of the former Fed chief Alan Greenspan, who oversaw the central bank in the 90s during a period of intense productivity growth. According to Druckenmiller, Kevin right now very much believes you can have growth without inflation. And there is a great... I mean, we can read this other quote. I mean, he's very open-minded. There's a great op-ed that Kevin Warsh wrote in the Wall Street Journal back in 2010 that we should read from. But first, let me tell you about MongoDB. Choose a database built for flexibility and scale with best-in-class embedding models and re-rankers. MongoDB has what you need to build what's next. So, 'The New Malaise and How to End It.' So, this is after the global financial crisis. We're now in 2010. Remember, 2008 is when the banks failed. So it is November 8th, 2010. So two years on, things have stabilized but growth hasn't really reignited. And so he's saying, given what ails the economy, additional monetary policy measures are poor substitutes for more powerful pro-growth policies. He says, after a cyclical boost this year, the current state of the US economy is unimpressive: modest growth, high levels of unemployment, stagnant wages, low levels of consumer and business sentiment, and volatile financial markets. I remember this time, it was like lots of articles about like you're graduating into a really, really weak job market. I graduated a couple years later, so it rebounded a little bit, but there was a lot of like, oh, if you went to college and you graduated high school in like 2005 and you're graduating in 2009, you're cooked.
Well, I was thinking because I graduated college in 2018 and I was always thinking like, oh great, like 10-year cycle, like I'm gonna graduate into just like chaos, and totally ultimately came in the form of COVID, but...
They were calling it the new normal, and he calls it the new malaise.
The prevailing theory has it that US policymakers should not deny our foregone fate. Like, don't deny it, like, you know, this is our fate. It's the new normal. Like the US just isn't growing and that's just what's gonna happen. This is just cope, I guess. We should accept... but he has a different view. He says, this is what they're saying: we should accept smaller improvements in output and employment and productivity. We should resign ourselves to the new normal and conduct policy accordingly. That is the last best hope, they argue, to preserve the remaining vestiges of a golden age that is no more. 'I reject this view,' he says. 'I consider this emerging ethos to be dangerous and defeatist and debunked by America's own exceptional economic history.' He says, we're goated. We're goated and I refuse to think otherwise. Nothing's changed. Our citizens are not unwitting victims of some unavoidable fate. The current period of subpar growth and high unemployment is real, but it doesn't need to persist. We can change things. We should not lower our expectations. We should improve our policies.' This is Kevin Warsh, 2010. 'Broad macroeconomic policies have not changed direction in the past several years. But change they must if we are to prosper. We can no longer afford to tolerate economic policies that are preoccupied with the here and now. Chronic short-termism in the conduct of economic policy has done much to bring us to this perilous point. Stop thinking short term. Think in decades.' He's a mindset guy. He's watching influencers and he's like, I gotta think in decades. I gotta think in decades. And everyone else here is thinking...
So like, how can we make a gym analogy here, right?
I was asking... so in some ways, right? You're going to the gym, you go to the gym, you do the same workout every single day, right? You're just kind of like following the same kind of programming. It works to a degree, right? You're healthy. You're not dropping dead, but at some point you stop making gains.
He's telling America, 'Stop doing the bro split.'
He's like, "We need a new program. We need to switch up the split."
He's like, "AI is peptides for the American economy."
We could take that so much farther, but we won't today. Policymakers should be skeptical of the long-term benefits of temporary fixes to do the hard work of resurrecting the world's great economic power. Since early 2008, the fiscal authorities have sought to fill the hole left by the falloff in demand through large temporary stimulus, checks in the mail to spur consumption, temporary housing rebates to raise demand, one-time cash for clunkers to move inventory, and temporary business tax credits to spur investment. All that stuff is temporary. He says, "These programs may well have boosted GDP for a quarter or two, but that's scarcely a full accounting of their effects. These stimulus programs did little to put the economy on a stronger, more sustainable trajectory. Sound fiscal policy must do more than reacquaint consumers with old bad habits." You don't just want — if people were overleveraged on their car, overleveraged on their house, you don't want to just get them back to a point where they're overleveraged. You want a more stable economy moving forward." So he says policymakers should take notice of the critical importance of the supply side of the economy. The supply side establishes the economy's productive capacity. Recovery after a recession demands that capital and labor are reallocated. There was too much capital and labor — you know, when there's a bubble, there's too much cap — it needs to be reallocated. You can't just reinflate the same bubble. You got to move things around. You got to figure out what's actually productive when there's a dislocation. He says, "But the reallocation of these resources to new sectors and companies has been painfully slow and unnecessarily interrupted. We are feeling the ill effects. Fiscal authorities should resist the temptation to increase government's expenditures continually in order to compensate for shortfalls of private consumption and investment." So every time, oh GDP, oh more stimulus, oh, you know, let's just — another band-aid, another band-aid, another band-aid." He's against that. He says, "A strict diet, strict economic diet." I think he's thinking about some chicken and rice here. Let's go.
A strict economic diet of fiscal austerity has greater appeal, a kind of penance owed for the excesses of the past. But root canal economics also does not constitute optimal economic policy. He says you can't just gorge on stimulus, but you also can't do a root canal. You can't pull back fully. So he says the US would be better off with a third way: pro-growth economic policy. The US and world economies urgently need stronger growth, and the adoption of pro-growth economic policies would strengthen incentives to invest in capital and labor over the horizon, paving the way for robust job creation and higher living standards. Pro-growth policies — what does that include? It includes reform of the tax code to make it simpler, more transparent, and more conducive to long-term investment. So, think: how can you incentivize people to go for long-term gains, hold assets, invest for the long term, capex,
tax, tax illiquid wealth.
Yeah, that's not quite it.
Oh. Oh. Oh, right. These policies,
right?
These policies also include real regulatory reform so that firms, financial and otherwise, know the rules and then succeed or fail. Regulators should be hostile to rent seeking by the established and hospitable to the companies whose names we do not know. Finally, the creep of trade protectionism is anathema to pro-growth policies. Very interesting in the Trump doctrine. We are seeing a lot of trade protectionism. How will these two — has he changed in the last 25, 15 years since he wrote this? I don't know. Obviously he's not in charge of trade policy, but that is an area where, in theory, if his opinion holds today, they would butt heads. The US should signal to the world that it is ready to resume leadership on trade. He says the deleveraging by our households and businesses is not a pattern to be arrested but good prudence to be celebrated. Larger, more liquid corporate balance sheets and higher personal saving rates are the reasonable and right responses to massive government disarray and unpredictable government policies. The steep correction in housing markets, while painful, lays the foundation for recovery far better than the countless programs that have sought to subsidize and temporize the inevitable repricing. It is these transitions in our market economy and the adoption of pro-growth fiscal, regulatory, and trade policies that lay the essential groundwork for greater, more sustainable prosperity. He goes on, but he closes, "Responsible monetary policy in the current environment requires attention not only to near-term macroeconomic conditions, but also to corollary risks with long-term effects. Should these risks threaten to materialize, however, one gauges the probabilities, I am confident the FOMC will have the tools and conviction to adjust policies appropriately." So he's saying like, "Let's think long term because the Fed is available for short-term fluctuations, but let's not lean on that exclusively for everything." So,
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Let's move on to podcast recommendation. Bessent on All-In.
I think that's like even more relevant now with this new nominee given that Warsh and Bessent, you know, come from the same sort of school of thought.
Yeah. Yeah. No, that makes a lot of sense. Should we go over to Joe Weisenthal?
Let's do it. Understanding the heights of different Fed chairs. Paul Volcker was very tall, wasn't he? 6'7."
I don't — Is this actually — this is just the Fed funds rate during their time, right?
Uh, yes. But so I think it's a loose interpretation of the Fed funds rate during their time. I don't know that that's a perfectly accurate chart. Um, but it was 6'4."
He was 6'7." That's what I'm saying.
What are you hallucinating on over there, buddy? I got 6'7" here. Um, anyway, um, yeah.
Oh, it's pulling up a running back for the University of Michigan.
Paul Volcker is the name of a running back.
Some other Volcker. Okay. 6'7."
Yeah. Fed Chair Jerome Powell last night invoked the legend Paul Volcker when it came to rate hikes. Volcker, of course, increased rates from 11.2% to 20% interest rates. Can you imagine the disaster? There were protests in the street when Paul Volcker did that. He got an immense amount of pressure, but he did bring down inflation, and he is now seen as, you know, a legend amongst the Fed chairmen. They've fought a lot of different crises, and Volcker is a legend. What else is going on here? President Donald Trump nominates Kevin Warsh as chairman to the Board of Governors of the Federal Reserve, and Elio says the signs were right in front of us. Were they actually on CNBC at the same time or something? What is this image from?
Yeah, this is the interview where Alex Karp is spinning, and he puts this in.
But wait, was he interviewed by Kevin Warsh?
Yeah, I can't tell if this is fake news or not.
Yeah. This is so confusing. I remember the Karp image, but I don't remember.
No. Yeah, it's a discussion. It's on the Palantir YouTube channel. Really? A discussion with Kevin Warsh? Yeah.
Alex, that's incredible. I had no idea. That's amazing.
Should we pull it up? How long is it? It's like 40 minutes long.
