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This is Not That Kind of Podcast - Fixed Audio
72 Plays1 year ago
- https://www.politico.com/news/2023/03/07/senate-white-house-tiktok-ban-00085998
- https://www.nytimes.com/article/svb-silicon-valley-bank-collapse-timeline.html
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Transcript
Introduction & Concerns about Zencastr
00:00:00
Speaker
One. Hey, guys. Kick it. Cool. This is a new interface, too. This is going to be a really interesting pod because I'm going to talk about some of the first 30 seconds talking about the updated Zencaster interface. Is it new for you guys, too? No. It looks the same. I'm the only one. OK. Never mind. Yeah. That's where you've been.
00:00:17
Speaker
That's where all the money went that they've been asking me for. They've been emailing fundraising, which is concerning. Hopefully they're not listening to this. But whenever a business is like, dear customer, we could use money. I'm like, am I Mary Kay now? Is that what I am? Where is my money going? I'm giving you money. It's for the services that you're providing. I thought that was the deal here.
00:00:43
Speaker
And thank you for that. I didn't get any of that. Okay. All right, fellas. Hello and welcome.
Podcast Introduction & Disclaimer
00:00:57
Speaker
At some point, we're going to have to do something about that music. Yeah. It's fun. And we, it's fun once or twice AI generated. Yeah. Yeah. Yeah. There's new AI generation music models now that we can use and get much better music. Should we hold ourselves to AI?
00:01:14
Speaker
Yeah, sure. I'm too lazy to do anything else. I don't know. I'm not lazy. I just don't have any talent. I don't have talent. If we have a fan that is an amateur music person and wants to collab, hit us up.
00:01:33
Speaker
Michael, you do all the work, you send it to us, we'll play it at the start of every episode and that's it. And we'll say shout outs to whoever for the music. Thanks so much. And then you'll get that every episode. Yes. Literally dozens of people will hear your name once a week unless something happens and we either have scheduling difficulties or audio difficulties. Dozens of us.
00:01:57
Speaker
Yeah. OK, so we should tell everybody who's tuning in what
Satirical Investment Advice: Silicon Valley Bank
00:02:00
Speaker
this is, right? It's just three lawyer friends goofing around. Nothing you hear should be taken as legal advice or technology advice or investment advice.
00:02:07
Speaker
or anything other than maybe don't put your money in Silicon Valley bank. I will go out on a limb and I'm going to give that. That is formal investment advice from me. Andrew Leahy don't put money in Silicon Valley bank. That seems like the best time to do it though. This is, this is a buyer's market. It's like flying after a plane crashes into a mountain. They're all really paying attention now. Yeah, you can, exactly. You can buy the whole bank for a dollar. So, you know, just go in and buy it. It's true. It's true to positing a dollar in the bank by the bank.
00:02:38
Speaker
Hmm. That voice you just heard now with that advice. That's Jake. Yes. He's a Florida local government land and use attorney. Yes, that's correct. And I don't know whether this was episode zero or episode one. At some point I said, I don't understand why anybody would campaign to become the president of a bar association.
Jake's Uncontested Election to Bar Association
00:02:59
Speaker
And what are you doing, Jacob? And as of last week, I am the president elect designate of my local
00:03:07
Speaker
Orange County bar, young lawyers section, uh, for some reason, uh, I've decided to do that. So yeah, that's congratulations. Thank you. I have questions. Um, yeah. President elect designate, is there a president and a president elect? And then there's you, what that means is that beats away in three months, I'm going to be the president elect. It just means that I've been, yeah, it's like a three year cycle. Your president elect, your president past president. And this means I'm,
00:03:35
Speaker
loaded into the chamber to start the cycle when the new year turns over. The human cannon that is the Bar Association. Yes, exactly. Well, congratulations. Were you running at the time of episode zero?
00:03:49
Speaker
The thing is, you're not selected by the members of the bar. You're selected by the board. So really, it was like, who wants to do it? The only other person that was likely to oppose me was like, I don't want to do it. Can you please do it? And I was like, sure.
00:04:08
Speaker
Uh, and then I became more excited about it as I started thinking about it. So, and nobody, I was uncontested. So I campaigned and that I called everyone to be like, Hey, are you running against me? And they were like, no. And then you moved on. Okay. Yeah. Yeah. Yeah. Now they're going to have to watch Andor for 12 months and they don't even know it yet. So.
00:04:29
Speaker
So your, your, your Mastodon post was that you had been elected and then you did hashtag mandatory and or, and I thought that was like mandatory and slash or, and I took me a long time to try to figure out what that meant. Like and or I won't be or what that was. Okay. But mandatory and or means you're going to make them watch and or in order to retain membership or something. Yes. There are 12, there are 12 episodes of and or season one, there are 12 monthly meetings of the wireless board. Uh, so there you go.
00:05:00
Speaker
Wow, okay. You
Succession Planning & Florida's Reputation
00:05:03
Speaker
know, from what it sounds like, the Orange County Bar Association, you guys have succession planning down. For all the other garbage that happens in Florida, that Orange County Bar Association knows who's coming down the pike. The thing about Florida is we are good at some things and one of those things is being a lawyer because man, we got a lot of lawyers. You know that's right. So we got that down. We got our legal system down.
00:05:31
Speaker
Who is, so you have governor, right? Then you have lieutenant governor. Who is the third in line of succession for the governor? Oh, that's a good question. I assume the attorney general.
00:05:41
Speaker
Really? I assume. Maybe the house at the federal level, right? It might be the speaker of the house, might be the president of the Senate, might be the agricultural sector secretary. Uh, it's possible. It might be the cause of the, who was like the age away or the president. Yeah, it falls a fourth in line is the HOA president at the villages retirement community.
00:06:06
Speaker
Right. And then fifth, it goes to sort of the largest citrus grove, a property owner, and then it works its way down. Yeah. The Tropicana lady with the fruit on her head, that she's in there somewhere. Is that Tropicana? I think that's Tropicana, right? I think so. Tropicana or Chiquita maybe, the banana company. Yeah. That joke doesn't work though. I don't think they're Floridian. Jason, you are a person. You can introduce yourself now.
00:06:30
Speaker
Yeah. Oh, great. Introduce myself. I am Jason. You know, I was president of the Young Lawyers Association for the Tippecanoe County Bar Association. That was a long, long time ago. Back when I was a young lawyer, I'm no longer a young lawyer. I think the definition is under 40. I am not under 40. I'm an old now.
00:06:48
Speaker
I sue people's bad bosses and I like part-time invest in domains that I think are going to be totally useful and actually don't end up being that useful like suemybadboss.com or indianainemploymentlawyer.com, my newest acquisition that I have yet to actually put into service.
00:07:09
Speaker
So I do things like suing hooters when they make their waitresses, do all of the cooking and deep frying and cleaning and still only pay them the tip credit wage. So I do stuff like that. Wow.
00:07:22
Speaker
That was fun. That's like one of the rare situations where I don't have any confidentiality obligation. So that's great. I mean, I have it to my client, but. I was going to say, what? Wait, what? Is there like a whole class of litigation where the attorney client privilege doesn't exist? In exchange for a lowered fee, you get to say whatever you want, wherever you want them. You could air all their dirty laundry. Yeah. Yeah. You know, it's nothing that's not already in a publicly filed pleading. So there you go. I kind of can't believe Hooters is still a thing.
00:07:51
Speaker
I mean, that just seems... It's multiplying.
00:07:54
Speaker
Is it? Yeah. Hooters is, I don't know if they were the original, but they were from the perspective of old millennials. Hooters was the scandalous, I don't know, exposed skin restaurant. That was the first one that did it on a big national scale. And now you got places like the, what is it? The Tilted Kilt or something like, Twisted Kilt. Twin Peaks.
00:08:24
Speaker
Twin Peaks, stuff like that. What are you talking about? They're just multiplying. Man, do you drive places? Do you see billboards? Have you ever been outside? Have you? The area where the walls. Yeah, Florida. I assume it's a ton worse.
