The Largest Standing Army In Europe

Jacob Shapiro: 00:00:03

Hello listeners.

Jacob Shapiro: 00:00:03

Welcome to another episode of the Jacob Shapiro podcast.

Jacob Shapiro: 00:00:06

I'm Jacob Shapiro.

Jacob Shapiro: 00:00:07

Rob Laity joining us for our biweekly chats.

Jacob Shapiro: 00:00:10

Um, boy, it's been a week, uh, recording Tuesday, June 24th.

Jacob Shapiro: 00:00:14

This will probably come out I would guess Thursday.

Jacob Shapiro: 00:00:17

Uh, president Trump has announced the ceasefire between Israel and Iran.

Jacob Shapiro: 00:00:20

So I've got one more piece to send out, uh, via Substack.

Jacob Shapiro: 00:00:23

If you have not signed up for my substack, please do so.

Jacob Shapiro: 00:00:25

Um, and then I'll try and, and take a little bit of a break

Jacob Shapiro: 00:00:28

'cause I have been running.

Jacob Shapiro: 00:00:30

Nonstop here for the last 12 days, and you'll probably able be able to get that

Jacob Shapiro: 00:00:33

sense from the podcast itself because I mean, we, we do some analysis of markets,

Jacob Shapiro: 00:00:38

uh, and especially of the usan relations.

Jacob Shapiro: 00:00:39

But the end of the podcast is basically Rob, uh, thank you Rob for, for

Jacob Shapiro: 00:00:43

being my therapist and letting me talk about, uh, sort of the initial

Jacob Shapiro: 00:00:47

reflections on what it's meant to be, uh, driving so hard, uh, analytic.

Jacob Shapiro: 00:00:52

Um, over the past couple of days and ways to think for my, honestly, for myself

Jacob Shapiro: 00:00:55

about how to maintain mental sanity and if, if, if you guys can take notes

Jacob Shapiro: 00:00:59

from that, if it's helpful for you.

Jacob Shapiro: 00:01:01

I, I hope it's helpful for you too.

Jacob Shapiro: 00:01:02

So, anyway, enough rambling for me.

Jacob Shapiro: 00:01:03

I hope you enjoy the episode.

Jacob Shapiro: 00:01:04

I hope that you've appreciated all the analysis.

Jacob Shapiro: 00:01:07

Uh, I'm taking a little bit of a break at the end of the week, uh, Lord

Jacob Shapiro: 00:01:10

willing, and the creek don't rise.

Jacob Shapiro: 00:01:11

Uh, but we'll be back at it, uh, with a vengeance.

Jacob Shapiro: 00:01:13

Next week I'm sure.

Jacob Shapiro: 00:01:15

And if, uh, the ceasefire does not hold, I'll be back at it sooner than that.

Jacob Shapiro: 00:01:19

So take care of the people that you love.

Jacob Shapiro: 00:01:20

Cheers and see you out there.

Jacob Shapiro: 00:01:28

Alright, listeners, it is Tuesday, June 24th.

Jacob Shapiro: 00:01:31

It is 10:18 AM Central Time here in New Orleans.

Jacob Shapiro: 00:01:35

Um.

Jacob Shapiro: 00:01:36

Unless something, I mean, I, I don't think we're gonna cover things that are breaking

Jacob Shapiro: 00:01:38

here, but like, you know, this will probably come out on our normal cadence.

Jacob Shapiro: 00:01:41

It won't come out in the next 24 hours.

Jacob Shapiro: 00:01:43

So if some things seem outdated, apologies, they probably will because

Jacob Shapiro: 00:01:47

the Iran, Israel war, skirmish, whatever, ceasefire, it's all evolving quicker.

Jacob Shapiro: 00:01:53

Then we could possibly keep in mind, Rob, I don't, I know you said you, it's

Jacob Shapiro: 00:01:56

been going too fast for you to follow.

Jacob Shapiro: 00:01:58

Um, in depth.

Jacob Shapiro: 00:01:59

It's going too fast for me to follow in depth.

Jacob Shapiro: 00:02:01

The latest thing was getting asked what he thought about Israel and responding.

Jacob Shapiro: 00:02:06

I mean, I'm basically quoting him almost word for word here.

Jacob Shapiro: 00:02:08

He said that Israel and Iran don't know what the fuck they're doing, which

Jacob Shapiro: 00:02:11

that comment could be made for a lot of different people, president Trump.

Jacob Shapiro: 00:02:14

But I digress.

Jacob Shapiro: 00:02:16

Um.

Jacob Shapiro: 00:02:17

Elsewhere in the world, uh, Germany is floating a return to required

Jacob Shapiro: 00:02:22

conscription in their military because Friedrich Mers thinks that Germany

Jacob Shapiro: 00:02:25

needs the strongest military in Europe.

Jacob Shapiro: 00:02:27

Can't say I'm looking forward, uh, to that, uh, sequel.

Jacob Shapiro: 00:02:31

As much as I'm looking forward to the Dune Messiah, uh, movie that was announced

Jacob Shapiro: 00:02:34

will be, will be filming in two weeks and.

Jacob Shapiro: 00:02:36

Timothy Shalam, if you're listening, want you on the podcast.

Jacob Shapiro: 00:02:39

I've been tweeting at you all week.

Jacob Shapiro: 00:02:40

You haven't responded to me like you're starting to hurt my feelings here.

Jacob Shapiro: 00:02:43

Like we really want you on.

Jacob Shapiro: 00:02:44

I think we could do some good work together.

Jacob Shapiro: 00:02:46

Um, some drama over us, Japanese relations.

Jacob Shapiro: 00:02:50

We're gonna get into that.

Jacob Shapiro: 00:02:51

We're gonna talk about some NATO things and anything else.

Jacob Shapiro: 00:02:54

But Rob, I, I've been looking forward to chatting with you because during

Jacob Shapiro: 00:02:57

these moments of crisis, like I don't really have time to, to do much

Jacob Shapiro: 00:03:00

besides put my head down and try and pump stuff out as much as possible.

Jacob Shapiro: 00:03:04

And honestly, I want to be embraced.

Jacob Shapiro: 00:03:06

By the, the sweet caress of the bosom of markets that that beautiful objective

Jacob Shapiro: 00:03:12

thing that is not blowing anything up, that is just responding with numbers.

Jacob Shapiro: 00:03:15

Like I just wanna stare at the Matrix for like a good hour.

Jacob Shapiro: 00:03:18

'cause I'm exhausted.

Jacob Shapiro: 00:03:19

I haven't been following markets that closely and you haven't been

Jacob Shapiro: 00:03:22

following the war that closely.

Jacob Shapiro: 00:03:23

'cause we're both sort of in our foxholes.

Jacob Shapiro: 00:03:25

So as I peak my head out of the foxhole, now that we have

Jacob Shapiro: 00:03:27

peace in our time, or at least.

Jacob Shapiro: 00:03:29

Piece this week.

Jacob Shapiro: 00:03:30

Uh, any market thoughts from you?

Jacob Shapiro: 00:03:32

I saw that oil, like did a massive, uh, collapse of, what was it,

Jacob Shapiro: 00:03:36

10%, um, a couple hours before the ceasefire was announced.

Jacob Shapiro: 00:03:40

So somehow the oil markets knew before everybody else.

Jacob Shapiro: 00:03:43

Um, but just curious if there's any other market action that you saw that

Jacob Shapiro: 00:03:46

was fundamentally interesting or, or told you anything interesting or if it was

Jacob Shapiro: 00:03:50

really like the market was just like.

Jacob Shapiro: 00:03:51

Okay.

Jacob Shapiro: 00:03:52

Like Israel and Iran are pummeling each other.

Jacob Shapiro: 00:03:54

That's cool.

Jacob Shapiro: 00:03:54

Like, uh, these, there are no Iranian companies in the s and p 500, so like

Jacob Shapiro: 00:03:59

it's interesting that the straight of horror moves gets blocked.

Jacob Shapiro: 00:04:01

Okay.

Jacob Shapiro: 00:04:02

But like, not a whole, not a whole lot else.

Jacob Shapiro: 00:04:04

So let, let's go into markets a bit.

Jacob Shapiro: 00:04:06

I could use like a boring objective sense of what's going

Jacob Shapiro: 00:04:08

on with the numbers right now.

Jacob Shapiro: 00:04:10

Not boring, you know what I mean?

Rob Larity: 00:04:12

Well, thankfully for people who were, who were uh, sort

Rob Larity: 00:04:15

of in the whirlwind of events, uh, the truth is pretty boring.

Rob Larity: 00:04:19

So, um, it's sort of one of those dog in the nighttime, not barking situations

Rob Larity: 00:04:25

where markets haven't really done much and there is some signal in that.

Rob Larity: 00:04:31

Um, the fact that Golds did not make a new high.

Rob Larity: 00:04:34

The fact that Bitcoin, which had been acting very gold like recently

Rob Larity: 00:04:38

actually sold off, um, on these events and is, you know, sort of in, in

Rob Larity: 00:04:45

the middle of its near term training range, like all of this suggests that

Rob Larity: 00:04:48

either markets had sort of priced in a lot of this potential geopolitical

Rob Larity: 00:04:53

volatility or they just don't view it as.

Rob Larity: 00:04:56

Anything fundamentally relevant to the big gears.

Rob Larity: 00:05:01

And that's the way I would think about this, is like in this multipolar world,

Rob Larity: 00:05:06

there are the gears, you know, the individual areas where within each of

Rob Larity: 00:05:11

those big and important things do happen.

Rob Larity: 00:05:14

And we can see this.

Rob Larity: 00:05:15

In markets.

Rob Larity: 00:05:16

'cause that is what's reflected in markets when, when something happens

Rob Larity: 00:05:20

in the White House relevant to fiscal policy in the US that is moving

Rob Larity: 00:05:24

gold and it's moving Bitcoin and moving these assets and bond yields.

Rob Larity: 00:05:29

But the, um, you know, the, the frontier regions, we haven't seen

Rob Larity: 00:05:34

much market response to that.

Rob Larity: 00:05:36

So I don't know exactly what to make of that other than I think these places

Rob Larity: 00:05:41

are viewed as sort of marginal to.

Rob Larity: 00:05:44

So the really important piece.

