Dec 11, 2021 · 1h 21m · allin
E58: November's CPI, preparing for a downturn, macro outlook, Better.com's botched layoffs & more
David Sacks · 19m spoken Chamath Palihapitiya · 18m spoken Jason Calacanis · 17m spoken David Friedberg · 13m spoken Jussie Smollett · 33s spoken Elon Musk · 22s spoken Better.com Employee · 3s spoken Vishal Garg · 2s spoken
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In Episode 58 of The All-In Podcast, the hosts examine surging 6.8% CPI inflation, macroeconomic market shifts, and national debt risks alongside an in-depth analysis of Better.com's botched mass layoff. They also outline fundraising strategies for an impending venture capital downturn and critique media coverage following the Jussie Smollett conviction.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 98% of the talking time here. How this is scored →
The hosts as informed peer 6.2 Guest teaching 0.5 Guest disagreement 1.0 The hosts pushing back 1.5
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 52:45 Better.com remote mass termination clip
During the remote termination call, CEO Vishal Garg curtly informs 900 employees their employment is terminated effective immediately, provoking outraged reactions from affected staff.
Hardest push from the hosts ▶ 9:05 Sacks refutes Build Back Better anti-inflation framingSacks systematically rejects the administration's premise that spending 5 trillion dollars under Build Back Better will reduce inflation, citing CBO deficit estimates and Larry Summers' early warnings.
Biggest teaching moment ▶ 34:39 Elon Musk on capital allocation efficiencyElon Musk concisely reframes government taxation and spending as taking capital allocation authority away from proven allocators and transferring it to an entity with a track record of poor efficiency.
The host holds their own ▶ 1:02:22 Chamath details Facebook outmaneuvering downturn valuation modelsChamath demonstrates deep insider fundraising expertise by recounting how Facebook rejected TCV's conservative model markdown during the 2008 financial crisis to secure better terms from Yuri Milner.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Title Sequence & Host Introductions | 1 | 0 | 1 | 1 | Casual intro banter and housekeeping among hosts regarding podcast metrics, Miami Art Basel, and Chamath's expensive sweater. No guest presence or deep subject matter expertise is featured. | |
| November CPI, Inflation Rates, and Build Back Better | 7 | 0 | 0 | 2 | Sacks and Jason detail economic metrics regarding CPI increases, citing CBO deficit estimates and Larry Summers' early warnings. Sacks presents a structured macroeconomic critique of government spending without guest involvement. | |
| Jobs Report, Great Resignation, and Real CPI Metrics | 8 | 0 | 0 | 1 | Chamath provides a technical analysis of structural labor shortages and owner's equivalent rent (OER) distortions in CPI calculations. He references Bill Ackman's single-family rental data to argue actual CPI is significantly higher than reported figures. | |
| Macroeconomic Outlook, Asset Bubbles, and Interest Rates | 8 | 0 | 0 | 2 | The hosts deliver a comprehensive macroeconomic analysis covering asset price inflation, Fed interest rate balancing, negative real yields, and institutional pension fund de-grossing dynamics. Friedberg uses consumer credit data and Druckenmiller's market signal framework to explain current liquidity bubbles. | |
| Political Critique: Biden Administration and Capital Allocation | 7 | 3 | 2 | 2 | The hosts critique progressive labor policy proposals and feature an audio clip of Elon Musk arguing private actors allocate capital better than government entities. Friedberg and Sacks expand on Musk's argument by contrasting institutional expansion incentives with market wealth creation mechanics. | |
| Historical US Deficits and Debt Servicing Risks | 8 | 0 | 0 | 1 | Sacks calculates the precise budgetary impact of expected Fed rate increases, showing that 75 basis points on 30 trillion dollars in national debt creates 150 billion dollars in annual interest servicing costs. The hosts contextualize this against historical presidential debt expansion records. | |
