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The End of Trust and Credit Suisse is Worth About 3 Nutrabolts
66 Plays1 year ago
- https://www.abajournal.com/news/article/former-biglaw-attorney-gets-one-year-suspension-for-trading-on-information-learned-as-conflicts-counsel
- https://www.cnn.com/2023/03/23/tech/tiktok-ceo-hearing/index.html
- https://www.reuters.com/legal/coinbase-issued-wells-notice-by-sec-2023-03-22/
- https://www.cbsnews.com/news/credit-suisse-shares-down-ubs-takeover/
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Transcript
Podcast Kickoff and Banter
00:00:00
Speaker
There are no rules and the points are made up kicking it off with head the Hannibal Lecter voice right off the bat tonight, huh? Zencaster needs to Institute like a not whose line what's the ESPN show with that used to be hosted by Tony reality Yeah, pardon the interruption. Yeah, pardon the interruption with scores and stuff. That would be very nice Yeah, the only person who ever scores points is Jake. Oh
00:00:27
Speaker
Yeah. I, well, I, I'd be the host. No, Andrew's the host. Andrew's still the host. I don't really know why I'm the host. I mean, I don't see that I'm the host. You're not a, I don't even know who hosts it now. It's not Tony reality, right? I know this show. This is me showing my age. Who watches TV anymore.
ESPN Nostalgia
00:00:45
Speaker
Watch ESPN anymore. Yeah. Who watches the age of the golden age of ESPN is long gone. Sadly. Yeah. And with that declaration,
00:00:56
Speaker
What? No, what are you doing? All right guys, show's over. Oh no, wrong one. Sorry, hold on. I thought that was on purpose. I should have pretended it was on purpose.
00:01:13
Speaker
I'm having interesting audio things today. People will really find this interesting. You guys are coming through my AirPods, I think. Yes, you are. But the track for the intro music is coming out the iMac speakers.
Audio Issues and Introductions
00:01:25
Speaker
I didn't know that possible.
00:01:27
Speaker
But anyway. Also didn't. I didn't hear it though. The audio was good. Episode 12, March 23rd, 2023. Show us three lawyer friends, not giving legal advice, not giving technology advice. We're certainly not giving technology advice because we're going like a month and a half now without having any audio issues. Every week we've had something, right? I think. Is that right? We've missed a week, then we had no Jake at all. Then we had too much Jake at the end of the last one, right? He was alone just doing an outro track.
00:01:54
Speaker
So four minutes of complaining about why is our audio always messed up. Yeah.
00:02:01
Speaker
Yeah. If you heard that, congratulations, you got the sweet bonus track, which was deleted after we were realized it existed. He really jumped on it. Congratulations. Yeah. Outstanding. So I'm Andrew Leahy. I'm a tax and technology attorney, and I'm joined by Jason Rangeland. He's the employment attorney, but also he's the only one of us who hasn't had an audio issue so far.
Tort Reform and Lawsuits in Florida
00:02:20
Speaker
He gets his audio issues out of the way before we do the show. He comes in and never works the first time. I was going to say. Before it's recording.
00:02:27
Speaker
Yeah, he gets the benefit of having an audio issue that alerts him to its existence immediately. And we're jinxed. We're jinxed tonight because this was the first time that I did not have that issue. Guys, this is some A++ podcasting right here where we're complaining about our audio issues. Yes, I am Jason Ramsland. I sue bad bosses. Sometimes I sue them one at a time, sometimes three at a time. This week, I'm suing eight bosses at a time. Yes, eight bosses.
00:02:56
Speaker
only slightly an obscure office space reference. I literally sent a letter where we're going to sue eight people for an overtime violation. So tons and tons of fun.
00:03:08
Speaker
The eight bosses, I don't know if you've been, how quickly you've been paying attention to Florida's plaintiff situation, plaintiff lawyer situation, because we have a giant tort reform bill coming through. It's the talk of the legal sphere especially, but man, every plaintiff lawyer I know is filing like dozens and dozens of cases. This, my local,
00:03:35
Speaker
clerk, uh, got over a thousand filings over the last weekend alone. Um, over the weekend, over the last weekend, whereas the average year is like 12,000 or something like that. Um, apparently there's like 400,000 new cases filed in Florida. Um,
00:03:56
Speaker
that's a rumor. I have no idea, but it sounds very high. It feels like 400,000 people should not have plaintiffs cases in Florida. Uh, but man, um, and so why is this the part about why, why, why is this happening? So there's a tort reform bill coming out, which is going to drive. It's going to change how much damages are available and also change how insurance works.
00:04:22
Speaker
And so they're getting it in under the gun, uh, thinking it's going to pass or some version of it is going to pass so that it's not, it doesn't apply retroactively, uh, or apply to that, even though, you know, I'm sure there's some question about, uh, you know, the retroactivity when it comes to the claims themselves, because you got injured under the 2020, whatever law.
00:04:45
Speaker
But I think for insurance and bad faith and stuff like that, it's gonna apply prospectively and retroactively kind of. But also it's definitely like,
00:04:57
Speaker
Uh, political, it's definitely like a political maneuver by you don't say to be like, we're going to, oh, okay. You're going to do this. Well, then we're just going to file on every case. I hope you enjoy your tort reform package insurance. Uh, you could like you, you lobbied for this. This is what you got. And then they're going to get, you know, we'll see how it goes. But even if, even if they don't pass it, it's going to be a mess already because yes.
00:05:21
Speaker
The best is made. The clerk. I mean, the judges are still backed up from COVID. And it's going to be even crazier just with defaults, I guess. I don't know. Are they going to default? They're definitely not going to follow the uniform case management orders that are getting sent out. So oh, boy. It's going to be a fun time. So who are you? Introduce yourself. Oh, yeah. I'm Jacob Schumer.
00:05:50
Speaker
Uh, I'm a local government and land use attorney in Florida. Um, the world's most fun state and he's the young lawyer section of Florida president elect designate designate the third, right? Yeah. Yes. Yeah. For the state or for Orange County. I'm not doing it for the state. For the state, you have to campaign and travel and I'm not doing that. So no, thank you. You don't want to go to Florida. Sounds lovely. Yeah.
00:06:17
Speaker
So close the loop for me here, because you were talking about eight bosses, and connect that to the tort reform thing. Well, just how many lawsuits and how many people you can sue at once. That was the closed loop, the segue that I was going for. Wait a minute, is that a new rule on the show? Like, are you going to call people out if we don't make our point? Because I'll drop the poll right now. That's unfair. Don't put me on the spot. Yeah, I go off on tangents. I have no idea where I'm going.
00:06:43
Speaker
When we were talking about this like four months ago before we ever started recording anything, didn't we say like the main purpose here was to make fun of each other? Yeah, that was a product. Okay, no. Yeah, okay, sure. No, it wasn't like a purpose, but it was like, hey, you know what, this is probably something that's gonna happen pretty regularly. In the middle of my statement, I was gonna be like, wait, I'm just as bad as you, I'm correcting you. We can't correct each other.
Insider Trading Scandal
00:07:10
Speaker
That's not okay.
00:07:11
Speaker
No reason, no correcting. Yeah, no. Everybody gets to say anything. It can be completely wrong. Right. Well, we have the disclaimer at the start. So once we say none of this is legal advice, anything we say, it's totally fine. There's no, that's how that works. It's like when you put at the bottom of your email, none of this is legal advice. That sounds right to me. We also have an 11 episode track record of being completely wrong a lot of the time. So muscle talk, guys. I haven't heard anything in like six episodes about something we got wrong. So I think we're totally good now.