Two things about Kevin Warsh. One, from Mark Halperin, he and his team just ran one of the most ruthless, tactical, strategic, and clever war room-like efforts to achieve a challenging goal ever seen in politics, government, or business. If you ever decide to run for president and need to win the Iowa caucuses, hire this guy to be your campaign manager or opposition research director. Two, the finance world is quite curious to see how the markets react to this pick. If the president hasn't been warned that the response could be negative, someone wasn't there, wasn't doing their job. And how are the markets doing right now? They're down. The Dow Jones is down half a percent. S&P down.
Well, I think Geiger Capital is playing around a little bit. You can pull up this post. He's calling it the Warsh wreck. He's sharing gold down 8%, silver down 21%, copper down 5%, platinum down 18%, palladium down 14%. Hard to read in this — started like potentially prior, right? And of course there's a ton of leverage in the system right now, and so hard to say if the market is correcting because of Warsh. It shows like potentially that the market is pricing in the fact that the dollar might not be as cooked.
Yes. I mean, when I look at the gold chart and I'm like, oh, it's up twice, like 2x over the year, I'm like, we're in danger. I'm in danger. Yeah. I mean, obviously it's good for all the gold bugs, and if you own gold, like, that's great, but it does feel like it's losing faith in America, American policy, Fed independence, all these different things. You know, I'm not crying over a little bit of a correction in the precious metals market. If it means more stable economic policy for the world, which
Yeah. Geiger also shared Kevin Warsh supports a strong dollar. Much of Trump's domestic and foreign policy requires a weak dollar.
Yeah, obviously on the trade side.
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There's a clip here from eight months prior to the election that you can pull up.
Yes. The Brookings Institution — he's a hawk and was against a lot of the post-policy, post-GFC called QE's reverse Robin Hood. Quantitative easing is fundamentally different than cutting interest rates, and that it appears to be working through fundamentally different transmission channels. No longer credit channels and lending channels appear to be the dominant way in which it impacts the economy. It appears much more to be working itself through asset prices. Whether you think about housing stocks or financial stocks, I think that is the dominant channel. And as a first approximation, if three-quarters of our fellow citizens get 96% of their income from labor income, it strikes me we ought not be dismissive and saying, "Oh, everybody wins." When I look at the wealth creation across the financial asset world post-crisis, I view that wealth creation as being significantly above what my former colleagues predicted. When I look at what they expected in the real economy, I look at the real economic performance as markedly worse than they predicted. And so that's what I think raises these questions, makes them absolutely germane to today's discussion. And I very much do worry, as I'm sure many of the people in this room do, that we've created a product — not with bad intent — we've created a product that may or may not turn out to be counterproductive. We are in the middle of this experiment as we are now, but where the gains have been extracted by the most well-to-do, by the most sophisticated, who see that the central banks are to one degree or another trying to get asset prices up to drag up the real economy. They get the joke. They have been willing to play the game. And it does strike me as though we have to think about not just the efficacy of these programs, but really who are the winners and the losers.
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And I'm also going to tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. And I do want to quickly interrupt. Catherine O'Hara, who is actually in an image that Capital posted, has passed away today.
Brandon Bo, Market Plunger 1, very funny name, is sort of summarizing the chaos on the markets. Gold lost an entire Nvidia market cap in minutes. Silver is moving 12% plus intraday. Copper is printing candles Japanese haven't even thought of. Bitcoin underperforming gold over 5 years. Oil breaking out finally. Agriculture futures about to break out. Microsoft down 12%. WTF.
And of course this is old news already because everything's different. Everything's back all over the place now. How is Microsoft doing today?
I think this post: sell everything. Exit all markets. Sell your dollars. Sell your gold. Sell your housing. Sell your
Stock. Sell your bonds. Sell it all. Sell every single asset you own.
Some people aren't getting the... he says, 'But what do I do with my dollars then?' He says, 'Sell your dollars. Sell everything.' And the Warren Buffett go freak the f out and panic sell everything right now. It's over. That one is so good. It's so funny that it just hits a fake.
Will MCP says, 'Selling my ability to sell. Selling the concept of selling.' Yes. Ridiculous. Vibe.co. Where DTC brands, B2B startups, and AI companies advertise on streaming TV. Pick channels, target audiences, measure sales. Just like on Meta.
Google aims knockout blow at Chinese company linked to massive cyber weapon.
Massive cyber weapon is such a crazy three-word combo to hit in the article title in the Wall Street Journal.
Great article titles. We had the one from yesterday. It was like BlackRock aims to be... Oh yeah. largest shareholder in New World. Yeah. New world's largest shareholder. And it just felt like they were trying to be the world's largest shareholder. And that was new. It was very odd.
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Okay. Google targets global network employed by hackers that often use devices running in homes of everyday Americans. Google took steps to seize control of dozens of domains operating by IP... IDEA, Chinese company accused of installing unwanted software on millions of devices.
On Wednesday, Google used a federal court order to get dozens of domains belonging to... I can't pronounce this. Ipedia. Epidea remove the internet.
Google and security researchers say the mysterious company... if you're going to be a hacker collective building a massive cyber weapon, pick a name that no one can pronounce and it just won't go viral. Yeah.
If it was like, you know, like Evil Corp or like there's some really crazy hacker collectives that are called Anonymous or like there's another one that was called like Black Sands or like Dark Wind and you're just like, oh okay, sounds like I'm definitely going to talk about that. This is much harder, but we will call it Epidia. Epidea. Epidea. Epidea.
Throw a Texas accent on it. So Google and security researchers say that the mysterious Chinese company is an unsavory enterprise that sneaks unwanted and dangerous software on millions of phones, home computers, and Android devices. Control of the domains allowed Google to both shut down the public websites and technical backend of the company, which operates using more than a dozen brand names. Google has also taken steps to remove hundreds of apps affiliated with the company from Android devices. It said the actions are expected to knock more than 9 million Android devices off Epideia's network.
They target a little-known but important part of the internet that has increasingly worried cyber security experts. It's called residential proxy networks. These online services are built out of apps that are installed on virtually any type of internet-connected device. IoT devices are joining these networks. Among them, media players, PCs, mobile phones. Companies such as Epidea rent out access to the devices to paying customers who want to use the internet anonymously. So it's sort of like a distributed VPN for anyone who wants an anonymous connection.
Last year, Google sued the anonymous operators of a network of more than 10 million internet-connected televisions, tablets, and projectors, saying they had secretly pre-installed residential proxy software on them. That is sketchy. Wednesday's action was a continuation of an order Google received. It's got to be so annoying to sue an anonymous person. You're just like, I sue you. Yeah, you have been served, whoever you are.
So, interesting. Epidea does have a spokeswoman. A spokeswoman acknowledged in an email that the company and its partners had engaged in, quote, 'relatively aggressive market expansion strategies' and conducted promotional activities in inappropriate venues, i.e. hacker forums. They just shared this.
But she said that it had since improved its business practices. There are legitimate uses for the service, which can be used to surf the internet anonymously or scrape websites for data. But from the time the company first gained prominence in late 2022, it marketed its services in criminal marketplaces. Residential proxies have become a go-to service for criminals and state-sponsored hackers that want to cover their tracks. It's a consumer issue and it's a national security issue at the same time. It's enabling some of the most serious threats to our country.
So less about you install some app and then it's stealing all of your data, more like it's stealing your bandwidth and enabling criminal activity, which could just be a business that wants to scrape a big tech company or it could just be somebody who wants a friendly bot farm. Maybe. Yeah. I mean, all sorts of things that are like violations of TOS or, you know, you can get really dark with like the dark web. But everything in between, and the problem centers around them actively marketing to dark web participants or hacker collectives potentially.
The company operates at least 13 residential proxy brands with names such as Epidea, 922 Proxy, Pyroxy, 360 Proxy, all of which were taken offline with Wednesday's action. The spokeswoman, she just can't stop talking to the journal. She said the company has always explicitly opposed any form of illegal or abusive conduct. Okay. With compliant operations at its core, the company provides stable and reliable data services for enterprises across various industries.
Just the most criminal company that you've ever heard of saying, 'With compliant operations at its core, our company provides stable and reliable data services for enterprises across various industries.' These services are mainly applied to legitimate business scenarios. Mainly just like... not exclusively. Fully exclusively was right there. You could have taken exclusive. Just like digging the hole.
These services are mainly applied to legitimate business scenarios such as data collection, market intelligence analysis, ad verification, and anti-fraud. Most people get put on the networks by installing mobile games or desktop software that has secretly included the residential proxy code. You take... going 150 miles an hour and it's like, officer, I was mainly going the speed limit. I know you caught me going 150.
Last fall, a group of hackers discovered a security flaw in millions of devices on Epidea's vast network of devices. By leveraging that bug, they seized control of at least 2 million of the systems. They built a botnet of their own and used it to launch a distributed denial of service or DDoS attack.
So you download some kind of sketchy mobile game and in the terms of service it says, hey look, we're going to piggyback on your bandwidth because you installed this, you're agreeing to that. Maybe that's okay, a little pretty sketchy, probably shouldn't be happening, but clearly they went way too far with marketing it. And then also, if it's insecure and then a separate hacker network steals the access to that, then they just have two million devices that they can just blast at whoever their enemy is and bring them down. Anyway, fascinating story.
