I am max kaiser this is the kaiser report the best show rated recently by show ratings amount of us as the best show in the world welcome stacy is that when i hear twitter accounts that you created. I get it well you know what the theme of this episode of kaiser report is you know those black friday shopping stampedes and shopping riots that everybody looks forward to the 1st friday after thanksgiving where people go and beat each other up in order to get a discount on a flat Screen Television or actually some sort of useless item that they dont need this started this trend started they say in 2005 according to the wikipedia black friday has routinely been the busiest shopping day of the year in the United States since 2005 all the news reports which at that time were inaccurate have described as the busiest shopping day of the year for a much longer period of time similar stories resurface year upon year at this time portraying hysteria and shortage of stop creating a state of positive feedback the other is a shortage of stuff perceived shortage and people get you know black friday they rushed the stores and they get into office fights or brawls and its like an american thing and amazingly its like migrated to the rest of the world even though these other countries dont have to giving even though that they dont have these big box discounters they still like to go to the store and beat each other up because they figure thats like being an american they get a hamburger from mcdonalds you beat each other up on black friday and youre saying the National Anthem i mean america is the culture that people d love and were going to get into this comparing this to robin hood app traders but you know i want to show you what i bought in black friday and that was a mini max it did sit on the shelf for. I do while but most people didnt realize many macs actually stood in for you for a few episodes during lockdown and nobody even noticed so it was worth the 599 not 599 but 5 dollars 99 cents i paid for this many macs know that outsold elf on a shelf for 3 christmas its a row before christmas got cancelled because the car Council Culture and the generation and this also the justice i got a calculator only paid 6. 00 for a member back of the 1970 s. I bought one for 800. 00 so that was a good one the 1st quite a bargain this was a ive no idea what this is but it looks like a keyhole but its attached to nothing. To unlock the present knowing not into the safe of vault of nothingness put the key here and enter the void so this this was definitely worth the 17000000 i pay for it this is where i would keep my stuff in case i was out there hunting in the bush with davy crocket i would keep my little packet of you dont do much that these days but it was a bargain at 47. 00 and who doesnt want the spare in the cupboard i got this. Mock out again and you know this is the standard style very stylish that moscow do where your own jumped up you know they were in this even over 30 below 0 you can you can be made from the forehead down if you have been choked on if you like your miami beach right is the amazing Russian Technology there so i know i did almost forgot here this is a 2 can i got also on the sal simply because i thought it would be a good friend for plucky you know plucky lonely a lot of times hes a manic depressive isnt it so i get him a nice 2 can like this he can have fun plucky the point is that one participates in one of these shopping stampedes and pretty much you put the stuff. On the shelf and never use that again but you feel better because you got a 50 Percent Discount well you know a lot of robin hood traders look at the markets and think theyre getting 50 or 60 or 70 or 90 Percent Discounts when a company on the verge of bankruptcy their shares collapse in like wow a 90 Percent Discount before declared bankruptcy it was 100. 00 now its only 10 what a bargain right well 20000. 00 robinhood traders are in for a rude surprise as c. B. L. Prepares to file bankruptcy bloomberg reports small operator c. B. L. And associates is preparing to file for bankruptcy the headline hit after hours on friday sinking shares by at least 20 percent and you could see shares collapsed by 20 percent then they opened down 23 percent on monday mornings incredible you know these rabid traders are really learning some important lessons about trading stocks and because in this case the perception that becomes something has dropped 90 percent that it cant go any lower and of course people who are experienced in markets know that if its dropped 90 percent the chances of it dropping another 90 percent are actually quite high things that are trading at all time highs tend to trade at new all time highs things trading at all time lows tend to trade a new all time lows thats a very subtle and kind of nuanced real fact of trading you find it in books like reminiscence of a stock operator by just livermore written in the 1920 s. Conserve the bible of trade if you really want to learn how to trade these things i suggest you read that very slim book and educate yourself on how these things actually work but Jeff Robin Hood apps these kids jency i dont mind picking their pockets every day i can see where theyre making the mistakes i just capitalize on their naivete but in my view im helping them learn its like i could give money to the college fund of america or d i could help robin hood traders lose money in my pocket. Well this is an interesting chart you can see the green line here is the users of robin hood app versus the price of c. B. L. And you see as it keeps on going down and it keeps going down robin hood apertures keep on piling in just for fun i went over to twitter and entered the house and a dollar sign c. B. L. To look at what people are talking about these day traders were saying on Twitter Holding c. B. L. And buying more to average down confident theyre going to reach an