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wipe out over three years yeah speaking
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of kind of bad situations we are not at
the end so we don’t have complete
clarity of the hindsight but there’s
been a lot of what I’ll just call bad
behavior in the market that led to a lot
of this so whether it’s the
over-leveraged of corporations or even
hedge funds at the key talks right at
one point a lot of the debt fueled
buybacks the CEO departure is kind of at
the top all of these things what’s your
take at this point in time right so
we’re kind of going into this situation
we’re not out of it but like how do you
view a lot of that be
right now so I got it I got an email
this morning actually from my prime
broker so hedge funds were at 99 to a
hundredth percentile of their historical
max leverage literally February 20th and
now we’re at you know the 20th to 30th
percentile historically so you know we
were probably at 7 or 8 turns of
leverage and now we’re probably down to
one and a half to two or three I think
that this next go-around you’re going to
have to realize government will have to
realize that in 2008 all they did was
allow financial institutions to pass the
buck they were able to take the leverage
off balance sheet and when you subtract
out debt as a function of GDP for many
years now we have had negative GDP so we
were not growing in the absence of
people issuing debt and most of that
debt unfortunately was not towards R&D
but it was towards things that
superficially propped up stock prices
which really only benefited a handful of
people and I do think we have to
restrain people from being able to do
that in the future I don’t think it
makes a lot of sense and I don’t think
it adds a lot of value and I think that
it’s not that it was obviously
responsible for the coronavirus but I do
think that when you look at how much
devastation we are encountering and when
we do the final tally on the amount of
buyback oh sorry the amount of bailouts
we need the bailouts are directly
correlated to how stupidly run and badly
run these companies were you know why is
it that California is legally mandated
and you’ll say oh because it’s a
nonprofit but legally mandated to have a
rainy day fund but a company isn’t and
then the company is the first one to
knock on the door of the government and
we’re just waiting for the next shoe to
drop or California Mississippi Alabama
Louisiana to all do the same thing and I
would much rather see the money go to
the states and the cities in an in an
fair even
then the money go to a private company I
think that those private companies
should be wiped out the equity should be
wiped out and they should need to
restart it’s one thing I’m a hundred
percent in alignment with you on this
but the part that I don’t understand is
how do you continue to benefit from the
elements of capitalism if you take out
the risk moving forward it everyone
knows I can quote unquote take this like
fake risk and if anything goes wrong I
can just run to the government and get a
bailout you changed the dynamic of what
happens and I actually think you
incentivize even more bad behavior right
it’s almost like there was bad behavior
and then there was no punishment for it
and therefore you just encouraged that
to continue you know when we get out of
this thing well I it depends on what you
view capitalism as I think if you view
capitalism as a game of risk I think
you’re right I’ve always viewed
capitalism as money becomes a fulcrum
instrument for change what do you want
to see in the world okay
money is your lubricant you decide and
the person with more money or the person
who’s willing to put more money into
something and who can be more clever
basically has the opportunity to win so
I I think it’s a game that puts
ingenuity and money at the forefront
that’s what to me that’s what capitalism
is and so when companies are doing
things that are fundamentally not
advancing that forward they should
disqualify themselves from them being
able to run to the government so it
would be a different thing entirely if
all the airlines had invested let’s just
say 96% of free cash flow dollars on
supersonic flight failed and then came
to the government and said look I took a
big bet on the future to help advance
humanity it didn’t work and I need a
bailout I would be the first one to say
okay but when 96% of free cash flow
dollars go back to buying back shares
and then you basically claim the same
thing I think you should be punished and
punished financially so you know you you
you took the money that you had you
refused it you refused to multiply it by
a good smart bet on the future and I
think that there should be consequences
for that
yeah I don’t disagree with you at all
last question for you
been incredible kind with your time here
if you were the president over the next
six months
what’s your playbook so president Shamus
got full control can do whatever was it
within the presidential powers what’s
your playbook to kind of weather the
storm and get us out of this
I would first stand up every single
voting site that we would use in the
November election
and I would schedule every single man
woman and child to come through all of
those testing facilities and I would
basically deploy a rapid test to figure
out whether they had coronavirus in that
moment okay and families could come you
know 10 minutes apart so that you could
get back into your car and go etc etc in
step number one if you didn’t have
Corona so you weren’t shedding the RNA
in that moment you go to a second and
you get administered a finger prick
and you get tested for the antibodies
and within 15 or 20 minutes and you’re
held in an isolation
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you know booth area where you you know
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you’re on Instagram and when you’re done
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you’re given a wristband and that
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wristband basically says one of three
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things well if you had tested positive
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you get a red band you go home and you
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isolate if you test negative and you
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have the antibodies you get a green one
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and if you test negative and you how
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don’t have the antibodies maybe you get
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a blue one green and blue are allowed to
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go back to work right away red self
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isolates you contact trace etcetera etc
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that’s sort of the frontline of getting
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the economy back to work and you have
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some combination of the National Guard
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and sort of like a whole infrastructure
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then separately I think you introduced a
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massive massive massive infrastructure
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bill that starts to drive the
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refactoring
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of the supply chain back in
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to the United States and part of that is
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incentives and part of that is
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government spending and it has to cut
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across many categories from you know
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semiconductors in silicon all the way to
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clean energy to actual physical
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infrastructure like you know bridges and
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and tunnels and roads and in that what I
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think you’re mandating is a certain
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percentage of things to be made
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domestically in the United States and
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you start to get people back to work so
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the short term path I think is to kind
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of baseline the disease and get the
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people who are allowed to be working