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The comments on the journal are kind of going off on this. Steve C with 174 likes on this says, 'Thank you, Google. I wish you great success on this operation.' That just seems earnest. Like I feel the same way. I feel the same way. Thank you, Google.
Thomas says, 'This is what modern warfare looks like. You don't have to have a physical battlefield to experience an attack. Blow these digital terrorists to smithereens.' Yes. Yes. Thank you, Google, for blowing this digital terrorist to smithereens. And thank you for Gemini 3 Pro, Google's most intelligent model yet. State-of-the-art reasoning, next-level coding, deep multimodal understanding.
So, should we head over to the mansion section? Harry Macklowe. He lost his 432 Park spread. Now it's selling for over $50 million. He was an owner at the Midtown supertall and he's agreed to buy the full-floor spread from CIM Group. He's the developer of the embattled Manhattan condo tower 432 Park Avenue and he's made a deal to sell a full-floor spread that once belonged to its partner on the project, the legendary New York property magnate Harry Macklowe. The deal for more than 50 million caps a saga that has captured the attention of New York's real estate world.
CIM Group is selling the two 78th-floor units to a buyer who already owns an apartment in the Billionaires Row building, according to two people familiar with the matter. If it closes at this price, the deal will be one of the priciest to sell in Manhattan in the last year. Macklowe, who worked on the design and development of 432 Park alongside California-based CIM, bought two units in the supertall for himself for $47 million in 2022, financing the purchase with loans provided by CIM. Hey, no one's blinking an eye at this circular deal. It's fine. See, it's not just AI companies that do circular deals. They're doing it in Manhattan real estate, too.
The deal included a third smaller unit on the 28th floor designed for staff. It isn't clear if it's included in the current sale. Macklowe is perhaps best known for his role in developing the Apple Cube on Fifth Avenue. If you've seen the Apple store in Manhattan, it's this glass cube. Very cool.
He filled the spread with modern art and minimalist furniture. He had a sculptural egg-shaped bathroom custom-designed in blue glass. He likes glass. But CIM initiated a foreclosure on the units in 2023, alleging that Macklowe was living lavishly while defaulting on those loans. Macklowe was forced to move out of the spread and in June 2025 surrendered his equity in the entities he used to buy the apartments to a lender tied to CIM, bankruptcy records show.
Shortly after surrendering the equity, Macklowe tapped real estate brokerage firm Douglas Elliman to list the apartments for 75 million. Even though he didn't own them, the listing never happened. The spread is currently configured as two separate apartments. A fully furnished roughly 7,000 square foot unit has four bedrooms while the raw space is about 12,000 square feet.
The smaller unit was originally intended for Macklowe's then-wife, Linda Macklowe, but she chose not to close on the purchase amid their divorce battle in the 2010s. The apartments have the building's signature design flourishes, including a series of 10x10 ft windows with recessed seating nooks. Meanwhile, Macklowe is still trying to sell his Hamptons mansion, which doesn't have a certificate of occupancy, meaning it can't legally be lived in. You got to squat in it. He recently increased the price to 38 million from 35 million.
I love that. Yeah, this house is not selling. I got the price. Maybe it's a Vlin good. Maybe I got to get the price up. 35 is not getting people interested in.
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Speaking of 11 Labs, Brienne Kimmel joined 11 Labs. Congratulations. Some trade deals, some personnel news.
She's going to be building out their creative platform. She says, 'Today, voice is one of the best ways to interact with technology. People are tired of slop, brain rot, and doom scrolling, which means every company needs to find its voice and adapt to the changing needs of their customers. Creative platform is how they'll do it. In my new role, I'll focus on our newest product, our all-in-one solution for enterprise teams to create lifelike audio, original music, and end-to-end video experiences.' Whoa.
Well, whoa, whoa. We're already powering audiobooks with character-consistent voices, voiceovers for YouTube and podcasts, game studios with original character voices, localization. So very excited for this move.
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So lots of people are tracking the Oscars. Lots of people are tracking the Super Bowl. Lots of people are, who's going to win? Who's going to win? The Emmys, the Grammys, all these things. What are we tracking? Never crossed my mind. We're tracking the Wall Street Journal house of the year and it's here and it's a cottage. It's a storybook cottage and it got a fairy tale ending.
That's right. The M.J. Murphy-designed home in Carmel Highlands sold for 4 million before our readers voted it their favorite. I love it.
When Flora Mora closed on her new home for 4 million in November 2025, she knew she was acquiring a piece of California history. What she didn't realize was that she was also buying the future house of the year. Let's go, Flora. Congratulations. What a pick.
It is the Super Bowl of real estate and architectural design. The property built in 1925 and located in the Carmel Highlands is an example of early 20th-century storybook architecture characterized by features such as curved roofline and stone chimney. The style is synonymous with the neighboring city of Carmel-by-the-Sea, which is known for its fairy tale aesthetic. Mora, who works in healthcare and owns an avocado ranch in San Diego, spent years admiring the home when she visited.
Yeah. Wow. Yeah. 'Every time I drove down that street, this home has always stood out to me,' said Mora, 49. 'I would admire it and quietly hope that one day it would be mine.' The dream materialized last year, but with an unexpected twist. After Mora purchased the property, which unbeknownst to her had been featured as a House of the Week pick in September, readers had already voted to crown it the house of the year in the year-end poll. 'It came as a complete surprise,' says Mora.
The path to the winner's circle was paved by a significant transition. The home, which was designed by famed builder M.J. Murphy, who was largely responsible for Carmel-by-the-Sea's signature look, had been owned by John and Beth Needle since 1986. Quite a long time for the couple. The house represented four decades of historical preservation. Beth, who's in her 80s, and her extended family were no longer able to use the home as much as they'd like. John died three years ago and his estate placed the property on the market last June.
Media exposure from the initial feature generated market traction, according to listing agent Ashley Whan. Three different people reached out to her after the article ran. One ended up in a showing, she said, but it didn't end up being the right fit for them. While the home's architecture drew interest, a price cut from 4.77 million.
Do you think winning home of the year actually adds to the property's value? Yeah. I would guess if she relisted it now it'd go for at least five, six... 30 maybe 45. I was just talking five, six billion. Yeah. Yeah. Yeah. For sure. For sure.
No. It is interesting. Three different people reached out after featuring as a house of the week. That feels like low. That feels like it should be much higher, given that this physically ships to people. Like a lot of people see this and if you're in the area you're probably going to at least say, hey, I want to take a look if you're down the street. But I don't know. Who knows? Maybe.
She says, 'I was very honored to purchase an M.J. Murphy home. I definitely want to keep the original structure, but just update it slightly.' What do you think she's going to do, John? She's going to have Alec Monopoly come. Yeah. She's like, I'm going to keep the footprint. I'm going to just make some slight updates. It's like Alec Monopoly wallpaper everywhere.
Have you seen the graffiti house? Are you familiar with this? No. So, there's this graffiti artist who has gone by... Sounds like a nightmare. It's insane. We have to find this graffiti house. So, the graffiti house, this guy is a YouTuber content creator and he will do the whole house like as Supreme or something like that and paint the whole thing a bunch of different ways. I saw a video with him and who's that guy that does the... what do you do for a living? Daniel.
Oh yeah, I found the video. You found that video. Okay, send that in. I'll tell everyone about Fin.ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. Do we actually have the video? Because we can... I found the video on none other than Facebook. No way. Okay. Yes. This is it. Yes. And hilarious intro, too. If this is the one that I'm thinking of, hilarious intro because Daniel Mac randomly at my gate unplanned, like I'm not even miked up.
Yeah, let's see the man show. He's like breaking the wall there. I really like that. Oh, he's got rolls rolling by. Yeah, just a random roll in. Yeah. Wow, that's crazy. Let's see it. Let's see it. Is this all paint? Yeah. Well, first we paint, then we party, then we party, then we paint. What's the craziest version of... Look at how he painted this house. It looks like cartoon Supreme. Look at the Supreme House. Hey, he wasn't kidding.
Well, you know, there was that one. And then there was a... one was crazier than the first one. And then this one time there was like, oh my god, all the foam stuff. All right, let's get in here. Can you imagine being the next-door neighbor? Can you imagine being in Carmel Highlands and the storybook gets a fairy tale ending? Daniel Mac showing up. This is the ending. This is the ending. It just... she's like, I'm just going to leave the original footprint. I'm going to turn it into the Carmel Supreme house. Unsanctioned. Look at all the LED.
This is understated. This is quiet luxury for sure. This is loud opulence. What do you do with all the cans in your... No. Funny enough, actually, we never throw away any cans. Oh, you do a thing called fan cans. What do you want with you? You sign it. If you're watching right now, you can win a fan can from Dan. Yeah. Very, very fun. Anyway,
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The co-working market is roaring back to life. Yeah, a new breed of co-working is fueling an industry comeback. The pandemic and the office market's collapse slammed the shared workspace business. Now, growing economic uncertainty and the rise of AI are compelling firms once again to embrace flexibility when selecting office space. President Trump's proposal to restrict Wall Street landlords from buying existing homes sent chills through the institutional investor community.
Wait, what? How is everything a political story? It's ridiculous. Are you a co-working guy? I've never been into that whole world. Co-working... Yeah. Never was that into it except like remember that random crossover where I worked out of the Soylent office. Oh yeah. It turned into a co-working space basically. They bought way too much real estate. Yeah. They just had way too much space. It was a really cool concept. They just said like, 'Hey, we're going to make like a kind of a startup zone.'