Jacob Shapiro: 00:05:45

Mm-hmm.

Jacob Shapiro: 00:05:47

Um.

Jacob Shapiro: 00:05:49

And maybe it's more important to think about the, I mean, like, this is gonna

Jacob Shapiro: 00:05:52

give people whiplash, but, um, the tariff delay is, is coming up, or the

Jacob Shapiro: 00:05:57

end of the tariff delay is coming up.

Jacob Shapiro: 00:05:58

Like, uh, we had the Liberation Day tariffs, then we had

Jacob Shapiro: 00:06:01

the delay around April 10th.

Jacob Shapiro: 00:06:02

So technically July 14th is when all of the Liberation Day

Jacob Shapiro: 00:06:05

tariffs sort of come back on.

Jacob Shapiro: 00:06:07

And I feel like you can sort of feel the market, or at least, you

Jacob Shapiro: 00:06:10

know, I, I sort of have in the back of my mind as Israel and, and Iran

Jacob Shapiro: 00:06:13

are pummeling each other that, uh.

Jacob Shapiro: 00:06:15

Where are the trade deals?

Jacob Shapiro: 00:06:16

Like, uh, are the tariffs coming?

Jacob Shapiro: 00:06:18

Are the tariffs gonna be back on?

Jacob Shapiro: 00:06:19

Is it just gonna be another extension?

Jacob Shapiro: 00:06:21

Do you think that the market is like just expecting Trump to

Jacob Shapiro: 00:06:25

kick the can down the road again?

Jacob Shapiro: 00:06:26

And that maybe if he, you know, if somebody asks him a taco question on

Jacob Shapiro: 00:06:30

the wrong morning, like maybe he'll like try and shake things up a little bit?

Jacob Shapiro: 00:06:33

Or is there anything on the horizon that you're particularly

Jacob Shapiro: 00:06:36

worried about coming up?

Jacob Shapiro: 00:06:37

'cause I mean, we do have some cliffs that seem to be coming up.

Rob Larity: 00:06:40

Yeah.

Rob Larity: 00:06:41

And I hate to be Mr. Boring on this call, but I'm not clever

Rob Larity: 00:06:44

enough to say what's gonna happen.

Rob Larity: 00:06:46

I, I mean, I don't know anyone who is, as you point out, you'd have

Rob Larity: 00:06:50

to be eating breakfast with Donald Trump to know what he's going to

Rob Larity: 00:06:54

do when this, uh, delay is over.

Rob Larity: 00:06:56

And even if you eat breakfast with him, you know, whoever gets up right

Rob Larity: 00:07:00

after breakfast is gonna have, you know, a totally different story.

Rob Larity: 00:07:03

Yeah.

Rob Larity: 00:07:04

I mean, honestly, like.

Rob Larity: 00:07:06

Leaving entertainment value aside.

Rob Larity: 00:07:09

What are we doing here?

Rob Larity: 00:07:11

How do we think about this from actually taking action?

Rob Larity: 00:07:15

And it's really getting back to this notion of uncertainty and, and

Rob Larity: 00:07:19

what effects have already happened.

Rob Larity: 00:07:21

And I can tell you that the effects that have already happened is we've seen a

Rob Larity: 00:07:24

massive whiplash in the inventory cycle.

Rob Larity: 00:07:29

So companies are struggling to figure out what the hell is going on.

Rob Larity: 00:07:33

Um.

Rob Larity: 00:07:35

And that uncertainty obviously hasn't gone away because you've had this

Rob Larity: 00:07:38

moratorium and, uh, the deadline is coming up and no one knows.

Rob Larity: 00:07:42

So, um, on this kind of constant refrain of the only certainty is uncertainty.

Rob Larity: 00:07:48

I mean, that's still in play and it's even a more, it's emphasized more now in, in

Rob Larity: 00:07:54

light of this, uh, recent conflict, um, supply chain managers all over the world,

Rob Larity: 00:08:00

even if it's unlikely that the straight of four moves would've been closed.

Rob Larity: 00:08:04

Everyone has had to scramble and figure out what do we do if x,

Rob Larity: 00:08:08

y, and Z scenarios should happen?

Rob Larity: 00:08:10

Um, so the, the way to think of this is sort of a, an absorption

Rob Larity: 00:08:14

of mental capacity, uh, by people who have to make decisions.

Rob Larity: 00:08:19

And that's bad because we are already straining that with everything that's

Rob Larity: 00:08:22

gone on in the last six months.

Rob Larity: 00:08:24

And all the data that's showing that sort of, you know, investment

Rob Larity: 00:08:28

demand, leading indicators are.

Rob Larity: 00:08:31

Our weakening, um, residential investment has been not good.

Rob Larity: 00:08:36

Commercial investment has been really coming off the boil.

Rob Larity: 00:08:39

The programs, uh, ARPA and the, um, infra infrastructure, uh, uh,

Rob Larity: 00:08:45

investment and jobs acts programs are sort of, one of them is completely

Rob Larity: 00:08:50

through the pipe and the other one is really getting through the pipe.

Rob Larity: 00:08:52

So those tailwinds are, are weakening.

Rob Larity: 00:08:55

Um.

Rob Larity: 00:08:56

And you just add all this on, on top of everything else, there's,

Rob Larity: 00:09:01

it's not a great environment.

Rob Larity: 00:09:03

Um, especially when you take into account sort of the AI situation

Rob Larity: 00:09:08

really having been this huge tailwind and now where's it gonna go?

Rob Larity: 00:09:13

I mean, recent data points have been bullish again, um,

Rob Larity: 00:09:18

but the risk reward is not great.

Rob Larity: 00:09:20

You know, you have Larry Ellison coming out last week and saying, we

Rob Larity: 00:09:23

are going to own and operate more cloud infrastructure than all of our

Rob Larity: 00:09:28

hyperscaler competitors combined.

Rob Larity: 00:09:30

Mm-hmm.

Rob Larity: 00:09:31

Like, does that sound like a comment that someone says at the top of the

Rob Larity: 00:09:34

cycle or at the bottom of the cycle, you know, like you get data points

Rob Larity: 00:09:38

like that coming through, but all tolds, you know, it's a time to be

Rob Larity: 00:09:44

cautious and to pick your spots wisely, and that that hasn't really changed.

Jacob Shapiro: 00:09:49

Did you see your boy, uh, Paul Tudor Jones's kind

Jacob Shapiro: 00:09:52

of out there, comments, well, maybe they're not out there.

Jacob Shapiro: 00:09:54

His comments on artificial intelligence, he said, um, here,

Jacob Shapiro: 00:09:58

lemme get the quote in front of me.

Jacob Shapiro: 00:09:59

Uh, there's a 10% chance in the next 20 years that AI will destroy

Jacob Shapiro: 00:10:03

50% of humanity knows his quote.

Jacob Shapiro: 00:10:07

Uh, he also, he also by the way, is saying he thinks that like, uh, that.

Jacob Shapiro: 00:10:13

President Trump is not gonna deescalate, uh, trade tensions with China at all.

Jacob Shapiro: 00:10:16

And that like the mark that markets are in for sort of a rude

Jacob Shapiro: 00:10:19

awakening about US China ties.

Jacob Shapiro: 00:10:20

I'm not quite sure.

Jacob Shapiro: 00:10:21

I I agree with that so much, but I, I know you like him.

Jacob Shapiro: 00:10:23

I, I also wanted to ask, 'cause I feel like everybody before the, the war

Jacob Shapiro: 00:10:27

started was talking about this and I was arguing about, uh, with Marco about

Jacob Shapiro: 00:10:31

this every time I did an interview this week, even on Israel, a run, I would

Jacob Shapiro: 00:10:34

get this question towards the end of the interview about, about the one

Jacob Shapiro: 00:10:38

big beautiful bill in spending, but also specifically about the deficit.

Jacob Shapiro: 00:10:41

And about the debt.

Jacob Shapiro: 00:10:42

And I know we've talked about it a little bit before, but I don't think

Jacob Shapiro: 00:10:44

we've framed it in quite the way.

Jacob Shapiro: 00:10:45

I'm about to frame it to you, which is I keep on getting the question

Jacob Shapiro: 00:10:49

from people who are trying to read positivity into the one big, beautiful

Jacob Shapiro: 00:10:52

bill saying, look like spending is actually not gonna be that much.

Jacob Shapiro: 00:10:56

Like they started with 10, they were gonna add 10 to 15 trillion.

Jacob Shapiro: 00:11:00

They're really just gonna add a couple of trillion and they're

Jacob Shapiro: 00:11:03

starting to cut entitlements.

Jacob Shapiro: 00:11:05

And isn't this a sign that actually like.

Jacob Shapiro: 00:11:07

Um, you know, this is the last gasp of populism, but there's gonna have

Jacob Shapiro: 00:11:10

to be fiscal conservatism from here, and that's gonna affect everything

Jacob Shapiro: 00:11:13

from, you know, the dollar to treasury yields, things like that.

Jacob Shapiro: 00:11:16

That doesn't rain True.

Jacob Shapiro: 00:11:17

It hasn't rung true for me.

Jacob Shapiro: 00:11:18

I keep on saying like, okay, like you're, you're still

Jacob Shapiro: 00:11:21

talking about adding trillions.

Jacob Shapiro: 00:11:22

I. And if you look at the breakdown of when spending is happening, like

Jacob Shapiro: 00:11:25

there's gonna be increases in spending up until the end of Trump's second

Jacob Shapiro: 00:11:28

term, and all the decreases are supposed to happen after he leaves.

Jacob Shapiro: 00:11:32

And the next president's just gonna be like, yeah, sure.

Jacob Shapiro: 00:11:34

I'm gonna inherit a plan from Trump and follow that to a t and not spend

Jacob Shapiro: 00:11:38

money to make my constituents happy.

Jacob Shapiro: 00:11:41

Um, but I, I do kind of feel like when we're thinking about, I keep on going

Jacob Shapiro: 00:11:45

back to this metaphor too of, of, of the United States today as sort of where.

Jacob Shapiro: 00:11:49

Um, the United Kingdom was in the late 17 hundreds, not quite as dire.

Jacob Shapiro: 00:11:53

It's not like the United States has lost the equivalent.