00:07:41
Speaker
I think initially people think they're probably holding themselves to some sort of standard and they listen under those auspices and then eventually they realize, oh, these people are not. It's like people on the street yelling. You don't keep fact checking everything they say. You know what I mean? Yeah. Yeah. We've also self selected out the audience that wants things to be accurate and high quality. Yeah. So, um, we successfully got rid of them. Yeah.
00:08:04
Speaker
Uh, yeah. All right. So we have a lot of topics, I think, but a lot of little topics. The first one, I don't know. I think Jake, you shared this, this, uh, Cozen O'Connor, uh, partner, right? Conflicts council that got, was that Jason? Oh, it was, it was me. It was me. Yeah. So inside of trading, I'm sorry. I don't know. Go ahead. Are you told? No, no, no. There was just, there's this guy who worked for this law firm. Uh, apparently it's got some connection to you, Andrew, in some way, uh, but no special inside information or anything like that.
00:08:33
Speaker
But there's this big law lawyer who got his license suspended for a year because apparently at some point he came across information that led him to engage in some sort of trading that
00:08:48
Speaker
with that inside information and what do you know he earned a profit of $10,000 by trading the stock of a client of a client of the firm and you know word kind of percolated through and it was discovered and instead of turning a $10,000 profit he paid a $20,000 fine.
00:09:11
Speaker
So 61 year old license, which is suspended license for a year, $10,000. His name is all over. I mean, if you search for his name, that's all you're going to find, right? He's a 61 year old, I think partner, right? And he's a conflicts counsel at Cozen O'Connor.
00:09:24
Speaker
I mean, if you're a 61-year-old lawyer, I sure hope you're a partner if you're out of law for them. If you're a big law partner and you're 61, I think he can just retire. I think he just, like, you know. I got the cleats. He was making enough. So, conflicts counsel in this context means when it comes to corporate M&A,
00:09:43
Speaker
Is that what it's about? I mean, I think in this particular case it might be, but in general, yeah, it's just, it's like one attorney they set aside that I don't, he's probably not inside the hierarchy of like the, you know, associate partner, counsel track and stuff. He's sort of like not quite a contract attorney, but something along those lines. And you're just in charge of basically looking at new matters coming in and sending that email for him wide that bothers everybody that says, does anybody have a conflict with, you know, with this whatever?
00:10:08
Speaker
Which is probably something that could just be delegated to like a trustworthy paralegal in terms of sending that email. And honestly, that's probably what happens. But he bought the stock in October of 2019 after he basically got a hunch on what to on what to buy when a tax partner asked him to run a particular conflicts check on a particular company, the company that he ended up buying stock in. And this was kind of
00:10:38
Speaker
on its way to a possible merger. I don't know whether that merger actually ever came through, but they ran the conflict.
00:10:46
Speaker
Guy figured out, oh, hey, this might be a good buy opportunity. If they're about to get snapped up in a merger, maybe the price is going to do well. Apparently, that was a good hunch, because the price did do well. I don't think it says how much he invested in order to turn that profit. That's my question, because I hope that was 1,000 to 10,000. Because if he put 100 grand in and he made 10,000 on an insider tip, then he needs better insider tips. And then lost his license for a year. He just needs to bet bigger.
00:11:14
Speaker
Exactly, yeah. Okay, here we go. I pulled up the SEC announcement, which was from November of 2021. So this is the SEC fine announcement. And so the license suspension proceedings only just kind of came to a head recently.
00:11:32
Speaker
He purchased 1,000 shares after the merger was announced, stock price increased 13.7%, sold his shares for profit of $10,002.
Remote Work and Confidentiality Risks
00:11:43
Speaker
Somebody else who actually math is good in their head can figure out what that is, but he invested enough to make 10 grand on a 13.7 return.
00:11:54
Speaker
He didn't bet big enough. Maybe he was betting small on purpose in hopes that he wouldn't be noticed. It is interesting to me to think about how this got figured out. I am willing to hazard a guess. I don't think it says in any of the articles that I've seen on this. I'm willing to hazard a guess that this was water cooler discussion.
00:12:17
Speaker
Yeah. Stupid Slack channel discussion, like we do constantly every day. Somebody hearing the tea about this guy who bought the, bought our clients stock or something like that. To be clear though, Jason just said, but like we do on Slack, we just talk on Slack. He's not, you know, when we have insider information, we buy stuff and we sell it at a profit. Just like we do. No, we don't do it. Yeah.
00:12:43
Speaker
Yeah, I agree. There's no way to find this out otherwise. This is not something like, what are they doing? They're not moderating their employees' investment accounts or anything like that. It's possible. It's possible that for a position that's a more sensitive position like conflicts council, maybe they are. Maybe for M&A people, I wouldn't know. Maybe.
00:13:04
Speaker
Yeah, but there's another this reminded me of an interesting case of like very similar where a a it was a big law attorney working on a corporate merger and her boyfriend stole insider information from her without her knowing and there was like a question about whether she was responsible and I think she ended up getting this discipline a little bit like a little bit.
00:13:31
Speaker
because for not having enough information security or whatever. But that's such a tough position to be in. Isn't it kind of the duty of the boyfriend to say that he stole it? Like once you're caught, doesn't he kind of have to say I stole it without her knowing? I mean, there's no point in everybody going down. I mean, yeah.
00:13:52
Speaker
although i don't know you know at that point you're you probably ruined the relationship so maybe you're just like that screw it she was in on it the whole time or something like that but maybe we're strong maybe we're too close in time to like the pandemic the part of the pandemic when
00:14:09
Speaker
everybody was working from home all the time to be like, where are these cases that are being prosecuted where client confidences were breached because somebody was working from home? And like, their kids in the next room were on a Zoom call with their teacher and some other kid's dad was listening in and discovered this like,
00:14:30
Speaker
just everybody overheard a phone call. There's got to be something weird like that that's coming down the pike and maybe we're just too close to March, April, May of 2020 and enforcement just slowed down so much that maybe we just haven't had a perk late through yet.
00:14:47
Speaker
I'm waiting for
US Congress vs. TikTok
00:14:48
Speaker
that. As you said with the other case, it's probably difficult for that to be caught as well. Each one of those leaks you're making, they're all in the same class and they're on a call and somebody's dad hears the thing. The further out you get, the less likely it is that... My understanding of how most of these insider trading things go is that people who have insider information at one company, one firm, one whatever, about one company that they're too connected to,
00:15:13
Speaker
sell it or trade it to somebody who has information about another one that they can act on. Like, does that make sense? So like, you know, I'm high up in Walmart, I know they're about to acquire something, you're high up in Target, you know, they're about to acquire something, you really can't act on your target information, because they'll catch you in two seconds. But you could act on my Walmart, and obviously, vice versa, the same for me. And so
00:15:32
Speaker
I imagine a lot of these things are traded on platforms and stuff. I might be writing an article about something like that. But anyway, moving on from that, our other small topic is the TikTok hearings and whether or not TikTok should be banned. This happened today, right? The CTO was in front of the House Energy Commission, I think, right?