| Labor Dynamics, Automation, and Positive Economic Signals | 7 | 0 | 0 | 2 | Friedberg explains how wage increases in low-cost service sectors will accelerate automation and spur growth in the creator economy, while citing Brad Gerstner on technological deflation. The conversation highlights structural economic shifts post-COVID rather than temporary wage friction. | |
| Better.com Viral Layoff Video Review | 5 | 2 | 5 | 2 | The hosts review video clips of Better.com CEO Vishal Garg firing 900 remote employees simultaneously over Zoom. The segment captures Garg's harsh tone and abrupt termination of staff three weeks before Christmas. | |
| Analysis of Startup Growth Incentives and Layoff Execution | 8 | 0 | 1 | 2 | Friedberg and Chamath critique late-stage venture incentives like SoftBank's that compel startups to pursue unnatural growth, culminating in mismanaged headcount reductions. Sacks and Chamath share practical management experiences on how humane layoffs should be conducted versus Garg's tone-deaf approach. | |
| Macro Downturn, Venture Valuations, and Fundraising Lessons | 9 | 0 | 0 | 1 | Sacks outlines how public SaaS corrections are forcing venture funds to mark down late-stage valuation multiples, advising founders to secure runway. Chamath recounts Facebook's 2008 GFC fundraising effort where Yuri Milner's DST provided non-dilutive capital without a board seat amidst plummeting market multiples. | |
| Holiday Party Banter and Friend Group Dynamics | 1 | 0 | 1 | 1 | Casual banter among hosts about upcoming holiday parties, RSVP conflicts, and travel schedules. Offers lightweight social interactions with no substantive subject matter analysis. | |
| Media Analysis of the Jussie Smollett Hoax and Trial | 7 | 0 | 0 | 2 | Sacks and Chamath critique media coverage of the Jussie Smollett hoax, focusing on the media's rush to judgment, failure to perform basic fact-checking, and reluctance to issue retractions after facts emerged. Chamath references Dave Chappelle's comedy commentary on public reaction to the case. | |
| Reviewing Jussie Smollett's ABC News Interview Clip | 4 | 1 | 3 | 1 | The hosts play and react to an audio clip of Jussie Smollett's ABC News interview describing his staged attack. Jason and Chamath mock Smollett's obvious poker tells and deceptive narrative delivery during the clip. |
Statements from this episode (24)
Chamath Palihapitiya invests $700 million per year into climate change initiatives.
“Does she pay attention when I put in seven hundred million dollars a year into climate change?”
Jason Calacanis discloses he is holding all of his Robinhood stock.
“We're not dispensing stock advice, but I'm not selling any of my shares.”
US CPI inflation reached 6.8 percent in November 2021
“Today was 6.8 year over year. It's the largest increase since 1982.”
David Sacks predicts US CPI inflation will reach seven percent.
“Now it's 6.8. Looks like it's headed to seven percent.”
David Sacks cites CBO report stating Build Back Better costs $5 trillion.
“Just today, we got a report from CBO saying that this Build Back Better bill wasn't going to cost two trillion, like the administration said. It's going to cost five trillion and add three trillion to the deficit.”
David Sacks argues government programs create constituencies preventing future spending cuts.
“Once the programs are created, there's going to be, it will create a special interest or constituency who is now dependent on those programs and no one's ever going to want to cut them.”
Chamath Palihapitiya calculates true US inflation is 10.1% using rental data.
“The OER that was calculated quote unquote by survey in the CPI was 3.5%. If you flow that through, it means that core CPI actually went from 4.9% today to actually nine percent. And the CPI print, which was 6.8% was actually 10.1%.”
David Friedberg argues asset bubbles exist everywhere from crypto to real estate.
“You know, we're seeing asset bubbles everywhere in NFTs, in crypto, in startups, in new startups, in new ideas, in home prices, in everything.”
Chamath Palihapitiya asserts technology companies represent true modern value investments.