Jacob Shapiro: 00:11:56

Of the 13 colonies in a failed war.

Jacob Shapiro: 00:11:58

And it's not like there's a Napoleonic empire that's rising on the continent

Jacob Shapiro: 00:12:02

that's directly threatening.

Jacob Shapiro: 00:12:03

But I like the comparison because it does seem like the UK was over its skis a

Jacob Shapiro: 00:12:07

little bit and over confident and IT and UK debt like was starting to get, I think

Jacob Shapiro: 00:12:11

upwards of 200% of GDP at that moment.

Jacob Shapiro: 00:12:14

And it really metabolized that over the course of the next century after beating

Jacob Shapiro: 00:12:18

Napoleon and colonizing India and.

Jacob Shapiro: 00:12:21

And things like that.

Jacob Shapiro: 00:12:22

So that's a really long-winded way of winding up to how do you approach, like,

Jacob Shapiro: 00:12:26

like when I'm on my next interview and somebody says, well, don't you think

Jacob Shapiro: 00:12:29

that the one big beautiful bill is actually more fiscally conservative

Jacob Shapiro: 00:12:32

than markets we're expecting?

Jacob Shapiro: 00:12:33

And that like, maybe we've turned a corner on the debt.

Jacob Shapiro: 00:12:36

And, and how do you work that into some of the things that we're talking about?

Jacob Shapiro: 00:12:39

I shoot.

Rob Larity: 00:12:40

Um, to start with the UK comparison, I think this is

Rob Larity: 00:12:46

really appropriate and it gets into.

Rob Larity: 00:12:49

The question that you asked, which is I think the UK was fundamentally different

Rob Larity: 00:12:53

than the US is today in the sense that the UK was run by hard money elites.

Rob Larity: 00:12:59

And you know that because after they defeated Napoleon, the next 20 years

Rob Larity: 00:13:04

were absolutely miserable in the UK because they ran a, a deflationary, like

Rob Larity: 00:13:10

a fiscal deflationary policy to back the pound and get it back in terms of

Rob Larity: 00:13:16

gold backing to where it needed to be.

Rob Larity: 00:13:18

And they just absolutely bit the bullet in terms of growth recession.

Rob Larity: 00:13:23

Um, it was, it was a miserable time.

Rob Larity: 00:13:26

And the only reason they could do that was because the people who controlled

Rob Larity: 00:13:30

the power were, were the elites who had a vested interest in that.

Rob Larity: 00:13:34

The US is not in that situation today.

Rob Larity: 00:13:37

The elites are not, um, effectively debtors.

Rob Larity: 00:13:42

Um, some of them are, but most elites own mostly equity.

Rob Larity: 00:13:45

Um.

Rob Larity: 00:13:47

And the incentives are different and they don't have the power,

Rob Larity: 00:13:49

like as much as you like to think, like, oh, the rich run everything.

Rob Larity: 00:13:52

Like they really don't.

Rob Larity: 00:13:53

Um, and you can see this at the ballot box.

Rob Larity: 00:13:57

There's, there's not a popular mandate to go out and cut spending and balance

Rob Larity: 00:14:03

budget because there's not been pain.

Rob Larity: 00:14:05

Like, yes, we had some, uh, inflationary pain in the last few years, which we

Rob Larity: 00:14:11

haven't experienced for a very long time.

Rob Larity: 00:14:13

It hasn't really been about.

Rob Larity: 00:14:15

Runaway budget deficits and inflation because of that.

Rob Larity: 00:14:18

Like, that's something that's more nascent.

Rob Larity: 00:14:20

So without that incentive, it's hard to see why.

Rob Larity: 00:14:23

Okay.

Rob Larity: 00:14:24

Like some, uh, moving around deck, uh, deck shares on the Titanic of the

Rob Larity: 00:14:29

one big beautiful bill or whatever.

Rob Larity: 00:14:32

Um, without a change in those incentives, I don't think I would ever

Rob Larity: 00:14:36

take this side of the argument that.

Rob Larity: 00:14:40

Oh, we're moving into fiscal rectitude.

Rob Larity: 00:14:42

Like, why, why would anyone who's a self-respecting politician

Rob Larity: 00:14:45

do that in this environment?

Rob Larity: 00:14:46

You're not gonna be rewarded for it, and if you try it, you'll be booted out.

Rob Larity: 00:14:51

Um, you know, we were looking, uh, I, I did some work on Japan just to

Rob Larity: 00:14:55

catch up of what's going on, and I was reading and, and looking at what

Rob Larity: 00:14:59

happened in 2010 when the DPJ finally came into power for the first time.

Rob Larity: 00:15:05

You know, ever.

Rob Larity: 00:15:07

And they came into power on a fiscal conservatism policy.

Rob Larity: 00:15:11

And they, and the, the leader of the DPJ at the time said,

Rob Larity: 00:15:13

we don't wanna become Greece.

Rob Larity: 00:15:15

We're going to raise taxes and balance the budget.

Rob Larity: 00:15:18

You know, how long they were in power.

Rob Larity: 00:15:20

And, you know, for a lot of reasons.

Rob Larity: 00:15:22

But the point is, even, even when it looks like to smart people, oh,

Rob Larity: 00:15:27

like this is a runaway deficit.

Rob Larity: 00:15:30

These are like income.

Rob Larity: 00:15:32

I'm sorry, interest payment levels that are ballooning and gobbling up

Rob Larity: 00:15:37

X percentage of our budget, um, until you get that feet on the ground, pain

Rob Larity: 00:15:44

coming out of that, like historically, you just don't see people stepping

Rob Larity: 00:15:48

in to fix it unless you have an elite driven society where people

Rob Larity: 00:15:51

are taking a far reaching sort of approach to this and they have the.

Rob Larity: 00:15:56

Incentives to protect the currency because they have a stake in that currency and

Rob Larity: 00:16:01

you just don't have any of that today.

Jacob Shapiro: 00:16:02

Yeah.

Jacob Shapiro: 00:16:04

Um, why don't, why don't we back into Japan a little bit?

Jacob Shapiro: 00:16:06

'cause, um, I think that's also a, a good place to think about what's going on.

Jacob Shapiro: 00:16:10

And also because this is, I mean, I won't say the media isn't covering it.

Jacob Shapiro: 00:16:13

I, I actually think the media has done an okay, okay, job here.

Jacob Shapiro: 00:16:16

But it's not like anybody has the attention to go to, like some of

Jacob Shapiro: 00:16:19

the more boring things that are happening in the world when you've

Jacob Shapiro: 00:16:21

got all this kinetic action happening.

Jacob Shapiro: 00:16:23

Um, but we've been talking about it now for a while.

Jacob Shapiro: 00:16:26

Um, which is that there are problems in the US um, Japan relationship, like

Jacob Shapiro: 00:16:30

before the war started, remember that the United States was making progress with

Jacob Shapiro: 00:16:33

China and London over trade negotiations.

Jacob Shapiro: 00:16:36

They were making no progress with Japan.

Jacob Shapiro: 00:16:38

They've had five different consultations with Japan.

Jacob Shapiro: 00:16:42

I. The Japanese officials have basically said they're no, they're

Jacob Shapiro: 00:16:44

nowhere close to any common ground.

Jacob Shapiro: 00:16:46

There was that Wall Street Journal report that you had multiple US officials

Jacob Shapiro: 00:16:49

literally disagreeing with each, uh, disagreeing with each other in front

Jacob Shapiro: 00:16:53

of a Japanese trade delegation so that the Japanese aren't even really

Jacob Shapiro: 00:16:56

clear what the United States wants.

Jacob Shapiro: 00:16:58

Um, and apparently that's not just related to trade.

Jacob Shapiro: 00:17:01

Um, so there was supposed to be a two plus two.

Jacob Shapiro: 00:17:04

Meeting.

Jacob Shapiro: 00:17:04

So that's meetings of top uh, you know, the, the defense secretary and the, um,

Jacob Shapiro: 00:17:10

secretary of State in the United States Foreign Foreign Minister in, um, in Japan.

Jacob Shapiro: 00:17:13

So a two plus two arrangement.

Jacob Shapiro: 00:17:15

And that meeting was abruptly canceled.

Jacob Shapiro: 00:17:17

It was supposed to be July 1st.

Jacob Shapiro: 00:17:18

The Japanese canceled it.

Jacob Shapiro: 00:17:20

Um, you had Financial Times reporting that at least some of

Jacob Shapiro: 00:17:22

that was because the United States made a new demand about how much.

Jacob Shapiro: 00:17:27

Defense spending as a percent of GDP Japan needed to do, asking

Jacob Shapiro: 00:17:31

Japan to hike it to 3.5% of GDP.

Jacob Shapiro: 00:17:34

At least that though, apparently, was something that Elbridge Kolby, who's

Jacob Shapiro: 00:17:38

at the Defense Department, was pushing where it wasn't what Rubio was pushing.

Jacob Shapiro: 00:17:42

It wasn't what Heg says was pushing.

Jacob Shapiro: 00:17:44

So again, the Japanese are like, we don't know.

Jacob Shapiro: 00:17:46

What you want, like you keep on giving us mixed signals.

Jacob Shapiro: 00:17:48

So they canceled that.

Jacob Shapiro: 00:17:50

And then, um, there's a NATO summit coming up and President Trump had

Jacob Shapiro: 00:17:54

been looking for Japan, Australia, New Zealand, maybe South Korea to attend.

Jacob Shapiro: 00:17:58

Maybe on the sidelines you can feel the US establishment trying to make NATO

Jacob Shapiro: 00:18:02

from just an anti-Soviet alliance, which.

Jacob Shapiro: 00:18:04

It doesn't really work anymore because Soviet Union's gone, uh,

Jacob Shapiro: 00:18:07

into maybe an anti-China alliance.

Jacob Shapiro: 00:18:09

Um, and Prime Minister Ishiba, uh, abruptly said, I'm not gonna come.

Jacob Shapiro: 00:18:15

I'm gonna send somebody else in my place, but I'm not really.

Jacob Shapiro: 00:18:18

Um, we're gonna be there.

Jacob Shapiro: 00:18:20

Um, and you know, you could say maybe that's nothing.