The problem with co-working spaces is it's fine if you get an office and then you can go there and close the door and lock in and it's just like a place with Wi-Fi and it's like your own little monk mode zone. But if you just have a floating desk, a lot of the co-working spaces will wind up with just a lot of people that are there to network and chat and talk. You're off and you just get nothing done and they can quickly turn into like, oh, there's beer on tap. I'm just socializing. I'm not actually grinding. And so it can be difficult, but when done correctly I'm sure you can have a good time and who knows, maybe it's coming roaring back.
Let me tell you about Turbopuffer, serverless vector and full-text search built from first principles on object storage, fast, 10x cheaper, and extremely scalable. And I want to go through this $140 million mansion in Saint-Tropez on the French Riviera, a waterfront estate that overlooks the Mediterranean. Look at this.
In an exclusive enclave in one of the world's most famous playgrounds for the wealthy, a waterfront estate on the Mediterranean Sea is seeking well over 100 million. Art collector Andrea Priest is asking €150 million euros or almost $140 million USD for a roughly 2-acre property located in Les Parcs of Saint-Tropez, the most exclusive community there. The coastal town on the French Riviera has long lured the rich and famous, including billionaires Ken Griffin and Bernard Arnault, who both own properties there. The Priest estate was completed in late 2025 and took about eight years to build. Wow. Thinking in decades there. Overnight success.
Priest is the founder of Priest Fine Arts, an art photography gallery in Vienna. I was just in Vienna. I don't know if I actually saw this when I was walking around, but I'm shocked that an art photographer... We need Dylan. We need Dylan to chime in here because this might be one of those things where it's like, you know, somebody who owns an NFL... Who are they? They also own all of the gas, every chemical, every stone. They own all the stones in the world. They own all the minerals in the ground and then they started a gallery that does $2 million a year in sales. And now they've rebranded. It loses two billion dollars a year.
The gated estate includes a roughly 10,000 square foot main house, a pool house, and a 90-foot swimming pool. A partially completed one-bedroom studio was intended for a security guard. They couldn't even finish it. What? But the new owner said they would use it as they wish. I guess leaving it unfinished means you can choose what you want to do and you can still move in and then just polish that up. The property includes a private tennis court, which is rare over there. Attached to the main house is roughly 8,600 square feet of terrace space. Wow.
Inside, all of its eight bedrooms have views of the Mediterranean. Amenities include a chef's kitchen, a secondary kitchen designed to handle large-scale culinary preparations and events with a dumbwaiter that transports items to the main kitchen area. There's also a spa with a steam sauna and a mosaic hammam. I don't know what that is. As well as a gym with around $200,000 worth of equipment. I wonder if they have any 45-pound plates in there. They skipped on.
It is funny hearing that in the context of the $140 million home because it's like you don't have to go that far in your house to end up with like a couple hundred grand here and there. It's like for 200 grand you can have the... just the bathtub is probably $200,000.
There's 165 residences in this community which are rarely available for purchase. Many homes in the community are sold privately rather than listed for sale. Ken Griffin in 2024 spent more than $90 million on an estate on the Tahiti beach, which is a roughly 7-minute drive from this new house that hit the market. Lambda. Lambda is the super intelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. I can't wait anymore. John, let's bring him in.
Let's bring in our first guest. We have our first guest, Jim Lanzone. He's the CEO of Yahoo. And he's live in the TVP Ultradome. We had breakfast with him earlier today. Had a great chat. We're very excited to have you live in the studio. Welcome to the show. How are you doing?
I'm doing great. You guys got me, you know, where I have to wear the green blazer. You said it's hard to get you in any blazer, but the green one even. You know, we're going to be following up after the show. That's fantastic. Anyway, introduce yourself since this is your first time on the show. Let everyone know who you are, what you do.
Jim Lanzone, CEO of Yahoo, which I've been doing now a little bit over four years. Everybody knows Yahoo is the 30-year-old, you know, original guide to the internet, but we are the turnaround team who've been kind of putting it back on the map.
Yeah. I want to get into the turnaround, but first, let's back up and start with a little bit of your career. What led you to CEO of Yahoo?
I don't know how it happened, but I kind of became the turnaround guy. I had a startup in the 90s. Yeah. Consumer startup. We wound up selling that to Ask Jeeves. I joined there as the head of product and became CEO. That was the first turnaround in search. I did my first 10 or 12 years in search. We sold that to IAC and I worked for Barry Diller then there for a few years.
Left to do a startup again that the investors were Bill Gurley from Benchmark, Jeff Yang at Redpoint. And we wound up selling that was a video search engine for like the original first few years of TV and video on the internet. We sold that to CBS where I joined as the head of digital. Yeah. And that wound up turning into an 8-year adventure. We founded what was called CBS All Access at the time. It's now called Paramount Plus. That was our baby. No way. Yep. I'm user number one in the logs for that thing.
We wound up eventually having our own show, Star Trek. We brought that back. That was a really fun time period. Okay. Or do you still get a free account? You get to watch UFC for free now. I don't know if they're still tracking. Don't hope they're not listening. But I finally... get him to pay. I finally lost my 20-year comp to Wall Street Journal. I just logged on one day and it was gone. So I don't want the Paramount guys to hear. I won't be able to watch... 20-year comp. Watch Land Man.
But yeah, my kind of COVID hallucination was I became the CEO of Tinder for about a year and then left to take the Yahoo job. Yeah. And was that through IAC as well? Okay. Yeah. Joey was the CEO of IAC, was the chairman at Match.
How much had you interacted with Yahoo throughout your career, like on more of the business side obviously as a...
Ton. I've known every executive team, competed against them at almost every company. So back, you know, for me the heart of it was like the Jeff Weiner, Brad Garlinghouse era in the 2000s. And then at CBS Interactive, we were competing with them in every single vertical. So that new team that came in, pre-sale to Verizon, you know, I knew them very well too, and definitely competed head-to-head in most categories.
Yeah. What was the inciting element for the Ask Jeeves turnaround? Like when does a company decide and what are the key moments to be like, okay, we're doing a turnaround now?
I believe I was announced as becoming the head of product on September 11th. Wow. So that was kind of rolled into it being a turnaround. The stock had gotten down to I think 79 cents a share. I think it was pretty close to being delisted. We got a new CEO of the company who brought me in. And look, what I've learned about all turnarounds in consumer internet, which is kind of all I'm qualified to talk about and all I've done, is you have to be able to start with a lot of traffic.
And if you have that and products that have seen better days, a brand that's seen better days, and an organization that needs to be turned around, you can work with that, right? The hardest thing to get on the consumer internet is actual traffic. Sure. And some of these things like Ask Jeeves at the time, you know, we really were the only major search engine to survive the Google era. Yeah. From all the ones that were originally there like Excite and Lycos and all those, you know, we made it through and the formula was way better product, reduce down the number of things you're doing, get a way better team, and have at it. And we totally grew every year.
We also were the first to switch to Google AdWords at the time. So I've been partners with Google at every company too, going back to 2002. That was and you could see it as we were testing it that switching from Overture to Google was going to make us profitable. Wow. And you know, you see it in the logs and so we made that switch and we were off.
Interesting. What do you think about the importance of traffic, the importance of users relative to the importance of ARR or revenue that might not be sticky? Like we see a lot of startups that they grow very quickly, they ramp, and then there's a question of like churn. Are people going to keep paying? And I'm wondering if there's potential like over-rotation to, oh wow, the ARR numbers are really good, but there's not actually that big of a community. So this doesn't have the staying power of something that just is like installed broadly amongst humanity.
I mean we see it at every... I look with enterprise it's a little different, find a way to goose your metrics and get there. Yeah. So that's the right question on consumer. Going to the beginning of time to the first internet boom when it crashed. You know there were so many companies that probably were even good ideas but didn't really have real traffic. They were buying ads and all that. That's always been the case.
Also there just wasn't enough users on the internet to sustain maybe businesses at that time. Well things just kind of got out of hand. Yeah.
In a lot of ways at that time, but you know, even through the 2010s and everything else, you've always seen companies just get... it's almost like the round-tripping that's happening now where you would get funded and you just buy a jackload of traffic and that's different than having truly sustainable traffic. And Yahoo, even 30 years in, 75% of our traffic today is direct, right? We still have SEO. We still do performance marketing and brand marketing, but the vast majority of our users are direct. Vast majority of our ad impressions are to people who are, you know, logged in. So, yeah, there is a difference.
Talk about what was going on with Yahoo like prior to when you were brought in, when you were brought in, why you took the job. Obviously, if you're a turnaround guy, you're going to take the job where you think you can actually have an impact and be successful. But walk us through kind of that moment.
Yeah, this was the white whale for me. Like I knew I think I'm on record in like 2010 saying this would be the turnaround I want to get my hands on. Let me get my hands. I have a lot of empathy for what those teams went through because Yahoo had probably the worst business mistake in the history of the internet in 2000 when they gave search to Google. The history gets written as they lost search to Google but they never did search. They first outsourced to AltaVista, then to Inktomi, and then in June of 2000, after the crash, to save money and get a better deal, they outsourced it to Google, which was almost more enterprise at the time. Yeah.
