¶ Introduction and Episode Overview
Hello listeners. Welcome to another episode of the Jacob Shapiro podcast. Rob and I are back at it for our biweekly chats. Uh, we talk about things happening in the US market and honestly, we, uh, we were pretty, pretty glum today. We talked about Chinese biotech and bear cases for the United States and some disturbing cultural changes, uh, in the United States.
Anyway, so we promise we'll be more upbeat next time, but, uh, this is definitely indulging in some more dystopian thoughts, so we hope you enjoy it. Email me, uh, jacob@jacobspi.com. If you have any questions, comments, concerns, you know the drill. Cheers and see you out there.
¶ Current State of the US Market
All right. It is Wednesday, May 21st. Rob, it's been a minute since we got together. Uh, we're on our every other week cadence. Um, I don't know if you feel this way, and by saying this, maybe I'm gonna jinx ourselves. I feel like the last couple of weeks, the world has been a little bit quieter. Do, do you have that sense or am I just, uh, have I just gotten numb to the, the pace of volatility and events that we're experiencing?
Well, compared to what came before, I certainly hope so. Otherwise, we'd all have a heart attack.
No, it, it, it feel, I mean, it, it sort of feels like there was liberation day and then there was like a swell of volatility. And then the Trump administration met constraints head on in the form of treasury yields and a declining dollar.
And, uh, you know, Scott Besson getting the president's ear and I, I won't say that things have been stable since then, but, you know, walked back from the biggest tariff threats like sort of normal level market discourse rather than, you know, what we were talking about even six weeks ago, like six weeks ago. I was having people like Chase on the podcast, you know, talking about is, are there great depression scenarios that we need to be worrying about?
And now it's like we're talking about, oh, like we've got a big beautiful budget bill, which, uh, is gonna, I had the numbers in front of me here, uh, how much it might increase the deficit. Um. White House Council of Economic Advisors projects that the bill would boost GDP by 4.2 to 5.2%, but, um, sort of independent budget analysis, if you're talking about the Joint Committee on taxation projects, they think it increases the deficit by 3.8 trillion through 2034.
Penn Wharton budget model calls for a $3.3 trillion increase. Uh, Moody's is expecting a $4 trillion increase over the next decade and downgraded US credit ratings last Friday. Um. Markets. Markets are not particularly, uh, I don't know what the word is, sanguine, optimistic treasury yields are going up again, dollar index going down again relative to where we were.
¶ US Fiscal Policy and Economic Outlook
Um, so why, why don't we start with the US itself and with the bill? Because we've gone from, you know, Elon Musk at Center Stage and fiscal conservatism and Liberation Day two actually, like we're negotiating on all the tariffs and there's no fiscal conservatism. And Elon Musk has been put out to pasture and is talking about not donating money to political causes anymore.
Um, so it, sure, it sure feels like constraints got here and now it's gonna be more normal trade policy and profligate deficit spending, which is pretty much on brand for every US government. Going back to Eisenhower, um, do you think that's the right way to assess the lay of the land or am I being too reductive?
Um, I think it is. Uh, I mean, it's funny how these things work because like we often talk about things being overbought or oversold when we talk about markets. You can really feel that in the narrative, like what you said about things quieting down, like that is expressed in charts too, where like now we're clearing the hyperventilating levels of a few weeks ago. Constraints are kicking in, they're dialing down the temperature.
Um, so yeah, I think there's, there's definitely an element of this, but also sticking with that sort of charts, uh, comparison, the uptrend remains intact, as we would say. So a lot of these fundamental things that you talk about, um, fiscal deficits blowing out, uh, all of that is continuing. 'cause that's the path of least resistance. Um, so there may be constraints around doing things quickly or doing things in an extreme way, but the path of least resistance is still holding for now.
Um, and you can see that in the price of the dollar. You can see it in yields like, we've had a, a rebound in risk assets. Basically clearing the oversold levels. Like now we're back to a level where I would expect to start seeing declines again. Um, honestly. So we will see if that happens. But um, yeah, it's definitely sort of a, a, a calm within the storm moment.
And it's, it's funny that you mentioned scent, 'cause I've been reading this biography of Zoe Unla, who's the, uh, was the right hand man of, of Mao and this is sort of the unauthorized biography that was written by, uh, a member of the inner circle of the CCP. It was banned in China when it came out in like 2000.
But I was thinking about Bessant because much like Zoe and Lai, he bessant has to be sort of a, a, a calming and moderating force within an egomaniac, uh, you know, sort of dictating policies, not necessarily based on, uh. Rational thought. So it's a, it's a tough position to be in.
It is, uh, I mean, Joe and LA is like maybe one of the most remarkable statesmen of the 20th century. Um, I, I wouldn't put him in the same category as Scott Best. I think like, like Joe and LA is like orders of magnitude or like standards of deviation. Uh, standards of deviation is more impressive to me as, as a statesman than Scott Besant. But May, but maybe I'm selling Scott Besant. Um, too short. I don't know. Um, we'll see
if he rises to the occasion.
Yeah. And if, and if Maoism is, is what is on, uh, on tap for, uh, for the US government.
¶ Comparing US and Chinese Economic Strategies
Um, h how are, how are you digesting this budget? Bill and I, I know like it's, it's still not completely through. Um, it looks like it's probably gonna get through, but I mean, you know, you, you look at budget specialists and people who analyze the budget, literally that's all they do for a living. You know, here's one from the conservative Manhattan in institute. So the Manhattan Institute actually knew some people who used to work there. I don't think there are anymore.
But, you know, generally fiscal conservatives or sort of typical small c conservatives. Um, and one of their budget specialists said, you know, this tax bill will cost more than the 27 tax cuts more than the pandemic cares act, more than Biden stimulus and the inflation reduction Act combined. Um, so like when you start to put that together, like, does that just mean we're gonna juice the economy and things are gonna be like.
Pedal to the metal for the United States in terms of growth, but you know, we're just creating that much bigger of a bug that's gonna splash into the windshield down the road. I'm also really struck at the sort of inverse, not inverse, like the opposite way that China seems to be approaching this. Because for, you know, if you, the thing with China, if, if you read the tea leaves, there's always some interest rate that's being cut or some way that they're trying to stimulate the economy.
But I was looking at, um, Shanghai macro strategist, he's one of my favorite follows on X and he was talking about how it seems like Beijing is actually doubling down on its commitment to austerity. Like talking about, you know, different initiatives to take the lead in living frugal lives for normal people on banning trips and re revising regulations for party officials.