Jacob Shapiro: 00:18:22

The foreign ministry in Tokyo cited various circumstances, which I don't

Jacob Shapiro: 00:18:27

know, to me that's Japanese diplomatic.

Jacob Shapiro: 00:18:28

Speak for go fuck yourself.

Jacob Shapiro: 00:18:30

Like, we're not gonna do this.

Jacob Shapiro: 00:18:32

Uh, but maybe I'm reading too much into it.

Jacob Shapiro: 00:18:34

Um, but this is arguably, like the US is closest ally in Asia.

Jacob Shapiro: 00:18:38

It's a country that is completely depen, well, I won't say completely

Jacob Shapiro: 00:18:41

dependent, but highly dependent on the United States in its security

Jacob Shapiro: 00:18:44

relationship, has a lot of different trade linkages, um, with the United

Jacob Shapiro: 00:18:48

States that it can't afford to deal with.

Jacob Shapiro: 00:18:49

And yet it's made little to no progress on trade.

Jacob Shapiro: 00:18:52

The security relationship looks like it's unraveling.

Jacob Shapiro: 00:18:54

Prime Minister Ishiba, uh, sort of, I mean, looks like he doesn't wanna

Jacob Shapiro: 00:18:58

do anything with President Trump.

Jacob Shapiro: 00:19:00

And certainly, uh, to, to paraphrase, uh.

Jacob Shapiro: 00:19:03

Dave Chappelle joke.

Jacob Shapiro: 00:19:04

I mean, Japan didn't even send PlayStations for this attack on Iran.

Jacob Shapiro: 00:19:07

They basically like didn't say anything at all.

Jacob Shapiro: 00:19:10

Uh, juxtaposed that with the uk, which was trying to get out there and show

Jacob Shapiro: 00:19:13

that maybe they'd be willing to help.

Jacob Shapiro: 00:19:15

So, um, that, that's the lead in to just say as all these things are happening,

Jacob Shapiro: 00:19:19

like we've got like real flashing yellow or red signals between the United

Jacob Shapiro: 00:19:23

States and one of its closest allies.

Jacob Shapiro: 00:19:25

So what direction do you wanna take that, Rob?

Rob Larity: 00:19:27

I think Japan is one of the most interesting places in

Rob Larity: 00:19:29

the world right now, and I think that even more after having spent.

Rob Larity: 00:19:33

A day or two really thinking about this and brushing up on what's going on.

Rob Larity: 00:19:38

And I want to kind of explore an early thesis that could

Rob Larity: 00:19:41

end up being kind of stupid.

Rob Larity: 00:19:43

Um, but it's also kind of provocative.

Rob Larity: 00:19:45

So I, I was really boring before, so I'll be a little more, a

Rob Larity: 00:19:48

little more, uh, out there here.

Rob Larity: 00:19:52

But I. I agree the signals between Japan and the US seem to be

Rob Larity: 00:19:57

more than just the normal noise.

Rob Larity: 00:19:59

It seems to be some kind of fundamental shift, um, maybe taking place in terms

Rob Larity: 00:20:04

of the relationship between the two.

Rob Larity: 00:20:05

And, and this is something we've talked about, you know, for the last four or

Rob Larity: 00:20:09

five years, like ever since we started talking to each other, this was one

Rob Larity: 00:20:12

of our big things we were watching.

Rob Larity: 00:20:14

And, um,

Rob Larity: 00:20:17

when I look at the numbers in Japan, the thing that really.

Rob Larity: 00:20:22

Jumps out to me is that Japan's outward investment, not portfolio investment,

Rob Larity: 00:20:31

but fixed, uh, capital investment.

Rob Larity: 00:20:34

So FDI has absolutely exploded in the last five or six years.

Rob Larity: 00:20:41

Absolutely exploded.

Rob Larity: 00:20:42

I mean, if you look in 2015, Japan had, uh, 150.

Rob Larity: 00:20:52

Uh, trillion Yen of outward investment.

Rob Larity: 00:20:56

That's, it's like 1.5 trillion US dollars.

Rob Larity: 00:21:00

If you were to look today, that's more than doubled in that time.

Rob Larity: 00:21:06

So, uh, the visual image here is just a giant fire hose of capital leaving

Rob Larity: 00:21:13

Japan to build factories and facilities.

Rob Larity: 00:21:16

And I did some work on this.

Rob Larity: 00:21:18

I mean, a lot of this is going into the US with the battery supply chains

Rob Larity: 00:21:21

and things like that, but a lot of it is also going into Southeast Asia.

Rob Larity: 00:21:25

And, um, the numbers that I saw suggested that Japan's outward

Rob Larity: 00:21:28

investment into Thailand and India in the last few years has each exceeded

Rob Larity: 00:21:34

its outward investment into China.

Rob Larity: 00:21:37

Um, which I find really, really interesting because like, here

Rob Larity: 00:21:41

comes the controversial part, like whenever Japan has felt threatened.

Rob Larity: 00:21:47

Um, by the United States.

Rob Larity: 00:21:49

I mean, the last time this happened, if we just rewind the history books, it turned

Rob Larity: 00:21:53

to Southeast Asian colonies, essentially to overcome its lack of what it has at

Rob Larity: 00:21:58

home, which is people and energy and food.

Rob Larity: 00:22:02

And if you look like really behind the boring numbers that

Rob Larity: 00:22:07

I'm citing, this looks to me like a very similar kind of response.

Rob Larity: 00:22:11

It's not top down driven, I don't think.

Rob Larity: 00:22:13

Like I don't know enough about what's going on.

Rob Larity: 00:22:15

I haven't dug into this from a policy standpoint to see how

Rob Larity: 00:22:18

intertwined the actual LDP is with businesses that are doing this.

Rob Larity: 00:22:23

But in any event, Japanese businesses are responding to what's going on

Rob Larity: 00:22:28

with gusto, and this is accelerating.

Rob Larity: 00:22:30

Like this isn't just a long-term trend.

Rob Larity: 00:22:31

This is going exponential.

Rob Larity: 00:22:34

So the upshot is like everyone always talks about how Japan's GDP, easy to.

Rob Larity: 00:22:40

Right.

Rob Larity: 00:22:40

So in 2015, Japan had 4.4 trillion of GDP in US dollars.

Rob Larity: 00:22:49

Fast forward to 23, it was 4.2 trillion.

Rob Larity: 00:22:53

So in eight years, GBP went down a little bit according to these

Rob Larity: 00:22:57

numbers and all in US dollars, GNP, which is national product.

Rob Larity: 00:23:03

So remember every, no one ever pays attention to GNP 'cause unless you're

Rob Larity: 00:23:07

looking at a weird country like Ireland.

Rob Larity: 00:23:08

It's always pretty close.

Rob Larity: 00:23:11

But that's not the case with Japan, and it's increasingly diverging in a huge way.

Rob Larity: 00:23:16

So GNP in 15 was 5.4 trillion, so it's 5.4 against 4.4 today.

Rob Larity: 00:23:23

While GDP has gone down a little bit, GNP has gone from 5.4 to 6.6.

Rob Larity: 00:23:29

So you've seen over, you know, roughly 20%, uh, growth in

Rob Larity: 00:23:33

Japan's national products.

Rob Larity: 00:23:36

So this includes the stuff that Japanese companies are producing not on

Rob Larity: 00:23:40

Japanese soil in that eight year period.

Rob Larity: 00:23:44

That is a completely different story than the common narrative

Rob Larity: 00:23:48

of Japanese stagnation.

Rob Larity: 00:23:50

Mm-hmm.

Rob Larity: 00:23:51

Jap Japan is stagnating in, you know, in GDP terms, however you wanna define

Rob Larity: 00:23:55

that purely on the domestic front.

Rob Larity: 00:23:58

But this is a really interesting element, and I haven't dug too deep into this, but

Rob Larity: 00:24:02

if you start teasing out the amount of income that those assets are now throwing

Rob Larity: 00:24:07

off, it's an extraordinary amount.

Rob Larity: 00:24:10

Of foreign currency based earnings and how that plays into sort

Rob Larity: 00:24:15

of the balance sheet set up.

Rob Larity: 00:24:17

You know, how Japan might intervene into the yen or you might have these

Rob Larity: 00:24:22

compiling effects where if the yen, uh, begins to strengthen, that could

Rob Larity: 00:24:26

be a self-reinforcing sort of process because you have this huge, you know,

Rob Larity: 00:24:31

net positive international position.

Rob Larity: 00:24:34

Um, there's a lot to tease out here, but that's my sort of initial.

Rob Larity: 00:24:39

Fun way to think about it is like, is this the Japanese up empire?

Rob Larity: 00:24:43

Just much nicer and, and not, you know, not with all the slavery and stuff.

Jacob Shapiro: 00:24:50

Yeah.

Jacob Shapiro: 00:24:51

Uh, without all the slavery and stuff, it was by, by the way, go back and if you

Jacob Shapiro: 00:24:54

go, like, go back and read the history of what Japan was doing even before

Jacob Shapiro: 00:24:58

like World War ii, like what Japan did on the Korean Peninsula in the 1920s.

Jacob Shapiro: 00:25:02

And, um, I mean, it's, yeah, it's, it's terrible.

Jacob Shapiro: 00:25:05

There are apologists for it.

Jacob Shapiro: 00:25:06

And the same way that Neil Ferguson is an apologist for, uh, the British Empire.

Jacob Shapiro: 00:25:10

And, and by the way, like, I mean, he has some points like, you know, the

Jacob Shapiro: 00:25:14

British Empire brought civilization and education and lots of, you know, uh.

Jacob Shapiro: 00:25:18

Public sanitation, lots of different things that were like really good, but

Jacob Shapiro: 00:25:21

like at the cost of you need to give up like central parts of your identity.

Jacob Shapiro: 00:25:25

Like the Japanese literally thought of the, of the Koreans as like lesser

Jacob Shapiro: 00:25:29

evolved forms of Japanese people.

Jacob Shapiro: 00:25:32

So they just needed to like evolve really quickly into the Japanese

Jacob Shapiro: 00:25:35

people that they could become.

Jacob Shapiro: 00:25:36

So that meant, you know, you don't get to speak the Korean language and you

Jacob Shapiro: 00:25:38

need to be taught like basics of modern.