00:08:40
Speaker
Well, we I we do have business lunches at Twin Peaks on occasion, but not for that, just because it's like the local. It's the American food place. It's like to have a wonderful buffet. Yeah. The breakfast buffet is just divine. Buffet. I would go if they had a man. I could go for a breakfast buffet, man. Yeah.
00:09:03
Speaker
By the way, I want to apologize to our audience for disappearing
Potential TikTok Ban & National Security
00:09:07
Speaker
last week or two weeks ago back when you last saw us and halfway through the episode. It's probably my fault for having bad internet, but we have fiber. As we speak, there are crews digging fiber towards my house and I can't wait.
00:09:26
Speaker
So when you disappear, it's because they've cut something and you've lost your connection. Yes, that's possible. When it happens again, that's what it is. Get your full allotment of Jake going forward because he's going to have that sweet symmetric fiber connection. That would be great. Fiber to the door, hopefully.
00:09:41
Speaker
Yeah. When we go shopping for a new house here in the next couple of weeks, uh, that's one of my absolute must haves is must have a symmetrical fiber connection available to it. I'm stoked. Oh man. I, I, my old house, we had files. Yeah. We only have Comcast here. It's terror. Oh man. It'd be really like degrades your quality of life.
00:09:58
Speaker
I would rather have like poison soil and have a decent internet connection. Because look, I'm not sitting in the dirt all day. Yeah. If I'm going to have bad internet like I do now, well, I have fine internet. But like comparing, I know like some rural places you have really bad. You have like, you know, five megabytes down is the best possible or lower than that. But if I had worse than I did now, I think I would rather have no internet than have something worse than this.
00:10:27
Speaker
and just like totally go like pretend be off the grid. Oh, I'm at home. Sorry, I can't check my emails and live like a like a I was going to say like a her like a monk or something, but like, you know, TV, I would have TV and I would have all these other things. You should go full Ron Swanson here. Yeah. Get your cabin out in the woods, disconnect from everything.
00:10:51
Speaker
I don't think you're truly speaking of like young lawyers I don't think you've really become like a full lawyer until you've had the I have no email I have no like what if it all just went away dream you know what I mean like that's sort of like daydream of like it all just I don't know the power went out and and everything's out and there's nothing you can do they can't reach you I think everybody has that at some point or another it seems like Jake you're just kind of living in that
00:11:12
Speaker
We're, we're planning on a cruise, uh, at some point so that we can really get like no internet COVID. Oh, right. We've still dodged COVID. We'll see.
00:11:27
Speaker
One of these days. Yeah, I'd say the giant boat where people can't leave will probably probably do that for you. Yeah. But anyway, OK, so we have topics. We have actual stuff to talk about. We got to catch up fast. So one of the things we had sitting here forever is that the US government wants to try to ban TikTok. Do we care about that still? I mean, it's evolved, right? Yeah, I mean, it's moving even faster. Like Biden's being very clear that like, yeah, you have to sell your America, your American business to an American company.
00:11:55
Speaker
they're saying, because of national security concerns. And do I care? I'm not sure I care. I like TikTok. But Reels is basically almost exactly the same. And I would have to retrain the Reels algorithm. I don't want to
00:12:17
Speaker
I'm not sure. The thing is, I understand the concern about having this foreign government in control of an algorithm that is controlling our youth
00:12:27
Speaker
Um, but I'm like, man, we're, it's just going to be Mark Zuckerberg. Is that any better? Do I trust Mark Zuckerberg? I do not. I don't trust. No, you don't. Mark Zuckerberg. Uh, so really there's, it's two, it's between a rock and a hard place with it. It's kind of, it's more dramatic than anything.
00:12:49
Speaker
Yeah, I mean, the divest or you're banned. What I don't understand is so I mean, I guess what they're trying to what the US government is trying to work, you know, Biden's administration and Congress is trying to do is say that it will have no value. Like, basically, if you ban it in the United States, it has no value. So even if you still own it, then it's worth less, right? So if you sell it now,
00:13:08
Speaker
What i don't really understand is well why would i you're threatening to either ban my app or take the app from me. No right i don't i don't want to do that in either case i lose i lose if you sell it i mean it's still valuable for right now like they're under because.
00:13:28
Speaker
Like, obviously, if they don't sell it, it's maybe worth zero. And so and from that perspective, there's a downward pressure on the price. But all the people that could buy it, they really want it. You know, they absolutely want it. If Facebook could buy the US tick tock and throw it in the trash, they would absolutely they would spend probably many, many, many billions of dollars to do that. They might be able to get a discount to do that now.
00:13:56
Speaker
Um, but yeah, somebody wants it and they, and they can bid against Facebook and bid against Snapchat or whatever. Um, yeah, I'm, I, it seems like that's the way things are going. Cause I mean, like governments, local governments, state governments are passing laws, banning it, local laws, banning it, banning it on government devices. It's on that way. I'm, we might be at a point where I'm going to have to have to, uh, lead it off my phone as a government contractor at some point. Um,
00:14:26
Speaker
but, and I'm gonna have to go to Reels with the Boomers, but that's okay, I'll live with it. In reading about all of this, have you guys heard about the throwback story that Furbies were banned from the NSA? Like, that's what everybody compares this to.
00:14:42
Speaker
When they first came out, yeah, the concern was that these might be listening devices. And so they were banned from, I think it was first any NSA devices and then it was any, I don't know, I don't know, the delineations of all these things. But it was banned from devices in a way similar, I'm sorry, banned from offices in a way similar to they seem to be going with TikTok. My thought is that it's going to be interesting. The narrative, I think, is going to immediately shift to whatever billions of dollars in American money has been sent to ByteDance and over to China. So if the sale goes through,
00:15:12
Speaker
that seems like a black eye for the Biden administration or whoever does it, right? That's an easy way to just say like, Oh, why don't you send another boatload of cash over to, you know, the Chinese communist party or whatever. Yeah. I don't think it's, I don't think that would be that effective because if you, because they get the win, uh, or right. I don't, I don't even know. I don't care. I don't really care.
00:15:32
Speaker
Like I care a lot about like TikTok is clearly having a big effect on kids and is a huge deal. But like this this kind of fight, I don't know, it feels a little bit like the 70s weed commercial like of the anti weed PSA. Like I learned it from watching you dad about using devices to for espionage and monitoring other countries.
00:15:56
Speaker
Um, I'm sure we do it. I mean, you can buy an insane amount of info from American
Samsung's Moon Photos Controversy
00:16:03
Speaker
companies on any person. Um, but there was a, there was a, like a minor scandal a couple of years ago. I think in Intel chips, there was some sort of backdoor. This is me just talking about something I barely remember. So if I'm wrong and I'm slandering Intel, I apologize, but I think it was Intel chips that had some sort of backdoor in them. That was, yeah, I'm positive. We do. That was like two years ago or like a year ago. It wasn't even that long ago, I think.
00:16:26
Speaker
Yeah, but it's rising that that had that too. I don't remember, but definitely there was a chip problem. Yeah. Yeah. There was something in them where and it seemed like it was sort of an intentional thing. Yeah. But we don't really we don't care that much about TikTok. So do we care about Samsung faking pictures of the moon? This is funny. This is just funny. So.
00:16:44
Speaker
Samsung, for background, Samsung Galaxy phones. I don't know if it was, I don't think it was this Galaxy, but maybe it was this Galaxy because if you zoomed in on the moon, because people like to take pictures of pretty pictures of the moon with their phones that can zoom in over 25 times,
00:17:03
Speaker
You take a picture of the moon and they would pop and boom. It looks so nice. And somebody figured out that if you were zooming in on the moon and you took a picture, Samsung would use pictures of the moon that it already had to fill in the gaps of where the picture was messed up. It's brilliant. It's really funny.
00:17:25
Speaker
I don't even know if this is bad. It's just funny. It's clever. Because of final lock, everyone is seeing the same moon for lack of a better way of saying it. All you need to do is set the scale. You just need to make sure the resolution matches and not have it look totally insane and look like a Venn diagram. You can just overlay a picture of the moon onto the moon and nobody's going to know. Who's going to look at that and say, oh, that's no way. It didn't look like that when I took the picture.
