E89: GDP growth negative in Q2, $SHOP layoffs, Alzheimer's fraud, Ginkgo acquires Zymergen & more

**Jason Calacanis** (0:00)
All right, his monthly burn rate would make even Bezos wince. He's living the life of a Sri Lankan prince. He drinks nothing but the absolute highest top shelf.
He's lifting Italy's GDP by himself. The dictator's back, Chamath Palihapitiya. I'm back to the program.

**Chamath Palihapitiya** (0:16)
Thank you, Jake.

**David Sacks** (0:17)
When you mentioned that burn rate, I thought you could be talking about me. Sometimes these intros, you're not sure which way they're going to go.

**Jason Calacanis** (0:24)
It's a misdirect comedy, a misdirect.

**Chamath Palihapitiya** (0:26)
It is inconceivable that my burn is higher than David Sacks. I own one house.
How is it possible?

**Jason Calacanis** (0:34)
And maybe one or two next week. He's analyzing macroeconomic charts and grids while at the same time ignoring his kids. He's the sultan of Sass. It's no surprise. The only thing heavier than his pockets? The bags under his eyes, the rain man is back, David Sacks.
The admiral of anxiety, he's rife with strife. He plays a **** out his PS5 and he also plays one in real life. Meow.
The commander of the catboys, David Friedberg.

**David Friedberg** (1:08)
I mean, I'm totally cool with that opening because you're going to look like an asshole.

**Jason Calacanis** (1:12)
I mean, more of an asshole?

**Chamath Palihapitiya** (1:14)
I mean, if you didn't ignore it, every time Friedberg spoke, you would have heard that the guy from Unaborn of Pictures reached out to him, gave him a link to download a free game about cats, which he downloaded and he's been playing. It's now the most popular video game in the world.

**Jason Calacanis** (1:28)
You introduced the cat game. It's on you.

**Chamath Palihapitiya** (1:30)
By the way, what shirt are you wearing? It looks like a carpet.

**David Friedberg** (1:33)
Yeah, you really do look like one of the characters from Goodfellas, like one of the older guys in the Kansas City. Oh, yeah.

**Jason Calacanis** (1:40)
I had my cigars right off screen here and I got my coffee from Dunkin Donuts.

**David Friedberg** (1:43)
You remind me of one of the guys in Kansas City from Casino.

**Jason Calacanis** (1:46)
Absolutely.

**David Friedberg** (1:47)
The guy sitting around the table in that restaurant. Right.

**David Sacks** (1:48)
It's like, should we whack him? Why take a chance?

**David Friedberg** (1:51)
Boom.

**Jason Calacanis** (1:52)
Listen, you got my style icon. Joe Pesci is my style icon.

**Chamath Palihapitiya** (1:58)
You look really bad.

**Jason Calacanis** (2:00)
Thank you.

**David Friedberg** (2:01)
Thank you.

**Jason Calacanis** (2:19)
GDP fell by 0.9% in Q2, marking two straight quarters of negative growth.
In Q1, we all know GDP fell 1.6%. Here's the real GDP chart. Current dollar GDP increased 7.8% in annual rate, or $465 billion in Q2 to a level of $24.85 trillion. Home construction down 14%, ostensibly because of the interest rates increasing.
Inventories which helped boost GDP in 2021 dragged down growth in Q2, so supply chains easing, taking away two percentage points. Chamath, what's your take to these year over year comparisons work? We were talking in the chat a little bit about the spike in 2021 versus the dip in 2020 What's your take on this?

**Chamath Palihapitiya** (3:09)
I mean, I think you just summarized that people are really fixated on these numbers without understanding basic statistics. So just taking a step back, if you go to the Bureau of Economic Analysis, which is an official website of the government of the United States that posts GDP, the title makes it pretty self-obvious what we're dealing with here, which it says, Nick, you can put it up there, real GDP, the percent change from the preceding quarter. So things can still go up positively, but still be negative if it doesn't go up by the same or more than the quarter before it.
The thing that we really have going on is that over the last eight quarters, we've had all kinds of very turbulent data that's made the trend line unpredictable. And the most obvious way to see this is actually in one specific subsector, which we'll get to in a second, which is around US e-commerce adoption. You see this one huge spike coming out of nowhere. And then eventually everything has settled back to trend.
The same way, I think what we're waiting to figure out is how many quarters does it take for us to get back to on-trend growth in the economy? We had a massive shortfall in Q2 of 2020 We had a massive surplus in Q3 of 2020 We've had a country that's been getting back to finding equilibrium over the last five quarters. So we don't really know what the steady state growth should be. This is why I specifically had such an issue with the tone the White House took, which was trying to explain away that this isn't a recession by trying to create doubt in the definition. Instead, I think it would have been much better off just repeating what I just said and explaining basic statistics and actually showing that the country is headed in the right direction, largely speaking from a really crazy one-time externality that nobody could have predicted, that it's going to take some number of quarters. And so really what you should look at, and Jason, you've pointed to this, is employment and wages and try to be a little bit more circumspect and overreacting to any one quarter of data. By the way, the Fed exactly just said the same thing yesterday when they raised 75 basis points. They said, we are not going to give guidance anymore because things are too turbulent.