Jacob Shapiro: 00:25:41

So anyway, I'm, I'm going off there.

Jacob Shapiro: 00:25:42

So do you.

Jacob Shapiro: 00:25:43

I mean, this is an impossible question to ask.

Jacob Shapiro: 00:25:45

You're probably just gonna throw it back at me, but I mean, do you think there'd

Jacob Shapiro: 00:25:47

be problems in the US Japan relationship even if, um, Trump hadn't been elected

Jacob Shapiro: 00:25:54

and we were seeing some of these things?

Jacob Shapiro: 00:25:55

I mean, Joe Biden was, uh, the Biden administration was not for that.

Jacob Shapiro: 00:25:59

Uh, uh, I'm forgetting the steel company's name, but remember they were.

Jacob Shapiro: 00:26:02

Making a big stink about a Japanese steel company not acquiring US

Jacob Shapiro: 00:26:06

steel for national security reasons.

Jacob Shapiro: 00:26:07

And Japan was like, you're supposed to be the liberal internationalist one.

Jacob Shapiro: 00:26:10

Like, what are you, what are you talking about?

Jacob Shapiro: 00:26:11

You're worried about not getting your, your steel from us.

Jacob Shapiro: 00:26:14

So I, I just wonder if maybe some of this US Japan tension was already,

Jacob Shapiro: 00:26:18

was already baked in and maybe Trump is like, uh, accelerating it

Jacob Shapiro: 00:26:22

or making it a little more bare.

Jacob Shapiro: 00:26:24

And I think Ishiba personality and his success so far has

Jacob Shapiro: 00:26:27

something to do with that too.

Jacob Shapiro: 00:26:29

But, um.

Jacob Shapiro: 00:26:30

Yeah, I think it probably,

Rob Larity: 00:26:31

I think it probably accelerates it, but this was going

Rob Larity: 00:26:34

on first, you know, it really started to accelerate during Trump won,

Rob Larity: 00:26:42

and maybe that was a key factor.

Rob Larity: 00:26:43

But I mean, my instinct is to say that this is largely bottom up economic

Rob Larity: 00:26:48

logic at work, that you have Japanese companies that have been historically

Rob Larity: 00:26:52

sitting on a ton of capital without a strong incentive to invest it.

Rob Larity: 00:26:59

Something has switched in that incentive structure where now you're seeing really

Rob Larity: 00:27:05

strong growth in investment even though they've, they've determined that they

Rob Larity: 00:27:09

can't or don't want to locate that in Japan, whether that's because the

Rob Larity: 00:27:14

workers aren't available, whether that's because domestic policies just aren't

Rob Larity: 00:27:18

favorable, you know, whatever it is.

Rob Larity: 00:27:21

I think it's probably mostly that just kind of.

Rob Larity: 00:27:25

Seeing the opportunity, seeing in some sense kind of the all clear to

Rob Larity: 00:27:29

cope, do this and take advantage of it in a way that wasn't there before.

Rob Larity: 00:27:34

Um, maybe it's a rising confidence by Japanese companies.

Rob Larity: 00:27:37

I, I don't know exactly, and that's a, an area that I think we have to

Rob Larity: 00:27:41

really think about more carefully and, and do some additional research.

Rob Larity: 00:27:46

But I think the two things combine that.

Rob Larity: 00:27:49

Fear isn't a great accelerant, but fear and greed together are

Rob Larity: 00:27:53

always gonna be much more powerful.

Jacob Shapiro: 00:27:56

I think some of the lessons too, from.

Jacob Shapiro: 00:27:58

From a lot of the recent conflicts that we've seen in the last six months,

Jacob Shapiro: 00:28:01

whether it's Ukraine's drone assault on Russian strategic air assets, or

Jacob Shapiro: 00:28:06

whether it's Israel bombing Iran, even aspects of the India Pakistan war,

Jacob Shapiro: 00:28:10

like one of the reasons people are not afraid of Japan is they think of Japan

Jacob Shapiro: 00:28:13

as this, you know, graying population.

Jacob Shapiro: 00:28:15

Super old demographics are against it.

Jacob Shapiro: 00:28:17

There's no way they're gonna be able to project force across all of East Asia.

Jacob Shapiro: 00:28:22

I don't know.

Jacob Shapiro: 00:28:23

We're seeing that if you've got superior technology and a superior, a

Jacob Shapiro: 00:28:26

superior level of industrial expertise and things like that, that maybe you

Jacob Shapiro: 00:28:30

can punch greatly above your weight.

Jacob Shapiro: 00:28:32

So if Israel can do it, it just did to Iran.

Jacob Shapiro: 00:28:35

Um, like I don't think Japan is gonna resort to this and there would

Jacob Shapiro: 00:28:37

have to be a similar cultural sea change in how they're approaching

Jacob Shapiro: 00:28:40

things if they were gonna have the stick to back up the carrot.

Jacob Shapiro: 00:28:43

But, um, I think, I think we do have to re.

Jacob Shapiro: 00:28:47

Reassess some of our assumptions about what is possible from a

Jacob Shapiro: 00:28:49

security standpoint, because Japan has plenty of resources.

Jacob Shapiro: 00:28:54

If it really wanted to, to engage in the type of modern strategic warfare

Jacob Shapiro: 00:28:58

that we're seeing, um, really, I mean, all across Eurasia right now.

Rob Larity: 00:29:03

Put another way now in Japan, sends PlayStations.

Rob Larity: 00:29:05

They could be.

Rob Larity: 00:29:06

Have wings and be packed with high explosive.

Jacob Shapiro: 00:29:10

Seriously, we shouldn't joke so much about that.

Rob Larity: 00:29:14

Um, no, but, but just to follow on on what you just said, like

Rob Larity: 00:29:17

I think that's a good way to think of it is like there's lots of different

Rob Larity: 00:29:21

forms of capital that a nation has.

Rob Larity: 00:29:23

There's human capital, which is obvious.

Rob Larity: 00:29:26

There's financial capital, there's visible capital, but then there's also

Rob Larity: 00:29:30

kind of intellectual capital and I think.

Rob Larity: 00:29:33

Just on the e economic side, like what we're seeing is Japan has

Rob Larity: 00:29:37

this enormous base of intellectual and intangible capital that it's

Rob Larity: 00:29:40

built up over the last 75 years.

Rob Larity: 00:29:44

And if you can plug in human capital from other nations that have it,

Rob Larity: 00:29:49

that's a very powerful engine.

Rob Larity: 00:29:51

Um, you know, when you're talking about just technology or business

Rob Larity: 00:29:55

organizations and how they work and how they're run process, process

Rob Larity: 00:29:59

oriented sort of innovation, um, I. Japan punches well above its weight.

Rob Larity: 00:30:04

So if you're sitting there thinking about like, oh, their power correlates with

Rob Larity: 00:30:09

how many human beings were they, like, I think that's the right way to think about

Rob Larity: 00:30:13

it, is that whole paradigm out of date.

Jacob Shapiro: 00:30:18

Yeah, and I mean, Japan has been a sort of small sea conservative

Jacob Shapiro: 00:30:22

country for, for decades and has really been happy to exist as a wealthy cog

Jacob Shapiro: 00:30:27

within the US led international order.

Jacob Shapiro: 00:30:30

So if that order really is gone and gosh, it feels like every single week, like

Jacob Shapiro: 00:30:34

more aspects of it are disappearing.

Jacob Shapiro: 00:30:36

Um, yeah, and, and I, and you know, Japan is not used to having its own

Jacob Shapiro: 00:30:41

sort of independent foreign policy.

Jacob Shapiro: 00:30:42

It's been a long time since they had to think of these things independently, but.

Jacob Shapiro: 00:30:46

I mean like that.

Jacob Shapiro: 00:30:47

That's why these meetings, these meeting cancellations stick out to

Jacob Shapiro: 00:30:50

me so much because it's not just anger about trade frustration.

Jacob Shapiro: 00:30:53

It's like, no, no, no, like we're not gonna meet with you if you're gonna

Jacob Shapiro: 00:30:55

treat us like this, and we're not gonna show up just for the NATO call, just

Jacob Shapiro: 00:30:58

because you say that you want us there for some of these different things.

Rob Larity: 00:31:04

It's kind of interesting, just going back to this notion of

Rob Larity: 00:31:07

being accountable to an electorate.

Rob Larity: 00:31:10

Like I would have to go back and check, but my guess would be.

Rob Larity: 00:31:14

Then a, some majority in Japan was always like fairly skeptical

Rob Larity: 00:31:20

of the US relationship, at least going back in more recent times.

Rob Larity: 00:31:25

But Japan, you know, obviously was always very, very tight with Ru regardless.

Rob Larity: 00:31:30

And now, um, again, I'm quoting from, uh, Tobias's, Tobias Harris's,

Rob Larity: 00:31:36

uh, Substack, which is very good.

Rob Larity: 00:31:38

And, and I would definitely recommend it.

Rob Larity: 00:31:39

Jacob and I are both subscribers.

Rob Larity: 00:31:42

Um.

Rob Larity: 00:31:43

He was quoting some of the LA latest poll figures in there and just calling out the

Rob Larity: 00:31:47

fact that, I mean, there's overwhelming majorities of Japanese that do not want

Rob Larity: 00:31:52

Japan to give in to the US on this and do not want Japan to follow the US lead

Rob Larity: 00:31:57

in terms of security policy and trade and all of these issues that are up to grabs.

Rob Larity: 00:32:03

And, you know, ishiba, one of the, one of the things about having a

Rob Larity: 00:32:07

weak government, which, like right now it's very, very weak, is.

Rob Larity: 00:32:11

You ignore that and you're at your peril.

Jacob Shapiro: 00:32:15

Yeah, for sure.

Jacob Shapiro: 00:32:17

Um, well let's, uh, sort of the last thing that we'll we'll talk about today.

Jacob Shapiro: 00:32:21

So we got some Japan, we talk, we got some market talk.

Jacob Shapiro: 00:32:24

Um, I do, I do just want to kind of take a step back and I. Let the

Jacob Shapiro: 00:32:28

listeners inside the, the Wizard of Oz contraption here with you and me.