00:17:50
Speaker
They also correct for color and your environment. They put a lot of technology into faking pictures of the moon for you. It was called Scene Optimizer and they claim it uses AI, but I don't understand why you would need to use AI for that.
00:18:07
Speaker
That doesn't seem like you need AI at all. Well, they have to be pulling in information from other somewhere else because they like people were testing it where they had a picture of the moon that they printed out from a blurry JPEG. So there was no detail and then took a picture of it and it filled in actual detail of the moon.
00:18:26
Speaker
And then also had a they also took a picture of a moon, the blurry JPEG, and then cut that in half and added another half moon. So it was like one and a half moons where the top half looked like it was like a moon half moon hat. Right. Filled in the detail for the round moon, but not the half moon hat moon. Oh, I miss. So it stayed blurry on the top and then filled in a bunch of detail that didn't that it didn't have on the bottom.
00:18:53
Speaker
Nice so like yeah, it was it used AI to supplement the to put the fake moon I mean the real moon pictures into your picture I think my question is is that I think that's good. Like I think that's probably a
00:19:10
Speaker
If we know what's there, it's the most picture, like, I don't know if it's good. I don't know. I would love to hear opinions on this because people are weirdly nostalgic. I mean, like, have you ever heard the study where they said this is a weird one, but I think the metaphor works. If they asked like 100 people they were going to take their, I think, engagement ring or their wedding ring or something and they were going to disassemble it molecule by molecule and reassemble it in a different place and then give it back to them.
00:19:35
Speaker
and they would give them some amount of money for it. And these people wanted extravagant sums because they were like, you're ruining my ring. Even though obviously it's the same ring, right? It's just people get like weirdly nostalgic to something that is other than the thing itself. So like, I think someone takes a picture of the moon. They need that. They need to believe that that is really the picture they took. Otherwise the magic is lost and it's not a wonderful memento of their night or whatever.
00:19:58
Speaker
So to me, this seems like a trust problem that Samsung is having right here because when I take a picture with my phone, what I am doing is I'm trusting that it is like every other camera that I've used before in my life, where when I take a picture of something, it is capturing this thing that I'm pointing it at. And what's happening here is I'm not entirely sure because I've read reporting from different places that it's not entirely clear on what's actually happening.
00:20:26
Speaker
Now there's the thing that every modern smartphone camera does and probably even some not smartphone cameras, probably some actual camera cameras, DSLRs and mirrorless ones where they use the processing that's in there to take more than just a single frame and they amalgamate the multiple snaps that they're taking. And this is why you end up with things like live photos because your phone is capturing image data from before and after.
00:20:51
Speaker
And it's why you end up with options like the night that's available on hdr or night mode that's available on iphones android phones that allows you to gather in more light by using a longer period of a longer sequence of images and kind of
00:21:11
Speaker
averaging. That's a super basic way of putting it, but like synthesizing those images, those multiple images together into one and that's fine. That's great. Like I trust that because at least I know in that situation I'm getting what I'm pointing at, but some like synthesis version of it that takes stuff that's actually gathered on the sensor on my phone and making it look
00:21:35
Speaker
approximately better, probably. And even when I load images that I've taken on my phone camera and I load them into Pixelmator Pro and I do the super resolution ML that like really is supposed to give you a lot of extra, it makes it so that you have a 13 megapixel picture that looks like it was taken on a 48 megapixel camera. Right.
00:21:59
Speaker
Like that I can get on board with because I can watch the change happening here. But if you're telling me that somebody at Google decided to take their pictures of like the moon and stick them into my picture that I'm trying to take of the moon, like how do I trust that what I'm pointing my camera at is what you're actually showing me anymore. Right. Why just the moon? I mean, some people have unfortunate looking children. Yeah. And so why not? Maybe I don't want to take a picture of my kids. You replace it with other kids.
00:22:27
Speaker
Yeah, we can sort of expand this further and further out. My car doesn't look so good. This is a better car. Where's the trust? It also undermines the feeling of ownership that you have over pictures you take. So you take a picture of the moon. I'm not saying I do this, but I take a picture of the moon. I'm like, oh, wow, that's so pretty. Look at this picture I took. It's like, oh, no, it turns out it's just the picture that a million other people that a high power telescope took.
00:22:55
Speaker
and they've headed into it. It's like, what do you, I'm not taking pictures of the moon so I could have the best quality picture of a moon. I can go online and look at a very, very high quality picture of a moon. I'm not taking it because it's what I'm seeing at the moment.
00:23:10
Speaker
um i have if somehow if phones get to the point where because of all the pictures of my son that i take it has a three 3d perfect 3d model of my kid when i take a picture of my kid i would rather have it be blurry
00:23:25
Speaker
then have a fake kid, if you know what I'm saying. Just a totally different kid, yeah. Yeah, like have an AI. Here's, look, it's blurry, but here's what the AI thinks your kid looks like. Right. That's, like, feels a little bit gross to me. Does he have a mohawk? He has a mohawk now, yeah. He's got, he's got, like, a One Direction kind of haircut, honestly. Yeah. We feel that's better for him. We're going to go in that direction. We've made some decisions here at Samsung. Yeah. My question...
00:23:52
Speaker
It's counter to what people actually take pictures of their smart, why people take pictures on their smartphones. Could you still
Banking Trust Issues & SVB Collapse
00:24:00
Speaker
obtain a copyright for those photos since that is not done by you or whatever?
00:24:06
Speaker
Yeah. Well, let's see the copyright office be like, we've detected that this picture of your phone was taken on a Samsung Galaxy S 20 plus. Therefore, we are denying your copyright because of blah, blah, blah, blah. I mean, that's a picture of your mohawk. Yeah. Show us the real kid. And we want to see to make sure that he matches. If he doesn't have a mohawk, you're not getting the copyright. You use the scene optimizer tool to use that to take this photo and therefore blah, blah, blah. Right.
00:24:35
Speaker
Yeah, oh gosh. I'm feeling the existential dread right now. Okay.
00:24:41
Speaker
This is a great time to not be a copyright lawyer. No, I'm glad I'm not one. And just talking about things that I don't know anything about. Speaking of things I don't know anything about. Silicon Valley Bank. Yeah, that's our main topic, I think, right? The financial system. You can hammer that out in 20 minutes. I mean, the money. What is it? It's a huge financial. I mean, it's the biggest story last week, right? Like in the world. And it's got a lot of legal aspects to it.
00:25:07
Speaker
I mean, if you're listening to us, you probably know Silicon Valley Bank. Darling Bank of the tech world collapsed because, you know, like 200 tech CEOs got together on a call on a Thursday. And we're like, we're spooked by this capital call by SVB. I think we should all take our money out at the same time.
00:25:33
Speaker
And that did not go well. No, it went like the opening of It's a Wonderful Life. Basically, they all came in and were yelling and screaming and waving, and they didn't have enough money to hand out. And they didn't have a George Bailey to stand up there and be like, you're begging you not to do this thing. Your money's in John's house. Whatever. I forget his speech. Somebody else who has a good Jimmy Stewart impression has to be like,
00:25:57
Speaker
your money's in in sparker and and your tech firm and a hundred others right so somebody's got to do that right uh exactly yeah so so for that we learned it yeah the stock plummeted the bank was shut down like even before the stock
00:26:19
Speaker
hit zero or anything. The federal government came in and was like, yep, your bank's gone. Sorry. You don't exist anymore. Yeah. Yeah. Bye. We'll try to find a buyer for you. The UK branch gets sold for $1 to HSBC, or the UK version.
00:26:39
Speaker
But the most interesting thing is so like the 90% of the money in the bank was uninsured by FDIC because of how much money those people had. Five depositors, high deposits, yeah. Yeah, 500 million was held by Roku and that was uninsured, which is crazy that Roku has that amount of money in the bank and that it's a quarter of its cash. Roku has 2 billion cash on hand.
00:27:06
Speaker
What are we doing? Anyway, what kind of comedy is this? Yeah, I, man.
