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Hi everyone. This is Pivot from the VOX media podcast Network. I'm Kara
swisher. And I am the first person in history of our economy to figure out a way to lose money on
crypto. Okay, we're going to get into that in a second as we have a whole section on coinbase excetera. Okay. Well, yeah, we're going to yes, we do. I know you're not paying attention. Just you're the pretty one. I've decided to W the pretty glad you realize that. Yeah. I'm the smart. You're not that pretty but you're the pretty one in this pair. I'm the smart one. You're the pretty one.
Like Daphne if it was if it was Scooby-Doo, I'll take it. Yeah. Okay definite. That's right. That's definitely you
know, we are the new that new game with our with lay our great then our that's right. And again,
oh, that's nice. That's good. All right, we got a lot to talk about there's a lot of news the news keeps the coming the
news keeps a-comin. Stop won't stop
on this week was the Johnson and Johnson covid-19 vaccine being halted by federal health officials as they investigate six us cases of severe type of blood clot associated.
The shot I'm not going to have you be dr. Galloway here because I don't think a lot of doctors think it's a good idea something a lot of others like Nate silver pain punting about medicine. I'm not going to do that. But what do you think this does for vaccine hesitancy and the brand brand vaccine Scott?
Well, look it it hurts. But that's why any media is attracted towards movement and violence in differentiation and the
Is vaccines have been such an enormous win? So far? Remember all the bullshit amongst for lack of a better term bless people who are economically secure and we're healthy who were saying this not kind of this narcissist Playbook. I'm going to wait. I'm just going to wait a little bit and see what happens and how it all plays out. And yeah, and
that is what I know. But okay. Yeah. Okay.
I heard that a lot and that has been surprised.
And gone away because my sense is this these vaccines are arguably if you actually believe in data arguably the most successful vaccines or the safest vaccines in the history of vaccines and then we have the the J&J coincidences
shot and an easier to can't manage. So it is being targeted at places that have less capable of
understanding is it's somewhere between
In one and a half a million and one in a million that have had this reaction. Yeah, and someone pointed out that when a woman takes responsibility for birth control. Yeah, which had so is on the woman. There's like a 1 in 10,000 chance. There is another blood clot. So it's like work where we're comfortable with one in 10,000 women getting a blood clot. Well when they take
responsibility about women being a
teacher but one-in-a-million with vaccines unacceptable according to Fox
News, you know, what's really interesting is that it's
You're going to have with any kind of treatment or any problems. That's it. That's just the way it's going now. And and what's interesting is though. I talked about it yesterday on Twitter live and it was astonishing to me that so many anti-vaxxers or on my we're on my live Twitter and I was like you need to shut up because I'm not going to respond to you in any way you awful people. I just was sort of like it was any any any tiny little thing in here they went for so that's my only works because there was also a poll that came out that was again fascinating.
Half of Republicans aren't going to take the vaccine half of them.
Well, I think Fox
answered 60-some percent taking the vaccine and demo Republicans are in 26 28 percent and half of Republicans are not taking
it well vaccine hesitancy has basically been a function of three groups and that is young people people of color and then hardcore Republicans. Yeah, and we made a lot of progress on the first it yeah, it's the third that is standing hard and look Life Is Life.
If is any action you take is a series of trade-offs. Yeah, leaving the house involves risks, but the trade-off is you get to go out, you know to Publix where you get to go to Chipotle, right which is wonderful which is
wonderful like the Turks and Caicos. But go
ahead. There you go. You're shoving my white privilege in my face. You can get a blood clot and Turks and Caicos.
Anyways, that's okay get a bloody mary to because there's like
Yeah from that whatever it is. I don't even know what the local Cuisine is there. I guess I'll find out.
The local Cuisine for the dog in Turks. And Caicos is going to be Zacapa and Edibles the local Cuisine that's for dinner tonight yell year and a half later Breakfast of Champions to breakfast have championed dogs anyways, but look life is mysterious every decision you make as a trade-off, you know what the best trade in the world is hmm
getting a fucking vaccine. Yeah. If just what if you do anything resembling worry, you're not worried about these things that this one, you know the stumble here, which is a
Bowl and then the that these polls showing this because you're not going to get to herd immunity unless these Republicans take the damn thing.
Well, I go into the ocean even though there's a chance because it's wonderful and I tried to take my boys in the ocean because my friend Bob Berkowitz a line to study to me that arguably the best thing you can do for kids who are struggling with anxiety or depression which is happening to a supposed about 40 percent of Americans now in covid vs vs 11% it's literally quadruple supposedly one of the
The most fantastic therapist for children, it sounds obvious but it's a genius and I started doing it with my boys is get them in nature and it sounds obvious but a lot of us don't do it with video games with bright over programming. It's easy to find a kid that other than his kind of program 58 minutes soccer practice isn't spending a ton of time in nature and I'm telling you Kara. I throw my boys and I realize I'm blessed to be able to do this. I throw my boys in the ocean and everything changes and guess what there are sharks where I am. Yeah, there is lightning where I am.