Um, you know, all these different things that might actually increase deflationary trends and which in the long run might make China look more responsible than other countries like China's the. Uh, bond yields, 30 year government bond yields are going down, whereas Japan's are surging to like record highs or not record highs, like 30, 40 year highs. Um, I don't know, like, how, how are you in, like, I'm not surprised that the Trump administration has discarded fiscal, uh, conservatism.
Like I, one of the points I made for the last 12 months has been, I don't buy it. Like they're gonna blow out the deficit and they'll blow it out, probably even bigger than they did the first time around. Um, but man, the, the scale at which people are talking about this bill blowing out the deficit, I mean the, the scale of it even surprises me and I was expecting this, so I, I don't know how you feel about that.
Um, yeah, I think really one of the main misunderstandings, sort of in the financial community or, or people who are following this stuff is this notion of having the pedal to the metal. Um, I think, you know, that is sort of reflective of a macro environment of 10 years ago.
And, and we've talked about this in the last few conversations, but if you go to the Trump first term, he was coming into office against a backdrop where we needed some sexiness, we needed some irresponsibility, we needed, um, a shot in the arm, so to speak. And that's because we were kind of operating against a deflationary backdrop. We needed, um, some kind of stimulus to, to drive that pedal to the metal a little bit. And it, it had some effect.
Um, like that, you know, it was a, it was a mixed data bag, you, you could say, but it wasn't disastrous by any means. What, um, you know, the first 2017 tax cuts and that did, you know, and, and again, it reminds me of the late sixties, early seventies and the Nixon administration coming in and sort of recognizing, oh, you know, there are problems. And then at the first sign of trouble turning back to sort of the fiscal spigot and thinking, okay, well. It's too early to deal with the issues.
So we're gonna go back to what has worked in the past. And the problem is things work in the past until they create the circumstances in which they no longer work. And that's the situation where we are now, which is, if you look at this bill, um, primarily we're talking about tax cuts, um, as the source of these gaping deficits. And that's a supply side stimulus.
So if you want, you know, always there's this fiction that tax cuts will pay for themselves, which is never true, but sometimes they do stimulate the economy. And the problem in this case is you can't use supply side stimulus, um, in a situation where uncertainty and worry and um, sort of forward projections are the problem. Like you need demand side stimulus typically to give people the confidence to invest. And there's no new major demand side programs here.
They've walked back some of the more, um, you know, drastic cuts that they had proposed to some things like the solar tax credit, utility scale, solar, you know, things like that, that have been very popular in, in a lot of states and, and real job drivers. Um, but there's nothing particularly new. We're mostly talking about, uh, supply side stimulus here.
And I just think there's, there's almost no circumstance in which that has a huge positive impact and certainly not enough to offset what we're seeing in markets today, which is 30 year US treasury yield approaching a new high mortgage rates over 7%. Um, those are huge factors that in all likelihood are gonna outweigh. And then some, any of the potential kind of pedal to the metal effects. Mm-hmm. Like you, you're pedal to the metal, but you're driving into a brick wall.
How far away is the brick wall? Is it two years away? Is it five years away? Is it 10 years away? Like, if, if you're trying to think about how to like position yourself accordingly, or if, if you're thinking about sort of the very, I'm thinking about the short term here. Like, okay, like yield's above 5%, that's a big psychological number and something that the media can really hang a hat on because, oh, now they're above 5%.
But you know, if you look at historical relative terms, five percent's not that much. 7% mortgage not that much, especially when you're going back like 30, 40 year time horizon. And I, I agree with you and I, and we'll get into this a little bit later. I wanna talk about, I. Private equity and biotech and, and some other things that are on the tops of our minds.
But I, I feel like you could get a scenario where maybe pedal to the metal is the wrong thing, but you're, you're sort of juicing the economy like with like a, with a steroid shot, like the economy is sick, but give it a steroid shot and for the next two years, it could be, it be, it could be growing like gangbusters and this notion that you're gonna outgrow all the problems might seem clear until all of a sudden everything like to, to reference, um, uh, that reference we
had a couple weeks ago, like, the music will stop and the music will stop very quickly and some big player will realize at first, and then everybody will pile in. So I'm, I'm just trying to get a sense from your brain. I know I'm asking you an impossible question, like, how long can we do this? Can we do this for five years? Can we do this for 15 years? Because you don't wanna miss like. The, the, the juice era.
Like if, if you're going long home runs, like you don't wanna, you don't wanna like get out of the home run market right before Sammy Sosa and Mark McGuire are squaring off. Right. And right after You wanna do it after when they have the new rules.
Yeah. The juice era is already over. And I can say that with some confidence because gold prices are hitting new highs. Bitcoin is hitting new highs. Yields are like, Mr. Market is telling us, hey, the juice is already killing us. Um, and that's really important because it would be one thing if this was, oh, just kick the can down the road. Like there's no more road according to these markets. And that's why intermarket analysis is so important. Like you have to be very precise.
Like, what is the question here? Is it, at what point does the US reach sort of an unsustainable escape velocity on the debt accumulation? Mm-hmm. Like, that's a complicated question. 'cause at some point they could just. Paying interest rates or intervene like this, it's not a linear sort of thing.
So there's the macro question, which arguably like on the current trajectory, you know, interest rates or I'm sorry, interest payments are already approaching or have exceeded a trillion dollars a year. Yeah. So we're in, like, we are in the danger zone. Um, and that's having a real income statement effect. Like, like this is one of the, one of the problems here in, in the analogy of sort of the juice, is there's balance sheet effects and there's income statement effects.
So yes, historically speaking rates where they are today are not particularly high relative to, you know, heights they've reached like in the mid nineties, 1994, like, you know, it's sort of more normal on that very long-term horizon. But the difference that is that the balance sheet is completely different, the balance sheet is super leveraged. When you're looking at the public sector, and you know, in many cases the, the corporate sector too, not households. Households are okay.
Corporate sector and especially government are not. Okay. And this is where you have the, the juice analogy, like immediately hits the, the wall because, you know, that has an income statement effect that's very rapid because you're refinancing into those rates. You're, you're servicing that debt on that bloated liability side of your balance sheet. And, and that has effects in just like how the money's flowing around. So I think there's, there's already a macro issue there.
And, um, you know, the markets are telling us what, how the markets are interpreting it, at least the bond markets and the currency markets, which are, you know, dwarf the, the equity markets. Um. And, and the other thing is like, what are companies saying? So are companies looking at this bill and saying, oh yeah, like let's go, let's go ramp up CapEx, let's go, you know, raise our, like, no, no, it's the opposite.