Jacob Shapiro: 00:32:32

'cause you and I have not caught up really since the war

Jacob Shapiro: 00:32:34

started in any meaningful sense.

Jacob Shapiro: 00:32:36

I mean, we had an investment committee call last week and we batted around

Jacob Shapiro: 00:32:40

very roughly the notion of, hey, there are these islands of stability in the

Jacob Shapiro: 00:32:42

world, in Latin America, maybe even Southeast Asia, but the Eurasian land

Jacob Shapiro: 00:32:46

mass is, is, uh, well it seems like on fire in all these different parts.

Jacob Shapiro: 00:32:50

Uh.

Jacob Shapiro: 00:32:50

Uh, mark cousin Marco said, uh, you know, on, on our other podcast there

Jacob Shapiro: 00:32:54

that, oh, but you have these Garrison states like Ukraine and Israel

Jacob Shapiro: 00:32:57

and Saudi Arabia that can do well.

Jacob Shapiro: 00:32:58

And it's like, okay, like that's cool.

Jacob Shapiro: 00:33:00

I think I'd rather be in Latin America or Singapore, uh, watching

Jacob Shapiro: 00:33:03

all this from afar rather than having my capital in the garrison state.

Jacob Shapiro: 00:33:06

But maybe, you know, people have higher risk tolerance.

Jacob Shapiro: 00:33:08

But, um, the oth the other thing, and I've never actually said these words to myself,

Jacob Shapiro: 00:33:12

but they really crystallized this week.

Jacob Shapiro: 00:33:13

'cause I kept on getting this question over and over again.

Jacob Shapiro: 00:33:16

Like, so how do you trade the war?

Jacob Shapiro: 00:33:18

Like, what, what are you guys doing?

Jacob Shapiro: 00:33:20

To trade the war.

Jacob Shapiro: 00:33:21

And, um, it's not a cop out, it's just to say like, I don't think you can use,

Jacob Shapiro: 00:33:25

I don't think you can trade geopolitics.

Jacob Shapiro: 00:33:27

Like maybe there are some asymmetric low probability, but high impact scenarios

Jacob Shapiro: 00:33:32

that we could create like a very niche strategy around, um, you know, and, and

Jacob Shapiro: 00:33:37

you and I keep that grab bag of black swan events in our, in our knowledge platform.

Jacob Shapiro: 00:33:42

You know, like EMPS and solar storms I know is one of your favorites.

Jacob Shapiro: 00:33:46

And like all, and maybe we create like some really weird positions that you

Jacob Shapiro: 00:33:49

hold for the long term thinking, you're gonna get explosive growth there.

Jacob Shapiro: 00:33:52

But I, I think that the question about trading and the way that the

Jacob Shapiro: 00:33:56

financial media has to link everything, every market, move back to something

Jacob Shapiro: 00:33:59

that is happening in the world.

Jacob Shapiro: 00:34:01

Um.

Jacob Shapiro: 00:34:02

It.

Jacob Shapiro: 00:34:03

It just doesn't give you actually any real insight.

Jacob Shapiro: 00:34:05

And I think it's more about like, yes, you have to follow

Jacob Shapiro: 00:34:07

all these things in real time.

Jacob Shapiro: 00:34:08

'cause maybe a nuke would've gone off or maybe they would've blocked

Jacob Shapiro: 00:34:11

the straight of horror moves.

Jacob Shapiro: 00:34:11

But it was never that likely that that was what, that was what was gonna happen.

Jacob Shapiro: 00:34:15

And even as the fire has been put out now, or at least there is a

Jacob Shapiro: 00:34:17

ceasefire, like all these tectonic plates that are shifting beneath us.

Jacob Shapiro: 00:34:21

They're shifting and they shift slowly.

Jacob Shapiro: 00:34:23

Like it's not like something's gonna happen and you're gonna

Jacob Shapiro: 00:34:26

get a 30% jump in your portfolio and then you're off to the races.

Jacob Shapiro: 00:34:30

But I do think we really need to be on top of like how these plates

Jacob Shapiro: 00:34:33

are shifting and what directions they go and things like that.

Jacob Shapiro: 00:34:36

So, I dunno, I'm, I'm playing around with the metaphors there, but what,

Jacob Shapiro: 00:34:38

what do you think are some lessons for, for people from the war itself and

Jacob Shapiro: 00:34:42

honestly from the first six months of what feels like a year that has just.

Jacob Shapiro: 00:34:47

Not let up so far, and I, I don't think it's gonna change.

Jacob Shapiro: 00:34:49

Like, I don't think we're going towards like a peaceful, more norm normal cadence.

Jacob Shapiro: 00:34:53

I think this is just how it is.

Jacob Shapiro: 00:34:54

So I think we need some strategies for the listeners for, besides listening to

Jacob Shapiro: 00:34:58

you and me, talk about this soberly and invoking, you know, cromwellian metaphors.

Jacob Shapiro: 00:35:02

Like what, like how are ways that we're thinking about this or how

Jacob Shapiro: 00:35:05

should people digest this information?

Rob Larity: 00:35:08

I really liked the phrase that Sunne Sorenson used in

Rob Larity: 00:35:12

our investment committee when we were talking about this and he said,

Rob Larity: 00:35:15

change is a process, not an event.

Rob Larity: 00:35:18

And um, I think that's the way people misconceive what you do.

Rob Larity: 00:35:23

People assume, especially in weeks like this, when you're just so busy and.

Rob Larity: 00:35:27

You, you putting out a lot of analysis, more than usual and doing a lot of

Rob Larity: 00:35:32

interviews that like, that's your job is like, oh, something blew up.

Rob Larity: 00:35:36

Let me go analyze it.

Rob Larity: 00:35:37

Like, like that's not your job at all.

Rob Larity: 00:35:41

Your job is identifying these big kind of trends, these big, huge rumbling

Rob Larity: 00:35:49

shifts in the tectonic plates.

Rob Larity: 00:35:51

And then the events are sort of manifestations of those shifts.

Rob Larity: 00:35:56

So that you're having a lot of new information, but if you've done your work,

Rob Larity: 00:35:59

shouldn't usually be some massive shock.

Rob Larity: 00:36:03

Um, and I, I like, that's what I would suggest is like, don't be reactive if

Rob Larity: 00:36:11

you're reacting to something and trying to change your portfolio because, oh,

Rob Larity: 00:36:15

you're trade, like, that's, that's stupid.

Rob Larity: 00:36:18

You're gonna, you're never gonna have success doing that.

Rob Larity: 00:36:21

No one can do that.

Rob Larity: 00:36:22

You're gambling.

Rob Larity: 00:36:23

It's not a way to manage your business, it's not a way to manage investments.

Rob Larity: 00:36:27

The way to do it is to anticipate and to zoom out and think

Rob Larity: 00:36:31

about these broader trends.

Rob Larity: 00:36:32

Like, like, like you talk about and like that's the research process that you

Rob Larity: 00:36:37

do is really what are the big things that matter and what are the signposts

Rob Larity: 00:36:42

around them that we put to identify, okay, is this thesis playing out or not?

Rob Larity: 00:36:47

And you sort of set that in place and monitor it.

Rob Larity: 00:36:51

And make decisions on a longer time horizon based on that.

Rob Larity: 00:36:55

Like that's the only thing that you can do.

Rob Larity: 00:36:56

Otherwise you're just in the shit storm of media noise and, um, and no one comes out

Rob Larity: 00:37:03

of that except for people who sell media and clicks and content and hot takes.

Rob Larity: 00:37:08

Uh, but that's not most of the listeners.

Jacob Shapiro: 00:37:13

Yeah.

Jacob Shapiro: 00:37:13

I did an event, um, God was that only last week in New York City?

Jacob Shapiro: 00:37:17

Yeah.

Jacob Shapiro: 00:37:18

Time has no meaning.

Jacob Shapiro: 00:37:19

Last week in your, it was 12 hours ago.

Jacob Shapiro: 00:37:20

Jacob.

Jacob Shapiro: 00:37:22

I'm in a wormhole.

Jacob Shapiro: 00:37:23

It, I'm here via Tesseract.

Jacob Shapiro: 00:37:25

After doing an event three minutes ago, uh, no.

Jacob Shapiro: 00:37:28

I, I, um, I was on this panel at this event last week, so it was last I.

Jacob Shapiro: 00:37:32

Um, last Tuesday.

Jacob Shapiro: 00:37:34

And so the war was sort of in its initial stages and you can, you know, bet that,

Jacob Shapiro: 00:37:37

uh, everybody wanted to talk about this.

Jacob Shapiro: 00:37:39

And so we were, the, the panel I was on was about navigating global uncertainty

Jacob Shapiro: 00:37:43

in a time of geopolitical risks.

Jacob Shapiro: 00:37:45

If I hear the phrase like navigating uncertainty, one more time, I'm gonna.

Jacob Shapiro: 00:37:48

Self emulate what is left of my hair.

Jacob Shapiro: 00:37:50

I might just buzz it anyway, by the way, I'm getting tired of it.

Jacob Shapiro: 00:37:52

But, uh, that's beside the point.

Jacob Shapiro: 00:37:54

I don't need to talk about my hairstyling choices on the podcast.

Jacob Shapiro: 00:37:57

Um, but I, I decided to start off when I, when I gave my little five minute

Jacob Shapiro: 00:38:01

spiel on the panel, I. Um, I said, look, I know we're supposed to be talking

Jacob Shapiro: 00:38:04

about uncertainty and volatility, but instead I wanna tell you the three

Jacob Shapiro: 00:38:07

things that I am absolutely certain of.

Jacob Shapiro: 00:38:09

And then we can talk about like all the crazy things that you want.

Jacob Shapiro: 00:38:12

But I instead want to give you things that I know.

Jacob Shapiro: 00:38:14

And the first thing I said was, I think we're moving towards a multipolar order.

Jacob Shapiro: 00:38:17

I think that this entire conflict shows us that like the United States

Jacob Shapiro: 00:38:21

didn't want Israel to bomb Iran.

Jacob Shapiro: 00:38:23

Israel said we're gonna bomb anyway.

Jacob Shapiro: 00:38:25

The United States like.

Jacob Shapiro: 00:38:26

Didn't have any allies that joined it in this.