And it is a great trade and when you take a vaccine, I'd I'm pretty sure that the odds are somewhere around not getting struck by lightning not getting struck not getting eaten by a shark but getting struck by lightning while you're getting eaten by a shark. I mean, this is just the best trade. I believe in modern
medicine. We got to figure out a way we could go on tour to get Republicans to take vaccines you and I
convinced them. Well, you know you got to do you can't and I'm disappointed you got to make it you got to appeal to their Macho and you got to appeal to their
Tourism as opposed to all this bullshit where it's people seen as liberal talking about it and
well they got it the government has a whole initiative although
gesture. What do you think? I'm as usual amount of
yeah. I think I think it's almost impossible can assume that they were so stuck in this situation right now. I don't know what's going to move them out of this but anything at all will cause them to say this like, it doesn't matter if it's vaccines or whatever and there was just that appalling video of a huge white guy who's in the army of her.
Currently yelling at a very very much less small guy. I'm small African American man and in a neighborhood in South Carolina, that was just astonishing and he literally thought he it was just I was like hello not taking the vaccine guy. You know what? I mean? Like it was sort of like he this guy was just walking his neighborhood and he's like you're in the wrong neighborhood. Keep moving this it was crazy. It was this great. I just don't know how you change their minds. I honestly don't I don't know
what I don't I think some people, you know changed her mind. I think it's required as
Leadership in the Army and you
say you're taking it
in the armed services. They do that all the time. We're going into a war theater where there's a threat of gas gas attacks. Also you are
taking seen or not, but I'm just saying that's was the attitude but that was the attitude. I don't know what I don't know what to do to convince these people except they will they're hurting other people and it's the Patriotic thing to do
calling on their better Angels or data does not work frightened cohort working on that but here's here's
So dangerous about an economy booming for the shareholder class during a crisis like that this and that is if Walmart stock had gone down 70% if someone walked into Walmart if their stock has gone down 70% instead of up 70% right when someone walked into a Walmart without a mask Assange was their Liberty. They would have taste their ass your stock to drop 70% They'd be like, yeah you and your fucking Liberties. Okay, welcome to my Taser of Liberty. Yeah, but because
It's well, our stock is up. Yeah, we don't want to offend anybody. Yeah, we haven't really paid any
price. Although business isn't putting it out. There. They are on lots of things. But go. Yeah, you're right. I think I believe I
need I want to say this right now. I run a small business. I have another small business and we're going to have vaccination protocols. If you for whatever reason to want to take a vaccine, no problem. You can't come into the office. Yeah, and if you can't come into the office quite frankly, you're not going to have the same economic opportunities that the people who can come in.
Office have I respect your decision. Yeah, I get to make these decisions for the health and safety of your
coworkers. Yeah, it's going to be interesting. I've been talking to a lot of CEOs and they're very nervous to say so they're very nervous it just but you're right I would do the same thing. I'd be like
sorry Lemonade's done it. Yeah. I know. There's a lot of smaller. There's a lot of companies who are signing up
on we have lemonade guy on and talk is fantastic - you ever try the last thing the iconic West Coast theaters ArcLight Cinemas and Pacific Theaters shut down several of their locations last week just
When things are looking up for movie theaters, and actually I was all excited about F9 V F9 trailer The Fast and Furious 9 came out which looked fantastic you and I are going together. This is interesting these theaters this is that beautiful Sinha dome in Los Angeles and others. So these are these big iconic theaters that are going it's just continuing correct. Is that where we feel this is where we are
Cinerama Dome. I have a real emotional guy saw me too when my mom and dad got divorced.
Dad didn't know what to do with me. All of a sudden. He's like Okay, I accept to pay attention to this kid every other
weekend. Oh, I love a good Scott. Sad divorced kids story. Go ahead. Do you
know it was rattling at the time but having a father who was uninvolved in my life all of a sudden forced to spend every other weekend with me and think okay and plan and think what are we going to do together? Uh-huh. It was wonderful for him. I think it was wonderful for our relationship. And one of the things we used to do is we go see movies into the center and Madonna Mi saw 2001 a
Space Odyssey I saw rollerball with James Caan how to remove remember that I saw I saw Logan's Run almost
again
and it was this amazing theater and it's definitely death of an icon. The next will be man's Grauman's Chinese Theater, but they used a rent that out for a bounce huh Bullock movie theaters, their time has come and gone and they'll still be they'll still be some of them but it's just your we're going I gotta think we're going to lose. It'd be interesting to look at movie theaters versus malls. It feels kind of very sad.