00:27:13
Speaker
anti-Roku will be on another episode. But before we go too far into the crash, one of my favorite quotes, I'm pulling this from the New York Times, March 9th. So this is the day before it fails because of the run on deposits. And so you might say, well, the run, we'll talk about this a little bit more, but the run might've been sort of forced kind of, but in a note sent to clients, a Silicon Valley executive wrote that the bank was quote, actually quite sound and it's disappointing to see so many smart investors tweet otherwise.
00:27:42
Speaker
Which is one of the great, I mean, like, I want that on a t-shirt. There's less than 12 hours before, like, the government steps in and says, you're not a bank anymore. Well, it's funny because I've heard that that's true. Like, it was fine. Yeah. But the thing is, if everybody is convinced you're going to collapse, you just collapse. Right. Right. That's what a bank run is, right? Yeah. That's what a bank run is. Like, if everybody suddenly was convinced that a dollar was valueless, it would become valueless because that's how
00:28:11
Speaker
You know, so much of our financial system is based on trust and perception. And once everybody is convinced it can happen, it's it's happening.
00:28:20
Speaker
Right. It's the stock market. It's everything, right? It's all like investor sentiment, whether it's in T-bills or the dollar or, you know, Silicon Valley bank, which, so this is something I, this is, I'm going to show my ignorance with the financial system writ large, but every time I'm reminded that there are publicly traded shares of banks, that seems to me like a conflict. This is really me talking. I don't know what I'm saying, but this sounds like a conflict of interest in that, like,
00:28:46
Speaker
So Silicon Valley Bank, how does it do well? It does well by taking people's deposits and investing it in such a way that it has a return on that money that is substantially less than the return it gives to its depositors in the form of their interest, right? So they're more than it gives to its depositors in interest. Especially more, yes, I'm sorry. They give very little to the depositors. They get to keep a lot of that interest for themselves. And so then your shares would presumably rise and your shareholders would be happy.
00:29:13
Speaker
But it's zero sum, right? Every dollar that is going towards a dividend for shareholders is a dollar that is not going towards the depositors. This seems like, from the start, a problem. Because you have a conflict between paying depositors and paying your shareholders?
00:29:30
Speaker
Yeah. Where's the money coming from? It's coming from failing to like return a substantial interest rate to the depositors. I think that's just like they don't really owe any duty to the depositors. They don't have to pay their depositors.
Interest Rates & Bank Shareholder Conflicts
00:29:52
Speaker
You're the product being sold? No. I'm sure they don't feel any need to pay the depositors any more than they want to to turn a profit. The agreement is the agreement. Whatever the interest is. Yeah. The amount of interest is just a selling point.
00:30:12
Speaker
Right, right. It just seems like over the entire sector, it would have like substantial downward pressure on interest, right? Because you can only chase the shareholders or chase the depositors. You kind of can't do a great job for both of them at the same time. They need cash. That's why they need to chase the depositors. And so at some point, they will need to increase interest to get the depositors.
00:30:35
Speaker
Let's not say that they don't have any obligation to the depositors. They do have an obligation to the depositors. They have an obligation to hold and keep available and ultimately to return the depositor's money, which is part of the big problem here. They don't have an obligation in the sense of there's an obligation to shareholders that you generate a profit and you
00:31:00
Speaker
Yeah, maximize shareholder wealth or maximize shareholder value. That's the moment that we're looking for. And then, you know, you have a duty to the depositors. I don't necessarily know that generating a profit is, I mean, it's not a problem as it relates to the duty to shareholders. It's probably not a problem as it relates to the duty of the depositors either.
00:31:24
Speaker
Because if you're generating a profit with the money that the depositors have put in there, you're kind of fulfilling everybody's expectations. So long as you still have the capital to return to the depositors when you're done here. So like, that's how banks work. And I think people just kind of generally understand it.
00:31:41
Speaker
Uh, but it's all built on a house of cards of trust. And when you remove that bottom card of trust, uh, then, uh, you got big problems. And so the whole system build on trust. And if you don't have trust, then we have nothing you have this exact situation.
00:31:58
Speaker
Well, and the other thing that adds into this is the fractional reserve banking issue, right? Which is they only have to have, what is it, 10% of the cash audience for the amount of deposit, the amount of debts on their book. So by definition, 90% of the money that they could potentially have to hand out, George Bailey style, they don't have. And it would be insane for them to have it, because in terms of being competitive with other banks, that would be a huge problem for them. They should be doing other things with that money. And if they're holding it on hand,
00:32:26
Speaker
And so that's why something like this, I guess, especially I mean, it seems Silicon Valley Bank, from my understanding, had like a couple of.
00:32:33
Speaker
Um, high level issues. One was that there were so few relatively deposit, it was such a large bank compared to the number of depositors it's had. It had, it didn't have that many depositors. It had a very high average deposit rate. So that has the twofold thing of being everybody's well above the FDIC, $250,000 per depositor per institution, uh, insurance limit. But then additionally, all you really need is a conference call of, you know, maybe 10 people and you could put a big dent in SVB's, uh, cash on hand, right?
00:33:03
Speaker
Yeah. And one other systemic issue with them is that they were all, they were really concentrated on tech firms, tech startups, that kind of thing. And so back three years ago, when cash was flowing, two years ago, when cash was flowing like crazy, they had a huge amount of money. And so they didn't know what to do with it. And they put it into low interest bonds.
00:33:26
Speaker
And now the Fed is jacking up rates to control inflation. The tech firms are all not depositing cash because they're burning through it and they're taking money out slowly. And that's what caused this hole. The crunch that caused the fear, which caused the panic, which caused the collapse.
00:33:47
Speaker
Yeah, and the bonds were like commercial, or no, they weren't commercial, they were just mortgage backed securities, I
FDIC's Role in SVB's Collapse
00:33:52
Speaker
think, right? Right. There's an awesome TikTok by Morning Brew, that's like 45 seconds long, that explains it very funny. I'd recommend to anybody listening.
00:34:03
Speaker
Basically they invested in low rates for a long payoff period, right? And then rates went up and now that's a terrible investment to have. And I mean, that's my understanding of like sort of the very cursory, poor investment choice. I mean, it didn't lose them money, but if you have to sell it, you're not getting very much in return in comparison to what you thought you were going to get.
00:34:24
Speaker
Sitting here on March 16th, we can say that, yes, it did lose that money. It did not work out. That's true. This did not go very well for them. Surely, it was a result of poor planning and investing into low interest yielding assets at a probably pretty unlucky time.
00:34:49
Speaker
When you know we didn't i don't think we had clear signals two three years ago that interest rates are gonna go up quite this much quite this fast and you're gonna have this sort of problem. But it does kinda present a diversification.
00:35:05
Speaker
lesson on a lot of fronts here, diversifying the nature of your depositors at a bank, diversifying the nature of the investments, because if you're leaning that heavily into these low interest bonds, generally that's a safe investment. I don't think anybody's ever going to get in trouble with a breach of fiduciary duty by investing in low interest bonds. That's a super safe investment that seems pretty reasonable.
00:35:33
Speaker
Uh, and it's safe until you're relying on a good return on your investment to be able to generate cash for you. And then that just isn't sound anymore. Yeah. And they weren't the only ones that invested like that. And a lot of banks took, took hits, but the, it's just happened to be the way that SVP was set up. I saw tweeted by somebody that, uh, is like they basically had accidentally gone all in on low interest rates, both from the investment side and from the client side.
00:36:03
Speaker
because tech firms are dependent on venture capital, which require low interest rates for money to flow freely. Or don't require it, but it's definitely a benefit for it.
00:36:16
Speaker
Um, yeah, but this, and it all culminated in FDIC, the federal government kind of bailing it out. Maybe so fight about this, uh, clear definition of bailout. I mean, yeah, to me, it's definitely not what happened with the old banks where like they just straight up got bought, uh, or like portions got bought by the government, um, as a bridge loan. Um,
00:36:41
Speaker
Yeah, but all the depositors got all their funds guaranteed by various mechanisms.
