Podcast
E20: Robinhood wrap up, Insiders vs. Outsiders, California's failing report card & how to fix it
All-In PodcastDavid Sacks, Elon, Vlad, Gavin Newsom, Aziz Ansari, David Friedberg, Chamath Palihapitiya
- David Friedberg anticipates a Fox News appearance and predicts a political shift from left-right to an "insider versus outsider" fault line, expecting voters to rise up against insiders; he forecasts a "death spiral" for California unless leadership changes specific propositions (Prop 47, 13, 4, 98), warning that a loss of 40,000 households could create a $50–$60 billion budget hole due to disproportionate income tax contributions, with $250 billion in pension underfunding and a one-party state structure beholden to unions.
- David Sacks believes Robinhood founders were compelled to restrict trading due to DTCC collateral demands dropping from $3 billion to $700 million, suggesting the company should have absorbed losses rather than harming customers like Airbnb did; he predicts GameStop short interest remains at roughly 50% but is ebbing, likely prompting short sellers to buy back shares after a 60% stock drop.
- Jason Calacanis reports that GameStop short interest has settled and the squeeze has abated, though he warns of concerns regarding Citadel's influence on the DTCC and the optics of their involvement; he predicts the Robinhood $3.4 billion capital raise occurred at par or a discount, potentially at terrible timing, and foresees Robinhood employees being "completely creamed" by the dilution.
- Chamath Palihapitiya forecasts that politicians from Elizabeth Warren to AOC will extensively debate payment for order flow (PFOF), though the outcome remains uncertain; he predicts investigations will clarify whether the GameStop event resulted from poor communications, poor preparedness, or a conspiracy, and speculates that insiders turned the board over to prevent being ousted.
- David Friedberg and Jason Calacanis both predict that if the California recall succeeds, it will serve as a roadmap for the other 49 states, forcing politicians nationwide to stop listening only to insiders; they agree that term limits (such as 12 years in California or two terms) would have a "cleansing effect" on the political class.
- Jason Calacanis identifies a structural failure in California's EDD, predicting $30 billion in fraudulent claims out of $114 billion in unemployment benefits, alongside a public pension deficit of $250 billion and over 340,000 public employees earning over $100,000 annually; he predicts the middle class will vanish, leaving only government workers, as businesses flee to states like Austin and Miami.
- Both speakers assert that fentanyl requires a solution involving "giant treatment centers" rather than decriminalization, citing a rise in overdoses from 18,000 in 1999 to over 70,000 now, with San Francisco deaths reaching four to five times the COVID death toll; they attribute the crisis to a lack of jobs and mental health resources.
- David Sacks argues that Robinhood's capital raise timing was "terrible" if at par, contrasting it with a Silver Lake/Airbnb trade of the previous year; he suggests that while shorting is a healthy market component, the "insider game" functions as a protection racket where elites protect each other, creating a movement of distrust toward career politicians.
- Jason Calacanis suggests T+0 settlement would solve margin and confusion issues better than current "black swan" infrastructure, and argues PFOF is not inherently bad for stocks but problematic for options; he notes long holders can earn up to 24% interest on borrowed shares but personally refuses to allow borrowing.
- Chamath Palihapitiya and David Friedberg predict that the political divide will increasingly center on the "insider vs. outsider" dynamic, with Friedberg forecasting a "mass exodus" of entrepreneurs to tax-free hubs and Calacanis noting that "career" roles will face significant public distrust.
- David Friedberg and Jason Calacanis agree that the government should run at a deficit only while GDP growth is positive, otherwise the economic formula fails; they both warn that California's current model will lead to a revenue collapse if high-net-worth individuals continue to leave, with Friedberg estimating a $50–$60 billion hole and Calacanis estimating a $70 billion hole from a 40,000-person exodus.
- Both speakers express that the recall of the California governor marks "the beginning of the solution" and a potential catalyst for broader national change, with Friedberg noting that Episode 21 will feature David Sacks reading a tweet calling him "sanctimonious."