00:15:49
Speaker
Oh, I don't know what committee he was in front of, but yeah, he was in front of some committee. And we covered this a little bit last week because, you know, talk has been ramping up about TikTok getting banned. And somebody said, you know, they'd been taking it seriously and not so seriously over the years, but they're starting to take it, that is,
00:16:09
Speaker
the commentator was starting to take it seriously because TikTok CEO came out with a video about the platform, talking about how nice the platform is and how important it is. 150 million Americans are communicating on TikTok.
00:16:24
Speaker
And he did this in like a high rise while wearing a hoodie. And it's like, oh, he's wearing, he's doing a hostage video. This is, this is looking bad. Um, that's the window. He will be defenestrated out if it's going to work out for him. Yeah. Yeah. But apparently it was like a terrible, huh? Yeah. Defenestrated. You know, that has two meetings. You know, that has two meetings. Yeah. It has a second meeting. Oh no. What's the second meeting? No, we're not going to talk about it. I learned it in Latin class. I mean, the window.
00:16:53
Speaker
You can look it up recreationally. Oh my god. I meant the window one. If it's some sort of horrible thing, I didn't mean that. I meant he's going to get chucked down. They're both horrible. I mean, they're both horrible. That's true. Let's not do any of them. No. OK. Apparently, the hearing was terrible. Members of Congress all went into, we're just like, TikTok is terrible, which is like, it kind of is. Yeah.
00:17:18
Speaker
And the CEO was basically like, yeah, we're just doing the same thing that Facebook is doing. Everything we're doing is the same. And there was definitely a share. I just saw the highlights. There was definitely a share of, you know, politicians, politicians, questions which don't make any sense. Like, is it true that TikTok accesses your home Wi-Fi when you use it? And he's the CEO of TikTok. He's like, what? Of course. What? I don't understand.
00:17:45
Speaker
Yeah. Bro, do you even internet? Come on. Yeah. And one of the questions was like, can you confirm now the TikTok's algorithm does not look at, use the camera to look at pupil dilation to confirm that that's used for the algorithm and the gut. And again, the TikTok guy was kind of confused. Didn't understand what was being asked. He was like, yeah, we don't use identification, the camera to identify, but that was, you know, that wasn't what it was being asked. It didn't make any sense, but, um,
00:18:14
Speaker
Well, apparently the CEO was preparing for weeks. They were peppering him with questions. He underwent a rocky training montage of getting ready to be asked by these 900-year-old mummies questions. But I'm sure those questions were not thrown at him. They never thought, well, what if this is the same? Was the guy who said the internet's not like a pipe. It's like a bunch of trucks. Was that the house or the senate? Well, there was the guy that said the internet is a series of tubes.
00:18:42
Speaker
Is that Ted something? Ted Stevens, who died in a plane crash? Died in a plane crash, yeah. Probably for asking a stupid question. But I don't think he was being peppered with these sorts of questions. And yeah, apparently, there was just bipartisan. He was just being basically flayed, the CEO of TikTok. He was not. At one point, he asked if he had an opportunity to respond to something. And the chair thought about it for a second and said, no, we're going to move on. And then moved on to the next. I mean, it was clearly just we're going to drag you out.
00:19:11
Speaker
And we're going to talk to you about that. I don't know what sort of level of prestige it takes in order to get a seat on the House Energy and Commerce Committee. It seems like the Commerce Committee would be a pretty important committee. I don't know why Energy and Commerce are bundled together like that. There's probably a whole host of- Those seem like too large enough to be on their own.
00:19:33
Speaker
Yeah, I mean, they're large enough, I think, also to have their own cabinet secretaries, right? There's a Secretary of Energy. Is there a Secretary of Commerce? Surely there is. Yeah. And so really showing the grade A government acumen here, Jason. But looking at some of these questions and look at the way that the questioning overall went, it makes me yearn for the time when the people who were on our TV asking questions of important people were like,
00:20:01
Speaker
Jamie Raskin, who was doing some of the questioning about the impeachment hearings and stuff like that, where you actually had a trained litigator who knows how to examine a witness up there. The caliber of the questions that were asked in this hearing, it was just so poor. It's really disappointing that you get this guy who's the
00:20:26
Speaker
head honcho, Shaochu, I think his name is, I might be pronouncing that incorrectly, but you get this guy who's like a big wig at the company that owns and operates the biggest, most important app in the world right now, especially as it relates to social media, and you get him in there and you ask him a bunch of stupid questions.
00:20:47
Speaker
Prepare for the hearing, guys. Prepare for the hearing. They just want to have the hearing so that they can tell their speech and get like a good clip to show off to their constituents about how they're fighting TikTok. They aren't really actually looking at it. And I don't think that's very effective at all. I don't think that's a good strategy. So like there are some people that are good at questioning.
00:21:13
Speaker
The two that come to mind are actually AOC and Senator Burr from North Carolina, I think, who are both good. And I know that because I saw clips where I was like, wow, you're actually smart. Whereas like any time I see somebody grandstanding, I'm just like, oh, this is so annoying. Like you could actually be asking useful questions and not like, why did you bring this person out?
00:21:39
Speaker
Yeah, so whenever somebody does actually ask good questions, I'm impressed. And it makes me think a lot more of them. Here's an example. So this was Representative Rogers. I don't know anything about her or him. It's she. And she, I believe, is the chair of the committee we were talking about, the energy and commerce or whatever.
00:22:02
Speaker
Well, she should be unseated both from the chair and from her seat in Congress because, I mean, she literally took the opportunity to grandstand in this, in what's supposed to be hearing. And this is the quote from her. It says, to the American people watching today, hear this.
00:22:17
Speaker
Okay. Great. We're all watching that. Literally. And hear this. Great. You sound like my eight-year-old dad. Hear this. Do you mean listen to this? Hear this. TikTok is a weapon by the Chinese Communist Party to spy on you, manipulate what you see, and exploit for future generations. Close quote. Okay.
00:22:38
Speaker
Let's take for a second here that there are some genuine concerns about TikTok and access to TikTok and what TikTok gleanes from us and our eyeballs and our watching habits and the sort of things that do well here. Let's assume that the Chinese Communist Party can have some access to that.
00:22:59
Speaker
Is it a weapon designed by the Chinese Communist Party? I don't know. In the same way that everything that China does is associated with its government. That's my larger point. Yeah, I don't understand. And I wonder how foreign that sounds to ears that are not American. Is that something only we do where we link everything? If it's owned by a French company, do we want the French to have access to this? What does that mean? What are you talking about? It's not like the government owns it. I understand it might be different in China.
00:23:28
Speaker
Yeah, it's kind of not like they don't they really don't own it and like independent researchers have looked at tiktok and it doesn't appear that there is some sort of back door in there that they like sure tomorrow they can just there's a my understanding is there is a law in China that you know for any national security reasons they could basically take all the data of tiktok and I think even if there wasn't a law like we can all sort of posit that they would be able to do that in some way right but the idea that reality yes they can break down right and just take it
00:23:56
Speaker
Right. Just as much as we can. Any other, like Facebook or anything like that, if there was some sort of actual wartime effort, you don't think that data would be immediately taken up to be used for something? Yeah. Honestly, to me, the biggest concern with the foreign government being in control of something like TikTok is the algorithm part, not the data part. Obviously, the data is concerning. Right.