And to get a better price, they gave Google a link with the Google logo on every search results page. And so I think Larry and Sergey just sat there watching the traffic migrate over. But it was done for the right reasons. They were the guide to the internet. They were a portal. And there was no business model in search for another two years. They let the fox in the hen house. And they were public. So they made the right call giving their users the best search engine, but it cost them owning it. So I think the brand has taken some lumps over the years for making some vast mistake. But truly at the time it was kind of the right call.
In the 2000s they tried to make up for that. They tried to get into social and video and they built a big thing down here and did a lot of entertainment. So you know, just and they were public so it was really hard all the way until they sold to Verizon in 2016-17 to be a standalone public company in the face of all that. So then you get four or five years inside of Verizon which is a telecom company and they had bought it with some vision of some data play. But then that CEO left and a new CEO came in who wasn't really responsible for that deal. What are we doing here? And so it was just hard I think to get real strategic alignment around what always should have been the mission which was the original mission to be the guide to the internet.
And through all of that, Yahoo is still number one or number two in all these important categories like finance and sports and news, email, and even number three in search. And where they were still strong had been where they had never stopped following the original mission. So that we kind of just tried to move it back to that.
Yeah. What I want to know more about the acquisitions that happened before the surface area of the company? I know that there were a lot of digital ad acquisitions, but did the previous team buy a lot of stuff in social and video and make a lot of different bets or was there a lot of building internally that was happening around new products that are maybe less of a focus now?
I think especially in Jeff's era, they were doing a lot of very interesting product development. Okay. And then also obviously in Marissa's era, she's a product person and they did that too. They also missed on a few companies, right? Google and Facebook and you know I think the price just got out of hand for who they were at the time. And then both companies because we got spun out not just with Yahoo. It was called Yahoo but we also at AOL which had been bought by Verizon. So those two companies combined have bought maybe 40 adtech companies or things in that space along with a lot of other things like Flickr over the years and Tumblr that you know all of which wind up being divested over time. We came in, we divested a lot more of them and just tried to get the focus of the company down to where we thought we could win.
Which are the core consumer products and then in the adtech space we kept the DSP, the demand side platform, because it turns out that one of the biggest strengths of Yahoo is the data. Not very many companies have this first-party relationship with hundreds of millions of users. Some companies do, but not a lot. Yeah. And one thing you can do with that is build things for your own properties, but another is that you can use that to help target off of Yahoo. And so that's why our DSP has been growing as well.
Yeah. What at that initial spin out like how integrated was AOL and were AOL and Yahoo or is it like same offices even? It's um because they split now but how how how...
The headquarters for AOL was still in Washington DC. Okay. But our office in New York City is their old office which is where Tim Armstrong's office was when he was running the company. Okay. So we still have a good contingent there. Sure. But the company was just kind of in a lot of different places. Offices here. They're just kind of all over. Now AOL is in Italy. America Online. America Online is in Italy. Italy. True. And we're still working arm-in-arm with them because we were pretty tied together. It was called Verizon Media. And so we're having to unwind a bunch of that.
So what's the core of the business today? And like as you go down the long tail, there are other products, finance, sports, etc. that are still driving growth and you're continuing to invest in and then there's stuff that you're not doing, but what's the surface area of Yahoo?
I'd say that look, the biggest businesses are search and mail. And I call mail the spine of the book for what kind of brings the most users back every day. But we get there, we get to our size. We're usually top, we are top five every month. We had 250 million users in the US, 700 million globally. But it's not true. We get the gong. That was not a gong. Watch out. We got a new... We got a new... Oh, look at that. We're hitting it for a top five. Well, I'll tell you the chos I brought along is a very small gong alternative at the right moment. What's this? I got to open it up. That is the Yahoo. Yodo button. So you smack that. It's such an iconic sound which just still happens at 49er games after touchdown. The whole crowd. It kind of let me know that the brand had a chance to come back because the whole crowd... We added the purple here for you too. Thank you. That's good. We'll add this to the board. I'll keep it here for... Yeah.
So I think everybody, our user base gets there in every different way. So some people we are their fantasy platform and have been for many years. They love Yahoo Sports and we have the number one NBA podcast. We have the number one combat sports podcast. Which one is that? Ariel Helwani Uncrowned. Oh, I didn't know that. We have Ross Dinger just won sports writer of the year. So we have a lot of ways in. Does that mean you have a marketing partnership with them where they're advertising Yahoo or you're doing distribution of their show? They're signed with us and Ariel's studio is in our offices in New York and KC does it off campus most of the time but Yahoo Finance the number one way that people you know for them to increase their wealth or save money but mostly you know a lot of tracking the market.
And we also do in those businesses we're now doing 60 hours of programming a week for sports and almost that for finance but we're basically just providing analysis and context for everything that's happening out there scooping like that. That's for Shams at ESPN for well not for us.
Talk about the other things that are downstream of finance and sports. You can imagine you're doing fantasy sports then you do daily fantasy then you do sports betting or you do finance and then you have an investment platform and then you have a crypto exchange and a coin. Like what's on the table? What's off the table?
Sports betting is a sad one because seven years ago Verizon did a deal with BetMGM. Okay. That was exclusive. So we've had to be on the sidelines this entire time. That finally ends at the end of this quarter. So we are out there playing the field. We did a short-term deal with Poly...
Market. Yeah. To hit markets where BitMGM isn't, but we're now moving strongly back into that.
Okay. But yeah, smaller ones are — I mean, it's not small. News is one of our biggest sites, and our app where we bought Artifact. If you guys remember Artifact, we bought that.
Wait, from Kevin Systrom? Oh, and Kevin and Mike. Yeah. No way. We bought it about 18 months ago. Love that Yahoo News app.
Oh, that's a great — it was so close because I believe it was like pre-GPT-4 when they launched that, and you could see a glimmer of like where that was going, and it wasn't quite dialed. And I feel like now it's like — yeah, especially when you power it with more data. It's all licensed and stuff.
That's right. And it was better than what we were doing. I mean, we just admitted it. And a lot of times you'll — a company like us will buy it and then kind of force them into the Borg. Yep. We actually made the Yahoo News app their app. Sure. And just changed the logos and took their algorithms into helping us with the Yahoo homepage, which is a big news feed.
Um, but even things like weather, which we've historically been top five and used to power the Apple product, um, is still huge. We have a new GM for that who used to work at Twitter, who's been rebuilding that. And I should say every version of our products has been relaunched over the past 18 months.
Uh, we brought in an awesome team, awesome product people, shipping. Uh, we are shipping all the time, and uh, the exception until this week was search. Yeah. Which is our biggest business, but we had outsourced just to Bing since 2009. Um, but this week we launched our new entry into that space.
Interesting. And what was that process like? Did you hire an engineering team for that, or were there business considerations?
Yeah. So we, um, about a year ago we looked at AI search as something brand new. Yeah. And something our users obviously needed, but our relationship with Bing had always been indexed, you know, web search. Um, and so we really got in our minds that we had all these assets to bring to the table.
We had the traffic, we had the way to distribute it, but also we just have all this proprietary data. We see 18 trillion user events per year at Yahoo. We have over 500 million user profiles. We have a billion entities that we track. So we have all these, and then all the vertical data from all of our verticals.
You're seeing valuations from companies like Perplexity, which have, you know, a tiny fraction of the user base, and thinking, hey, maybe there's an opportunity here.
Well, that is definitely one part of it. I won't put the words. Another is really the thought that we had the ability to bring a differentiated product to that market. Yeah. We're not going to be an LLM ourselves. We're not going to build that. But if you take our data, you marry it with an LLM — and we're partnered with Claude on that, and with Bing on grounding — then you could have a really unique product. So that's what launched on Tuesday. That's called Yahoo Scout. Yep.
Um, but to your question about bringing that in, we actually, over last summer, we bought a company called Symbol, which was run by Eric Fang, who's a very well-known product and CTO in the valley. Yeah. Um, he had a company that he sold to us and came in. We put him in charge of all of Search. Yeah. So his team set about building Yahoo Scout. Uh, and we're, you know, so that was the beta launch on Tuesday.
And what's the — yeah, yeah, talk about beta launch. The decision to roll it out to parts of the user base incrementally, hide it behind a fold or a button. Google's been pretty aggressive about just throwing AI search overviews right in the search results for what feels like 100% of their user base pretty quickly. How do you think about not jarring the user base but actually shifting the behavior in a way that's not disruptive?
Um, well, I think part of that is how we designed the product, which is it's an AI answer engine. It is way more similar to search than a pure chatbot. And how we've launched it — it's available to everybody. So at either scout.com or scout.yahoo.com, it's available to everybody in the US. So it is in beta more as a hedge to say this is just our starting point. We have a lot more work to do here, and our roadmap is very aggressive.
But the way that we've thought about it is, given that we have millions of people using search every month, it's way more congruent with web search. It is conversational the way an AI search engine would be and a chatbot would be, but a little more straightforward. It's not kind of getting to your inner feelings and having that kind of a conversation. It is conversational, but the format is — besides being very Yahoo with a friendly personality, which I think is very different.
It is. There you go. That's what that was for. It is all very visual in how we lay things out, and I'd say just very different that way. Um, it is also, you know, really dipping into all of our unique data to bring in just very original answers.