He'll same you're right. It does feel like malls, you know, I covered malls for years and they were they had they had a moment. They malls had a moment and then they didn't they just didn't and now I can't even go into one if you've ever and got the pandemic was it just
I work at a movie theater in high school. I worked at the United Artists Theater in
Westwood. Yeah, that's it. And that particular one the ArcLight there are beautiful beautiful theaters. I've had I have it's great dates there. I've had great times at those theaters. It's really interesting. I but I again haven't gone in a hundred years and I didn't before the pandemic and I certainly would wait I'll do.
Though F9 got me thinking I got to get back in the theater because I want to see if nine in the theater.
There's on the nine of
us. They've done nine. They're so good every one of them really like you. Yes say nothing against Vin Diesel unless you want to have a fist fight right
now. I've got I've got absolutely no impression event. I don't know him at
all. He's the best. Yeah. Okay, let's just like that's not what this is. This is an area of holding him on the show. I well I well I gotta get those one of the top. I remember years ago at Facebook. They said Vin Diesel was their most popular.
Person, which was fascinating. Anyway. Alright, let's get into the big story. Breakdown.
This is an area that you are completely wanting to talk about. I know it's coin basis IPO the startup that allows people to buy and sell cryptocurrencies been around a long time. I remember meeting them a hundred nine years ago. It shares began trading at 381 dollars each. That's a 52% from a reference price of 250. It's settled back. It went up to above 400 then settled back in the 320s. I don't know where it is right now, but it gives the company evaluation of ninety nine point six billion dollars based on all outstanding shares made a billion.
Are of a couple people including one guy who came from Google just 18 months ago that Rivals the size of Air B&B in Facebook. Meanwhile Bitcoin continued to climb to a record 64 thousand dollars a piece ether traded as high as as mm and Dogecoin. Let me just add cryptocurrency created as a joke. Was that more than 40% Although coinbase does not trade it. There was a lot of Doge action in the Twitter
yesterday.
So, like I said, I think I called my broker and I said, all right. I'm interested in a direct listing. I don't really understand them. But I want to see if there's a pop here and I think coinbase has a lot of heat around it. So I said let's buy some on the open and we bought some at $381 it pop for a hot minute or 383. I think a pop for a hot minute to 410 like right out of the gates and then over the course of the rest of the trading day. It literally just waddled down to like 310 and then it closed at 3:30 and I got out I just
Jesus looks like a cliff as usual. I don't understand what I'm doing and I sold and I think I'm the first person in the history at least the first person to admit it in history that has lost money on cryptocurrency. It's my first crypto investment. I'm a no pointer.
So you're in and out is that
Julie and pretty much, you know, I like to buy high and sell low and so but like that beyond my beyond my poor investing the learning here the interesting thing here is a
Glistening versus a traditional IPO. Okay, and it's all about the story and what is total bullshit is the number that you just pointed out a $250 that is a meaningless. Number one reference price what they wanted to do and it said this on Yahoo, and I still go to Yahoo! Finance because I'm still on AOL and I still have an oyster phone clamp. Oh a clamp-on. Oh, sorry. I don't even get a ride. Yeah, I need to go on CompuServe and figure out what if I get a better deal. Alright anyways.
Anyways, they come out with this bullshit number that's meaningless. So they can say they can say the IPO is up 50% No wasn't Kara. This is a broken IPO the first trade. Yeah the reference price. What the fuck does that mean? No one got to buy it. It's 3 2 1 it wasn't yesterday coinbase. You're a broken IPO because the first tray the first time anyone has gone down yeste tutions or any retail investor. It closed down. I don't know. What is that 50?
10 or 20 it closed down 15 or 20% This is a broken IPO in this bullshit PR spin. Let's say the reference price was to who got to bite it 250 yesterday. No one. No, so even with a traditional IPO where all the venture capitalist wind that they aren't getting the pop You could argue that the institutional clients to do get the pop represent retail investors because of Ottawa teachers the biggest fund of funds in Canada buy stock in an IPO. It goes up 40% a third grade teacher sees her.