00:36:47
Speaker
by the Federal Treasury. That's probably the best thing, even though it's probably short-sighted for those depositors to have all or very vast sums of money in one bank. I don't really know how you do something, how you handle that situation. Is the FDIC insured limit just a quarter million dollars across the board, regardless of what type of client you are?
00:37:16
Speaker
And so how do you take the kind of cash that, let's use Roku because we use them already, how many banks need to exist for Roku to be fully insured by FDIC? If they've got $500 million just at SVB, then what do they need?
00:37:36
Speaker
How many banks does it take to do that? 200? I don't know. I'm not a mathematician, but a lot. 2,000? So there's a way to do a lot more than 250,000, I've learned. It's called a sweep account, apparently.
Wealth Stratification Among US Banks
00:37:50
Speaker
And basically, it's a product that banks can offer that automatically cuts up your cash into FDIC insured sub-accounts.
00:38:01
Speaker
And people didn't do it. But that has a cap of like 250 million, which is like pretty high. That's a big cap. That's better than 250,000. Yeah. Or 150 million. That's better than going out and having to find 1,000 different banks to stash 250,000 in a piece. But isn't there also some sort of like? You can always buy stock, by the way. You can always put it in assets.
00:38:31
Speaker
administratively don't like when you hear that don't you kind of just go like what are we doing with this this insurance limit like if there's a product that the bank can unilaterally offer that will sort of skirt that to and if then just change the limit I mean that why are we doing this yeah what is the purpose of like why is this there's some expert there's some person some lawyer working at this at the bank doing this chopping up that came up with this idea that is getting paid boatloads to do and all it is is just an administrative hurdle that should just be resolved at the policy level
00:39:00
Speaker
Well, I think that sweep account thing was actually an FDIC program. FDIC came up with it or something like that. So I follow somebody. I wish I had read the article, but I didn't because I followed our rule of no research. But immediately after this bailout, all the law professors were like,
00:39:24
Speaker
Oh, well, that's maybe this is the best result. But this totally changes risk, you know, risk management, the idea of the cap was to force people to deal with risk management and best practices and all that. But if the government is going to back the banking system, then we need to think about what that means. And the, you know, this this bailout, if you want to call it that, is getting paid for by a special assessment on banks.
00:39:52
Speaker
Um, which is apparently something they can just do. And I'm sure the banks are like, we'll take that over financial stress. They'll take that every any day rather than fight it. Um, yeah. And, uh, yeah. So I, I don't know the policy implications of having FDIC limit not exist and just be like, okay, bank is now an insured institution and all depositors are guaranteed unlimited.
00:40:21
Speaker
Maybe the bank has to pay a significantly higher premium or something like that, or I don't know. I'm curious enough that I'll probably read one of these professors things at some point.
00:40:37
Speaker
It would definitely change, like you said, the risk assessment, right? I mean, the most conservative option would become being perfectly insured for all of your capital, all of your money, right? Like right now, anywhere you put your money, there is some...
00:40:55
Speaker
modicum of risk, right? If the FDIC ensures all the way to there's no limit, then now the truly conservative investment choice is to just completely be completely covered. There is no risk whatsoever. At least the money you put in will be there. And yeah, I would imagine it would be a shakeup. But as you said, this professor said, it seems to me that that's functionally what happened. I mean, Silicon Valley Bank was big, but it's not huge. They're not dealing in trillions of dollars. I think they had $500 billion in deposits or something.
00:41:24
Speaker
And, but the concern becomes, well, the contagion effect, right? It's going to ripple up and then JPMorgan chase is going to crumble or whatever. And so can't people sort of moving forward just sort of bank on that? So to speak, they had, they had under 250 billion. So one of the things that, uh, that, uh, that was part of this discussion was S V B was one of the specific people trying to raise the, um, so
00:41:51
Speaker
under Dodd-Frank as it was after the crisis set a cap of 50 billion in deposits for when you were structurally important and therefore had to go through a bunch of stress testing and stuff like that to make you more regulated because if you failed, it would be a real problem.
00:42:10
Speaker
This contagion idea. Yeah, this contagion thing. And SBB was one of the drivers of raising that cap from 50 to 250 billion. So they were no longer considered structurally important enough. Because we're doing fine. We don't need that. Yeah, like we're too small. We're just little baby SBB. We're not going to cause any problems if we collapse. Right.
00:42:33
Speaker
and it might be so it might be that that was true but man after as svb was collapsing uh all the libertarian tech people were like screaming at like literally all caps
00:42:50
Speaker
probably actually screaming. The government has to step in and guarantee all depositors now what there's going to be a run on banks. You should take your money out of the financial system. All banks are going to collapse on Monday if the federal government, like really trying to cause, actually trying to cause a run for everyone else so that they would get saved. Misery loves company. Yeah. Yeah.
00:43:16
Speaker
And so it might like I it seemed like it wasn't actually gonna affect the bigger banks other than like everybody getting spooked a little bit. And the bigger banks would have been fine. But I mean, it probably wasn't they didn't want to risk it.
00:43:32
Speaker
Yeah. It seems like if like, so like another bank failed too. Is it Silverstone or something like that? Silvergate or something? Yeah. Silvergate. Nobody cared. So like maybe there is a limit, uh, like that makes sense where like, it doesn't matter what happens to this $30 billion bank or something like that, but it's SVP, whatever it was, was too important to
00:43:57
Speaker
shun the depositors at least. It seems. I'm not mad that depositors didn't get totally screwed on this and the banks are going to pay for it. I'm not mad about it. I'm not mad about that either. I do want to take a moment and observe that at the 42 and a half minute mark that we can forever mark that as the moment when Jake did his baby voice. That's going to have to go down along with episode zero and I don't know what else.
00:44:24
Speaker
It's a Jason Calacanis voice. I think is what you should call it, Jason Calacanis. Is that how you pronounce his name? Calacanis, yeah. I'm sure. I don't know. Calacanis. Have I told my Jason Calacanis story? I don't think I've told it on the podcast. That guy's a jerk. Tell it. Yeah. So years ago, he used to be on Twit this week in tech. He was on the podcast. And he was like a tech podcast, right? We had live video editing. Sure. And he also had the human-powered search engine. It was called Mahalo.
00:44:48
Speaker
And it was the idea was like, I don't know, he had some people that he paid nickels or whatever. You know, that's a joke. I'm sure he paid them, you know, minimum wage or whatever. Paid them very well to go through all these search results and like hand curate results. You know, it was the anti-Google basically. And he talked about something on on Twitter and he like semi sort of put out a call for answers to this like problem. I don't remember exactly what it was, but I remember was I emailed him and I said, hey, I heard you say this thing and I think it's this or whatever.
00:45:15
Speaker
He responded and said, I'm stupid for thinking that's a solution, and if it was a good solution, I would start my own company. He was just like, I was really just absurdly rude. Ever since then, I've been rooting for him to fail. When it looked like he was going to be the CEO, maybe Elon Musk was going to choose him for Twitter.
00:45:39
Speaker
I really kind of hoped that that would happen because I think he would screw it up really bad. He does not understand people. So no, no. Yeah, no, he was not with that haircut. You didn't understand people. So what I wanted to do is some things I wanted to point out. I hope this is interesting. I was looking the other day at like the largest banks, the largest US banks and what their total assets are in billions or trillions of dollars. So do you think either of you guys can guess what the number one bank is?
00:46:08
Speaker
Yes. Okay. I think I'm going to guess. Okay. The number, so I'm going to guess is JP Morgan with $2 trillion. Okay. Jason, do you have a guess or you just want to, uh, I'm going to say HSBC with a trillion and a half. Okay. So
00:46:31
Speaker
Closest is Jake. The correct answer is JP Morgan Chase. $3.7 trillion. HSBC is number 15 with 231 billion. But listen to these numbers really quickly. Yeah. So JP Morgan is number one, they're 3.7 trillion. Bank of America is 3 trillion. Citigroup is 2 trillion. Wells Fargo is 1.8 trillion. If we get to number seven, we're at 600 billion. So like the top three banks are up near 3 trillion and then it falls off a cliff.