You know, we just had Q1 earning season, which ended, you know, 10 days ago, two weeks ago, depending, and that was a disaster. Um, lots and lots of companies withdrawing their guidance, pulling in the horns, talking about sort of macro uncertainty. Um, you know, uh, that is, that is not a sign that normalcy is here or that that level of confidence that you need for investment to, to drive again is, is necessarily coming.
Mm-hmm. Anything else you wanna say about, uh, like US markets before we turn to a different topic? No,
I don't think so. Okay.
Um. Not that they're, you know, a nice rosy, uh, optimistic point of view from us on that score. Cool.
¶ The Future of US and Chinese Biotech
Um, l let's turn to, um, um, l let, let's turn to biotech and in particular Chinese biotech. This is gonna be one of those conversations listeners where Rob and I are at the very beginning stages of talking about something and he and I have not had a chance to actually talk about this, and our schedules are crazy. So, Rob, I just wanna talk to you as if like, I wasn't actually talking to you on a podcast and we'll put it out anyway.
'cause I know this is something you've been thinking about and it's something I've been thinking about. And I think it actually does connect with exactly what you just said, which is, you know, are American companies investing more? Are the circumstances that led to American growth and American outperformance, whether it's in semiconductors or biotech, in some of these, in some of these areas, are those fundamentals gone and have they actually shifted to other places in the world, namely China?
Um. When you start sort of looking, you know, last 40, 50 years, the United States has really been the king of biotech. I don't think that that's a, a crazy sort of assertion to make. Um, but if you start looking sort of closer the last 10 to 15 years, like China's flashing all the right signals, and some of that is for popular consumption.
Like so many people like to, you know, flaunt this idea that, uh, you know, China has more, has doubled its clinical trial activity and it's doubled the number of articles that it's published in various journals. Like I know I, I, I'm not trying to throw shade at journals, but like I for instance, knew people at a Russian think tank who decided they wanted to get more articles into foreign affairs journals to make their university look better.
So they were just doing things to try and get as many articles as they could possibly get published in these journals. So like there, there is some level, um, of sort of, um, emptiness to those things, but at the same time, like, um, there's sort of a couple different. Things that supported the US biotech industry, or at least the way that I understand it.
Um, there was funding for research and for universities in particular and that public-private partnership and the US government really putting its foot forward there. I mean, you had, you had US presidents, I believe it was Lyndon Johnson, I think it was Lyndon Johnson, I forget which president said we're gonna cure cancer. I mean, you, you had that sort of. Shoot for the moon type of thinking in the United States and you had dollars that went to those sorts of things.
Um, you've had a low interest rate environment and lots of venture capital and startup funding really since post 2008. And biotech is the perfect place for that. 'cause you gotta do a lot of expensive research and hire a lot, hire a lot of expensive people, and you don't know if the technology's gonna work.
Um, so in a low or zero interest rate environment or in an environment where a pandemic coming and you're doing operation warp speed, yeah, there's probably a lot of money out there for r and d for us biotech companies. But that's starting to go away. And we can talk, you can go down that rabbit hole too. I mean, this is something we talk about a lot at Bespoke.
There was an FT article this week about, you know, US universities like Harvard and Yale exploring discounted secondary market sales of private equity stakes. I'd love to know how many of those are like shiny biotech startups that didn't actually pan out, I don't think we'll ever actually know. Um, so there's that. And then. Attracting top tier talent from abroad.
This really like started around COVID and the things that the Trump administration has done in the first five months of this year have exacerbated it. Um, the United States, like US universities are still at the top. But there's fewer and fewer positions. Um, there's less and less optimism that the United States is a place where you can make a career in this sense, not just for very, very smart foreigners, but for us scientists themselves.
Like anecdotally, I have friends who were in this space who suddenly the money is drying up and they're looking towards, well, could I tolerate living in China? Could I move to Europe? Like what are some of the, uh, changes I'm willing to make in my life in order to participate in top tier research? Because it doesn't look like it's gonna be happening in the United States going forward. And here, like China is singing a very different tune.
'cause yes, they're talking about austerity at a top level, but the government has said very clearly, no, biotech is one of the commanding heights of the sort of tech economy going forward. They have multiple five-year plans and spending plans and, you know, different hubs that they want to create within China that are gonna be hubs that expand this.
Um, people talk about China's demographics as being a negative, but when you have a bunch of old people and not a great healthcare system and you need social stability, probably a good idea to throw as much money as possible as you could at this industry. And you're gonna have way more data and way more old, old people to treat, uh, than you necessarily will in some other parts of the world.
Um, and in, and China has also become just like it has in every single manufacturing supply chain in the world. Like they produce a lot of the precursors, like they have gotten involved in biotech in an incredible way. Just in terms of like the things that are, you know, like the ibuprofen that I'm gonna g that I give my daughter when she has an ear infection, that's probably some of the ingredients are sourced from China or India.
Um, and you start going down the list of medications and things like that, that's all there. And there's been this huge growth in, in Chinese biotech in general. So I'm rambling a little bit, but I'm trying to, to connect what we were, what we were talking about before. And here's China, which everybody says demographics sucked, uh, sucks. Structural problems. Real estate bubble that's never gonna be fixed. Everything else.
And yet, like burgeoning biotech industry, it doesn't take long to go find McKinsey 50 page decks about what the opportunity set is, or US government reports about how China is stealing the, uh, the cutting edge here and that the United States government needs to get back on track immediately, which the United States government is not doing. So. Um, I, I rambled a little bit, but that, that's the setup. Let's talk about it.
No, no, not a ramble. I mean, there's so many different interlocking issues. I think you covered a lot of them really well. Um, where to begin, I think just to, to start with first principles, like, let's not get outta, you know, get out of proportion here. Um, the US is a biotech juggernaut and that's not gonna change overnight. Um, like yes, obviously the NIH is a major factor in that.
There's tons of stuff going on with the FDA, with the NIH itself, but the sheer amount of wealth that is in the US that is financing, um, innovation and research is just beyond compare. Even China can't touch it can't even come close right now. Um, so the US has enormous strengths. Like if you look at something like the Ark Institute, which is financed by. Um, Patrick Collison, tech entrepreneur, like that sort of thing is where the US is going to continue to shine.
And when you look at sort of where still the most interesting cutting edge stuff is happening, predominantly it's still in the US so let's not, you know, just make sure we're not being doom and gloom about the US. 'cause relatively things are still good, but it's similar to the Multipolarity thesis where the US is going to be a very powerful force in this area as well, but they're not gonna be the only force anymore.