00:24:20
Speaker
you'd be concerned about the algorithm. And if one day they're just like, we want to amplify this message or we want to suppress this message, which is also a problem when Facebook does it is I think one point that everybody's making is that really maybe one of the things that they should be looking at is how do we can we like force out algorithms because algorithms are obviously one of the most valuable protected assets that a
00:24:48
Speaker
that a social media company like TikTok, like Facebook has because the algorithm is kind of the product, but is also the biggest thing that has its social downside to it if you are manipulating it to impact what people see. I saw some people saying that there's no legitimate concern with TikTok other than pure xenophobia. I think there's some legit
00:25:17
Speaker
you know, like concerned with having a foreign government have control over an algorithm.
00:25:22
Speaker
that are affecting our constituents. But those other countries should have, and do, have these same concerns about Facebook and Twitter. Absolutely. They should have potentially greater... I mean, we have a longer history of being successful. I mean, we have spread our culture all over the world. You know what I mean? We've done a pretty good job. Name a Chinese pop star. I don't know any. I bet you the Chinese people can name some of ours.
00:25:49
Speaker
Yes, yes, though, South Korea is now, you know, South kpop is now the one of the biggest things in the world. And I'm sure Facebook is in the I mean, it's a product of the Hollywood machine being so effective. But like, I think there's there'd be some benefit to all these companies having to front their algorithm and make it perfectly clear what the algorithm is doing all the time. And that being conditioned of doing business in general.
00:26:16
Speaker
I don't know whether that's the complete solution or whether that's even a workable solution. But the fact that we are being served content, and this is one reason why I like Mastodon, which is we choose what algorithms we subscribe to. The fact that we don't have any kind of look into these algorithms that are determining what we see is a problem no matter who owns it, is a problem no matter
00:26:43
Speaker
Any geopolitical concerns. Yeah, right. I agree. There was an episode of the Simpsons about this. Do you guys remember it? You remember, uh, when the Nate, when the Navy, no, no, no, no, no, no. I'm it's a way.
00:26:58
Speaker
Even at Neage, yeah, where the, where the Navy, the recruiting was slipping for the Navy. And so they just inserted it into like popular pop song. And it was subliminally conveying to everybody joined the Navy, joined the Navy, even at Neage has joined the Navy backwards.
00:27:14
Speaker
And so we're all getting even at Neash by TikTok. I mean, is it theoretically possible that at some point the Chinese Communist Party takes over TikTok because they want to send a subliminal message to Americans? Yeah, it's possible.
00:27:35
Speaker
I have a hard time imagining that possibility actually coming to fruition, but in the history of everything that's never happened before, that's ever happened, there was a time before which it had never happened before. It could, but I'm not losing sleep on that. I do wonder what the people in Congress that are asking these questions, what they envision it would look like, because as we said, their questions seem just
00:28:04
Speaker
you know, way out there in terms of is it accessing the local Wi Fi in order to access the internet or all this and you know, is it scanning your pupils to see if you're upset. So I wonder what they think like, so the algorithm is going to be weaponized, what are they because my bet is like it's culture war stuff for like fully half of them, they think the Chinese Communist Party
00:28:22
Speaker
is going to convince all of our teens to like, I don't know, what are the culture war things? And I don't see that these are the people that are really holding those concerns. Is there a genuine concern there if a foreign government has access to this algorithm and can push some sort of message?
00:28:38
Speaker
Sure. But what I actually see being most likely is that they would be like maybe favoring one of our political candidates over another. It would be something we're already pretty used to and we've experienced before. I don't know what else like what are they gonna do to start inserting Karl Marx quotes into videos or like just like literally like Xi Jinping propaganda. He's a great guy. Oh, okay. What am I gonna do about that? That's great. My opinion of Xi Jinping is that he's wonderful now because I watch too much TikTok.
00:29:03
Speaker
OK, they're going to they're going to eradicate all the Winnie the Pooh videos on. Right. One. Well, if you look at what Russia has done with their like psyops in America, they really don't try to. I mean, they do definitely have like people that are like out there being pro-Russian. But even when they don't do that, they're stoking. They are stoking culture wars without a.
00:29:29
Speaker
uh without a clear dog in the fight with the purpose of polarization in order to reduce our effectiveness as a country um and so stoking polarization they don't even need to convince anybody to go on their side to have an effect
00:29:45
Speaker
Um, really, this is like, I'm sounding more alarmist about it than that, than I'm intending to be. But like, really, there's so many things you could do that with a, with control over an algorithm, if you wanted to take that control. Um, I'll say that I'm not subscribed to the TikTok channel, the TikTok
00:30:05
Speaker
whatever, but their message about being pro TikTok showed up in my feed for whatever reason, you know, on my for you page. I don't know. I assume that was, you know, organic and that it wasn't like forced into my feed. But there's nothing that stops them from being like, you're watching this, our message now. Oh, on TikTok. You mean on TikTok, the official TikTok account within TikTok got forced into you.
00:30:30
Speaker
Sort of like musked forcing his tweets into the for you page on the winner. Yeah, exactly. Yeah. And Facebook does the same thing, but like on a much they can't do it as much because they can't do it with Mark Zuckerberg because everybody would just immediately. Yeah. One of the House members did mention like you've united us against you just like Mark Zuckerberg, who also sucked. And I was like, yeah, I appreciate. Thank you for mentioning that.
00:30:56
Speaker
That's fair. Wait a second. Did they actually just say Mark Zuckerberg sucks? No, they said you're being evasive just like Mark Zuckerberg was. Can't get a yes or no answer out of you. Everything is hedging. Well, I mean, in defense, in the CEO's defense, yeah, you're not getting a yes or no answer because your questions are crazy. They don't make any sense. First of all, most of them are not yes or no questions because there's all sorts of built-in premises that you need to just sort of... It's like, so when did you stop beating your wife? Right?
00:31:23
Speaker
I can't answer a date on that. I'm going to have to give a little more information about how that's not true. It seemed like it went about as bad as it could for TikTok and 4. But the few clips I saw of him, he seemed genuinely surprised at how bad it was going. This was not how he expected. He kept his composure. I give him credit. It can't be easy.
00:31:49
Speaker
Yeah. Yeah. It was, uh, it was Tony Cardenas, uh, from California. I, I, the accent is over the a, so I tried to emphasize that. Uh, he, uh, said, you've been one of the few people to unite this committee. You remind me a lot of Mark Zuckerberg. He came here. I said to my staff, quote, he reminds me of Fred Astaire. Good dancer with words. Close quote. That was a long, that was a long way to get to your point, man.
00:32:14
Speaker
Yeah. Good. Not you Jason, the gut, the gut. You're right. Yeah. It was like, okay. Like that's a pretty old reference. And also like, just like it's 2023, man. Let's talk about Ginger Rogers. Ginger Rogers did everything that Fred is staring at, but she did it. And he was a liar is what you're trying to say. I see what you're saying. Okay.
00:32:35
Speaker
Yeah, it's about time. You know what? This is the platform to do it. We're finally going to drag. Ginger, is she still alive? She's probably not alive, right? She's got to be gone? No? I don't know, but their creditor wasn't a liar. He was just a dancer. That's what they're talking about, a dancer. Yeah, it's a bad metaphor.
00:32:53
Speaker
and a very dated reference. Tony, get with it. Yeah, hook up. Yeah, Mr. Cardenas, hook up with us if you want tips on how to make analogies with the pros. We have our youth correspondent here. He could tell you somebody from TikTok. Maybe it's somebody that's been pushed on him by the Chinese Communist Party, but that doesn't have anything to do with it. Yeah, I'll teach you some TikTok dances.