00:47:01
Speaker
So the idea that this like so yes, Silicon Valley Bank was had a lot of money, right? It was handling a lot of deposits. But relatively speaking, where it stood in like sort of in the ranking was not
00:47:14
Speaker
indicative of how much money it's handling as compared to like the real big boy big weight. So you're telling me we have a stratification problem in finance in this country. No, I don't believe it. I don't believe there's a stratification of wealth. Yeah. I don't want to sound alarm bells and make our listeners get nervous or something, but I think the banks might be sort of merging together too much. And that might be a problem moving forward.
00:47:40
Speaker
I did know it was JP Morgan because I did pay a little attention to this professor who also talked about, so one of the ways the stratification is happening is that JP Morgan has $500 billion in deposited with the Federal Reserve Bank.
00:48:00
Speaker
And so they have money in a bank that can never, ever default. They have a special access to a bank that will never, ever default and other banks don't have that. They can deposit money with the Federal Reserve and have a special account because the Federal Reserve can't default.
00:48:24
Speaker
So I see what you're saying. Okay. Uh, because it is the cousin price. That's the whole game. It just types in. Oh no, we just have a trillion more dollars. That's fine. Yeah. Um, yeah, they could just do that. Uh, so, so they have, um, you know, unfair advantages as the biggest banks as well as the, the constraints of stress, then it's testing and stuff.
00:48:47
Speaker
So yeah, it's, I mean, I mean, to that end, the contagion effect, I'm sure is a real threat for like, say numbers 10 down. But I, it seems to me that, you know, as to your point, what you're saying about the, the federal reserve deposit account, but also just 3.7 trillion. Like I don't, I don't believe that the larger banks were ever really concerned. And I think actually today, the latest news was that one of them deposited 50 billion into the, have you guys heard about that?
00:49:18
Speaker
into Silicon Valley bank, like whatever the sort of shell bank is now that has been reformed. There we go. I'm sorry. First Republic bank received 30 billion in deposits from nearly a dozen of the United States biggest banks, including JP Morgan Chase, Wells Fargo, and Morgan Stanley. The beleaguered banks shares closed up 10%. And that's where the New York times. So the other, the banks are bailing out the smaller banks now. Yeah.
00:49:42
Speaker
That's funny. I have to imagine there's some sort of like network effect and symbiosis that's happening here where like, yeah, somehow First Republic Bank is strategically important to these guys for reasons that I'm sure is big time inside baseball that is well beyond my grasp. But yeah, they're not doing that out of the kindness of their hearts. They're doing that out of like ruthless self-interest for sure. Is First Republic Bank is the is the bridge entity?
00:50:10
Speaker
30 billion in deposits. By the way, so one thing I didn't mention, they tried to sell the American business over the weekend. They didn't. They weren't able to. Did they get sold this week because they knew they were going to try again? Do you know? Of First Republic or Silicon Valley? Silicon Valley Bank. I don't think it got sold. Last I heard was that I think HSBC was going to buy the British subsidiary, but last I heard there was
00:50:38
Speaker
Yeah, they I heard that happen and that, yeah, OK, that the federal FDIC tried to sell off SPV and they got one bid and rejected it from an entity and they wouldn't say what the entity was, which makes you very interested at all about what that entity was. It was Bill Browder. It was Bill Browder. It was Bill Browder. Oh, God. It was the Browder family. Yeah. Yeah, it was Joshua Browder. His A.I. did it and he was he was going to disavow any any knowledge.
00:51:06
Speaker
It does make me think about how so, you know, as VP, it's, you know, much smaller than JP Morgan, obviously, but still pretty, you know, pretty big, pretty major to the point where it's a, you know, institutional problem to have them fail out of nowhere. And then their deposits are still less than the network of are like around the same as the network that Jeff Bezos of one guy.
00:51:32
Speaker
of an Elon Musk. Though Elon Musk, I'm not sure how real his wealth is since it's all tied up in so much of his setup in Tesla. It's all fake, man. It's all a sham. It doesn't matter. It's all a house of cards. That's like, man, these guys have too much money. I'm brave enough to say it. I think these guys have too much, maybe too much money.
00:51:55
Speaker
OK, but if any of them are listening, we still want you as a listener. We value you. Obviously, not you. Jeff, hit me up. I would love Prime. If you could, you know, just hand me, give me some Prime. I would love it.
00:52:08
Speaker
Maybe I will, I will say nice things about you forever. If your mass effect, uh, adaptation goes well. So here, here, here, here, you know, I'll talk nice about Bezos. If I can get a reboot of the, uh, men in the high castle, like bring that show back and give me more, give me more.
00:52:28
Speaker
That show got canceled, right? No, it just finished. I want more of a good thing. I should probably leave it how it is so that we don't end up with Fonzie jumping the shark on the men of the high castle.
00:52:41
Speaker
But it's wearing a little swastika hat when he does it. That's a difference. We don't want to episode zero this.
Clarifying WWII Fictional Discussion Context
00:52:49
Speaker
So let's leave it there. Okay. So Man in the High Castle is based off of what would have happened if the Nazis had survived World War II and it's a fictional world and yada, yada, yada. That was a topical statement that wasn't out of nowhere. That was a topical and appropriate to the context.
00:53:07
Speaker
This is not a Nazi podcast. If you're looking for a Nazi podcast, you should unsubscribe. This is not a Nazi podcast t-shirt is having a lot of people asking questions.
00:53:22
Speaker
Great merch idea. First merch idea. That's great. I love it. I mean, that's the title for sure. This is not going to cause any problems for us at all, but okay. More of a good thing. More of a good
Joshua Browder's Legal Issues
00:53:32
Speaker
thing. Uh, the aforementioned Bill Browder, son, Joshua Browder is getting sued yet again. It seems, I mean, well, so the other one, there's two more lawsuits.
00:53:43
Speaker
I can hardly believe it, guys. I only knew about the class action one. There's another one? Yeah, somebody else sued him. Well, there's a class action. I think there were two class actions filed in California, separate ones. One of them was fraud on behalf of
00:53:58
Speaker
Like two different fraud class actions. I'm pretty sure. Well, so I know the two broad things are substandard legal documents and the provision of unauthorized legal services. Yeah. Those are the two sort of, what else do you need? Yeah. I mean, the second one was like a given probably no matter what, right? He's out there like saying, yeah, we want to be your robot robot lawyer. It's like, I mean,
00:54:24
Speaker
Yeah. That seems like the obvious. The obvious joke is, will the robot lawyer represent him and represent do not pay for these? I mean, that's like a lame joke, but it's not even a joke. Like, is he, is this an attempt? Will he make an attempt to, or I guess not because he abandoned all that, right? It wasn't profitable. I mean, he, so when GPT, so chat GPT four was just like, just had its big,
00:54:49
Speaker
moment in the last like day or two, right? Was it today? Or yesterday? Yeah. And he was immediately out there like, Oh, yeah, we're working with chat GPT for to start drafting, telemarketing complaints, drafting pleadings, pleadings are law practice. And he showed an example that has through the undersigned counsel on the
00:55:16
Speaker
buying through the understand council on the pleading. It's like these things. Telephone Consumer Protection Act. I think it was one that kind of thing. I don't remember what it was. But yeah, that is not not good. No, bro. Stop. Just stop. Just stop. Take a take a vacation for a little bit. But he can't take a vacation now because I was hotter than ever. And he has to be the one.
00:55:42
Speaker
to be the AI lawyer guy. I mean, he was, he had first mover advantage there for a little while, except for the part where it didn't do anything.
Impact of Chat GPT-4 on Legal Tech
00:55:51
Speaker
But I mean, if it didn't work, he would have had a solid couple of weeks where he would have been the only one, the only, you know, player in town. But now there's case text has one. Yeah.
00:56:01
Speaker
GPT-4, obviously all these various industries had access to the API for GPT-4 for longer than regular end users. Every couple of hours, it seems, there's been another announcement of another product that uses it.
