10/21/25: Josh Shapiro Pressed On AIPAC, Epstein Prosecutor Dined At His House, WH Blows Up On Ukraine Question, AI Bubble

24:12Even then I'm like, yeah, I don't know. You know, who's paying for this, right? It's one of those where there's some blood money here on the table. I don't want anything to do with that. Or I'll split the bill with you if I think it's interesting. That's the thing where apparently I'm a YouTuber and I hold myself to that standard. And these guys are like, oh yeah, I prosecuted you. And even though So you're a registered sex offender. I'm just going to go ahead and I helped lock you away. I'm going to go over to your house for dinner. And it's probably not with people. I don't know about him specifically, but it's probably not even though or despite.

24:43It's because. There you go. Because he knows the details of what Epstein is into. Yes. He wants to hang out with him because he wants to get into that too. Because he probably investigated. He probably added some of his tax returns and stuff in front of him. He goes, yo, I need to get in on this. He's like, this is a good deal right here. By the way, speaking of that, as Ryan said, hold for Leon Black. Leon, I've talked about Leon from day one in the Epstein case. It remains one of the most mystifying. This is one of the titans of Wall Street. $9 billion net worth,$150 million payment to the Jeffrey Epstein estate that has been revealed for, quote, tax advice.

25:15Nobody knows why. He's been friends with him for decades. Everybody, he's defended his relationship with Epstein. He said he had no idea, put him on the board of his charities, decades-long friendship. Well, Leon's emails with Jeffrey Epstein came out, and they're pretty interesting, aren't they? They say Epstein was furious. For years, he had relied on Leon Black as his primary source of income, advising him on everything from taxes to his world-class art collection. By 2016, Black seemed reluctant to keep paying him tens of millions of dollars per year, so Epstein threw a tantrum. Epstein wrote in an email to Mr.

25:47Black, quote, quote, he was another waste of money and space, attacked Mr. Black's children as retarded for supposedly making his, that's relatable, for making a mess of his estate. The typo-ridden tirade was one of dozens of previously unreported emails reviewed by the New York Times in which Epstein hectored Mr. Black, demanding tens of millions of dollars beyond the 150 million he had already been paid. The pressure campaign, Ryan, appeared to work. Mr. Black, for decades, who was one of the richest and most high-profile figures on Wall Street, forked tens of millions of dollars in fees and loans, albeit less than Mr.

26:26Epstein had been seeking. Of all the relationships, his friendship with Mr. Black is the most important. He served jail time for soliciting prostitution. Mr. Black kept him afloat for many years. The new emails provide the most complete picture yet of their relationship. Now, to be clear, you know, for legal purposes and with Mr. Black, I am simply noting how shocking it is for a titan of Wall Street, a private equity giant, one of the most well-known billionaires in the city of New York, how completely opposite it is to the way that the Apollo group and others would conduct business to seemingly constantly just caving to demands for tens of millions of dollars.

27:11from jeffrey that's all i am noting you can draw your own conclusion uh very specifically as to why anybody would ever act like that who made nine billion dollars and doesn't conduct business that way in any other similar tone similar tone and black denies all yeah yeah he blacks black similar tone from the new york times article that sager just put up they they write and this is one of those delightful uh sentences in the new york times uh echoing sager and quote and for reasons that are unknown, Mr. Black wired hundreds of thousands of dollars to at least three women who were associated with Mr.

27:47Epstein, according to court documents and notes taken by congressional investigators that were shared with the Times. Representatives of Mr. Black did not respond to questions about those payments to women. So in other words, representatives responded to a bunch of other questions at the Times sent, but ignored those questions. So I like this phrase. For reasons that are unknown, Mr. Black wired hundreds of thousands of dollars to at least room and we don't know why yeah they are just good good friends remain unknown to the same good good friends of with these women you know uh they were they were you know they needed a little help get through the weekend or something it happens it happens you know who amongst us has not floated our friends girlfriends right i mean with hundreds of thousands of dollars i i do it every day of course and we're going to insinuate something about that that's outrageous exactly uh i'm sure my wife would be cool with it right she'd be totally cool with it uh so here we have here's my other personal favorite from Mr.