agreement with the banks are selling. So this is somebody on july 18th the day then they basically were filing for bankruptcy so there are agreements in place with creditors that the creditors when you the equity holders lose as weve said many times as they keep on piling into these bankrupt companies yeah these robber who traders would be buying deck chairs on the titanic you know because the price keeps going down and theyre really cheap about a dollar a share im going to buy more while im on the lifeboat we. Could do it do it do it in the dot com days when i guess it was really generation x. Participating in the dot com days and the last of the boomers like yourself and you know people are piling in on these companies that had no earnings because they had bought like a u. R. L. Like pets dot com but these were companies that were in the beginning of not only a Tech Industry which was still quite new at that point and you know the World Wide Web you know monetizing that that was brand new at the time in the late ninetys but also like these companies at least you could imagine that they might grow into something huge like pets dot com or whatever even the Infrastructure Companies that did fall after that the hype that once everybody realized like the power of the possibility of the World Wide Web they went bonkers right well with these sort of bankruptcy speculators these shopping. Stampedes to invest in bankrupt companies there are literally companies at the end completely of their life cycle hertz over 100 years old it was one of the 1st of the rental Car Companies now were in the day and age of and other right sharing our ups that started to destroy that business and were in a post pandemic world well not yet but one day we might be and people Business People arent traveling anymore malls dead theyre not coming back and theyre buying these bankrupt Companies AwaitingPetroleum Oil whole oil industry dead so these are end of life cycle that these Young Robinhood apertures are piling into the i think thats a remarkable kind of insight interesting point there that the gent acts on the last the baby boomers who are speculating in the 990 s. On the birth of companies that went public for the 1st time and they would have these pops and then there was a sting normas crash here the millenniums and gen zinni are speculating on the death of companies and companies that are dying and declared their dead companies and their client plowing their way in to speculate on the death of a company so there seems to be a very elegant kind of comic circle being square here im not exactly sure what it all means but it is quite beautiful well i think its kind of a trickle down situation and if you look at the these people piling into dead companies not only dead companies but dead industries dead Business Models. Look at the chart from the United States the government the treasury monthly u. S. Surpluses and deficit since 1980. Look at huge the deficits are getting lookout more and more bankrupt slowly and then suddenly its becoming bankrupt and yet you see you know investors around the world many of them from this mysterious caribbean area piling into treasuries. Theres often. Excess demand for negative the open bottoms i mean were making fun of all these millennia old and gen buying up robin hood out you know chairs on robin hood after bankrupt companies and dead Business Models but the same thing globally with investors Bond Investors doing the same thing theyre being paid you know theyre paying government to borrow from them so like how much less insane how much of a stampede at the supermarket like we all make fun of those walmart rioters and were making fun of the robin hood app rioters and what about the bond traders well its all of us short termism so the appeal of buying negative Interest Rate bonds is the greater fool theory that i was going to buy after you bought it and you can get a short term profit and the reason why short term profit seeking a so paramount today is because people are broke and theyre bankrupt and theyre drug addled and theyre drunk. And you put them on line with free trading on an app and they do stupid things so the secret of course is to get rich slow but nobody has 20 years to do that everyone has to make money in the next 20 minutes or face the creditors and that includes institutions Pension Funds you know i think government is trying to make money in the next 20 minutes otherwise its going to have to declare bankruptcy and thats unfortunate but true so its the risk gets more extreme like a gambling addict at the casino they only have one bet left before theyre taken to prison and they put it all on red right on the roulette wheel thats america now that its bankrupt no more defense ability pennsic i was blown out there like were going to put their entire future the country on a red spin that rule that will maybe maybe well let you know fred smith who is the founder of fedex actually the company was down to us last 5000. 00 or 15000. 00 he did go to vegas he did put it on the roulette wheel he did win and he saved the Company Without that lucky spin. In vegas fed ex the company would never have survived ok but that was a one in the 10000000000 shot you cant roll the entire future of the country on a rule on a bit of the roll that wheel well don it. Does that. I want to point out to the last seconds here i do want to point out that you know just like those robin hood app traders are hoping for something that never what happens in real life which is the bankruptcy that equity holders are going to make any money the same with all the investors in this failed Business Model of a global system based on the u. S. Dollar any currency would fail and that reserve currency but were all a doubling down on this hoping like some sort of miracle the bankruptcy judge basically makes us all whole can link up the fun of the fun about the. Well well be