00:56:17
Speaker
The real beauty of this whole thing is that now that chat GPT four is out to the general public, I think, I guess, uh, that he can actually use it to program his app because I've seen a bunch of people programming iOS apps with chat GPT four. So maybe now his app that he says is AI can actually be generated by AI, which I think the FTC would still say it's not AI powered. Right. Didn't we talk about this a couple of weeks ago where the FTC was saying that
00:56:45
Speaker
your app has to use A.I., not actually just be generated by A.I., so Browder's still for that. Well, he could write an app that uses the GPT. He could write an app using GPT that uses the GPT API to generate these documents. And then he can show up in court and be like, I had these the whole time. And then they'll say, well, wait a minute, when did GPT-4 come out? And then the answer will be weeks after you were already being sued. And so that's a problem.
00:57:11
Speaker
When is the chat GPT? Yeah, I was going to say, why don't we just have a specific branch of chat GPT that's only for generating chat GPT apps? So you're just like, you just have to write app that blank, and then it writes that. And so then that's a chat GPT app app.
00:57:34
Speaker
Have you seen the things where they have chat GPT? They say like, you're now an operating system that is running Linux version, whatever. And I'm going to give you a command. They basically have operating systems running inside of chat GPT. And it's simulating what it believes that OS would do. Or you can make up an OS. And I think somebody had like, basically you could play the original, I don't know if it was Pokemon red and blue or Pokemon like gold and silver.
00:58:00
Speaker
or something, it has the entire story in there. So you can just tell it to pretend that you're the game and it starts you off like a text-based adventure. Professor Oak or whatever is chasing a Pokemon around and you're standing there. What do you do?
00:58:17
Speaker
In my little world, ChatGPT 3.5 was very bad at chess. ChatGPT 4, pretty good at chess. Still won't make illegal moves, but won't imagine pieces all of a sudden appearing on the board like ChatGPT 3.5 did.
00:58:37
Speaker
That's a higher level of cheating. I like that. I never thought of that. It was just like, yeah, there's some good chess recap videos of people playing chess against chat GPT and be like, queen takes what? There was no queen. Anyway, I mean, so GPT looks super impressive. I haven't had a chance to play with any of the applications yet for like the purpose built
00:58:59
Speaker
As I said, I think case text has one and somebody else has one. I haven't had a chance to play with any of those yet. My understanding is what they do is they're still interfacing with the GPT-4 API, but they also expose the language model to other purpose-built datasets like a bunch of case law or a bunch of the entire internal revenue code.
00:59:23
Speaker
And then, you know, voila. Now you have a tax expert that you can do all the things I could do before, but it also knows how to calculate a business deduction or something. Jason, do you say you got into case techs program or whatever? We have a couple of people in our little learning council community slack that I've tried it, but I wasn't sure if you were one of the people that did it.
00:59:45
Speaker
Uh, on the, on the off chance that I, somebody may have signed it or deny on the off chance that the co-counsel beta or trial has a click wrap, a non-disclosure agreement. I can either confirm nor deny. Okay. Okay. Well, we, we'll just talk Andrew about the possible possible things. But one, one thing that I saw in their thing, in their like promotion was that, um,
01:00:15
Speaker
uh that you can have like you can turn on and turn off whether or not you can see the outside world or whether or not the ai will just look at the actual legal documents and also all of its answers are linked to the actual cases and actual laws and such so that seems like very an awesome way to start
01:00:39
Speaker
Yeah, I would love if they had like a free trial so I could like check it out, but there's a free trial. There's a free trial. You don't know. There's a free trial. Yeah. No, there's a free trial. You can sign up for it. Yeah. It's pretty publicly on their website. They wanted me to have to. They wanted to make me sign up for like a demo or something on like a Tuesday. It only gave me one day.
01:01:06
Speaker
And I was like, I can't do it. It's not going to get a free gift from a timeshare, right? You got to sit through there. And they have no idea that I'm not the partner in charge of those conversations. Right. You wear a fancy hat and they'll, they'll think you're a partner. You look real fancy. I assume you're the partner. So I'll pull out, I'll pull one out from my trilby slash fedora collection that I have right behind me.
01:01:29
Speaker
That's how people know you're fancy or you have a lot of money. Same thing for the timeshare meetings. You go with a little fancy hat and they assume you have a lot of money. So the sandboxing thing you were saying where basically it's not looking at the outside world, that seems super interesting to me. So I have a lot of questions, but one question I have that I know you can't answer is just to the outside world here. I assume the language model is still the language model that has been built
01:01:54
Speaker
more generally, right? Because otherwise, if the AI only knows about the, you know, say the case law and the statutes that you expose it to, it's not gonna be very useful because all it can really do is duplicate what it has seen, right? It needs a larger data set. So cutting it off from access to the outside world via the internet, that is great to sort of limit, like, so you make sure you're not getting some kind of like eHow answer for, you know, how to suemybadboss.com or something, right?
01:02:21
Speaker
You don't want, you want it to be limited to the world that it's viewing. But as long as that language model is the one that has been built and gives us wrong answers for things, it seems that you could still arrive at that because there is some baked in issues. The basics of language, the ABCs of language I had to learn from somewhere else. Right. And so any problems there are coming with it.
01:02:43
Speaker
I would love to see. I think it would be very funny to see a language model trained only on legal language. I bet it would be very bad and very dry and boring. It would be like the most pretentious gunner in your law school class. Again, probably a guy who wore a hat.
01:02:59
Speaker
There's going to be a lot of two wits. Yeah. Yeah. The guy always sat in the front. Our guy had a, um, he had a, I think it was an umbrella, but he had like a gold handle on the umbrella he walked around with. He looked like Mr. Peanut. Yeah. It was not as cool as he thought he was, but that's what I think that that language model would sound like that guy.
01:03:18
Speaker
Yeah, it's going to be all, uh, they're going to name the model, learn at hand, and it's going to be all like a spewing, uh, uh, uh, Posner and the Scalia isms. Yeah. You're going to hear a lot about originalism and, uh, yeah, it's, it'll be just a hot mess. It'd be a great AI resips. I'm excited to see what it looks like. Uh, try it myself.
01:03:43
Speaker
Yeah, me too. And so the other just really quickly before we move on. Yeah, you don't know anything about it. Before we move on, the other thing I've been thinking about is, today, Microsoft, I don't remember how they name their products. It's not Office 365. I think they call it Microsoft 365. It's CoPilot. Yeah, Microsoft 365. CoPilot, right? Yep. Not Office 365, CoPilot. Microsoft 365, CoPilot. I think that's right. I think. Yeah. So GPT-4 in Microsoft Word.
01:04:09
Speaker
I wonder how far that would get most legal professionals that are drafting things. A little bit of help, get a quick skeleton. Emails? Oh, I'm excited. I'm excited for the emails. Draft an email to opposing counsel asking where my discovery requests are. Look up the discovery requests. If it does that,
01:04:31
Speaker
Man, I I'm going back to dictation if I can do that on my on via voice just lay back and say Alexa don't do that. Sorry. Sorry to everybody listening. Sorry Cortana that's not gonna activate anything Cortana do this and I can just sit back and
01:04:58
Speaker
Man, that would be nice. Again, I've mentioned this before, bar association coordination. Man, do I send a lot of emails for that stuff. That is... And I don't want to write them. Yeah, I don't want to write them. The writing is the stressful part. I don't want to make... How do I spend two paragraphs?
01:05:21
Speaker
in language that i'm sure i've written a million times anyway you know what i've used it for this like super helpful now with chat gpt is. Write me an email asking for these things but put each thing in a separate sentence and you know make it sound nice and then i just paste in a list of like documents i know i need or something.
01:05:37
Speaker
It'll just turn like a simple thing like that that I just don't want to sit around trying to type out You know and then please also it's basically just doing all the niceties That's what I trust it to do is to sort of you know tack in the you know make this into language I'm not just control being a a bulleted list to somebody that that's how you know neither of us feel like we've you know, we're we've earned it yet because
01:05:59
Speaker
You know, the the young the young associates have nice intros and, you know, flour, you know, proper language. All right. Well done. And then the old partners are like, where is this? No, no, no punctuation sent from my iPhone or OK, period. Where's the where's the disco? Where's the disco? No punctuation.