And, um, you know, you mentioned sort of China's property bubble, the treadmill to hill all of these things and yet at the same time, look at what they're doing in batteries and EVs and grid technology and biotech and, and all of this stuff. But those are two parts of the same coin, or two sides of the same coin, I should say.
Um. Sort of this kind of, uh, the Chinese model, which is really based on to some extent guiding and commandeering state priorities around capital allocation results in stuff like, you know, cattle and BYD and you know, the, the supply chains getting built to support companies like that and biotech and, and all this sort of stuff. But it also means you have treadmill to hill, you know, ghost, uh, cities in the middle of nowhere and, and capital misallocation just on huge scale.
So it's always a race, like how much value can they create with the good stuff versus how much do they throw down a hole with the bad stuff. Um, and it's just the nature of the system. So that's kind of working as intended. And I think just like China has caught up and, and in many ways surpassed, depending on which specific area you're talking about. Surpass the US in, in a lot of these areas, like biotech, they're a player. Like that's, that's clear.
And that is the most interesting thing because it wasn't very long ago that they were just nothing like Chinese biotech was a joke. Nothing was happening. Like I think it was only like two years ago. Um, you know, uh, which was the leading C-C-C-D-M-O provider to us and European biotechs. They got cut out, uh, from the bios secure act from providing this to, to us customers providing their services. And it was viewed as like, oh my God, these guys are gonna be just completely destroyed. Mm-hmm.
Since then, you know, it's sort of, I mean, it's too early to say 'cause uh, they're not as far along in the recovery period as Huawei, but it has been sort of a Huawei kind of scenario where I. They're, they're probably gonna be fine. And, and guess what? Now they really dominate the burgeoning Chinese scene. So this has happened very fast, and we do have to keep it in proportion, but we also have to recognize that this is for real.
It's not just marketing and, and it's not, um, it's not a flash in the pan. Like very clearly they've put in place some of the fundamentals to do this at scale, as you say. Like if you have, if you're gonna have this industry because it's so tied to sort of local regulatory, uh, apparatus, you need to have scale to sell into. Like you can't, it's very difficult to export these kind of innovations unless you have some sort of deal.
So like Australia does a lot of early stage biotech research because they have a favorable sort of, um, pathway to get FDA approval and stuff like that. But that's more the exception than the rules. So usually you need a big market. Um, to do this, Europe, China, United States for the most part, and China, you know, they've planted their marker. So, you know, I think they're here to say, how do you, how do you get positive exposure to that?
Like, we have a lot of different things around this, you know, that we're doing, but that's more of a bottom up question. But certainly as a theme, I, I think it's, I think it's pretty legit.
Yeah. I want to give you some stats because I, I think you're right in terms of a snapshot of today, the United States is still the juggernaut. This is sort of the, in the same vein as, as the conversation with Multipolarity, but. When I look at the data, and this is like, you know, I've started my deep dive into this this week. So maybe three weeks from now I'll be here saying, eh, like, uh, this data, I, I found some other data that's better.
But, but here's just a couple of data points that like, really I sort of sat up in my chair when I read some of these. Um, if you look at share of clinical trials based on a company's headquarters in 2013, China accounted for less than 5% globally as of 2023, almost 30%. And the United States has declined from sort of between 37, 38 down to 34. If you look at global, um, shares of biotechnology, venture capital raised the United States.
That's declined from about 70% of global share to 60% from China. It went to basically five to almost 20%. Um, when you look at, um, STEM PhD graduates in 2000, US universities awarded more than twice as many STEM doctoral degrees as Chinese universities. Uh, in 2019, uh, China awarded almost 50,000 STEM PhD degrees. United States 33,000. So getting lapped there in general.
Um, up to this, uh, these next stats are from CSIS up to 90% of the most widely used medications in the United States, including ibuprofen and acetaminophen. So your Tylenol are imported from China as Chinese investments have surged in the biotech space in the last 10, 20 years, federal funding for biotech is actually flat in the US since the 1960s. And the regulatory environment has gotten even more sort of complicated.
There was a bio survey, um, that surveyed 124 different biopharma companies inside of the United States, and they found that 79% of them, so 79% of 124 US biopharma companies had contracts with China contract manufacturing organizations or contract development and manufacturing organizations. And that's so important because it's not like you can just switch that to the United States. I recall the conversation we had with, uh, Tomas.
Uh. Uh, on the podcast that, uh, well, I guess that was the beginning of the year, so many episodes ago. But one of the questions, uh, we asked Tomas was, Hey, if, if we could wave a magic wand and there were no regulatory problems and there was operation warp speed from the US government, how fast would it take you to spin up US refining capacity for some of the rare earths and other minerals that you're looking at?
And he said, without hesitation, eh, like seven years is probably a good estimate. Maybe that's a little conservative, but seven years, a good estimate. Um, bio found that it would take a lot of these biopharma companies that they surveyed up to eight years to change partners.
So even if you want to pass something like the Bio Secure Act, or if you want, if the Trump administration considers other things to try and move, um, dependents away from some of these, you know, Chinese contract manufacturing organizations, uh, okay, you're gonna need seven to eight years to build either the domestic capacity or the nearshoring capacity to do some of these sorts of things. So I totally grant that the like.
Snapshot today, the United States is still the juggernaut, but Arrow is pointing down. And for China, the arrow is pointing up. And even though they don't have the same level of experience of turning cool science into products, and even though they don't have a history of venture capital and all these different things like creating products that make profitable companies in general, as with so many of the things that we talking about, they are the one making things.
They are the ones that make the things that go into the things that make the products. And if you get into a real decoupling sort of scenario, like, okay, like they can't do the high-end stuff, but we can't do any of the high-end stuff without them either. And they are pushing really, really hard on the science and trying to get smart. So maybe it'll take a long time, but I don't know, like the, the arrow seems to be pointing up to me. Um, am I, is is that too doom and gloom?
Because you said not to go doom and gloom and I'm looking at the data and I'm like, I don't know. First look looks pretty gloomy to me.
China has a lot of advantages. Um. One of the best books to read on this subject of venture capital and biotech is Bill Jane Way's, um, doing capitalism in the, in the financial economy, or I forget what it's called, something like that Bill Jane Way's book. And in it he points out, you know, he was traditionally a software VC and he pointed out the difficulty of VC in biotech is you know exactly what your market is like.
You can literally say, okay, there's 482,000 people with this disease every year. That's we can sell to immediately if we can get this right, which is very different. But at the same time, getting the science to work, getting a product that actually can get through, you know, the gauntlet of, of clinical trials and all of that is so long and so expensive that even though you kind of de-risk the market size like the TAM issue.