Earth go up because she is part of that institutional. This is
basically was 381. The price was 381
fair, right? So down to 334 the venture capitalist got to create heat and got to throw this thing on the market. They got to fling unicorn feces a tourist to the unicorn zoo and then pretend that this was a successful IPO. It was successful for the private Market investors, but the public market investors, this is a broken IPO and
To a certain extent you can say. All right, did they shouldn't have to give away free money to the clients at Goldman. But you could argue the clients that Goldman are more retail investors did well on the Airbnb by po be the direct direct listings, basically Garner more and more of the of the games to the private Market investors. Whereas a traditional
IPO on because they're not rich
enough. That's right. Where's the Goldman of the traditional? IPO gets the pop-goes to institutional investors, which you
Argue is still the same old white guys, but it there is some they do represent if you will some some retail investors do Pension funds. What have you so look this is a full
stop 250 thing was I was like, I thought it's whatever it is on Direct listings. I thought it's
whatever so fucking in we need to do better. We're proud of the progress. We've made it something that was invented by the coinbase pr people whom I guess came from Facebook. That is a lie. There is no $250
number, but let's get to the point of it. It's still were 66.
Point four million, I agree with you. I agree with you. It was a it was kind of a yeah, IPO now that doesn't mean it won't zoom up and down again, but but it's right now at 338 is sort of stick in there. It's up a little bit today, but not it keeps going down and up and down and up is one of these people don't know what to do stops. Yes 337 which is down from 381, which is that's that that's the way it is. And so Bitcoin surging and Dogecoin for whatever reason is surging maybe Ilan went doze or something like that. So what
Where do we go? What do we do from here? Because because obviously some this is a very important feature its kind of reminds me a lot of so the all the heat around sub stack and and Clubhouse there's something there but what's what is the reaction of the bank's? What do they do here? And what's
next? There's just no getting around it when you have a company that is that is worth, you know as much as traditional banks that started just a few years ago.
I think they have to pay attention. And what would the reason why I am. I think a little bit bearish on coinbase is that if you think
about us money
and one am angry, yeah to be you know what I played with my dog for 5 minutes and I'm over it. I'm over it. So all right, but if you think about the whole point of crypto is could be to kind of distill down to one word and that's dispersion or decentralization and then there's a certain amount of efficiency. The trading fees on coinbase are
Multiple higher than a place like I think it's you know swap. There's other more. There's other more efficient ways to trade crypto. It's kind of what I'll call the retail AOL on-ramp to the internet of crypto. It has been
around a while. I remember meeting with them a long time ago, but go ahead but I think the
analogy is that there right now the AOL there the on ramp into crypto their retail friendly. They have a nice interface. The question is will eventually the decentralization. We were trying to cut out the middlemen and trying to do so
centralized just going to go to more efficient means of trading so like the B&B coin or there's just other trading platforms that are more what I would call more efficient and don't charge nearly the fees. So is this sustainable but there's just no getting around it when you have a company come out at the value of yeah Wells Fargo or it dis is an enormously successful
company ratio of two hundred and four point eight, right? Yeah.
Well, at least they
E right most a lot of companies for the first time since guess what 1999 about two-thirds of the companies going public don't have a knee. They don't have earnings. So the fact that even has a multiple of earnings is Testament to the management team and the business the question is is this something is this something that's going to turn into another the ultimate exchange that just pulls away and network effects or is this AOL where it's just kind of a
isn't fair point. Yeah.
What do you think? What are your thoughts on
corn -
you know, I think it's a feature for some reason. I have a feeling it's everyone's got a copy it and it has no modes here. I don't see the mote. I don't think it's like Robin Hood seems to have like a fan base. I don't think this does you know what? I mean? Like I would just take whatever one's the cheapest like and the most secure but I guess those are the two things that would be and that and the one I could figure out how to trade it into real money. Like I know everybody thinks it's real money, you know what I mean trade it back and forth and then that's easiest to use. It was the only one around for a while. So being early.
Pioneers is always great at the same times. The planes are covered with the bodies of pioneers. That's what I say. Anyway, we'll see what happens. I'm sorry. You lost money Scott, but you
know, that's okay short term tax fraud.
Okay? Yeah. Yeah. Yeah, you know, I can't find my Bitcoin but I will someday and then I'm going to take you out to a
friend. That's right. We're going too fast and furious
9, that's right a by Vin Diesel or going to by Vin Diesel. Anyway. All right, Scott, there's time for a quick break. We'll be right back and look back on the late Bernie Madoff and
listener mail question
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Okay, Scott, we're back Bernie Madoff the Ponzi schemer behind the massive financial fraud scam died in prison this week as a reminder made of admitted to swindling thousands of clients out of billions of dollars in Investments over decades and many movies in sued more than thirteen billion dollars of an estimated 17 point seven billion dollars has been recovered from investors that put the which is a lot put into Madoff business at the time made us arrest fake account statements were telling clients.