01:06:26
Speaker
So yeah, we'll eventually get there. But until then,
Generational Perspectives on Text Punctuation
01:06:29
Speaker
there's chat GPT. Hey, at least the boomers are putting no punctuation in their things, right? Because otherwise, the young millennials and the zoomers are going to think like, oh, there's punctuation in this. Like, they're being passive aggressive to me. Like, oh, man. If you put in a par-, I mean, periods are definitely passive aggressive, honestly. I'm fired, yeah. If you get to something with a period at the end of it, have you ever put a period on a text message, Jason? All the time. All the time.
01:06:55
Speaker
Really? I don't think I have. I type multi-sentence text messages. Why would I not use a period? How do you know where one starts? No, at the end. One stops. No, no. Period in the middle doesn't matter. Period in the end is the question. That doesn't count. Just like, OK, period. If I'm fine with somebody.
01:07:10
Speaker
Sometimes, sometimes my reflex, sometimes if my reflex will take over and you guys do the thing on your phones where you double tap the space bar and it gives you a period instead, sometimes my reflex for that is strong and maybe I'll start another sentence and delete it and just let it stand on the last sentence and leave the period there. Am I committing a big offense against people? I don't know, maybe. Maybe I'm more boomer than I want to admit.
01:07:37
Speaker
I don't think it's a big deal anymore because I think more people are using voice text and that adds a lot of punctuation that you might not necessarily need. So I don't think it's as big of a deal as it used to be.
01:07:50
Speaker
No, even just like iMessage and like the merger of text messaging with chatting on a computer, I think also added to that too, because you might be using a keyboard and it's not that crazy to hit the period. But if you're hitting period on like an old one of those where double space didn't do the period on the on-screen keyboard, you're angry. You're mad at somebody.
01:08:10
Speaker
Also, if you have a period, but it's followed by an emoji, I think that blunts the trauma. But it depends. Didn't we talk about the emojis a couple of weeks ago where we don't know what they mean? We think we know what they mean and we don't. Like the smiling one, the dead eye smiling one means like something terrible. Just smiling is weird. Who just, just a smiling emoji? I don't know. In a professional context, that would be off-putting.
01:08:36
Speaker
So, fellas, hey, Andrew, what's going on with you? What recommendations do you have? I have a very easy recommendation. It's quick. Basically, if you have an old computer, you should upgrade it to a new computer. The M2, I haven't got a Mac Mini M2 Pro. The middle of the road one, I don't remember what it is, the 10-core
01:08:54
Speaker
CPU, I think 12 core GPU and two 38 inch screens moving up from a, I'm sorry, two 28, two 28, two 28, I'm sorry. That's more reasonable. Yes. Just two of them next to each other. Like low, like not expensive, not, not because I'm waiting for the new pro display. You know, reasonable, like, I don't know what they were maybe 350 bucks each. Not, not outlandish, expensive screens. Samsung's they're fine. They're 4k. Two of them next to each other. 4k.
01:09:23
Speaker
Fantastic. Enjoying it quite a bit. Little finicky, the Mac Mini is a little weird. It has one HDMI port, and it has a bunch of USB-Cs, and they have DisplayPort out over USB-C. And HDMI was giving me 4K. Nobody's going to care about this. But if you have this problem, the one person listening is going to go, oh, OK.
01:09:42
Speaker
HDMI does 4K at 60 Hertz. The USB-C out to HDMI does 4K at 30 Hertz. But if you do USB-C out to DisplayPort, it does 4K at 60 Hertz. So get that cable. It's like a box. And there you go. So my recommendation is if you have an old computer, get a new computer. You don't need to go for a Mac Studio if you're something like an attorney or somebody that's even just doing a little bit of, like I do a little bit of video editing, do a little bit of audio editing and stuff. More than enough, great computer.
01:10:11
Speaker
Really good. Can't recommend enough. The Mac Mini is the one that's like a little box that goes on your little like a personal pan pizza style computer. Yeah. Cool.
01:10:24
Speaker
I have one recommendation, which is, well, yeah, yes, I think I would call it a recommendation. Phantom Brigade, which is a game. I'm always recommending games here. It's a mech tactics game. It came out on Steam. It just came out out of early access. It came out a couple of weeks ago. So it's tactics like it's XCOM, but both of you are taking your turns.
01:10:52
Speaker
It's set up where it's the turns are five second increments, both sides, uh, play their turns at the same time. So you press the play button and both people's five seconds go off and you're planning out what your mechs are doing for the next five seconds. And so you're like, run up this side of the road for, you know, three seconds, then turn and shoot and then run again. The, the,
01:11:17
Speaker
gimmick, the trick to it is that your side in this political war has something called a prediction engine. So you get to see what they are planning to do for the next five seconds. You see a little red indicator
01:11:36
Speaker
Showing that they plan that they're going to shoot. It's like a little time machine They're gonna run this way and shoot and it's always right unless you interfere with it so like if you shoot in the first second and You shoot off one of the next legs
01:11:53
Speaker
uh it'll obviously fall down instead of keep going like it might have and that might affect you later because like maybe your other mech was going to shoot and instead of shooting the the location where it would have been it shoots where it fell down and maybe that gets another mech caught in the crosshairs or something like that or maybe it misses because it was actually behind a building
01:12:14
Speaker
Anyway, it's a grandfather paradox of you go back in time. It is the grandfather. Then you don't exist. OK, except, yeah, the the met killing paradox. Yes, it's five or five seconds rather. Yeah. But it's it's a good one if you're in the if you're in the tactic tactic games. If you like to battle tech the tactics game, you'd probably like this one.
01:12:35
Speaker
This is an entire genre of game I've never heard of. I will try it. None of that. I'm sure I'll play it and then I'll listen back to what you just said. But I dissociated while you were speaking because I didn't know what any of that said. That's understandable. I went somewhere else. That's a common reaction to mech tactics discussion. OK.
01:12:52
Speaker
All right, my recommendation or what's going on is an anti-recommendation. I'm going to say that daylight saving time is stupid and we should stop doing it. And you should write letters to your Congress people. You should write letters to your, I don't know, your state legislature people. Daylight saving time should end. It's stupid.
Daylight Saving Time Criticism & Legislative Actions
01:13:13
Speaker
I have no idea why we're still doing it. Apparently it's because chambers of commerce around the nation think that it's good for certain businesses.
01:13:21
Speaker
Chambers of Commerce, stop being stupid. Let's end daylight saving time. Please, I anti-recommend daylight saving time.
01:13:29
Speaker
Florida is either your best friend or your worst enemy because did you know we passed a law to eliminate the daylight savings time change? But you can't do it yet because Congress has to act before it can actually go into effect. Florida is not a great champion in this respect. Florida is one of something like 30 states that have already done this.
01:13:52
Speaker
Oh, the Arizona not do it. So just to be clear, you guys don't want to get rid of, yeah, you don't want to get rid of daylight saving time, right? You want to get rid of the opposite. You want to go into daylight saving times, which is where we are now and stay here, right? I don't, I don't care which we keep. I care that we stop changing. It was great because it used to be, uh,
01:14:11
Speaker
It used to be Arizona and Indiana, where I used to live, and will soon live again, that did not do it. And then for some reason that I don't understand, Indiana started doing it, probably because they got tired of flip-flopping back and forth between Central and Eastern time. And that screwed up everybody's TV watching schedule and sporting schedule. But Arizona, I think, still does it. They're on a mountain time, I think, normally. And so that's just an abandoned, lawless wasteland anyway. So who knows what's happening?
01:14:40
Speaker
And like your flip-flopping between central, between nothing time and Pacific time is my guess. Fine, whatever. But yeah, like let's just, I don't care which we pick, let's just pick one and stay with it so that we don't have these super disruptions to circadian rhythms and all sorts of other, I don't know, just body stuff.
01:15:07
Speaker
Yeah, no more. Put an end to it. End it. I would prefer we stay with what we have. Spring forward. Let's keep this. But I'm with you. I'll land wherever you want. Just stop changing. No body stuff. No body stuff.