The other thing that we've done besides make it similar to search in a UI perspective is one of our core values of this product was taking care of the open web. Yeah. All the answers in AI search come from the open web. The first generation, I think, were very research almost based. They look like they were built by research labs. They have citations that didn't send traffic back to where they got that information. What you'll see in Scout is blue highlights all through the text, which are all links back to the original sources of information.
Um, so we really want to do our part to send traffic downstream and maybe set the pace for the way other people should think about it. And then downstream from that will be — we actually think search advertising does not need to be abandoned in this new AI search era. That there's a way to kind of bring those marketplaces along if you do the interface differently. Um, and so we actually want to get to that as well.
Yeah, we were talking to Matthew Prince of Cloudflare about how much more of the open web that Google sees because no one wants to block the Google bot, but they maybe are saying, 'Ah, I'll update my robots.txt to not include OpenAI.' Um, do you have an advantage because no one is blocking Yahoo, and then you can surface those in AI search results?
Well, we're not crawling. So we do that with Bing. With Bing. Okay. But people aren't blocking that either, right? Ours is with our own — you know, again, we have had thousands of relationships with content creators, years of our own. So we have a lot of other data that comes in that way. I would say that the AI universe has not really respected our content that way over time. You'll see a lot of Yahoo links on a lot of them. Yeah. But we think the best way we fight that is with making a badass product on our own.
Focusing on yourself. I mean, it's, you know, certainly been a number of companies that have just said like we're going to dedicate a huge amount of resources and energy into fighting this, and you guys have basically said we're just going to make great products.
I think that's the right approach. I mean, I think it's very hard to block anyway. Um, and so, yeah, I mean, I think that generally speaking, the way that these products were initially created clearly did publishers no favors. And I think the stat is that only 20% of publishers believe they can make a sufficient living or a substantial amount of revenue by licensing their content to AI providers. Yeah. So we have to take care of their businesses if we can. And again, we might not get this right with this first generation. Um, but it's one of the things that we are dedicated to figuring out.
What's the user base like these days?
Yeah, it's — we touch 90% of the internet in the US. So it's — and again, the average user uses two or more of our properties per month. Because I'm not trying to get yodels here. You're baiting. You're baiting. I'm not yodel baiting. Yahoo. Um, there we go. We're going to regret getting that seat. Your viewers will regret it again.
Um, yeah, so the user base really cuts across demographics. It's not, you know, your uncle using Yahoo Mail. We're the second largest personal email. We don't compete in enterprise mail. We only compete in personal. Um, but we're the only major other platform, and it's all new, so people tend to really like it. Um, but half of our user base is actually millennial and Gen Z, and I think that probably surprises some people.
Yeah, for sure. Uh, what's the top of funnel look like? What's the user journey to get a Gen Z user on a Yahoo Mail account?
Um, well, I'd say it starts with whatever property they prefer. So that may be finance or sports, it may be news, it may be, you know, one of our other properties. Um, we also — I would say we have not put a ton towards brand. We even did — we did our first Super Bowl ad last year in 23 years. It was with Bill Murray. 23 years. Yeah. But it was only 15 seconds long, and we only bought it locally. So we were being like super cheap about it. Um, and then it led you to this online exchange with Bill Murray where he emailed you back and forth and sent you other videos.
Um, but we don't have the biggest budget yet. Um, and we are owned by private equity, so we're not, you know, we're not overdoing it on that, and margins do matter. Um, but we have a really kick-ass social media team. We do do online ads. We actually launched a — there's a thing called Yahoo Games, which people — similar to like New York Times or LinkedIn, they have games, Reddit, they all have games. We have games. We launched one with blackjack — Candy Crush. Yes, we do. Yes, we do. We launched one with Candy Crush yesterday called Crushable, and the ad is hilarious. It's on YouTube, and it has Frankie from, you know, Malcolm in the Middle. You guys even remember Malcolm?
I do remember Malcolm in the Middle. Do you? Uh, he's not much of a TV show, but he knows. He knows I wouldn't know. Yeah.
So we've been trying — we try to be very creative and a little looser with the brand than you would expect.
Is there an unexpected intergenerational element where if a parent is using Yahoo product — We're a Yahoo family. Yeah. I mean, it sounds ridiculous, but no — exist. Do the children revolt? Win every Zoomer?
Well, so here's the thing. So I think that there's a campaign — you know, there's nothing I love more than advertising and marketing, and like I think there's a campaign that you could run to get not just, you know, half your — you know, basically like a bunch of Gen Z millennials are using Yahoo Mail and all that stuff, but I think with the right influencer campaign — I look at what JPM has done with the Sapphire Reserve card, specifically making Yahoo like the backbone of Hailey Bieber's life, stuff like that. I think you're just like one or two great campaigns away from it being like — you know, I've run on Gmail, you know, basically my entire life, but I think there's a possibility to always turn like the next generation hard over to just going back to the glory of Yahoo.
Well, we'll know we hit it if Tyler starts using it. Yeah, that's going to be the threshold. But um, we have done some of that. We launched a new fantasy game with MrBeast. We launched another new fantasy game with Liquid Death, and we did an ad with them, which is also hilarious, where a guy gets his head cut off at a bar for guillotine leagues. Sure. And that one at Cleo actually. They really did. We rode their coattails on it. But um, we're humble about the fact that like, you know, we're coming from behind with this thing. It's a vintage brand that we do need to earn people's love for.
The thing. Vintage never — the technology is not, the brand certainly is. Yeah. Yeah. But like just in terms of the consumer tech products, most people don't think of like vintage. Yeah. We talked with Alexis about this, and um — sorry, I'm blanking who Alexis — think they did. They did. Yeah, they're out in beta. And so I think there's something about like nostalgic brands and technology that hasn't been fully explored. Yeah.
Um, we — yeah, we love to tap into that. So maybe we do have a marketing, you know, position open. I know you guys are busy, but — No, John, I started after breakfast brainstorming, and unfortunately the show is way too — I will keep — I'll keep texting you ideas. Okay, good. And yodelling. Yeah, yodelling on the show.
Uh, are you seeing — what are you actually seeing in terms of AI and productivity? We've seen a lot of, you know, the MIT research reports, a lot of enterprises did demos, dropped them. At the same time, it feels like the tech is very real. You're not asleep at the wheel. You're partnering with Anthropic on stuff like — have you deployed AI tools, vibe coding? Are you seeing actual needle-moving cost reductions or performance increases? Anything you can tell us about what you're seeing from operating in your seat?
Um, I'd say yes. And I am also sensitive to the, hey, the CEO says we have to start using AI, and everybody rolls their eyes about it. Um, you know, the way we operate, we've left that to the heads of state. Um, but I would — you know, our CTO has certainly deployed it. HR has done it. Um, all of our heads of engineering who are dedicated to their brands. So there's a head of engineering for each one of those products. I, you know, look, I'd say there are certain people — I think it's pretty top-heavy, right? There are certain people who use it a lot, and there are certain people who are just really reluctant to come along for the ride. But I think over time — you know, of course I would love to see more — not to be more efficient in terms of like saving headcount, but in terms of being able to get more done with people that we have.
I'm just thinking about like there's probably a ton of different like small code changes that happen to the Yahoo Fantasy codebase in a week, and if that can just accelerate, like that's an improvement, right?
Yeah. Well, it's pretty funny though. You would probably be a little surprised — how probably would not be that surprised — how ancient some of the codebases were that we picked up. Yeah, of course. Of course. And probably a little harder in some — perfectly suited for AI agents to go through and do replatforming or cleanup or just add documentation. Like there's a million different ways. But at the same time, like you're an enterprise, it's going to have cost to that, and you have to weigh that against the benefit problem. We were not even moved to the cloud when we took over. We're in the middle of cloud migrations in every division that we have. I'm not kidding. So — well — there's a lot — the problem. You're going to move to the cloud, and then everyone's going to be on Mac minis in the future. We have to move back to on-prem. This has been Mac Mini week. There need to be a Mac Mini yodel button. It has. It has.
Uh, what — why — like why do you — turnarounds? Because I have a bunch of reasons that it makes sense. Uh, but in our industry, so many people are obsessed with newness, starting the next big thing versus working on it, start fresh. Uh, what are kind of like the unexpected joys or what's like especially motivating about it? Yeah.
Well, there's a pattern to it where if you do the turnaround, I always tell my team, we can't be brats about it and skip levels of the video game and just, you know, come out with our own invention like the iPhone or ChatGPT from scratch. We have a job to do of turning the company around. But if you do that level by level, you then earn the right to innovate. And we're in that spot here now where we got the company on really solid business footing. We did all the hard work, and starting with Yahoo Scout on Tuesday as one example, but last year relaunching every one of our brands on the product side, we got to the point where we could start innovating.