28:40Black's lawyer. To imply Mr. Epstein somehow had influence over Mr. Black is false and patently absurd. Okay? To imply Mr. Epstein, who demanded tens of millions of dollars and received tens of millions of dollars and called his children retarded and also hectored and berated him, to imply he had any influence over Mr. Black is false and patently absurd. That's from Leon Black. Again, these guys, you think you just get$9 billion? You think somebody just hands it to you? No. You get it by being a swashbuckling dealmaker. If I was running the Apollo, by the way, these guys are legends on Wall Street, right?

29:15Apollo. Does Apollo just let somebody who they're doing a leverage buyout of demand certain terms of conditions? Is that how you got$9 billion in net worth? No, you would be a bankrupt, right? So we know he knows how to do business. And to say no, how to say fuck you, that's literally part of being a Wall Street He actually did fire. And he did, well, yeah, we can get to that. Yeah, ish. But the point remains something for reasons that remain unknown that he continued to hand him tens of millions of dollars. Okay. All right, let's go to the next part here. This gets to the interview with Alex Acosta.

29:50I read the entire thing, several hundred pages. Kind of boring, to be honest. They didn't do a very good job. But, guys, please put D3, please, up on the screen just to show you. The signature claim from Alex Acosta is that any trial of Jeffrey Epstein, quote, would have been a crapshoot. Now, this is a central issue because, remember, Alex Acosta was the labor secretary under Trump. He was the prosecutor who did the sweetheart deal with Epstein. After he resigns as a labor secretary, the Office of Professional Review over the Justice Department does an internal investigation of the Epstein non-prosecution agreement.

30:27They find that Alex Acosta and his office acted improperly. Now, Acosta contends throughout this entire interview that he did nothing wrong and that he got the best possible deal. Now, remember, the retroactive review by the DOJ specifically says that is not true. So they find fault with the actions of his office. Acosta stands up for the actions of his office saying, effectively blaming the victim, saying, oh, well, they weren't credible enough to be able to bring them to trial. By the way, remember, that is a direct contribution of what some of the agents and the other people on the case said.

30:57So this is not 100 % the view of the entire U.S. Attorney's Office. It is the view of Mr. Acosta. I will say, because there have been some sketchy questions here around the claim previously that he had said he belonged to intelligence, he claims that he never said that. He says, I never said it. So I want to make that very clear because that's a quote I've relied on in the past. Probably one of the most famous quotes. So I want to be clear that he now emphatically denies. He said, I never heard that from anybody. I didn't tell it to Steve Bannon. I have no idea where that comes from. So let's be clear.

31:31That's what he said. Now, you know, I've laid out my other case for why I do think he was at the very least involved with multiple foreign intelligence agencies. But nonetheless, Alex Acosta says there was nothing untoward. I never had any indication he was intelligence or whatever. Nobody told me what to do, which, by the way, again, that doesn't fit with some of the past timeline. Like the previous timeline was that Washington actually made a phone call around this from the DOJ. But, you know, you have to get very dark and into the weeds on this. I think the fundamental premise, though, is even if we take all the intel stuff out of it and we just keep it focused on the victims, he basically was victim blaming throughout the entire thing.

32:10He said, yeah, they weren't credible. They made stuff up. MySpace page. They were sketchy. And so that's why the sweetheart deal is the best that we could possibly get. Again, that's totally disputed. So his mindset around it does not seem conciliatory at all. He still continues to defend his conduct, Ryan, which I personally find disgusting. Intelligence, if anything, it's worse. I'm like, oh, so he just didn't believe them. He even says in there, he goes, well, the times were different. People didn't believe women at that time. I was like, so you're blaming the culture? What is this? It was crazy.