“Value isn't necessarily things that are cheap. Value is things that are things that are valuable. And over the last 15 or 20 years, what was once a question is now definitive, which is that the things that are valuable tend to be technological, because they're…”
David Sacks notes growth stocks and SaaS companies dropped 30% since November.
“So, what we've seen over the past four or five weeks, about the first week in November, most, the market basically peaked, and at least growth stocks did, and SaaS companies did. If you look, kind of, November eighth was sort of the beginning of the downturn, …”
Chamath Palihapitiya predicts the federal spending bill will not pass.
“This bill is not going to happen, David, with a three trillion dollar deficit increase.”
David Sacks notes US fiscal restraint only happens under divided government.
“Historically, the best, the only times that you really have it seems like fiscal responsibility is when you actually have, the best track records have been when you have Democratic presidents or Republican Congresses, and the Republicans suddenly find their pr…”
David Sacks projects Fed rate hikes will cost US $150 billion annually.
“The Fed is now saying that they're projecting two to three rate increases next year. So let's call that 75 basis points. Multiply that by the close to 30 trillion of government debt that you're talking about, Jason. That's about a hundred and fifty billion a y…”
David Friedberg predicts fast-food wage pressures will accelerate service sector automation.
“The low cost model of consumerism in the United States, which has been a stronghold for our economy for a hundred years at this point, Maybe coming to an end, or it will accelerate the implementation of automation across that sector of the economy.”
David Sacks predicts killing Build Back Better triggers massive 2022 market rally.
“Manchin would do Biden the biggest favor by just putting a bullet in this Build Back Better plan, because I actually think there'd be a massive relief rally And the economy would take off like a rocket next year.”
SoftBank planned to invest $1.5 billion in Better.com's SPAC PIPE.
“They were in a SPAC. SoftBank was gonna put in 1.5 billion in the pipe.”
David Friedberg argues SoftBank incentivizes unnatural startup growth leading to subsequent shocks.
“SoftBank, as you guys, as we all know, creates a very strong incentive and capitalizes businesses to go after kind of ultra perhaps unnatural growth. And there's almost always shocks that occur after they do that.”
Chamath Palihapitiya argues excess capital caused Better.com to mismanage its growth.
“The root cause of why this is here, as far as I can tell, is not a company that doesn't have consumer demand. It's a company that may have been mismanaged for growth to meet the consumer demand because of too much money.”
David Sacks predicts public SaaS correction will trickle down to venture valuations.
“We've already seen in the past five weeks, we've seen 30 to 40% correction in the public markets for growth stocks and SaaS companies. That is absolutely going to trickle down to venture valuations.”
Chamath Palihapitiya argues that conflating valuation with true business value kills startups.
“You cannot get confused that value and valuation are not the same thing. Yeah. And so the minute you conflate the two and you're like, I'm an X billion dollar company and start behaving that way, you're dead.”
David Friedberg says mega-VCs push startups to risk failure for 100x returns.
“For their portfolio as a whole, they would rather tell everyone, go hard, go fast, spend as much money as you can, and they hope that one out of 10 companies becomes a hundred X from there. And it's okay if nine out of 10 die. So they don't care if you die. Th…”
Jason Calacanis asserts that BuzzFeed's SPAC IPO was a complete disaster.
“BuzzFeed IPO was a complete disaster. 80% of people already in their SPAC. BuzzFeed is circling the drain.”
David Sacks argues Jussie Smollett media coverage showed a rush to judgment.
“This reflects all the worst qualities of the media. Number one, rush to judgment. They immediately bought into the story, and they were attacking the Trump administration for creating the hate and the MAGA people. So there was a feeding frenzy. Number two, the…”
David Sacks asserts US courts deliver correct verdicts while mainstream media fails.
“But, you know, the court systems have been doing an amazing job. When you think about the cases, I think the courts have been on quite a run in, I think, contradistinction to the media. It keeps getting it wrong, right?”