Credit Suisse's Acquisition by UBS
00:33:17
Speaker
Our other news, like sort of major story of this week was the, uh, so my wife tells me that in, in the, in the, in the industry, this company is called CS. And I think it's because nobody really wants to gamble on, is it Credit Suisse? Credit Suisse. I've heard several different pronunciations. Credit Suisse acquired. That's the other big story for a song. For, for a song when it comes to one of the banks that was considered one of the 30 most important banks in the world.
00:33:47
Speaker
10 years ago, 15 years ago. I call it Credit Suisse. I did have a job interview with them 10 years ago in law school, and my interviewer called it Credit Suisse. Oh, okay. That was a New York office though, so that might have been fake, I don't know.
00:34:06
Speaker
It being fake did you had did you see who owned like I've had a note some way I did a little bit of research but it was for something else so I had to do it like 15% were owned by the Saudi investment fund yeah yeah cutter right so it's not even a Swiss but I mean it you know maybe the rest of it but
00:34:24
Speaker
Clearly, they are at least mostly controlled by the Swiss government because this was all basically forced by the government, more or less. But also, yeah, so the Saudi National Bank refusing to increase its capital investment was one of the things that spurred on this crisis. Credit Suisse had a liquidity concern and they were like, we want to raise capital, just like SVB said they wanted to raise capital.
00:34:53
Speaker
Uh to resolve the liquidity issue Saudi national bank was like, uh, no by the way Credit Suisse this is on the backdrop to this is that they've had like years and years of scandals since 2008 They came out looking good in 2008 And then they were like not affected basically, right? Yeah, I don't I don't know i'm sure they affected a little bit but my understanding was they were looking better than better than ever and then all of a sudden all of these
00:35:21
Speaker
All these like ethical and accounting and other scandals started coming out and it was just like time after time getting hit by different things. And they were apparently worth as much as like 30 billion or something just a few months ago though still.
00:35:40
Speaker
No, it's even more than that. At the end of 2022, it had the equivalent of 1.4 trillion in assets under management. At the end, as in- Oh my gosh. Three months ago. Well, that's assets, right? So do they still have that much maybe? Yeah, no. They carved off a whole big chunk of them and sold it already. But the problem with that is that they should still have that cash on hand then. That should still be part of their value. And so it's even more alarming.
00:36:05
Speaker
Yeah, from the sale, exactly. So it's even more alarming that you've already sold a lot of your stuff and your bank account doesn't have that. Your whole net worth isn't that high. That is crazy. Yeah. And so Credit Suisse got bought by UBS for $3.2 billion and a government like kind of
00:36:23
Speaker
structured sale, the US capital bank issues with SBB and the other one, Signature Bank, basically forced their hand supposedly. But along with that, in order to get UBS to buy it for that much, the government somehow can just do this, just got them to write off $17 billion in what are called like tier A bonds.
00:36:52
Speaker
Tier A bonds, is that what they're called? I think so, yeah. Tier 1 or AT1, which are apparently semi-risky bonds, but nobody expected that to happen. Nobody expected that to just disappear into a proof of smoke. So it's a huge deal for Europe, and I'm sure Europe is still really annoyed at the US federal government for continuing to increase
00:37:16
Speaker
interest rates and being liquidity even worse. To your point of it being huge, the $1.4 trillion in assets under management, if that was an American bank, it would be right smack between Wells Fargo and Goldman Sachs to give you an idea of how... Oh my God. For here, it's somewhat smaller, but I imagine a lot of American investment funds had money in Credit Suisse as well, or Credit Suisse, whatever we're going with here.
00:37:44
Speaker
So this acquisition, it was acquired for, you had the number, what was the number? 3.2, 3.2 billion. 3.25 billion US, 3 billion Swiss francs. So this, I wanted to give a quick background here. Credit Swiss, right? Founded in 1856 to fund the Swiss rail system and it funded the construction of the entire Swiss electrical grid, right? So then goes through all that time. It endures the 2008 crisis pretty well, has some scandals and it's from eight to 12.
00:38:10
Speaker
And then it has the $1.4 trillion assets under management by the end of 2022. But then I looked up, I wanted to see what are some comparable mergers and acquisitions that have happened this year or late last year that would give you an idea of where that purchase price fits in.
00:38:25
Speaker
The company Broadcom, they make the ethernet or Wi-Fi chips. Motives. Yeah. Motives, right. They acquired VMware. Do you guys know what VMware is? Yeah. It's a virtualization. They're the remote access thing, right? It's been a virtual machines. Virtual machines. Yeah. 61 billion.
00:38:46
Speaker
is how much they acquired that for. So Credit Suisse is what, 1 30th of it, 1 20th of it, right? Yeah. And then the other one I saw was that there's a company, I didn't know these two companies were put together. Keurig Dr. Pepper Inc. Did you guys know Keurig and Dr. Pepper were one or one business? I thought Dr. Pepper was like a- Is Dr. Pepper its own company? No, I don't know. I don't know, man. Keurig Dr. Pepper Inc. bought Nutribolt, which is best I can tell is like a knockoff Nutribullet.
00:39:15
Speaker
company for $863 million. So Credit Suisse is worth about four knockoff, NutriBullet companies. I mean, it's just insane. This is an enormous bank and it was acquired for nothing. Or it's worth one thirtieth of an Activision.
00:39:35
Speaker
120th of an Activision. That's exactly what I was looking up. Yeah. Right. Which Call of Duty is worth so much more than Credit Suisse. Right. Just Call of Duty. In fact, just like the mobile version of Diablo that I've never even seen played is probably worth more than Credit Suisse. That's just absolutely bananas to me.
00:39:59
Speaker
I don't know how an organization falls so precipitously, so quickly to be where at the end of last year, they had almost 500 times the assets under management as what they sold for here. Now, I don't know banks, I don't know mergers and acquisitions, but it seems to me like if you have assets under management,
00:40:26
Speaker
on that order of magnitude that $3 billion is a mighty cheap purchase price. For sure. But I imagine that when you buy Credit Suisse, you're not buying $1.4 million worth of assets for $3 billion. You're not even buying all of their assets that are under their management for $3 billion.
00:40:49
Speaker
You're buying their business as a going concern, which has assets, but also has liabilities attendant to those assets. So how much is it actually worth? I don't know. Apparently it's worth $3 billion because that's what they could get somebody or 3 billion francs.
00:41:04
Speaker
because that's what they could get somebody to pay for it. But man, it's making things feel really touchy, because that's a familiar name. And for a bank to have a familiar name in the United States, a European bank to have a familiar name in the United States, it's got to be a monolith of banking over there. And it seems like it is. What do I know in banking in Europe?
Crypto Regulation Challenges
00:41:30
Speaker
I know Credit Suisse, and I know Deutsche Bank, and that's about it.
00:41:34
Speaker
and UBS, apparently. Is UBS, is that a European bank, I guess? It's a Swiss bank. That's another sort of thing of like, is it a Swiss bank? If we looked at the ownership of UBS, is it as Swiss as Credit Suisse was, or is it less Swiss or more Swiss? It's Saudi. It's all Saudi. Yeah, that goes like Tesla, or not Tesla. SpaceX is getting an investment from the Saudi National Bank now.