32:40And if you look through his emails and the different appointments that he had, what you realize is that Jeffrey Epstein knew everybody. Like he had pull with Russian oligarchs, top Russians, the Israelis, Europeans, Americans in both parties, and also Wall Street and the banking world. Like he was at the middle of all of this stuff and he had people who owed him and who he was willing to berate at the top levels everywhere. And so the idea that at minimum he didn't call in favors and that his powerful friends didn't do anything for him just is not remotely credible. Yep. Like that, like even if you don't think, even if you dismiss the intel part, but also to me the intel part is a bit of a red herring because what we found going through all of these emails, he was absolutely doing work for people that are in the orbits of this intel world.

33:45Which only backs up everything that we've said. Yeah. Is no one has said he was an agent for it. That's not how the world works. Yeah, exactly. That's what we keep trying to explain. There are these fixers. There are these shady characters. If you live here in D.C., you're familiar with them. They do contracts for Russia. They do contracts for Qatar, for the UAE. They're hired guns. They have nexuses. They have foreign bank accounts. They have a special knowledge. What's the taken language? It's like a very specific set of skills that they have. And so, yeah, you guys released that report at DropSite about the Israel deal with Mongolia.

34:15They're convenient actors who can just insert themselves in the process. Epstein started out working with Anand Khashoggi. Exactly. Khashoggi is CIA. A literal CIA cutout. Like, it's like this is a – it's trying to explain this to people who deny it is they are relying on willful ignorance and the definition of terms, which are fake. Like, no one has ever said he was an agent for – Like, here's his Mossad card. Yeah, here's his literal ID bank card. Wait, actually, didn't the head of Mossad tell Barry Weiss that he wasn't – Oh, sorry. I forgot. Never mind. That's right. Sorry. Thank you. We apologize.

34:47Shout out to the editor-in-chief of CBS News for her great journalism. She settled this one. She settled the question. She settled the question. Finally, let's put this one up here on the screen with the appropriate caveat. This is a new book, a memoir come out from Virginia Gouffre. Remember, one of the most prominent victims of Jeffrey Epstein. She did, unfortunately, take her own life recently. She'd lived a very troubled life. She famously was pictured in that photo with Prince Andrew. And in her new memoir, which was post-hospitalically released, she says she was, quote, beaten, raped by a well-known prime minister in an attack that broke the Epstein spell, her memoir reveals.

35:23Now, Ryan, you will be shocked to learn that the New York Post said well-known prime minister and did not name the country. Oh, New York Post's journalistic skills failed it finally. What happened with that? Which prime minister? Who was it? And in fact, it doesn't even appear in the lead paragraph. You have to go all the way down past three different advertisements to say that in past, however, she had pointed to Israeli prime minister Ehud Barak. Now, to be clear, Mr. Barack denies it. And also to be clear, yes, Virginia Gouffre was a very troubled woman. And she did certainly say some things in the past, which did not turn out to be true.

36:02Or that she's retracted. Or that she has retracted. Yeah, which she personally has retracted. So all appropriate caveats and all of that said, you should not necessarily take it to the bank. But the one thing nobody can ever get away from is the photo exists of her as a very young girl with her arm around Prince Andrew. And that photo, I'm sorry, you can't make it disappear. You just can't. And it was enough that Mr. Andrew, Prince Andrew, sorry, I apologize. Randy Andy. Yeah, so Prince Andrew, His Rural Highness. Prince Randy Andy. Has still remained out completely of public life and had a complete meltdown of it.

36:36What was his defense? He said, I don't sweat. He's like, I'm not a sweater. Do you remember that? I mean, if that's all you got, brother, I don't know, man. Pretty sure he sweats. Yeah, it's like, I'm pretty sure he's human. It's like, really, the British don't sweat? Even in heat, really? that doesn't fit with my experience but okay and going to Epstein's emails with Barack because Barack also got his emails hacked of course yeah you guys really said and so there's there's some in there where he's like hey where Barack's like can't wait to see you on the island maybe the security won't be there this time yes I remember that um and there's there's another one where he's like why don't you know why don't you um talk to these particular women that they're doing a business deal with he's like because you really have a way with women like so like Barack and And this is post conviction and sentence.