Um, like with very few exceptions, there's, there's very few like really successful recurring biotech VCs. Like who's the Andreessen Horowitz of biotech?
Like, you know, I'm sure there's some firms that have had success, but it's very difficult to do and I bring that up because when you think about discount rates, when you think about time horizon, and this is one of the issues when we talk about uncertainty and why what Trump is doing, getting this back to the macro is not gonna fix a lot of these problems. The problem in many ways is discount rate and uncertainty.
You're not gonna go build a factory if you don't know what the hell the policy is gonna be five years from now. You're not gonna invest in a biotech firm.
¶ Challenges in Biotech and Med Tech
And we see this on the ground up 'cause we get a lot of visibility into early stage biotech and med tech companies. And they're suffering because people are looking at what's happening at the FDA and they're saying, what the hell is the, is the length of the pipeline here? Is this gonna take four years or is it gonna take seven years? Is it gonna cost $30 million to get to phase two, or is it gonna cost $70 million to get to phase two? And there's so much uncertainty around that.
At the same time that the 30 year treasury yields is making new highs, it just strangles private capital allocation. I mean this is going back to Cain's, like this is classic, you know, stuff here.
¶ China's Capital Allocation Advantage
And I say that because, you know, China does have, the Chinese capital allocation model does have a, a real advantage there because it's not market driven. In many cases it can be driven by political dick to, it can be driven by other factors. And this is getting to one of the, like, I don't want to be all doom and gloom. I, I think that's a reason to be very bullish on China and what they can do. And let's be clear like this is not a competition.
The more good stuff that comes out of this industry, the more humanity just does well. So it's not, you know, bombs or semiconductors or missiles or something. Like, let's just keep that in perspective. So we want everyone to win here. Um, it's not gonna make the US suffer If, you know Chinese, uh, elderly people get cured of Alzheimer's, like that's just a win-win for everybody. But, you know, I think there's reasons to be very bullish on, on the Chinese opportunity.
¶ Impact Capital and Social Investing in the US
I wouldn't say doom and gloom for the US 'cause I, I, I do wanna speak to that, but one of the sort of hidden advantages of the US is I think, sort of the growing influence of impact capital and sort of social investing. And, and this is something I've really come to appreciate more since we've been doing the, you know, work with bespoke and, and seeing how people are doing this at large scale is, that's sort of another way of, of the Chinese model in some ways.
Like it's not financially driven only it can have. You know, quote unquote political motives and, you know, social motives, o other reasons to invest in these ventures. Like I just was speaking with someone, um, this morning I had coffee, uh, with a guy who's involved in a, in a biotech startup, and they're doing a gene editing thing for congenital heart failure.
And, um, they're in the process of raising, you know, 30 or $40 million from a daf, a donor-advised fund and, and doing it through a grant process. Um, that's a huge, when I, we talk about the pools of wealth and what people invest in and why that's a huge sort of un under-recognized and strength of the US that is probably gonna get bigger, uh, in the next few years.
That said, it's not that big relative to the existing mechanisms and all those other problems about uncertainty and VC throttling back that is gonna outweigh that. It's just a way of saying like, the US isn't totally screwed in any way. It's just relative, you know, getting to the Multipolarity thesis, China is going to continue rising. They have these unique advantages and the US does have major problems even though, you know, a lot of those strengths still are there. Um,
yeah, I'm, I'm struck when you say that about, and I don't know if I'm just making everything comport to my thesis here 'cause I'm in danger of doing that, but when you think about.
¶ Historical Context of US Social Welfare
Even the notion of tariffs and of protectionist US policy and of the overtones and current US policy to the early 19 hundreds. I mean, even in what you just said, in the early 19 hundreds, there was a real movement in the United States towards social welfare that was privately funded. The government was not the one that was actually funding all these sorts of things. It really isn't until World War I that the size of the US government increases markedly.
And so you had, um, you know, this real movement in the United States, whether it was making factories safer or in educating children or like, or in basic hygiene, things like that, where you had, and you know, there was also the, the temperance side of this too, making people drink less, which, uh, maybe went, went a little bit too far. Um, or not, but may, maybe we have some temperance radicals listening to the podcast. I don't wanna, I don't wanna assume anything.
Um. But you know, you're talking like that, that sort of notion is very antiquated. Like we live in a world where like, like you said, it's too small to make a huge difference. And many of the amazing changes that have happened inside of the United States happened because the United States government, for better or for worse, we can agree or disagree from a policy perspective on whether it's the right thing or not.
But since World War I, the US government has basically just gotten bigger and bigger and bigger and has taken on more and more and more. And that has come with certain problems, but it's also come on, unleashing capital and focus on a national scale. Not according to dicta, like you said, as as in a dictatorship. But you know, in certain moments, yes. Like semiconductors is a story there too.
And I hate being the cynical one in our conversation, but you say that this is gonna be better for the world. Uh. Yeah, maybe overall, but not necessarily for the United States. If China cures Alzheimer's and China and the United States are in a great grand geopolitical battle, um, and, uh, we can't, and the United States cannot replicate what China does.
I mean, China's gonna use that against the United States like we already saw, like in COVID vaccine diplomacy and the hoarding of PPE and how really geopolitically nasty things got about a relatively minor, uh, pandemic.
In the grand scheme of things, when you look at other pandemics and the mortality rate and things like that, like cynically, like I, I think we're imagining a world in which if the United States is not at the center here and there are other centers that are doing so much better, um, yeah, I mean, I, I guess maybe you'll tell me that the technology will diffuse and it'll, it'll go around everywhere.
But the cynic in me sort of sees, well, no, like if China's at the center of these things, um, today, then like life relatively in the United States will be worse. It's, it's not a foregone conclusion that, that that technology will diffuse.
Well, from my perspective, if you said to me that the world is gonna get a cure for Alzheimer's, but the Chinese are gonna be the only ones to develop it, I would want to live in that world. Um, but let me, let me give like a bear case on the US 'cause I can, I can argue a bear case and this is how I see it.
¶ US Biotech Industry's Unique Position
I don't necessarily believe this, but this is how I would lay it out, which is that you take sort of an exceptionalist view of the US biotech industry over the last, you know, 40, 50 years and say, okay, this is like, you know, the New York jazz scene in the 1950s. Like the right places, the right people just happen to be together. You know, this, this is Renaissance Florence.
Like something happens, some like, 'cause if you look at the rest of the world, biotech is something that doesn't really happen almost on anywhere else. Even Europe, which is extraordinarily rich and successful in so many levels like. The level of biotech research that they're doing, really like at the edge of what's happening is, is not remotely in proportion to their level of development.