00:42:04
Speaker
Um, what, uh, Epic has a lot of investors from, has a big investment from Tencent, which is a Chinese company. Um, it's like everything is global now. If you're, when it comes to equity ownership, Tencent doesn't own WhatsApp. What do they own? Tencent, they own so much. There's a big kit. Do they own kick?
00:42:28
Speaker
I don't know. I don't know. Well, anyway, moving on to, so this is a good segue. I think we have, I'm sorry, I skipped this story. Coinbase, Coinbase might be about to get in trouble. This is like the continuing burning of crypto. I just want to quickly, before you give us the overview of it, Coinbase market cap is 15.35 billion. So that is what? Five credit suites. Yeah. Five credit suites. Though maybe not for this. We'll see. No. Yeah.
00:42:53
Speaker
But yeah, I can't claim to know exactly what this SEC is going to be doing and or like anything about these regulations. But yeah, so SEC sent them a sent Coinbase, a publicly traded, the only publicly traded crypto bank or crypto exchange as far as I know. I think they were mating maybe. Yeah, FTX, was FTX ever ever publicly traded?
00:43:21
Speaker
Um, I don't know. It's a good question. Uh, a notification, which is called like a Wells letter or something. Yeah. We're thinking about coming for you. We're about, well, it's treated as like, they don't send these unless they're really doing going to do it. Um, so, and it's about their staking businesses, business and their spot, uh, their spot market business. And, um, uh,
00:43:51
Speaker
They're staking and spot market business where the two things I knew, Coinbase Earn, Coinbase Prime, and Coinbase Wallet. And basically the idea is that, according, SEC is not saying a lot about it.
00:44:04
Speaker
But Coinbase's CEO and SEC compliance guy have been tweeting about it. And they were basically like, we have been trying to comply. We've been trying to convince them or trying to talk to them. They won't talk to us. We have been trying to comply with it with this. We
00:44:25
Speaker
review all of our coins to make sure they're not securities before we start selling them. That kind of thing. And basically it seems like there are at least two problems that I can see and people are free to comment. I would love to get corrections because I'd really like to know what's going on.
00:44:43
Speaker
But so Coinbase earn, which is the staking business, something I did is you put up this money, this coin, you put your coins a state and then you get the some portion of the income from the staking and staking basically is just like you're acting as collateral for somebody else's processing that goes into this crypto currency that a proof of
00:45:08
Speaker
work, it's proof of stake. Yeah, those are the two major systems that cryptocurrencies are based on. Ethereum switched over to proof of stake earlier in 2022. That was a big deal. That's like mining went down and that's why some GPU prices kind of went back to earth a little bit, et cetera. Okay. Sorry. Go ahead. Yeah.
00:45:28
Speaker
Yeah, if you stake, you get rewards based on the algorithm. That's the way the coin is set up. When you stake, you get rewards for that staking. You get rewards for putting a collateral. If whoever you're staking for makes a mistake or intentionally tries to mess with the system, those staked assets get punished or get taken. They get stripped.
00:45:52
Speaker
And so maybe that's a security. I don't know. I haven't thought about it enough, but I think they are trying to. The SEC is saying that's basically a security to stake to stake cryptocurrency because that's a rating income. The SEC has had some success with that because back in February, maybe it was January, there was another crypto firm that's small enough that I had never heard of it before. Kraken Kraken Kraken.
00:46:22
Speaker
The SEC I think managed to persuade Kraken to stop doing this and pay a penalty, surely under the threat of enforcement action by the DOJ.
00:46:39
Speaker
It seems like they've come across some success, probably starting with smaller fish to test out the argument, and now we're moving on to a bigger fish here in Coinbase, which as far as I know, may be the biggest fish that's left in the crypto market with FTX and the big players getting disappeared off the face of the earth.
00:47:03
Speaker
Coinbase is probably the biggest one left. So, I mean, there's probably some juice here as far as it can get at stake. There's probably some juice here when it comes to the SEC enforcement because they've been able to persuade some smaller players to do it.
00:47:21
Speaker
And, you know, in my line of work, we come across this definitional issue of is it a, you know, they're talking about, is it a security or not a security? We talk about all the time, is this person an employee or not an employee? Like, are they an employee or an independent contractor?
00:47:37
Speaker
And in that context, it boils down to a test of what is the economic reality here? It's the economic realities test. That's literally what they call it. And in this situation, it seems like it's going to be an economic reality that when you stake your crypto and you get paid a return on it, it sure looks and behaves and feels like a security. And you can call it a bagel if you want to, but that doesn't make it not a security.
00:48:06
Speaker
Right. So the test in this case, I did a little bit of work on a research project for like a tax angle on a cryptocurrency thing. And it was in Europe, so it's not that helpful. But the test in the United States is the Howey test. And so the Howey test is to determine whether or not something is an investment contract. And that's what this all turns on. This is a security if it's an investment contract, basically.
00:48:25
Speaker
And so the investment contract exists if there is a quote, investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. That derived from the efforts of others is I think what for the most part is in question with these different coins. And so I think there is a novel question here in that with proof of work,
00:48:46
Speaker
It's pretty hard to make the argument that you're not expecting a profit derived from the effort of others because the other miners are the ones that are going to... You have to really get nuanced into a deep dive into how the blockchain works to make an argument that you're not getting a profit from somebody else's work in those cases. But with proof of stake,
00:49:08
Speaker
I mean, it seems like it's a little bit more nuanced. Like maybe there's an argument there. But again, I think eventually we're going to have to come to something like what Jason is saying with economic realities or in tax. It's the sham transaction test. It's like there's this like base catch all that basically if nothing, if none of the other tests work, the last test is like, yeah, but come on, what are you really doing here?
00:49:27
Speaker
You know what I mean? Like what's really happening here? And so the Howie test, what that is, is it's a case Howie and it was based on like a 1930s. I've made the joke a couple of times. There's like literally citrus groves in Florida where I think they sold interests in them. And then you would like, you would all co-own a citrus grove and you would get some of the profits or something. And so obviously you're deriving profits from the work of others. And so that was a security. And this being applied in 2023 to
00:49:54
Speaker
these kinds of distinctions like proof of stake versus proof of work. I mean, this clearly is going to have to be reconsidered. I'm not saying reconsidered as in Coinbase, you know, needs to lose here or or anything like that. But like this, it's pretty clear there's going to be a new test soon. I can't imagine this is going to persist for another 90 years.
00:50:13
Speaker
I mean, it's until Congress steps in, it seems like it probably will just like be like this kind of ad hoc figure it out through the courts. They're going to have to go to court at some point. I think they already there was there was either an SEC decision or court decision saying that Bitcoin and Ethereum are not securities themselves. The coins, Ethereum, maybe that changes with proof of stake, but the coin itself still remains not a security because it's a store of value. That's how it's used, at least.
00:50:43
Speaker
Um, but, uh, when you're just trading it, but there's all these other aspects that go into the crypto that, you know, maybe, maybe it does become, maybe the staking is a investment vehicle. It's so not prepared. The law is so, you know, it's based in the 1930s or the twenties. Um, it is not ready for this at all. Um, so I, I would love,
00:51:11
Speaker
I would love to have some faith in Congress to address it, you know, fairly, but also the prevailing sentiment I feel like is to get rid of it. But I don't even know how you do that.
00:51:20
Speaker
Get rid of crypto. You can try. Crypto, yeah. I mean, they'll do it. They could just ban it and then that's that, you know. I mean, shove it underground. Yeah, the choke point is just don't let them convert it to US dollars. That's it. I mean, that's the point that we always can... You can convert it to US dollars in a country that allows it from your computer.