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back into a green zone of every city
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every town where people with these green
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and blue bands are allowed inside and
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the red banded people have to stay and
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quarantine themselves so that we can
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start to restart this economy and then
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longer-term is an infrastructure build
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that basically resets incentives towards
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resiliency towards inefficiency away
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from efficiency I think that’s a pretty
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solid plan I’m shot I’m actually shocked
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that some of this hasn’t been instituted
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already the lack of testing just blows
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my mind I mean the stats I saw on
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Saturday 895 thousand people I think
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I’ve been tested at a 330 million in the
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United States I think the other
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reckoning that we have to do maybe just
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to finish on this is that we’ve
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politicized things that should never
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have been politicized health should not
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be politicized you know the problem is
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that starting with Obamacare health
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became something that was about the
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Democrats versus the Republicans and you
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can see how that’s sort of like you know
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flowed into things like the FDA and the
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CDC and history will tell what they
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could have done better history will tell
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what the w-h-o should have done
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differently
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but I think what we can see is that
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there are many points along the
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evolution of this disease where logic
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and open-mindedness and iteration ran
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into bureaucracy and bureaucracy one and
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I think that’s probably the most
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generous way of describing it and we
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need to figure out
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where there are almost constitutional
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level provisions you know you have the
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right to bear arms great what about the
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right to basically not you know not die
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in a preventable scenario what does that
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mean for how these organizations should
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run you know we at a very basic level
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have told the healthcare infrastructure
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that we must do no harm and I think it’s
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time to say look with 8 billion people
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in the world and a 90 trillion dollar
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economy that supports those eight eight
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eight billion people do no harm doesn’t
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work anymore it doesn’t scale we need to
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do our best and there’s a lot of rules
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that could change in a scenario where
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you embrace do your best and I think
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that that that has to happen but the
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failures of the political infrastructure
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and the healthcare infrastructure to use
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bureaucracy as the thing that that
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drives decision making I think is also
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the a domino that has to fall after this
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and we need to revisit because it’s a
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you know we’ve we’ve done a lot of
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unnecessary damage to ourselves and some
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of this some of these self-inflicted
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injuries we should figure out how to
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prevent for the next time because it’s
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gonna come again yeah I think we’re
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living in incredibly uncertain in
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chaotic times and you know one just
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thank you for your time today but uh too
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is uh think I speak for a lot of people
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in that we’d love to see you go public
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and kind of be along for the journey so
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you’re doing an incredible job and I
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just appreciate you uh
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kind of going out there and sticking
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your neck out there frankly because a
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lot of people who they they’re gonna all
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be the armchair quarterbacks right okay
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two three years from now like I said I
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told you that we should have done X or Y
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but right now they’re they’re kind of
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quiet so we’ll see how it plays out well
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I really appreciate the fact that you
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had me on and I just want to say that I
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think you’ve been a really good person
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in being out there in this moment the
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reality is like in moments like this you
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need people to be coalescing opinions
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and I think that you’ve done that that’s
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a really important service because it
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allows people to get to ground truth so
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I just want to say thank you for doing
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that
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thanks for including me
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no problem at all all right sir well
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thank you a teacher
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all the best talk to you soon right bye