That Holdings were 60 billion dollars. It was really quite something. It was one of those Great Wall Street moments of terrible Wall Street moment on a great one, but famous One. Let's take a look back on this story and dissect what it means for today's Financial environment. Guess who we got to do it kicking it off. We have Ultra MVP friend of pivot Andrew Ross Sorkin who interviewed Madoff in 2016.
Hey Karen Scott, it's Andrew Ross Sorkin here, you know back in 2016. I went down to North Carolina and visited Bernie Madoff in prison. I did it twice.
Weiss and I spoke to him for probably more than six hours collectively at the time. I was trying to persuade him to allow me to do the first televised interview with him in prison he agreed but unfortunately I couldn't get the prison to allow me to bring cameras inside and I'll always regret that the public never had an opportunity to see him answer for his conduct not because the answers were revelatory unto themselves. But because the public would have seen what deception looks like.
And hopefully by seeing that deception may be more skeptical about the People Who oversee their finances and make people more frankly attentive about the way they manage their own money. Bernie Madoff could be remarkably convincing and he told lots of stories but you know every time I left that prison and stood in the parking lot I would second guess at all and even to this day
I'm not sure which parts were truth. And which parts were
fiction Sorkin. Thanks to our Ken for that little insight him and Bernie Madoff. Can you imagine
that don't you on a French kiss Andrew Ross Sorkin right now, could he be any sexier? He's can you kiss a voice? Can you kiss her voice? My God if Andrea sanderlin, you know, he recorded that like seven times. It's like, how can I be sexier? How can I beat
any case let's get to the content of what he's saying right there Canadian.
That guy is Canadian since Wayne Gretzky, uh, Janet
Skills that are named Janet Wayne's wife Janet
Jones Canadian, but in
okay. Oh anyway my God, let me
just okay when you're comparing him to jail. That's Caitlin and Janet Gretzky. Yeah, she was an actress for a
she was in from the flamingo kid. Probably one of Matt Matt Dillon's best films
it is it's a great film. It's actually a great really cool. It's cute film. Listen adorable film. I bet you felt like him at the time working at the at the at the
club. Yeah - - the good looks and talent.
Talent exactly. That's my
life. All right. Listen to me anyways get that wasn't Matt Damon. That was what's his name Dylan? No, Matt Dillon. Matt. Dillon Dillon was me. Anyway. All right. I want you to talk about the content of Bernie Madoff. You worked on Wall Street. You understand this kind of thing. What is the legacy of Bernie Madoff? And what do you think of what what your McDreamy
said look the thing that I read about Bernie Madoff and it
You know, it takes me to a different place not about Wall Street, but what about you know what it means to be a man and a father and failing as a person and that is that's right is sometimes I think you incrementally make rationalizations. First off the storytelling was amazing here. He said he didn't say I can get you great returns. You said I can get you modest returns, but they're safer with this thing called a paired trade and that was if you're looking for twenty or thirty percent go to those venture capitalist. I just do four to
Six percent a year. It sounded very adult and very measured in the sexiest word in the English language was leveraged by Bernie Madoff. Yep. And that word is know when anyone called him to invest he would say sorry. I don't have the capacity and that would make them totally horny to get in and then the next time he called and said I have a small allocation. They would want to put in 2 or 3x. Yeah, and here's the thing incrementally incrementally. He let not only him but I think a lot about masculinity.
Manhood and what it means to be a man. I think what it means to be a man is to demonstrate strength and skills and intellect and kindness that you can gather enough resources to provide Economic Security to protect others specifically protect your children in this is where Bernie Madoff ended up he ended up waking up in a cold cell putting his feet on a cold ground whole ground after after one of his sons had killed himself because of his lies and the second son died of cancer. Yeah. I mean this guy
why this guy is for the people who lost money from him and damn him to hell they got their wish this guy went to hell and his wife is now living in Palm Beach broke after having lost her two sons. Yeah. I mean this is this is a failure and a lesson on a cosmic level.
It really is either been several movies done on the whole thing, which have been quite good actually, but what do you from from a Wall Street point of view? You know, what what does it say? And what does it say next this could happen?
And again, I would assume this
is gonna happen again. And again, yeah, I'm not sure it isn't happening. Now. I don't I mean the weird thing is the really weird thing here is Bernie Madoff in terms of talking it up and then paying off your investors a granted it's illegal, but I was thinking about I was thing about Elizabeth Holmes. What if Elizabeth Holmes would raise another billion dollars and they found that Edison machine whatever it was called started working. Would she still be on the cover of Forbes? I do think when
and frothy times the line between vision and fraud get increasingly narrow because we'll put up, you know the kind of I don't even call fake it to make it. It's like fraud it to you'll make it. Yeah. Yeah and you can
see I got a lot. Yeah, a lot of these
things in my fraternity brother kid named Brad Ruderman nice kid started a family office hedge fund got in over his head didn't want to disclose his losses because he knew the moment. He disclosed the losses he would you um,
Um would go to 0 so, you know what you did he start playing poker and he actually ended up blowing up Molly's game. He would hand it up. He's like, okay, I'm gonna go start playing high-stakes poker. And so I can lie about my returns and that ended up blowing up that whole thing. So look, it's it's a really it's a great lesson for young people especially in again. I know I'm sounding sexist here. I think men are more prone to these incremental bad decisions.