00:51:43
Speaker
send it to an overseas account, which then converts it to another US dollars in an overseas bank online and then converts it back to get it back from that other country. A couple of people getting their accounts seized because that can be proven and people will be scared out of doing that in any kind of volume. Yeah, ordinary people will be totally out of it.
00:52:05
Speaker
We don't have the political will in this country to do that. I'll tell you why. It's because people like Tom Brady and Rob Gronkowski get on Twitter and change their avatars to laser beam eyes to indicate their support. Matt Damon does a Super Bowl commercial for it like, well, okay guys, we may not like crypto and we may not like all of the things that it's like the environmental implications and the crime implications and the drug trade implications.
00:52:30
Speaker
We can't hurt Matt Damon and Tom Brady. Matt Damon. Their eyes are so blue. I'm not anti-crypto. Either we've talked about this. I'm not anti-crypto as a rule. The rule is not that I'm not anti-crypto. Anyway, I don't know if you know this, but that proof of stake conversion totally
00:52:55
Speaker
totally basically made negligible the environmental impact of Ethereum, because Ethereum doesn't use any much more power than it needs to, as opposed to like Bitcoin being like, still, you got to run a computer for, you know, a whole lot just to crank out one coin.
00:53:17
Speaker
But yeah, I don't know. I don't see a band coming either just because I think they are much more prepared to do nothing and just let it stay kind of chaotic.
00:53:31
Speaker
Yeah, absolutely. And I think if they want to kill it, one way to do it is to just let it kill itself. Just continually put up these little barriers and these little highlight these issues. I mean, FTX collapsing. Talk about the Super Bowl thing, right? On the year anniversary of them basically dominating the Super Bowl with ads, right? And I think the previous year, MLB, all the umpires wore FTX on their shirts.
00:53:55
Speaker
They were one of the first brands that got to buy a logo on there, which I thought was the technology. I had no idea. I didn't know what FTX was initially. So I thought it had something to do with the stuff MLB was rolling out with automated strike zones and stuff like that. I thought it was some sort of technology company. I had no idea this was just a Nike swoosh, basically, on the umpires for some shady crypto exchange. But yeah, so on the year anniversary of their Super Bowl,
00:54:22
Speaker
It had already happened like he was indicted and you know to be the whole thing is collapsed so if they're looking to I don't think they need to ban it you
Twitter Verification Crisis
00:54:30
Speaker
could just sort of sit back and Wait for all this to happen I mean it seems pretty clear that it's gonna kind of collapse on its own but as you said Jake I think it just gets driven underground and I think yeah people who are gonna use it for nefarious purposes They are going to continue to use it the only people that are gonna be left are gonna be those people and it's gonna be a complete Wild West and
00:54:47
Speaker
I'd say maybe the way that they, the thing that gets them to actually do anything is to stop crime. That's their excuses where, you know, cracking down on this because it's, cannot be regulated, we cannot track it, it is impossible to track somebody doing that kind of thing. So, you know, they could add,
00:55:10
Speaker
The easiest way to enforce something like this is the openings to the financial world, as you were talking about. I'm just kind of spitballing live, brainstorming, just thinking about the different things that they could do to actually stop it from happening. But I think that's
00:55:29
Speaker
I think that's where they go if they go with the banning route is we're trying to stop crime. Oh, here's all the things banks need to do when they think they have a they have a transaction based on cryptocurrency. They're not allowed to transact with cryptocurrency based companies, you know, whatever. Yeah.
00:55:47
Speaker
All right. Our final topic real quick, before we go to follow up, because I think it's going to be or not follow up before we go to being done. This is follow up, um, is a Twitter verified going away. Do we really care at the old, uh, legacy verified accounts? Do I care? Do I care? No, I don't care. Once people can pay $8 and I was no longer elite, that's it. I mean, you know, any, any schmo with eight bucks can be just as cool as me. Then I don't care anymore. Take it away. It doesn't matter.
00:56:13
Speaker
Yeah, I saw somebody reacting with to it with like, so there was a blue check person, you know, said this was a terrible idea. And another person replied to them and say, saying, you know, why do you have a blue check? I have no idea who you are. This is why this needs to change. Right. And it's like, wait, so you if they paid $8, that would be better for you. You still wouldn't know who they are.
00:56:36
Speaker
I think Twitter is gonna be like way worse, like without knowing that the person is who the person claims to be.
00:56:44
Speaker
Like, it served a purpose. It served a purpose. And I also think they've, or he has successfully made a situation where it's going to become a badge of honor for the previous Twitter verified people to not have the check. A lot of them are not like, you know what I mean? Like all the New York times, maybe that's a bad example. They, who knows what they'll do. But what I'm saying is like columnists, people who are like the, the previously thought of is whether or not you think they should have had a blue check or anything they have to say is valuable. I agree that probably most of it's not, but they, the original blue check people,
00:57:13
Speaker
are all now it's going to be the exact inverse. They're going to need to demonstrate to their followers that they are not a fool paying $8 and they're not going to have a blue check. So now it's just going to invert, like you're still going to have this stratification. It's not whatever he thinks this is going to achieve. I mean, I guess I assume what it is is he's looking at the number of Twitter verified accounts that have blue checks that he's not getting eight bucks a month for and thinking, well, we can convert all of those. But I mean, I would be surprised if many of them make that jump.
00:57:40
Speaker
The really alarming thing to me in this whole context is we are in the probably early, maybe early middle stages of an extreme crisis of credibility where things have been, the credibility of things in general has been undermined. We are seeing a long-term erosion in trust in science, in trust of government institutions, of
00:58:06
Speaker
you know, banking establishments, and that is rapidly accelerating because now, like, I have genuine doubts, and boy was it demonstrated this week, I have genuine doubts when I see a picture, whether this is a picture of a thing that actually happened. And it's not just the, it's not just the Samsung, is it really my picture of the moon stuff? It's, hey, there are these hyper realistic, like,
00:58:33
Speaker
genuine looking photos of Donald Trump being tackled to the ground by police officers in New York City, and they're fake. We got to talk about that quickly before we move on. I don't know who those are for. I mean, they're great. I don't know who they're for. And if anyone saw them and thought they were real, my biggest problem with it is not the realisticness of the depiction, but
00:58:54
Speaker
that he has the body type that could contort to lean that far back. He would need like those smooth criminal shoes that locked in so that he wouldn't fall over. In all of his positions, he's doing things that that is a much more nimble man than the guy who was president. He would not be able to do any of those things, but I'm sorry, yes, credibility.
00:59:12
Speaker
Yeah. So like we are, uh, and I don't know exactly, like historically we'll find out in, I don't know, 20 years, 50 years, exactly how bad the credibility crisis is right now. But like we're in a spot where I genuinely can't tell sometimes if I'm chatting with a person or if I'm chatting with chat GPT, uh, if this photo, which like we were already on the precipice of this with deep fakes. Uh, I can't tell whether this is a real photo or a real video.
00:59:42
Speaker
And now it has been firmly punctuated with an exclamation point this week of, oh my, I have no idea what I can trust now when I see these pictures on the front page of, I don't know, Reddit or something like that.