So there's something kind of weird about biotech, and I suspect maybe there's something about sort of these, like the equilibrium for private capital to do this, it's just not there. So you need some weird mixture of like the right people in the right place and the right sort of financing structures. And I guess my bear case would be like, you know, is that the case? Is this renaissance Florence? Because if Florence goes down, you can't just replicate that.
Like if the magic sauce is lost, like that could just be a, a net loss. It's not just like, oh, these people will go do this somewhere else, or this activity will happen in India, or you know, whatever, Turkey or something like, maybe it just doesn't happen anymore. And, and to support that, like, just an anecdote. So, you know, I'm originally was in Cambridge for all so many years, and most of my friends are somehow related to scientific research.
And Juliet is obviously, as you know, um, so I see a lot of people in, in that area.
¶ Immigration and Talent in US Research
And, um, the, the thing that strikes me is a how dependent, truly cutting edge research is on immigrants. Um, that is a huge factor. Like if you look at the top labs at Harvard for instance, they are 60, 70% non-US born researchers. Um, so the US has been this enormous magnet for talent and that is really under threat. Um, you know, some of my, my closest friends, just to give one anecdote, so I'm really good friends with a Brazilian couple, young Brazilian couple. They're both scientists.
They come from Sao Paulo. They've been here for like seven or eight years, uh, on a green card, which they got recently. One is the head of a lab, one works at a private biotech company. Both of them are, they just had to go back to Brazil. They were terrified they wouldn't be allowed back into the country. Um, they're both like reporting that everyone they know is just, they don't know what to do.
Um, they're, they're feeling whether it's justified or not, there's an impression that they're gonna be kicked outta the country, that they're gonna be hunted. Like there's some issue that's gonna emerge because there's so much stress around. We, we take this for granted. As you know, American citizens. There's so much stress around the process of getting your green card, doing the application, going through the process. Trying to get it through.
Don't, don't screw something up, like the stressful levels are through the roof. Uh, one of their friends from Brazil went back to Brazil last year to go work, uh, in a lab in, in, in Port Alegre. And that was weird. Like he just, he just went back to Brazil and I don't know, like maybe they'll stay long term. They've, they've kind of put down roots, but at the margin it's gonna be more difficult to attract that talent if that's the zeitgeist around what's going on.
And people see that we're gutting the public institutions that stand behind a lot of the kind of basic research. 'cause you know, we have to remember too, it, it's sort of like government and, and the bureaucracies, or I'm sorry, government and private industry where people go back and forth. Like people will come here to do research and then they'll hop to.
A biotech private sector job like that happens a lot because most people, especially if they don't, if they're coming from abroad, they're not usually coming from a private sector background. 'cause there are no biotechs abroad. It's, you know, they're, they're, they've just been educated and now they're looking for, you know, they're gonna continue in the ac in the academic, you know, uh, role.
But that is really, like, that's a bottleneck that's dependent on grants and labs and universities and, you know, all of this stuff that we're talking about. So, you know, it's easy to underestimate how much, if that bottleneck gets squeezed, that you're ultimately squeezing the flow of people also to the private sector and to, you know, the big biotechs in Kendall Square and, and all of that. Like, it's just very fragile.
I think that that would be my, my bear case is that it's much more fragile than we think. It's much more of a like. Unique combination of ingredients and we've like spoiled the, the souffle and now it's just gonna collapse and you can't get it back in remotely the same, you know, fashion that it once was.
¶ Public Perception of Science and Progress
Well, and, and I don't know how much this actually matters, but you know, there used to be a belief in scientific progress. Like these things were seen by society as fundamentally apolitical and as fundamentally virtuous, and they're not seen that way anymore. I mean, we're having real conversations in 2025, the year of our Lord, about measles outbreaks in the United States.
You know, I'm, I'm sorry if there are listeners who, who are on the anti-vax thing, but I like, it's one of the few things I, I don't have a whole lot of patience for. Like, we have a fix to this problem. It was fixed. It's a vaccine like I have children. You wanna risk that your kids are gonna get measles. Like this is not some experimental thing. Like we had it. And like even stuff like that is getting demonized.
And that's before you get to, okay, we've got all these new types of technologies that we need a whole new regulatory apparatus to even comprehend the things that we're capable of. And. Things that could be very dangerous if they're not handled correctly. Like the speed at which we can do things doesn't mean we should necessarily do them like we should totally have very serious conversations about what this looks like.
Uh, but the point just being like in that fragile renaissance Florence metaphor that you're talking about, like there was a time when US society believed in progress and believed in science, and the majority felt good about that and felt good about the United States being the cutting edge. I don't get the sense that that's true anymore. I saw a map about for, for measles vaccination rates in the country, and I was absolutely gobsmacked, um, at the, at the high levels of like unvaccinated rates.
Um, for something, for something like measles. So like maybe the, the system doesn't care about what. The rank and file think, but I gotta think that if you have a society that is beginning to show signs of fundamentally doubting the very thing that underpins the advances in the first place, um, I mean maybe that will express itself in a lack of political will to protect this funding. Maybe it does just make it so that foreign researchers are like, well, why would I want to go there?
Like, China's the one that has a five point plan that says, we wanna do the absolute cutting edge stuff and we will stop at nothing to make sure that the cutting edge happens here. We'll give you all the tools and all the, the hubs and all of the, everything else just like solve these problems because this is what the future of the planet and of the nation like completely requires. And you couldn't be farther from that in the current US regulatory environment.
Well, to tie this into something else that we've talked about in recent months, um, scientists are experts. They're authority figures by definition. 'cause they have a secret knowledge. And you know, I kind of made my thesis earlier that. I think a lot of what's happening in the US is really a cultural thing.
And we've talked about this many times in the sense of like, it is an anti-authoritarian and anti expert, anyone who, who is perceived to be sort of part of the hierarchy of, uh, authorities and people, you know, elites, they're being torn down 'cause it's a, it's a populous kind of movement.
And you can see that like Renaissance Florence only worked and those superstar artists, you know, fancy pants elites, they only got to do what they did because the public was financing the churches that were paying them to paint stuff.
Mm-hmm.
And you know, same thing for like, you know, mid 16 hundreds Dutch culture, like people really valued what those guys were doing and they were buying what they were doing and that's why it could exist. And, you know, to transport that to today. The public doesn't support, you know, these, these structures doesn't support these, these forms of elites. And you can see that in the gutting of public funding. It's gonna be very difficult to, to maintain that.