They put other people at risk, I think yeah, I don't know. It's because I feel more pressure to be economic body of
Faller governments and you know, the Iceland situation that was one of the things they looked at and
it was the dude the whales that put JP Morgan at risk with a two billion dollar trade. It's never a woman on the distress credit desk. Yeah. It just reminded. I don't know if it's because women have been precluded the lock one of the
things about Bernie Madoff. It was an amazing story. Like right look it was this sort of like long con that this guy put on forever. It was someone who was so well regarded.
Started and had so many people sort of saying trust and Bernie and it was it was this idea, you know the sort of high-level people who thought they were safe that were not safe and the kind of Devastation. He wrought on people's lives was just you know, it went on and on I remember what story at the time, you know, the newspapers are covering it rather heavily and it was story after story after story and then his own personal story of his kids was even you know, it just was sort of the ice.
Hang on a fetid cage it was devastating the whole thing was devastating and I think that I would have loved to have seen interview with him with with with with Andrew because you want to see what it looks like who would do that who would do that like in keep doing it and and and be you know, so consistent about that. That's what I think would be like, I just went people do things like this. I'm always like what wasn't there a moment and I didn't seem like it was with Madoff during the trial or
Like that and I just would love to have seen that interview. I'm sorry Andrew Ross Sorkin didn't get to to tape it. But but another one of these one of these stories we always say, oh it'll never happen again. I think it does happen all the time. And I think it is amazing that we may still have situations in place where lots of companies can do stuff like this continuing with hedge funds and other things
the story that's if there's a silver lining here. I forget who is the administrator charged with with collecting funds, but he did a great job.
Job, and that is he went back to all the people who had taken out profits and said you register these profits under the auspices of fraud. You need to give every penny back and he actually I believe he ended up recovering most or all
13 Vuitton's. Yeah.
Yeah, and I said, yes, my sense is obviously you got to figure out how to the virus a Bernie Madoff ever happened, but the immunities to kicked in I think yes, the outer of deterrence was the most powerful cop in history and that is nobody is going to send money to
Sailing coach at Stanford in exchange for getting their son and right now because and but Becky doing a purple lock and Bernie Madoff dying knowing that his two sons
82, he's not the
only there it's not very satisfying tastic. That is fantastic algebra of
deterrence. Well, he deserved every bit of pain as far as I can tell. I'm
not a fizzing or Tucson's. I don't know that's that's I think what he did was wrong. I think he should have died in prison, but I think he
paid himself he did he made every choice you made every
choice.
I agree. He he endured what no parent. That's your worst nightmare for every pair. Well,
I agree but I think he did it. So we're going to have different opinions about that. I would never do such a thing to my children anyway, but said she said before she does something terrible. Anyway, all right
by Dogecoin
Dogecoin. Anyway, let's move on to listen our mail. Let's roll the tape.
You've got you've got keep lethal going to be a mailman You've Got
Mail. Hey Karen Scott. My name's Claire. I'm 22 years old.
San Francisco my question today is about Russia decision to slow down Twitter for the next month. They said it's because of the platform's issues regarding drug use and child pornography. But I'm wondering why they wouldn't just ban the platform all together to slowing it down me members of my generation effectively won't use it because our attention spans are too short and do we buy that they're actually doing it because of the platform's content issues or because seven people are posting Pro navalny anti-putin messages. Would love to hear your opinion about this. Thanks both huge fans.
The show oh, that's a fascinating question from Claire Claire. Thank you so much, you know, they're throwing it down because of navalny and that's it. You know, I don't think they care about their people or how they're they're do child pornography Etc or they'd shut it down. You're right. That's what they would do. And I don't think it's particularly effective to do. So, it is an interesting idea to slow it down. But I think more we have to get to the cause the root causes of the problem. I doubt the US would ever do something similar with Twitter at all. I don't know Scott. You're a shareholder. What do
Think
well, I'm going to go out on a limb here and posit that perhaps the Russian government isn't being totally forthcoming. And if I had to guess what's going on here instead, they're scientists have very smart. If very smart intelligence unit. The gru has figured out a way to Garner information and is basically engaging in Espionage and part of that part of that s ability to hack into people's user profiles or anticipate actions on Twitter or on
And inform their security apparatus is to slow down. Its they're getting access. My guess is they're getting access to what information they're trying to Garner on Twitter. But before the public has a chance to trade or the media and that information they get to slow it down alter it or have some sort of intelligence Edge, but the notion that they're doing this for I mean, that's just ridiculous. This is a this is some very smart people in the gru. Who said we can anticipate actions. We can anticipate media stories we can spend shit before it gets fun for us.