01:00:01
Speaker
at the same time that we're experiencing this crisis of credibility, we are now in a small way contributing to that credibility, the waning of credibility, not just of particular people, but in general, by saying that this blue check, which once stood for, we have verified that this is authentic, this is this person, this is somebody who is like a reputable source or a known source, maybe not reputable.
01:00:27
Speaker
And we're taking that away, and we're selling it instead. With no identity check, by the way, right? I mean, as far as I know, that $8, they don't confirm you're you. They do do that for the, like, when I got mine, I had to send my driver's license or something. I don't know. I had to somehow prove that it was me.
01:00:46
Speaker
So they don't do that for this. So yeah, to your point, there's no credibility whatsoever. Anyone can get the check and it doesn't even mean they're the person they're saying they are. So Elon Musk's cash grab for $8 a month from these people who used to be verified as
01:01:01
Speaker
credibly the person that they say they are, it's not going to be the watershed moments of the credibility crisis. In fact, I think probably the watershed moment happened gradually over the course of the last 25 or 30 years when we decided that everybody knows best for themselves and we don't have to trust doctors or scientists. And that was the very gradual erosion watershed moment
01:01:29
Speaker
Maybe the watershed point is going to be chat GPT-5 or whatever, but this is one of those little utility flags in the ground that's mapping where the gas line is going towards the eventual oblivion of trust.
01:01:51
Speaker
I think it definitely makes a bigger impact like the it's a much bigger story because trust is like on its way on its way to kind of uncharted waters with all the AI stuff.
01:02:03
Speaker
Yeah of like whether or not a person is real let alone who they say they are But it's gonna be it's terrible for Twitter because this was a service to Twitter's customers to make the feed better because you now know yeah if somebody is verified and it's they had a famous person's name you had a good idea that yeah, it was the famous person and
01:02:28
Speaker
So now, if you are a famous person that doesn't want to pay $8, anybody with your same name, and there are a lot of common names out there, is going to look the same. And if you are a just ordinary person looking for a Will Smith,
01:02:45
Speaker
and neither of the Will Smiths want to pay $8, then you're going to be looking through a lot of Will Smiths trying to figure out who's the right one. And there's nothing that says they can't put their profile picture as the Fresh Prince. And by two Will Smiths, I'm referring to Will Smith's rapper and also Will Smith, formerly of Maximum PC, and now has a very good tech podcast.
01:03:12
Speaker
Um, I didn't realize those two guys were two different guys. I thought it was the same guy. Yeah. I, I assumed you were talking about the relief pitcher. Yeah. Yeah. Uh, yeah. So Twitter itself is going to be worse. It's going to be much worse without the verified the legacy verified, which are the things that actually made it better for, for everybody. It made the whole, the whole system better for everybody. And whether or not you paid.
01:03:42
Speaker
Um, so i'm not i'm i mean twitter was already going downhill. It's just like I have to think that it's going to go into bankruptcy in the next year or something like that because or
01:03:54
Speaker
something, it'll collapse. I don't know what's going to happen, but it's clearly not in a good place and it's getting going to get worse. And I wouldn't be surprised. We should keep a track record of our predictions. I like our predictions. We should do an over under. Why don't we do an over and under right now? When does does Twitter still exist or has Twitter declared bankruptcy by March 23rd, 2024?
01:04:18
Speaker
I would actually, I will say that it is declared bankruptcy by then. I'm with you. Yeah, I think I'm. Yes. I'm taking the over. I'm taking the over past March 23rd. The yeah, it'll be a long farewell.
01:04:31
Speaker
Okay. Just, just declared bankruptcy though, right? This is not just declared bankruptcy, not that it doesn't exist, but just that it's declared bankruptcy.
Personal Recommendations and Conclusion
01:04:37
Speaker
Okay deal. Stake in the ground episode 12. All right. Yes. We'll check back. We'll be on episode what, what plus 52. So we'll be on episode 64. Sixty something. Yeah. Okay. That sounds good to me.
01:04:50
Speaker
All right. With that, I think we can do our concluding ideas or what's going on, recommendations, et cetera. Random things. Resident Evil 4, the remake, is out tomorrow. I played the demo and, man, Resident Evil 4, if you don't know, is considered one of the best games of all time.
01:05:13
Speaker
It's the only Resident Evil I've ever liked. And I played it a lot. It's come out on like nine different platforms and they are remade it to be more modern. And it is real fun. It'll be on PC. It'll be on Xbox X and PS5. I don't know what else. Great. I'm in. Yeah. But if you don't want to do the remake, the original is on literally everything. It's on. I played the remake of two. It was great.
01:05:41
Speaker
Yeah. Resident Evil 2, really good. I recommend that. That's not my recommendation, but I sort of recommend it. It's unsettling. It's one of the only games I've played that I actually feel sort of, I might want to turn a light on. Yeah. I'm out for stuff like that. Jumpscares. Jumpscares are a no for me. It's not that jumpscary. It's more like, you know that a zombie is coming at you, but you're so awkward.
01:06:06
Speaker
And it's very silly that like the lines. It's so campy. There's your main character is Leon Kennedy, who's like an emo kid looking guy. And he's and he's like part of a special presidential task force. And you just see this emo kid me likes shaking hands with the president. Like it's super portrayed super seriously. It's very it's it's sneaky funny. A bunch of zombies like start walking away when a bell starts ringing in and he's like, where's everybody going? Bingo.
01:06:36
Speaker
Anyway, it's all very silly.
01:06:41
Speaker
I will do mine really quickly because it's very simple. Netflix show Outlast. It's pretty good. It's another reality show. I'm working through all the terrible reality shows on Netflix. This one is they put a bunch of people in the Alaskan wilderness and try to see who can survive. It's really good right up until the end. I won't give any spoilers away, but the overall like the final determination between the two teams isn't what the rest of the show was. So it's sort of like if Survivor at the end, it was just whoever like won a game of badminton or something.
01:07:08
Speaker
So the end is a little weird. But up until that point, it's pretty good. OK. My recommendation is if you're going to do any amount of driving at any point in the near or intermediate future, try a vehicle that has automatic steering functionality, like lane keeping assist, like a genuine lane keeping assist, and adaptive cruise control. I just drove in the past three days 1,300 miles. This is fantastic.
01:07:37
Speaker
I love a vehicle that requires minimal input to just stay straight and keep driving in your lane. It's great. Strong recommend. A lot of cars do it. Even some Fords will do it. Kias will do it.
01:07:53
Speaker
The new kind of de facto minivan is not a minivan anymore, at least not down here in Georgia. It's Kia Telluride, and you can get that with Lane Keeping Assist and DAPTIF cruise control. I haven't tested any one other than the one that's in my car, but it's great. I love it. It's great. It's worth it.
01:08:18
Speaker
I can vouch for Nissan Leaf. We have a 2022 Nissan Leaf, not an expensive car, not a super high end car. With the tax credit, it's, you know, you can get in at like under 30 for it. And yeah, it's fantastic. I mean, it's it's an undersold feature from everybody. Like Tesla makes this sort of a big point of it and everybody knows about Tesla stuff. But from what I've seen, a lot of car companies have like really quite decent just base model, adaptive cruise control and lane assist and all of that. You know, touch the steering wheel every once in a while. That's all you really need. I'm with you.
01:08:47
Speaker
It's so great. I'll never buy a car without it again. Agreed. We done fellas. We're done. All right. Music coming up. I'm praying for, I'm watching the audio closely, please. You stayed green the whole time. It's your lucky green shirt.