And that's why, like China is one thing, but I think Europe has an extraordinary opportunity here just because it's more, it's more accessible to most of these people. Like realistically speaking, my Brazilian friends, if they didn't go to Cambridge, they would not be going to China. 'cause it's just too weird. It's too like, out of their experience. Um, it's not like China is its own civilization, whereas like coming here to Paris, you know, that's a much easier leap.
And I haven't had a chance to really dig into this, but one of the things that's like top on my list is I know the EU has announced some, some significant funding behind, like trying to attract scientists. From abroad and, and, um, like really lean into this. And I don't know if it's, if it's of any size or whatever, but they'd be stupid not to.
Um, and, and you know, just thinking, putting this back into the framework of like populism and anti, anti elites, like as I said before, Europe is still pretty in favor of people who know what they're doing. Uh, you know, uh, right wing movements left aside. Like those people aren't running these nations yet. Whereas the US is really struggling with that for reasons we've talked about. And I think that's gonna be a core problem for the US in supporting the sciences.
Um, and, and these, these sorts of like research oriented technology development ventures, because to get the people you need to have the structures in place and you need to have the, the general acknowledgement that like, this is a good thing. We like these people. This is good for society to have this. And that's just really lacking, uh, as you point out in, in a way that it wasn't 20 years ago.
Yeah. Well, maybe two things to, to close out on.
¶ China's Rise and US Decline: A Balanced View
There was a, I dunno if you saw this op-ed by Kyle Chan in the New York Times, which was really good. Um, and it was about China sort of dominating things like high-end manufacturing cars, chips, MRI machines, commercial jets. He makes the very spicy take that the battle for AI supremacy, if we continue on the current trajectory, will not be fought between the United States and China, but between high tech, Chinese cities like Shenzhen and Hong Jo. Like it's not, it's not about us versus China.
It's actually probably about like Chinese provinces and cities and like development hubs themselves. Um, and Kaiser quo, who's somebody that I really respect, um, Seneca podcast, if tho for those of you who haven't sort of, uh, discovered him, wrote, not a rejoinder, but actually sort of a meaningful engagement with Kyle Chan's piece. And I, he had a really great corrective.
He, um, I. I'll actually read something that he, he said here, he doesn't, he, he says he doesn't, uh, dispute that China's poised to dominate in many of these areas, but he cautions against overstating the coherence or inevitability of China's rise or the permanence of America's decline. Um, he doesn't say this out of patriotic sentiment or triumph as nostalgia. Rather, he believes that his historical outcomes are rarely as clean as the Chinese century versus the American century.
And much will hinge on whether either country can summon the political will and institutional capacity, um, to adapt to the scale of the China, uh, to the, uh, to the scale of the challenge. China is formidable, but not infallible. The United States is reeling but not terminal. I thought that was like a really good way of encapsulating some of these things.
On the flip side of this, there was an article in the Wall Street Journal this week about, um, a bunch of data centers that were gonna go up in West Virginia actually about a, a law that the West Virginia legislation was trying to pass.
¶ Local Resistance to Tech Development in the US
Uh, to allow the use of natural gas and coal to power AI projects in West Virginia. And we are talking Podunk, West Virginia, some of the most impoverished places in the entire country. This is coal country. It got left behind. Nobody took care of them. Uh, it's absolutely, it's a beautiful part of the country. I've spent a lot of time actually like hiking and traveling in this part of the country. 'cause um, I had some family like in this, in this neck of the woods, no longer.
But, you know, I've spent time in this part of the country, even though it's beautiful, it's poor, it's impoverished. And the Wall Street Journal article was all about how the locals are saying, actually, we don't want any of that. We don't want any data centers built anywhere near here. And on the one hand I'm like, okay, I get it. You don't wanna ruin the pristine, you know, rivers and the hiking and the mountains and things like that. But on the other hand, you guys are poor.
Your GDP per capita relative to the national average, terrible, your life expense, life expectancy relative to the national average. Terrible. And you don't want the shiny tech money that's coming in and has discovered this beautiful part of the country. It is like, ah, we finally have something we can use all this coal and natural gas for.
Why don't you guys become the center of an AI renaissance inside the United States And the the poor impoverished residents are telling the Wall Street Journal. No way. Get off my lawn. I don't want this money. I want my poverty. Uh, along with, you know, being able to hear the crickets, which I get it. I want to hear the crickets too. I talked on the last podcast about how depressing it is that we killed all the fireflies in New Orleans as we were trying to wipe out malaria. Like, I get it.
But you can sort of have both. And I, I'm, I'm like a little bit tongue in cheek, but my point is just, you know, it's not the biotech example, but this is an impoverished area that has a resource that could be critical to a boom in an industry that is going from strength to strength, AI and data centers and information economy and everything. And it's like, nah, actually we're good. We're good with where we're at. Like, I, I, I feel like I see that mentality.
Everywhere in the United States economy, in the United States culture, in the, you know, the, the gravity that the past has make America great again. Let's go back to the way that things were before. Like, I don't know, like there, there is just something in that, that I have a hard time engaging with and which makes, when, which is starting to color some of these deeper dives into things like AI and biotech. Um, in the current context, which it's not the fault of the current administration.
The current administration is just, I think, a reflection of this cultural change. And with its disjointed policy is accelerating some of these trends. Um, but it's, it's hard to be optimistic in some areas about the United States when this is the cultural push. Am am I being, I don't know. Is that too much? I, I'm, I guess I'm feeling glum today.
No, I think it, it hits, hits it on the head, frankly. 'cause and tying this into China, um, I think it's a matter of coherence. Like when I think about what we're really doing. For clients or from an investment standpoint. So much of it is trying to find where in the world is there the coherence of action and the uni unity of action to, to do big things and to build things and, and to develop and to grow. And that's, that's rare.
And, and in the United States, I think in many ways that's now breaking down in many places. Like NIMBY is a form of lack of coherence. It's atomization of interests that will not work together, even though it's probably in the greater good to build that data center. You have friction. And, and this is not to look at China with rose tinted glasses because you know, the normal state of China is one of high friction and lack of coherence and warring states.
And one of the things I worry about is like, if Xi Jinping dies tomorrow of a heart attack, I. What the hell happens?
Do you enter something like, just look, one of the things that terrifies me, and I don't think anyone's really talking about this, I haven't seen it, are these stories of, um, I dunno if you've seen this, but uh, Chinese local governments are kidnapping executives who come from other states and, and like basically holding, like blackmailing them, holding them ransom 'cause they're so cash strapped. That is a major red flag to me. And maybe it's just, it's anecdotal.