On Twitter and we'll pretend to be open will pretend to be engaged in Western Commerce. And we have this the bottom line is the gru the Mossad the Chinese security apparatus could enact their Wildest Dreams invented a Espionage vehicle called Twitter and Facebook. Yeah, and this is the G. Are you trying to figure out a way to better leverage that security apparatus
internally with domestically navalny stuff. I think there's
I think that's right. I think that's the way to do it without doing it and thought about I think that's yeah. So is it going to affect Twitter? Do you think this will this will happen with the wood countries if it works all over the world presumably though. They already do they already took most of the people turn it off most countries block it or turn it off in some way instead of something like this the slow down.
I don't think I can't imagine I would have bet they're getting less than one percent of the revenue out of out of Russia. So I don't think it's a it's interesting just theoretically
And what happens to the service and and how they're you know how they're exploiting social media and social media Executives have not shown a concern for how their platforms are exploited by Bad actors to the detriment of the government and the nation that's given them so much that they don't, you know, they don't really appreciate or my opinion anyways, so I don't think this is a I don't I don't think this is a big deal.
Deal Twitter's bigger issue is that square continues to innovate like a like a bat out of innovation? Hell did you see her get cash app is like on fire and yeah Twitter continues to put push out stuff at about one ninth of velocity Square which is exactly correlated to the fact that Jack dorsey's wealth is 9x at Square versus it literally the product development and Innovation at Twitter is 1/9 what it is at Square threat have a little bit
of jumps there. You think they're still like slows?
Losses. Well, it's gone from it's gone from awful too bad. So I'll give him that but but look at seriously look at the product Innovation at the place where all adores his wealth is its staggering the cash app, they've come in and they've kicked they've kicked venmo Zas. Yeah and they're doing cash app for business they're doing they're trading and now in crypto. Yeah. Anyways, I got off I got a point here, but I don't I think back to Russia and Twitter this
it is a gr. You move and you know, will we
do Nation based information need-based is that they're doing it the Claire they're not doing it to help people. Let's just be clear Russia does nothing to help people. That's the love to do things to hurt people in any case. It's a really interesting story and thank you for the great question. Great got one more quick break will be back for predictions.
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Okay, Scott, you have some great predictions last week about LG handset. I really like that. What's next?
What's your next prediction? Well, I talked about this earlier in the week. I think the best value there's so few stocks. I like I think everything is overvalued we made this and I think Ali Baba is a fantastic stock right now now that the overhang of this match so I think it's trading at like 220 240. I think it's 300 by the end of the year. I think on a risk-adjusted basis. It's a fantastic.
Eric a fantastic stock to own Compass we predicted this Compass is a now a broken IPO and I think it's in the single
digits explain that explain that that it's that well Compass isn't broken IPO.
Well, it's sort of you know, it's like you're your bar your Bob Mitzvah everybody remembers you reading from the Torah and how you did and I got got there with those but and I know is basically a
moment engines this week, but go ahead. Yeah, but
if you only go public wants and it basically it's a moment where
Whole world establishes your momentum and they say okay. That's why the pop is so important because it's like, oh clearly there's something here clearly. This is a stock that keeps going up and everybody says in the direction feeds on itself. And that's why I just find so disingenuous about this notion that that coinbase wasn't a broken IPO Compass has now broken IPO. It's below its offer price and this is after the thing about Compass. This is after they cut the valuation by a third and the number of shares of
Available by 50% So yeah, I think this thing has all the makings of a trade where the corners are collapsing and I think it's about 18 bucks went poking box. Yep in 2018. I think it's single digits and I think on a risk-adjusted basis the best internet or the best stock by the world right now is is Ali Baba.
Yeah. Yeah, it started Compass started at 20, I guess 20 that's right now is 18 and that was
would you say I have another prediction coming? All right, go for it. So I had a
Precision I'm so blessed. I have these these really smart dudes and a few women including yourself in my life that call me and say you're all fucked up. You don't know what you're talking about and problem I get very upset and then I learned from it and I realized I'm blessed to have these people in my life. And one of those people is Roger McNamee and I did a post on crypto and he called me and he said you're missing the bigger threat here. And I said, what do you mean he
decided like this Scott Scott him. You're missing. She talk first.