back after this moment ago it. Capitalism in the United States abandon the United States the leading capitalists in this country are now global capitalist grab that link that leads them there middle class without jobs without a future its a disaster covered over with endless eater but the reality is a disaster and if mr trump were here you would see other people emerging trying to make a political career by pointing to this. Problem drugs dont always come from unscrupulous dealers but from pharmacies to in every state in the United States weve seen fairy sharp increase in the number of people seeking treatment for addiction to prescription opioids oids invented america under the banner of medicine persisted with the pain but instead of trying to wean him off though she did go sefer dose after dose after dose and really became his drug dealer so whos to blame patients doctors manufacturers all the governments of. Welcome back to the kaiser report imax keyser time now to turn 10 a fantail way to more it is the host of breakdown an l w author hes also the author of long raids on sunday at his sub stack i follow this guy on twitter hes a deep thinker were going to interview him right now is pretty darn interesting that they now welcome a thing so much for having me everybody is talking about open ai g p t 3 is the most powerful Artificial Intelligence language model ever is this something we should celebrate or fear i think it goes both ways i mean i dont think you can have a i advantage without worrying a little bit about it the specifics of this one the model thats been released the thing that makes it less scary to me which may be relevant for other parts of our conversation is that it cant do narrative so basically this is sucked in 16475000000000 inputs half a trillion words and so it can predict with incredible accuracy affectively what the next word is supposed to be based on context so it makes it easy for it to do things like imitate blog post and people style the scary thing that of course is that you can imagine you know essays op eds or whatever coming out from max or from the faneuil hall that sounds just like us if people are reading us a lot because its good at doing that sort of imitation the less scary thing is it doesnt really have any comprehension of what its putting out there its just really a predictor so its not kind of intelligent in any meaningful way its just very impressive but its still i think you know every advance that ai has implications for a lot of different roles in jobs and Everything Else and ultimately you know its about trajectory and last year g p t 2 came out and people were blown away that it existed and its taking an even less them out of time for it to be sort of this new version thats 2 orders of magnitude stronger so you know the question that we have with ai i think are bigger than. Any one specific implementation or model but it reminds us that this is going to be a serious part of our future right you think cant stand narrative what does that mean and means that it has a hard time keeping a coherent thought it doesnt have a mental model of the world all it has is the ability to read other stuff and so lets say that you and i wanted to kind of construct a story or you know your were going to talk about a bunch of Different Things today but you know if we talk about the the wall street right wall street bath and robin hood and these sort of things im coming into that with a set of mental models that help put that in context for the world it doesnt have anything like that and so what this amounts to is that after a couple paragraphs it can get kind of disjointed and weird and go on strange non sequiturs and tangents and so it can craft a story basically it can do bullet points it can do essays it can do a lot of very impressive things but it cant keep kind of a coherent picture of the world that its all building up to look at an age where pay paul. I dont really believe in any narrative right because everythings become fake this cell in the president says thats fake news and Mainstream Media is fake there is a feeling telling people that dont believe any narrative if you have an ai bot that doing is rape our taj as it were and it famous from what you find from other fake nez its going to be difficult to convince anybody that anything is worth listening to and i think that might be one of the risks of this particular piece of technology now moving on the free money p. P. P. Bailouts the massive money printing operations enhanced Unemployment Benefits universal basic and come put the scale of the money printing into some sort of macroeconomic context and where does this go and mean it goes bigger i mean youre seeing already the all of the kind of like but a little headlines menuhin back on the hill talking about more in stimulus and wanting to get both the fiscal and the monetary engine going in concert you have the e. U. Who just approved a 2000000000. 00 carbon recovery package and so i think that the biggest thing for me is to hold inside the numbers if the normalization of the methods right when this happened there wasnt a question there wasnt a debate about whether we were going to engage in these programs there wasnt a National Kind of conversation about whether the fed was kind of moving outside of its mandate with the special purpose vehicles it was just assumed that when things got bad the fed was going to be there and the real impact to me is again less the actual dollars and cents in fact is people who are arguing right now that you know as as a kind of percentage of g. D. P. The feds Balance Sheet is still low relative to the e. C. B. In japan and things like that i think what matters much more is again the narrative implications and the normalization of the fed beds backstopping everything right when you say they are normalizing the fed going outside of a say normal channels and using special purpo