And same thing happened with CBS Interactive and CNET. It took three years, but once we did that, we launched CBS All Access in October of 2014, five years before Disney Plus. Wow. And HBO Max and some of these things, we were still early. Um, and back at Ask, we really — our team was kind of well known in the industry for being the ones that lead the charge beyond ten blue links, which is now what people are saying again, but I tell you that started 20 years ago. Uh, where we started bringing structured data into the page, um, and natural language kind of move beyond those things. And we got really well known for that, and we're growing on the back of it. So I don't look for turnarounds. In both my first two, they bought my startup. Sure. Um, in this one, Apollo was buying it, and they needed a CEO, and I was just really jumping out of my seat to go do it. So —
And how do you — what's your framework? I think like just purely from a value creation standpoint, even though turnarounds sound like in many ways so much harder than building something from scratch — you're dealing with, you know, these organizations that have been placed for a long time, codebases that you're inheriting from decades ago, dealing with cloud migration versus just starting in the cloud. But purely from a value creation standpoint, it's actually easier to grow a multi-billion dollar company 25%, 50% from an EV standpoint than it is to go from zero to, you know, billions by itself. So is that part of the — has that always been part of the appeal?
Honestly, we were — in a lot of cases it was about the journey at first, and then good things happened. So we wound up 50x-ing the Ask stock by the time we sold the very — You got to get on Patrick O'Shaughnessy's show. 50x. Hit it. Hit the gong yourself. Hit the gong yourself. 50x, 50x. There we go. 20-year-old gong. Yeah. Ooh.
Um, and you know, I think at CBS when I got there, it was after the global financial crisis, it was down to $3 a share, and I think got back to 70. Um, so if we do this right at Yahoo, um, you know, look, I mean, I think we're back to being any pre-IPO company. It would be either IPO or sale. And I think the only way we can control that is by growing the company, and growing that starts with growing the user base and our products. It's not more complicated than that.
That's an awesome mission. Thank you so much for coming by and sharing with us. Yeah, come back on again soon. I have a lot more questions, but thank you. I'm going to tell everyone about Gusto, the unified platform for payroll, benefits, and HR built to evolve with modern small and medium-sized businesses. And I'll also tell you about Figma. Figma Make isn't your average vibe coding tool. It lives in Figma, so outputs look good, feel real, and stay connected to how teams build, create codeback prototypes and apps fast. And without further ado, we have Tyler Cowen returning to the show. He's in the radio room. Now he's in the TV Ultra. How are you doing, Tyler? Good to see you.
Happy to be back. Good to see you here in Virginia. Snowed in.
Oh, are you actually snowed in? I've seen a lot of videos. I don't know exactly how bad it is. How long do you expect to be snowed in?
Well, we can get out to some places. Getting around Washington's terrible. Our driveway is fine now, but normal civilization has not yet resumed.
Oh, you like — do you like being — do you kind of like being snowed in?
Well, I'm doing the show. Otherwise, I'd be out and about. So we got to roof for more snow.
We got to roof for more snow. Uh oh. I'm glad the internet's stable. I don't know if you're on Starlink satellite or something, but it seems like we have a strong connection. Uh, anyway, I'd love to get your reaction to the new Fed chair pick. How much do you know? How much did you see this coming? Uh, any initial reactions? And I have a bunch of questions about the mechanics of what might be coming down the pipe.
It's not surprising at all that Kevin Warsh was picked. It's a very difficult pick to judge. So usually you think, what does this Fed chair believe, and is it in accord with what I believe? I think what Kevin Warsh believes is that he should be chair of the Fed. So he's very good at politics. First he's for tight money. Now with Trump as president, he's for easy money. Like that's fine. It doesn't bother me. The real question is what's the psychological and power dynamic between that person and Trump? How will he do? I'm not sure. But the fact that he's connected to the very wealthy Lauder family fortune to me says he at least has the freedom to tell Trump to take a hike. It could work out okay. Uh, it's not the end of the world.
Well, he's smart enough to know exactly what he's getting into, right? I mean, he knows that if he does things that Trump doesn't like and he becomes the enemy of Trump, then uh, he's going to either have to be some type of martyr, uh, or, you know, it's not exactly fun to be on the receiving end.
It's an impossible job for anyone at the current moment, but I think it'll be okay. It's no reason to panic. That's good. Stocks down a bit, dollar up a bit, big deal. Let's move on. You know, we can all move on and see how it's going to go.
That's good. Zooming out. Uh, what have you been reading into the massive run-up in precious metals?
Well, the dollar with one class of investors has lost a lot of safe haven status, but keep in mind equities have mostly done okay over the same time horizon. So to say that, you know, the US financial position has collapsed simply isn't true. But those are markets, you know, they're not super large, and some money flows in or flows out. You want something to buy. You know, Bitcoin — we've realized it's not a hedge. Where else do you go? The rest of the world seems a bit crazy. Europe is still slow growth. You pick the precious metals. They're like the new meme stocks. Okay. Uh, that's fine. I don't think it has major significance, but look, it's not good news, right? Mhm.
What do you think about Warsh's idea of lower interest rates but also quantitative tightening? How realistic is that? What are the downstream implications of that? Does that feel like something that can actually result in a more smoother yield curve? I guess just my fear is that you bring down the interest rate, but during quantitative tightening, mortgage rates actually go up, and we see the 10-year yield increase.
Yeah. And the question is, will Warsh matter at all? He has his own board, which I think is not per se loyal to him. He doesn't have too many sticks or carrots. He has to deal with Trump. Congress will probably get more active. Democrats will win the House. More importantly, they may even win the Senate or at least be close to that. So he's juggling all balls just politically to stay alive. So what he thinks about X, Y, and Z, I wouldn't put a whole lot of weight in. But as I said last time on the show, we're in this new era of fiscal dominance. It's the fiscal variables that matter. US central bank becomes a bit of a puppet to those, and that's the job Warsh has.
So what does that mean for how we should be thinking about the size of the Fed's balance sheet? He's sort of lamented the fact that it's grown 10x over his career at the Fed. Uh, is 7 trillion inherently too much? Is there a logical chain of reasoning to justify quantitative tightening or easing? How should we think about the correct size of the Fed's balance sheet?
If I were running the Fed, I would enjoy being in charge of the biggest hedge fund in the world, right? So it's an easy target when you're not running the Fed. But in fact, it's done for various political reasons, whether we like them or not. And the fact that in the past he criticized that, I don't think it means much. I think he'll do what's politically expedient. Yeah, it's okay. Uh, yes.
How do you — how do you — do you think that — like how do you view Bessent and Warsh given their kind of shared history? Yeah. Uh, kind of — Dr. Miller and Miller.
I don't know. I think Congress will become much more important again. So that's what I really have my eye on when thinking about the macro situation — that Trump's declining in popularity, the next election is approaching, Democrats will gain further ground, and that's where the action will be — is Congress actually speaking up a lot more. Specifically, it's like, you know, you can do okay with them in those jobs. Again, I'm not at all panicked or unhappy, but I don't think they're going to be driving positive change either.
Yeah. Can you dig in a little bit more on the foreign buyers of treasuries? Uh, it feels like China and Japan are pulling back. We heard sort of some jockeying around Denmark over Greenland. Uh, is there a meaningful shift in foreign participation in the Treasury market?
I doubt it. Keep in mind you can buy treasuries directly or indirectly. Sure. So everyone buys treasuries. Instead of buying treasuries, you can buy institutions that buy treasuries. And it's like Modigliani-Miller theorem, same final effect. There's nowhere else to go. The real problem would be if there were a rival asset. There's not. The fact that gold and silver went crazy is kind of proof that there isn't. Like, where else can I go? Well, I'll buy some silver. Yeah, it's a sign actually that there's nowhere else to go besides the dollar.
Yes. There was someone that was jokingly posting, sell everything. Sell your house, sell your stock, sell your bonds, sell your dollars. And of course, the joke is, well, what are you going to buy then? You have to put the money somewhere. It does feel like there's a demand for a store of value, and that's maybe what's driving the gold trade — that Bitcoin never really took up the mantle of the true store of value. Do you buy that? That there's more people that are thinking about a more durable store of value, and that's what's driving all of this?
I do. People will keep on looking. They look at different things, but if you want something that does not positively covary with treasuries, I'll just say good luck. Let me — you know, send me an email when you find it. So it turned out Bitcoin is, you know, super positively covarying with a lot of other US assets, which again is good news for the US. It may not be good news for those seeking to hedge. I worry the world is just becoming a lot more correlated. Yeah, that's my big worry — that if things ever did go down the drain, there's nowhere to hide.
Yeah. So Tether, Tether, you know, buying a bunch of gold. Any reactions to that? Is that just, you know, good — you know, is that signaling? Or is there something more significant there? Gold-backed stablecoins essentially.
Well, brilliant investing move, but if I'm the people regulating stablecoin institutions, I'm getting real nervous very quickly. And whether they will be part of that regulatory network, we'll see. But I think this is them a bit thumbing their nose at it and saying, 'Well, we're just going to invest in what we want to invest in, and we're not going to be fully transparent, and you know, you can take your risks if you want.' But I think that's the importance of it.
Yeah. Uh, we were reading a 2010 Wall Street Journal op-ed from Warsh about his view for getting out of the economic malaise that followed the global financial crisis. And he was taking a very political position advocating for deregulation, clearer tax codes, more incentivizing of long-term growth investing. Do you think that that's the role of the Fed chair? Is that something he'll back off of, or does he even have the ability to apply any pressure there? It feels like going back to your point about like maybe he doesn't matter at all, but how do you think about his voice as someone in favor of like, you know, more aggressive growth and deregulation and all these other political ideas?