37:20So Barack, and also everybody who talks about Epstein is like the thing about him. Even Leon Black said this. The thing about him is that he was always surrounded by beautiful women. Guys, it's in the birthday book. Are we not? Are we stupid? Do you remember? Leon Black signed the birthday book. He signed the book. Did Barack? Look at the cartoon where they have Jeffrey Epstein, 20 years. It's like a cartoon drawing of him hanging out with young girls and them all in scantily clad bikinis giving a massage on the Virgin Islands 20 years later. It was out in the open. Six years later. Sorry, six.

37:53Yeah. Something gross. So gross. So that's your update. I don't even have words. The Leon Black stuff, man. I just wish – this is the problem with the house and all of this is get these guys. Wexner is like 90. He needs to testify while his mind is still there, okay, before he can claim dementia or something like that. Get his ass on the record and, you know, under sworn testimony. Same with Leon Black. Same with, I mean, all of the top financiers. Because to date, all we have are the bullshit denials of Ghislaine Maxwell. I don't think we mentioned this yet. His fee to Leon Black was$40 million a year.

38:35He said, I want$25 up front. Other times he would say, I want 20 up front, 20 in January, 20 in July. That's what he was getting cranky about. Like, where's my$40 million? This is a guy who has no tax licenses. He's not even allowed to give tax advice without saying, I can't give tax advice. Charging$40 million to give tax advice. Yeah. And estate planning and art and all this. Yeah, it's such great taste, right? Like the photo of Bill Clinton in a fucking dress. Like, come on. What a joke.

39:11What do you do when the headlines don't explain what's happening inside of you? I'm Ben Higgins, and if you can hear me, it's where culture meets the soul, a place for real conversation. Each episode, I sit down with people from all walks of life, celebrities, thinkers, and everyday folks, and we go deeper than the polished story. We talk about what drives us, what shapes us, and what gives us hope. We get honest about the big stuff. Identity when you don't recognize yourself anymore. Loss that changes you. Purpose when success isn't enough. Peace when your mind won't slow down. Faith when it's complicated.

39:49Some guests have answers. Most are still figuring it out. If you've ever felt like there has to be more to the story, this show is for you. Listen to If You Can Hear Me on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

40:08Welcome to the A-Building. I'm Hans Charles. I'm Menelik Lumumba. It's 1969. Malcolm X and Martin Luther King Jr. had both been assassinated, and Black America was at a breaking point. Rioting and protests broke out on an unprecedented scale. In Atlanta, Georgia, at Martin's alma mater, Morehouse College, the students had their own protest. It featured two prominent figures in Black history, Martin Luther King Sr. and a young student, Samuel L. Jackson. To be in what we really thought was a revolution. I mean, people were dying. 1968, the murder of Dr. King, which traumatized everyone. The FBI had a role in the murder of a Black Panther leader in Chicago.

40:53This story is about protest. It echoes in today's world far more than it should. And it will blow your mind. Listen to The A-Building on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. China's Ministry of State Security is one of the most mysterious and powerful spy agencies in the world. But in 2017, the FBI got inside. This is Special Agent Regal, Special Agent Bradley Hall. This MSS officer has no idea the U.S. government is on to him. But the FBI has his chats, texts, emails, even his personal diary. Hear how they got it on the Sixth Bureau podcast. I now have several terabytes of an MSS officer, no doubt, no question, of his life.

41:43And that's a unicorn. No one had ever seen anything like that. It was unbelievable. This is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to The Sixth Bureau on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Turning now to Ukraine, we wanted to make sure we gave everyone an update. Still some major developments here. President Trump reverting back to his original position. Ukraine has to give up some land and a peace deal. Let's take a listen. Friday, you said you had a cordial meeting with President Zelensky.