He's so good. He goes he goes first off.
I read your post and it's brilliant only you can bring these points down to he always starts with like a real like a wonderful come. He's very Charming guy. Yeah anyways, and he said look and he really kind of blew my mind with this. He said we need to have a talk about the security threat or the threat to our sovereignty that is cryptocurrencies and that is maybe we want week or sovereigns. But if you think about a nation and I've been thinking about this a lot, it's really two things. It's the ability.
Ready to tax and it's the ability to impose violence or specifically take aircraft carrier forces and and deploy force in favor of your interest which has led to a nation that has 5% of the population and 30% of our resources. Our contracts are enforced people are scared to try and interrupt our supply chains are ability to to leverage or deploy violence is an enormous asset for us and it's funded by our ability to tax our citizens and
If you don't pay your taxes again more violence a man with a gun shows up and puts you in a cage and if with without the ability to do those two things. Yeah, you're you really don't have a nation you have a protocol or a platform to use a crypto term and crypto is probably the greatest threat to those two Sovereign asks because if you look at ransomware, if you look at the ability to launder money, if you look at the ability to perhaps engage in tax evasion, if you look at the potential risk to the
Markets with extreme volatility or something that ends up being the mud like something that makes Bernie Madoff look kind of cute and cuddly. Yep, you know it all kind of roads lead to crypto and the problem is just as 92% of our elected representatives who are supposed to regulate big tag don't have a background in technology or engineering. I've always said my thought here as I understand crypto better than 99% of the population and I do not understand crypto. So I can't even imagine how few of our elected representatives my regular actually
Understand. Yeah, definitely a wrist rest geralyn's got to get on
this. So that's my prediction. My prediction is I think that there's not not only is there a new sheriff in town with Biden there's about there's a new sheriff that has 40 additional IQ points. And that is the people that buy new surrounding himself with just in general are just much smarter. Okay, and I think that Janet Yellen and some of the people in the administration are going to recognize that this is a
Existential threat and we're going to see some I do too decisions are because what you have with China what we have with India, especially China, especially with Russia. Yeah. They have a vested interest in ensuring or seeing of cryptocurrency can unseat the dollar off all currents
here Peter teal. He said it the other night remember in the
Nixon speech there's some truth to it. But anyways, we're about to see you know, everyone's talking about over the suc is says we're going to look at Spock's Jesus Christ looking crypto for God says and by the way, they might decide
This is a healthy robust component of capitalism or gonna let a thousand flowers bloom but I want I'd like to see really smart people indeed. It's really tearing us apart maybe at
the speed that they regulated text which is detect which is to say never which is kind of interesting will see where way that you know, oddly enough Roger Mac meat literally just texted me and said, oh my God The Umbrellas you and Claire A continuing source of joy to me. I posted a picture of me and Clara with these
umbrella so good, isn't he?
I know he just was it just was funny
Roger.
You know what you got with Roger why he might be wrong but his hearts in the right place. He just literally doing all of that
because either by the Silicon Valley people because he's they see him as a try to
make fun turncoat. Yeah, but it has a bag of
look like a like a boob and stuff like that. It's not fair but he's he's
as close to an academic or it's the spirit of Academia, which is to pursue the truth regardless of who defends he's not doing this for money now talking is book he's doing it because he thinks this is an existential threat to
our common Jesus is they say, yeah.
Tanner anyway Roger he's a big fan of yours. He agrees with you. Anyway. All right, Scott, that's all the time. We have don't forget if you have a story in the news if you want to hear our opinion or submit your questions at do it at NY mag.com pivot Scott. Can you read us out and then take off on your fabulous vacation
Today's Show is produced by Rebecca Sonata Stern and retired engineer this episode. Thanks. Also Hanna rosin Andrew Burrows. Make sure you subscribe to the show on Apple podcast repair an Android User. Check us out on Spotify or wherever you listen to.
Ask me like the show please recommend it to a friend. Thanks for listening to Pivot from VOX. Media will be back next week for another breakdown of all things Tech in business. That's Swisher family and bathes the beach of Galloway week. I'm come on down coming down and write our life. That's
right liquor as I like to say young. I look through all your things. There is gonna there better not be a weird room. Someone actually said that to me, but I wonder if Scott has a weird room at his
the weird room is called my
house.
I know but they said like a special right? I got a panic room right now. I think it was more like a
dungeon fairly boring at the Galloway up if I feel like it was a
dungeon. I was like, I don't think he has a dungeon. I literally was it it was someone that is a credible person asked me this I will be looking for that dungeon
Towanda vision and playing with a puppy. That's all right. Okay. We're
very excited to come. We'll see you next week.