Jacob Shapiro: 00:38:28

They were also like Russia and, uh, Russia and China stayed on the outs

Jacob Shapiro: 00:38:31

and were going to stand the outs like this is a multipolar world.

Jacob Shapiro: 00:38:33

Get used to it.

Jacob Shapiro: 00:38:34

The upside is there's not gonna be World War iii, even though

Jacob Shapiro: 00:38:37

the media's gonna sell you that.

Jacob Shapiro: 00:38:38

The downside is there's gonna be a lot more of these type of events,

Jacob Shapiro: 00:38:41

so buckle up your seatbelt and like you're just gonna have to get used to

Jacob Shapiro: 00:38:44

this level of volatility in markets.

Jacob Shapiro: 00:38:46

The second thing I said to the audience was, unless you are

Jacob Shapiro: 00:38:48

Iranian or Israeli, or have assets.

Jacob Shapiro: 00:38:51

In either one of those countries, maybe if you have assets in like a

Jacob Shapiro: 00:38:54

Cutter or a Bahrain, you know, like maybe we could talk there, but unless

Jacob Shapiro: 00:38:57

you're directly exposed, um, or you're somebody who's trying to get out of

Jacob Shapiro: 00:39:01

those countries and thinking about thoughtful ways to structure your wealth

Jacob Shapiro: 00:39:04

and get out of those countries, this is not gonna have any impact on you.

Jacob Shapiro: 00:39:07

So I'm not saying, I'm not saying it's unimportant.

Jacob Shapiro: 00:39:10

I'm not saying don't follow it, but like, if what you're looking for

Jacob Shapiro: 00:39:12

is insights on how this is going to affect your life, not that much.

Jacob Shapiro: 00:39:16

And I, and I know that that message needs to be said because, uh, we, we've

Jacob Shapiro: 00:39:21

talked about this before in the podcast.

Jacob Shapiro: 00:39:22

My, my sister indicator went off this week.

Jacob Shapiro: 00:39:25

I hadn't heard from my sister from literally months and I

Jacob Shapiro: 00:39:27

got a text three days ago.

Jacob Shapiro: 00:39:30

She gets so much flack on this show.

Jacob Shapiro: 00:39:32

I. No, I, it's out of a place of love.

Jacob Shapiro: 00:39:33

I, if she's asking, I know that something is really in the zeitgeist.

Jacob Shapiro: 00:39:37

Like she's the one that keeps me, like, I'm up here in my

Jacob Shapiro: 00:39:39

scholarly, pedantic, pretentious tower, and she's like, yo, dude.

Jacob Shapiro: 00:39:43

Like, uh, real talk.

Jacob Shapiro: 00:39:45

Like, uh, is anything bad gonna happen here?

Jacob Shapiro: 00:39:47

Like, do I need to worry about this stuff?

Jacob Shapiro: 00:39:48

And I was like, no, Leah, like.

Jacob Shapiro: 00:39:49

Like, it's fine.

Jacob Shapiro: 00:39:51

Like, I don't think anything's gonna happen.

Jacob Shapiro: 00:39:52

I think you're fine.

Jacob Shapiro: 00:39:52

And then she goes off like, I, I wish I had her approach.

Jacob Shapiro: 00:39:56

Uh, I wish I could move through the world the way that she

Jacob Shapiro: 00:39:58

does without lack of stress.

Jacob Shapiro: 00:39:59

Just like, you know, all of this happening and like literally nine days

Jacob Shapiro: 00:40:02

in, do I need to worry about this?

Jacob Shapiro: 00:40:04

Like that?

Jacob Shapiro: 00:40:05

That sounds like a, I wish I could reach that enlightened plane.

Jacob Shapiro: 00:40:07

So it's not shade at all.

Jacob Shapiro: 00:40:08

If anything, it's jealousy.

Jacob Shapiro: 00:40:10

Um.

Jacob Shapiro: 00:40:11

But point being like I had a bunch of different like messages like

Jacob Shapiro: 00:40:14

that and it wasn't like, what's this gonna do to my portfolio?

Jacob Shapiro: 00:40:16

What does this mean for the future of the Iranian regime?

Jacob Shapiro: 00:40:19

And like, you know, I had the nerds emailing me too, but like I had normal

Jacob Shapiro: 00:40:21

people just asking me, Hey, am I okay?

Jacob Shapiro: 00:40:24

Like, can I travel to New York City next week?

Jacob Shapiro: 00:40:26

And like, is there gonna be a terrorist attack?

Jacob Shapiro: 00:40:28

Like, can you just like give me a gut check here?

Jacob Shapiro: 00:40:30

And I said like, yeah, you're fine.

Jacob Shapiro: 00:40:32

Like I, I know the media's not telling you that way, but

Jacob Shapiro: 00:40:34

like, I, I think you're fine.

Jacob Shapiro: 00:40:34

You're no more, you're no more or less at risk than you would be otherwise.

Jacob Shapiro: 00:40:38

Like I, me here in downtown New Orleans and my coworking space, probably

Jacob Shapiro: 00:40:41

more at risk of harm than, you know, any American city terrorist attack.

Jacob Shapiro: 00:40:46

Um, and then the third thing I said, and this goes back to some of the

Jacob Shapiro: 00:40:47

things we've talked about, this podcast, uh, on this podcast for some time now

Jacob Shapiro: 00:40:51

and goes back to our good friend eth.

Jacob Shapiro: 00:40:53

Which is, I'm certain that despite the fact that we're gonna have all this

Jacob Shapiro: 00:40:56

technological innovation and artificial intelligence and robotics and all the

Jacob Shapiro: 00:40:59

crazy things that are happening, um, in a really good and positive and meaningful

Jacob Shapiro: 00:41:04

way, I, I disagree with Paul Tudor Jones.

Jacob Shapiro: 00:41:05

Like, I think AI and some of these things are gonna change the world for the better.

Jacob Shapiro: 00:41:09

But no matter how much advances we have in these technologies, I'm certain.

Jacob Shapiro: 00:41:14

That, um, it hasn't changed our relationship with time and that

Jacob Shapiro: 00:41:17

we have a limited amount of it.

Jacob Shapiro: 00:41:19

And that one of the, the distressing things about this media environment

Jacob Shapiro: 00:41:22

and about like the uncertainty here is that it's stealing your time.

Jacob Shapiro: 00:41:26

It's stealing your attention.

Jacob Shapiro: 00:41:28

So instead of focusing on the things that matter to you, or thinking about

Jacob Shapiro: 00:41:31

the future of your business, or spending quality time with the people that you

Jacob Shapiro: 00:41:34

love, you've got CNN in the background.

Jacob Shapiro: 00:41:36

You're taking out your phone and being, oh my God, what did Trump say next?

Jacob Shapiro: 00:41:39

And I think all of that is conspiring to steal time away from people.

Jacob Shapiro: 00:41:42

And so I, when I, one of the ways I think you have to be, or one of the

Jacob Shapiro: 00:41:45

ways I've been trying to tell people to deal with this multipolar world and all

Jacob Shapiro: 00:41:49

this insanity, and one of the ways I keep myself sane is protect your time.

Jacob Shapiro: 00:41:53

And you need to erect defenses against the things that wanna steal your time away.

Jacob Shapiro: 00:41:58

And you should have a very high threshold for what that looks like because it's

Jacob Shapiro: 00:42:01

not just your job, it's literally the media that's wanting to steal

Jacob Shapiro: 00:42:04

your time with clicks and attention.

Jacob Shapiro: 00:42:06

It's literally the click bait.

Jacob Shapiro: 00:42:08

That is causing you to not be fully present before.

Jacob Shapiro: 00:42:10

So I know people don't listen to this for like me, like, you know, giving

Jacob Shapiro: 00:42:13

them life advice or anything like that.

Jacob Shapiro: 00:42:15

But when I, when I was speaking to that audience, it was just like, what

Jacob Shapiro: 00:42:17

are the three things I'm certain of?

Jacob Shapiro: 00:42:18

I'm certain the world is multipolar.

Jacob Shapiro: 00:42:20

I am certain this conflict is not gonna be World War iii, and I'm certain that all

Jacob Shapiro: 00:42:25

of this is just another way to waste time.

Jacob Shapiro: 00:42:28

So stop wasting time and go do something productive with your

Jacob Shapiro: 00:42:30

time, with your family, or with the cool technologies that are out

Jacob Shapiro: 00:42:33

there or anything else, like spend.

Jacob Shapiro: 00:42:35

Spend your time doing that rather than worrying about that.

Jacob Shapiro: 00:42:38

Um.

Jacob Shapiro: 00:42:39

And I don't know, I, I feel that way at the end of this particular war

Jacob Shapiro: 00:42:42

too, which I didn't get to do that 'cause I had to spin out content.

Jacob Shapiro: 00:42:45

To your point, the way that I attract people to some of what we're doing is when

Jacob Shapiro: 00:42:49

you get this surge of interest from most people are not normally interested in the

Jacob Shapiro: 00:42:53

world, and then suddenly the sister index goes off, you wanna make sure that you're

Jacob Shapiro: 00:42:56

there providing those answers so that they can ask the next follow up question

Jacob Shapiro: 00:43:00

when something happens and give them an objective sense of what's going on.

Jacob Shapiro: 00:43:04

So like for me it's game time.

Jacob Shapiro: 00:43:06

Um, but in some ways my.

Jacob Shapiro: 00:43:07

My ability to compartmentalize makes it easier.

Jacob Shapiro: 00:43:09

'cause it's just like, okay, like now we've got a ceasefire.

Jacob Shapiro: 00:43:12

I'm gonna put the finishing touches on a, on a piece right here that I'm gonna hit

Jacob Shapiro: 00:43:16

send on as soon as we get off the podcast.

Jacob Shapiro: 00:43:18

And then I'm gonna take day off, I think.

Jacob Shapiro: 00:43:21

I think I'm gonna go to the beach.

Jacob Shapiro: 00:43:22

So

Rob Larity: 00:43:25

there's a, I think it's in Liar's Poker where, um.