Maybe it's not big, but that's the sort of thing you should be looking at if you want to make the bear case on China is that without the sort of coherence of 10% growth, which was driven by the factor, you know, the treadmill, the hill factors that we've talked about, does that coherence break down into atomization and they just can't get anything done. Um, there's no real sign of that yet, but that's the risk on the Chinese side. And it's not a. Tail risk.
It's a real, like significant, like that's the bear case and it's worth taking very seriously. Um, and in the US you have the bear case that you pointed out, which I think paralysis, inability to build. Like that's why software has been so successful and everything else has not because software you can just spin up a server and you know, AWS la la land and no one can stop you. Um, it's a lot harder to do that with physical things out in, out in space.
Um, so he, God that's like pretty negative on both places.
It is, it is negative on both places, which actually underscores.
¶ Concluding Thoughts on US-China Relations
I, I had a question at an event I did a couple weeks ago where somebody asked me, who wins in the US China trade war? And we've said this on the podcast a couple different times and had guests who brought data to back this up. Nobody wins. There are no winners in what's happening right now.
So instead of focusing on the things that could actually make life better, we are now focusing on recreating things so that we can have national, um, you know, self-sufficiency in some areas, and we're using these different things as leverage against each other and thinking about what this means from a national power perspective.
You can see this in how, I mean, look at how the tech community in the United States has basically just morphed into a defense tech play and has allied itself with, um, you know, uh, with a really defense oriented, like, protect oriented environment, rather than pushing the boundaries of what's new. Um, I think you can sort of see that all over the place.
And the, and the depressing thing of what you're saying is, well, what if in fighting each other and in the great power competition, there can be no florences. There can't be a Florence anywhere if everybody is thinking is watching their back and thinking about how some other country is, is gonna attack them. Um, and I think that was one of the nice things about Kaiser's rejoinder to that Kyle, that Kyle Chan article reminding us that, okay, like we're sitting here in the United States.
I know West Virginia, I've been to West Virginia. I can read that Wall Street Journal article and make the jokes that I just made. I bet there's a Chinese version of me who can do the same thing in China and can, you know, think about, oh, well we got these grand plans, but I can't, I mean, China had a real problem in getting people to take vaccines around COVID-19, right? Like, so I'm talking about vaccine hesitancy here.
Just because, uh, there's a dictatorship in China doesn't mean that the average Chinese person wants to take a vaccine any more than a American citizen wants to take a vaccine. So, um, yeah, I don't know. Maybe you should tell your Brazilian friends to go back to Brazil. That comes with its own, uh, problems. So,
well, I guess that that's the bear case to everything that we're doing. I, I've been reading some books about, so, uh. This book by Eric Klein, I just read 1177 bc. Did you ever, did you hear about him? No, no. He wrote one called 1177 BC and then one called after 1177 bc But this is about the collapse of the Bronze Age, uh, civilizations and sort of what happened. And, you know, they used to call it the, the original Dark Age.
Basically there was climate problems, mass migration that destabilized societies, which led to warfare and agricultural, you know, problems, which led to costs. And the takeaway in his book after 1177 BC is just like, nobody won. Like, yeah, there were like, the Venetians did relatively better and the Creon did relatively better, in part because they were more mobile and sort of how they could do things, which is a separate discussion, but like, it just sucked for everybody.
Everyone did absolutely worse off than they would've otherwise. And that's like the negative scenario of what could potentially be in our future. Like, I hope not. I hope we're in a situation where we're arguing over who gets all the new Alzheimer's treatments and they won't share with each other. But it's not unthinkable to think like, yeah, maybe just no one wins. And it's just, you know, God going into a dark place with this. Yep. With this one. But
our podcast title, it sucks for everybody. Nice chatting with all of you. We will see you in two weeks with our latest and greatest. Yeah. Anyway. Um, well, no, it's, it's important to think about the, it's important to think about the downside. Okay, well Rob, I, let's commit to each other that we'll come back here in two weeks. Uh, and let's try and argue the opposite, or let's see if there's any optimism that we can find at some of these things.
'cause I think that that's the other thing about the volatility spiral it, uh, I said this actually on another podcast yesterday that I did. Somebody asked me what, uh, what I've been focusing on right now in my honest answer was I haven't felt like I could focus for three months. Um, it used to be that, okay, I spent the first couple hours of my day getting on top of, okay, here's what's going on in the world.
And, you know, I'd pour myself a cup of coffee, maybe two, and by 10 o'clock I'd be like, okay, like I have a pretty good, my finger's on the pulse of the world. I can go do some deep research. I haven't been able to do that for three months because just keeping your finger on the pulse of what's going on, like is a five to seven hour job now, where it used to be a two to three hour job for somebody who does this for a living and has been doing it for a living for like 10 years.
Um. Which makes it harder to like stay focused on the things that are optimistic. 'cause you're not thinking about the bigger trends. You're just having to deal with all of this. Um, and, and it's not just, it's not new things. It's like, okay, one day it's this, then it's 180 degree turn, then oh, another 360 turn then oh, 90 degree angle. Let's go this direction. And it's sort of the same thing over and over again. And the trend lines just kind of stays, uh, stays in the same place. So anyway,
well, the last time we were in a volatility cycle, I think people said some of the same things about these new motor cars zipping around at these unheard speeds. And, you know, my God, I can't even keep up with the news and war here and terrorist bombings there. And, you know, there's some element of of that that always happens in these things like volatility spirals are also very good.
I think that's the hardest thing is like, it's, it is so easy to say the doom and gloom and, oh, 1177 BC and everyone's screwed. Like there's an equally and probably more valid in terms of probability scenario, which is the future's so bright, I gotta wear shades. And like the volatility spiral swings both ways and it'll be both at the same time. There's gonna be countries that are gonna be absolutely demolished by all this stuff going on, and we're already seeing so much of this.
And at the same time, there's gonna be such incredible things coming out of this. I, I think, and you can see some of that too, like it's, it's hard to have a nuanced and complex view of the world, but, and that doesn't make for good podcast listening 'cause people just want kind of a relatively straightforward narrative. But both those things can happen simultaneously and you know, that's, that's the reality of it. So yeah, we can talk about the future. So bright, I gotta wear shades.
Side of things next time, just to even it out, but
alright, well, I'll hold you to it. We'll go from there. Thank you so much for listening to the Jacob Shapiro podcast. Uh, this show is produced and edited by Jacob Mian, and it's in, in many ways, the Jacob Show. Um, if you enjoyed today's episode, please don't forget to subscribe. Rate or leave a review takes just a couple seconds of your time, but it really helps us also share with a friend.
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