Well, what I'd like him to do is be a voice for proper use of AI in the financial system, which does relate directly to the Fed's credential and supervision functions. Mhm. A bunch of central bankers, Mark Carney included, made the mistake of pushing like green energy as the central bank thing. Yeah, I'm all for green energy, but central banks lost political capital as a result of doing that. It was a mistake. So I hope he interprets his mandate pretty narrowly and talks about one or two other things that really matter. Picks the priority. No surprise. I think it's AI. Maybe you even agree with me.
Yeah, I agree with you that AI is very important. I'm struggling to understand the interaction and what the Fed could actually do. Can you unpack a little bit of that more?
As financial institutions use more advanced AI — of course, there's some use of AI already. Uh, what new kinds of systemic risk does that create? What new kinds of oversight functions does the Fed need? Who or what does the Fed need on staff? How should the Fed use AI? All big questions. We haven't made a lot of progress. I think we need greater awareness that we need to address them. Warsh can do that. Uh, it's kind of a win-win for him. If something goes wrong, he can say, 'Wow, we were working on this.' If something doesn't go wrong, uh, it seems fine. He can claim credit for nothing going wrong.
Okay. I have two theories. I think one you'll probably think is less important, but maybe the other one you'll agree with. Um, should the Fed be worried about a bubble, uh, you know, forming in AI, uh, massive over-leverage, debt flooding the system, uh, hyperscalers drawing down all their cash flow going into debt, and then a potential financial collapse? Like, should they be pattern-matching to the global financial crisis and sort of adopt a more ready-to-react position? Is that the role of the Fed in AI at all, or is that something that they should just be purely reactionary about?
Well, I'm more optimistic than that, but the Fed absolutely should be paying attention. Okay. I don't know that there's very much they can do in advance. Yeah. It's so connected to the real economy. Yeah. The standard tools — they're actually pretty well practiced with. Whether there's something else they need to consider — again, you could have people study it. Yeah. But I would rather them be proactive than, you know, responding ex post.
Yep. And then on the employment side, you have Dario Amodei talking about how advanced AI might create 10, 15, 20% unemployment. Is that something that the Fed should be thinking about or taking seriously or creating plans around?
Well, it's another claim I definitely disagree with. But if the question is just should the Fed worry about this, the answer is yes. Yes. So yeah, worry about everything. That's your job. Worry about everything. That's — worry about everything, but don't black pill maybe. Yeah. Yeah.
Can you unpack the unemployment thesis that you're wrestling with right now, or maybe very confident about actually — why AI and strong AI and advanced AI in particular won't cause unemployment to spike? You had 10% unemployment before during COVID and during the Volcker period — like it does happen. Uh, why is this time different?
Well, if you close all the stores, you're going to get high unemployment. If you have a disinflationary shock, you're going to get high unemployment. But if you have sectoral shifts across jobs, you might have temporarily somewhat higher unemployment, and I think we will. But there'll be so many new companies coming out of AI. There'll be so much demand for more energy, an incredible number of jobs in the energy sector. Just we'll need a lot more government lawyers to write laws for AI. There'll be more leisure time, more travel, more entertainment. It will over time be a very radical shift in what people do with their lives. And we will have these transitional periods where unemployment is somewhat higher. But it is not personally for me a big worry. Even though, as I said, Fed needs to worry about everything.
What about for students if they're doing, you know, a four-year undergraduate degree in something that's somewhat specific, and then by the time they graduate, the whole nature of that job and that role has shifted, and they're not prepared? Are you worried that if there is a slightly higher unemployment rate, it would disproportionately affect students?
That's already happening. You should learn how to work with AI. You should make your expectations more flexible. Not everyone who wanted to be a consulting partner and earn, you know, $1.4 million a year will have that option. Maybe you'll have to go work in the energy sector and move to Houston where it's hot, and you'll be paid 300k a year instead. Uh, no crocodile tears from me, but I think a lot of that's going to happen, and many people will hate it.
Yeah. Uh, how do you think about the legacy of Jerome Powell? How do you think he'll be remembered?
I thought he was a good pick. He was very good at dealing with Congress, which is important, but he will be remembered for 8.9% inflation, and that's unfortunate. He is partly at fault for that, but mainly the fiscal authority and Putin are much more at fault than he was. So I think he will be seen as a transitional figure running into the era where the Fed is not that independent anymore.
If he got a do-over, what would he do differently?
I think he would monitor M2 much more closely and not have it increased by, you know, 40% over that what two-year period. Yeah. And the rate of price inflation instead of 8.9% might have been 7.9%. Yeah, that would have been better. Yeah. But again, not a huge difference.
But would that have been raising interest rates earlier or engaging in quantitative tightening?
Whatever, you know, forward guidance — just not putting pedal to the metal, as they say. Yeah. Is it? Yeah. Metal to the metal. Forgive me. Uh, expansionary. Don't be expansionary. Don't be expansionary.
What were some comments yesterday from Trump saying that he really doesn't want housing prices to go down? He wants to keep housing prices high. How do you look at this sort of generational rift between older people that own their homes and the majority of their net worth, and they've sort of — in their mind they're worth a certain amount because of whatever their house is worth, versus the younger generation that, you know, wants housing supply to expand and prices to come down?
It's amazing to me how Trump can be the president who both is the biggest liar of any president and the one who tells the truth the most. And this is Trump telling the truth. Most politicians think that. Few say it. It's not a change in regime. Most home prices will stay high. And Trump's just making it clear. So I guess you could say kudos to him. I don't agree with the policy decision. I'm a big YIMBY person myself, but I have never thought we'll succeed in getting that much YIMBY through. And this is why.
Is monetarism a dead philosophy?
It's dead at the moment. It will come back once we start monetizing more of the debt. So there's a resurrection pending.
Uh, switching gears, what's been your reaction to Claudebot, which converted to Multibot, which converted to OpenClaw — all — or just Claw code in general? Have you used any of these command-line terminal interfaces for agents or the AI personal agent, something not in a web browser?
I'm still afraid of them. Yeah. Now, I know there were safeguards, but you really need to know what you're doing at a level where I do not. The Multibot tweets I'm reading, and you go to the site, you read the comments from the bots. They are insane. Yeah. This is better than a movie. Like, who wrote this plot? I've upped my probability that we're all living in a simulation. So quite a fantastic development. Well, yeah. So keep clicking on those tweets to get more in my feed.
Yeah, you're talking about Multibot, which is effectively like a Reddit for a bunch of different bots to participate in. Okay, so the crazy thing is with that plus Genie 3 launching yesterday — I don't know if you've played around with that — those two things happening in the same 24-hour period really increases the simulation likelihood. Uh, I just decided on the fly that we're going to get you a Mac Mini. Our producers will reach out and send one to you. So you can set up a fresh device and you can play around with it without worrying about, you know, exposing your personal information to prompt injections. Yeah. Uh, what were — do you have any thoughts on Dario's recent essay, 'The Adolescence of Technology'?
It's very long. It's super high IQ. It's very thoughtful. But there's too much in it. And I think there should be a single clearer message that people in Washington will read. And you can disagree as to what that message should be, but I think that's my impression.
Yeah. With a lot of Dario's recent messaging, I've seen he's making the case for, you know, a problem coming down the pipeline, but it feels like the solution — he's not fully proposing a solution to the problem that he's proposing or he's identifying. He's making a convincing case, an increasingly convincing case that there might be a problem coming down the pipe, but he hasn't really stepped up and wrapped the solution in a catchphrase like UBI that Andrew Yang took up years ago and was picked up by some of the AI folks who were worried about job displacement specifically. Um, I don't know.
The argument for it is that he wrote it for Claude, you know, wrote it for the AIs. They'll understand it very well. They'll come up with the solution, and that's the audience. And if the rest of us are not bright enough to hold it all in our heads at once, tough luck. Yeah.
How do you think AI will change religion?
People more and more look to the AIs for wisdom, for therapy, for counseling, for warmth, for dialogue. This will extend into the sphere of religion. So why ask your priest or rabbi when the AI knows more about the Bible or whatever your question is more about the history of the Catholic Church? So I think a lot of people will do religion solo through their AIs. Over time more oracles will evolve. It'll be a kind of implicit polytheism. It will feel very weird to people from my generation. I don't think it will be so terrible. People will adapt. Some people will take comfort in this. Traditionalists will hate it. But religion changes every time there's a new technology. We see that with the printing press. This is the next stage in that evolution.
We talked to Pat Gelsinger, the former CEO of Intel, about this, and he has a project that is benchmarking all the different models on a variety of metrics around how much they understand. And one of the metrics is like how spiritual are they effectively. And his conclusion is that the models are much more atheist, I think, than he would like. And I'm wondering if you're proposing like there will be demand for more religion or more religious features within these models — like ChatGPT now has a specific health product or an image product for people that are looking to go down a —
Specific path. Do you think there'll be enough demand to shift the actual structure or the goals of these big labs, or do you think this will just happen organically?
For now, you can just do it through the prompt. Yeah. Answer this question as an educated Jewish rabbi would, right? It obeys.
Will there someday be a switch you can flick? Maybe, but same result.
Yeah. Yeah, that makes sense.
Have you spent even a minute thinking about the ways in which various Elon companies could combine and how one structure might be more efficient than the other?
It hurts my brain. I don't feel I have wisdom on that. I've never understood how we can do so many successful companies to begin with. So asking anyone but Elon is probably a mistake because we all thought it was impossible. We'll have to ask Rock.