Rob Larity: 00:43:30

Michael Lewis was talking about when he was a young analyst, uh, and,

Rob Larity: 00:43:37

you know, on Wall Street, and he would go to this older guy and like,

Rob Larity: 00:43:41

there'd be big events all the time and say, well, should I, you know,

Rob Larity: 00:43:44

what should we doing, buying, selling this, blah, blah, blah, blah, blah.

Rob Larity: 00:43:47

And the older guy would just say, it's a bull market.

Rob Larity: 00:43:51

It's a bull market every time it's a bull market.

Rob Larity: 00:43:55

Just hold on.

Rob Larity: 00:43:57

And, uh, I was thinking about that.

Rob Larity: 00:43:59

'cause I think that's, that's the problem.

Rob Larity: 00:44:03

You know, as you say, like you have to do a lot right now because like everyone

Rob Larity: 00:44:06

understands a big part of what we're, what you do is drawing attention to the

Rob Larity: 00:44:12

work that you're doing elsewhere by sort of getting a little into the vortex.

Rob Larity: 00:44:17

But it's definitely not that way in terms of actually.

Rob Larity: 00:44:20

What we do from an investment standpoint.

Rob Larity: 00:44:23

And that doesn't make for good, it doesn't make for good media.

Rob Larity: 00:44:26

'cause I'm here every week.

Rob Larity: 00:44:28

It's a multipolar multipolar world.

Rob Larity: 00:44:31

Still multipolar still happening.

Rob Larity: 00:44:33

Yep.

Rob Larity: 00:44:33

All signs are go still going.

Rob Larity: 00:44:36

What are the implications?

Rob Larity: 00:44:37

How do you prepare for it?

Rob Larity: 00:44:38

Like, doesn't change that much, but that's, that's good.

Rob Larity: 00:44:42

'cause those are the, that's the definition of a big trend.

Rob Larity: 00:44:46

If we're here five years from now saying the same thing.

Jacob Shapiro: 00:44:49

Well, and it used to be like there was a time in American

Jacob Shapiro: 00:44:52

history where the media played that role, where the media was the touchstone,

Jacob Shapiro: 00:44:55

where there were only three channels and there was a certain amount of

Jacob Shapiro: 00:44:58

trust that you had in the people that was telling you what was going on.

Jacob Shapiro: 00:45:00

And this is what I mean about I. Protecting time.

Jacob Shapiro: 00:45:03

Like now, things have fractured and we're part of the fractured media environment.

Jacob Shapiro: 00:45:06

Like we're two bros on a podcast, and I'm beaming on articles on a substack,

Jacob Shapiro: 00:45:09

so I'm not throwing too much shade on it.

Jacob Shapiro: 00:45:11

Um, but just to say like, you don't have those touch tones anymore, and

Jacob Shapiro: 00:45:14

you have all of these different sources and now we have deep fakes and AI and

Jacob Shapiro: 00:45:17

bots, so it's really hard to distinguish between what's real and what's not real.

Jacob Shapiro: 00:45:22

But I think it is important to, to have those touchstones and to have

Jacob Shapiro: 00:45:25

those centers of gravity, whether it's.

Jacob Shapiro: 00:45:28

You know, your own family or whether it's the sources that you trust or

Jacob Shapiro: 00:45:31

the ideas that you have about the world, and it's, it's difficult.

Jacob Shapiro: 00:45:34

You have to be flexible enough to change your ideas about the world as

Jacob Shapiro: 00:45:37

things around you change, but then.

Jacob Shapiro: 00:45:40

Also to like put a stake in the ground and be like, but no, I

Jacob Shapiro: 00:45:42

think this is what's happening.

Jacob Shapiro: 00:45:44

So when I see all these things happening in the world, like I can digest

Jacob Shapiro: 00:45:47

them, I can compartmentalize them.

Jacob Shapiro: 00:45:48

I put a little, I put a little label on a box and I put them in my mental box,

Jacob Shapiro: 00:45:52

and then I put them on the shelf when it's time to go, uh, do something else.

Jacob Shapiro: 00:45:56

And I, I think our, I think the way our information diet is structured

Jacob Shapiro: 00:46:00

right now, it's not like that.

Jacob Shapiro: 00:46:01

It's just like.

Jacob Shapiro: 00:46:02

Constant McDonald's being intravenously beamed into our cell phones, um, which

Jacob Shapiro: 00:46:07

makes its way directly to our brains.

Jacob Shapiro: 00:46:09

Like the idea that we're gonna have, like those, you know, the glasses and

Jacob Shapiro: 00:46:12

things like that, that are gonna allow us to see the world through the AI

Jacob Shapiro: 00:46:14

and the computer, like, God shoot me.

Jacob Shapiro: 00:46:16

Like, I don't want anything like that.

Jacob Shapiro: 00:46:18

I, I really just wanna throw out all of my devices for all those reasons.

Jacob Shapiro: 00:46:21

I don't know.

Rob Larity: 00:46:23

Well, I think in our small way we can play that role to some extent.

Rob Larity: 00:46:27

'cause like what you just described is a media environment where

Rob Larity: 00:46:30

there was no incentive to generate activity for the sake of activity.

Jacob Shapiro: 00:46:34

Mm-hmm.

Rob Larity: 00:46:35

And like if people are looking for good sources of information, I. Like,

Rob Larity: 00:46:40

you don't have to listen to us, but try to replicate the incentive structure of us.

Rob Larity: 00:46:45

Like we have an incentive to find truth.

Rob Larity: 00:46:47

And sometimes truth is boring and sometimes truth is, yeah, this isn't

Rob Larity: 00:46:50

a big deal, don't worry about it.

Rob Larity: 00:46:51

Like go back, go back Leah and just enjoy your day.

Rob Larity: 00:46:55

Like nothing to see here.

Rob Larity: 00:46:57

And that's sort of what the incentive of the media used to be when there

Rob Larity: 00:47:01

was no, you know, ad model and in competition and stuff like that.

Rob Larity: 00:47:04

'cause these were well-educated people who had a civic duty to, you know, kind of.

Rob Larity: 00:47:09

Say it as it is and what they, you know, all that stuff.

Rob Larity: 00:47:13

Um, so if someone is, is depending on clicks for their paycheck, then be wary.

Rob Larity: 00:47:23

But thankfully, like, I don't know, my, I think that's probably peaked.

Rob Larity: 00:47:28

Like, I think there's probably more sources of good analysis of, and

Rob Larity: 00:47:31

information of people who don't have that incentive and are just doing.

Rob Larity: 00:47:36

And have an incentive to find truth like us.

Rob Larity: 00:47:38

I don't know, maybe that's super rose tinted glasses, but,

Jacob Shapiro: 00:47:42

um, I don't know.

Jacob Shapiro: 00:47:43

It's, it's really hard.

Jacob Shapiro: 00:47:44

Um.

Jacob Shapiro: 00:47:45

I, I think it's hard because our phones are so embedded in our daily lives,

Jacob Shapiro: 00:47:49

and even if you want that, like, you know, your phone is constantly pinging

Jacob Shapiro: 00:47:53

you, whether it's with emails or social media or or things like that.

Jacob Shapiro: 00:47:57

And even, even somebody like me who like is actively fighting against this

Jacob Shapiro: 00:48:00

in my life, sometimes I find myself just staring at my phone and I'm

Jacob Shapiro: 00:48:03

like, what, what am I doing right now?

Jacob Shapiro: 00:48:05

Like, I've, I've already checked this inbox like 10 times today.

Jacob Shapiro: 00:48:09

I need to check it again.

Jacob Shapiro: 00:48:10

I like can't be sitting here in this moment like thinking about something else.

Jacob Shapiro: 00:48:14

It's like I. Yeah, it, it's there, there's something about the ease

Jacob Shapiro: 00:48:17

of having it there that, that, um, that makes it difficult.

Rob Larity: 00:48:22

You need a Jacob.

Rob Larity: 00:48:23

I don't, I don't check my phone.

Rob Larity: 00:48:25

Like I, I barely kept up on what's going on in the last beat.

Rob Larity: 00:48:28

'cause I know if there's anything I really needed to know that you would let me know.

Jacob Shapiro: 00:48:34

Yeah, I need it, Jake.

Jacob Shapiro: 00:48:35

Okay.

Jacob Shapiro: 00:48:35

Well, I'm just gonna send all of my articles to chat, GPT, and once, once

Jacob Shapiro: 00:48:38

AI gets big enough, like I'll just have AI replace me and I'll, I'll

Jacob Shapiro: 00:48:42

no longer be here doing my thing.

Jacob Shapiro: 00:48:44

So.

Jacob Shapiro: 00:48:44

All right.

Jacob Shapiro: 00:48:44

Well, anything else you wanna tell the listeners, Rob, before we get outta here?

Rob Larity: 00:48:49

No, go enjoy your week.

Rob Larity: 00:48:50

Everything is okay.

Rob Larity: 00:48:52

Sounds good.

Jacob Shapiro: 00:48:54

Cheers.

Jacob Shapiro: 00:48:56

Thank you so much for listening to the Jacob Shapiro podcast.

Jacob Shapiro: 00:48:59

Uh, the show is produced and edited.

Jacob Shapiro: 00:49:01

By Jacob Mian, and it's in, in many ways, the Jacob Show.

Jacob Shapiro: 00:49:04

Um, if you enjoyed today's episode, please don't forget to

Jacob Shapiro: 00:49:07

subscribe, rate or leave a review.

Jacob Shapiro: 00:49:09

It takes just a couple seconds of your time, but it really helps

Jacob Shapiro: 00:49:12

us also share with a friend.

Jacob Shapiro: 00:49:13

If you're interested in learning more about hiring me to speak at your

Jacob Shapiro: 00:49:17

event, or if you wanna learn more about the wealth management services

Jacob Shapiro: 00:49:20

that uh, I offer through bespoke or cognitive investments, you can find

Jacob Shapiro: 00:49:24

more information@jacobshapiro.com.

Jacob Shapiro: 00:49:26

You can also write to me directly at jacob@jacobshapiro.com.

Jacob Shapiro: 00:49:30

I'm also on, on X for now with the handle Jacob shop.

Jacob Shapiro: 00:49:33

That's Jacob, SHAP.

Jacob Shapiro: 00:49:35

No DATs dashes or anything else, but I'm not hard to find.

Jacob Shapiro: 00:49:39

Um, see you out there.