42:21During that meeting, did you tell him he needed to cede all of the Donbass region to Russia? No, we never discussed it. We think that what they should do is just stop at the lines where they are, the battle lines. You have a battle line right now. The rest is very tough to negotiate. If you're going to say, you take this, we take that. You know, there's so many different permutations. So what I say is they should stop right now at the battle lines. Go home, stop killing people, and be done. What do you think should happen with the Donbass region? let it be cut the way it is. It's cut up right now.

42:54I think 78 % of the land is already taken by Russia. You leave it the way it is right now. They can negotiate something later on down the line. But I said, cut and stop at the battle I go home. Stop fighting. Stop killing people. So that's the position today. A couple of weeks ago, Ryan, he said that they could take back all of Crimea. So I don't know. Nobody knows what's going on here. Let's put this up here on the screen from a recent, you know, this, by the way, very interesting. Not only that Zelensky and Trump met, but did anyone notice there was no joint press conference? There was no joint meeting.

43:27There was no statement afterwards by the president. Zelensky slunk in and he slunk out. And the reasons why is from the Financial Times, quote, Donald Trump urged Zelensky to accept Putin's storm or, quote, be destroyed by Russia. The meeting descended many times, quote, into a shouting match with Trump cursing all the time. They added that the president tossed aside maps of the front line, insisted Zelensky surrendered the Donbass to Putin, and repeatedly echoed talking points that the Russian leader had made in their call a day earlier. Now, obviously, that is coming straight out of Zelensky's mouth to the Financial Times, and we don't really know which way it's going to go.

44:03But it's just pretty obvious that this is the only way this was ever going to end. You have the military power. I mean, the current U.S. intelligence estimate, apparently, I don't know if I believe this, but let's say it's directionally correct, is 100 ,000 people have been killed since January of 2025. Do you see a single crack in Russian society? They don't care. Now, I don't get it. All right. If 100 ,000 of my guys were killed for some bullshit like this, yeah, I would riot. For some reason, they have a different society over there. Be it propaganda. Maybe they believe in it. Who knows? But the point is, their economy is doing well.

44:36I don't see a single crack in their society. Putin seems humming along more than ever before. They can throw as many bodies into this as we want. And Zelensky is like, oh, we need long-range missiles. That's going to make up the manpower deficit? You guys have 60-year-olds on the front line. It's not going to happen, right, from day one. So we're back to this. And yet, even this morning, this is what I love about covering this administration, what do I see? Marco Rubio's call did not go well with Sergei Lavrov. And the potential meeting in Budapest with Putin may not happen because Russia has not backed off its maximalist position.

45:10So Trump says they need to surrender, but Russia hasn't backed off its maximal position. So we're stuck right back from where we came from. They can't get their hands around this. Something like Israel-Gaza needs to happen where they're like, yeah, we just got to have to talk to Hamas. You just have to accept the unacceptable. And when that happens, yeah, you can actually get something done. Yeah. And Trump also said on Putin and Zelensky, they hate each other and it makes it a little bit difficult. And then he also added, but it doesn't affect us. Right. I agree with that. He really thought this was going to be extremely easy.

45:42You know, it wouldn't happen if he was president, according to him. Therefore, once he becomes president, it's going to end. That hasn't happened. And he's just flailing at this point. As he told, as Politico says, Trump says he's going to meet again with Putin to discuss it. They're going to go back to that. But the Budapest location is interesting, and it flows into this funny exchange between SV Date, a post reporter, and is Caroline Levitt? Yes, Caroline Levitt. I'll read the text first. So SV reaches out. Is the president aware of the significance of Budapest? In 1994, Russia promised in Budapest not to invade Ukraine if it gave up the nuclear weapons it inherited when the Soviet Union dissolved.

46:27Does he not see why Ukraine might object to that site? who suggested Budapest thanks? Your mom did. I mean, it's funny, but it's not that funny. Yeah. I mean, I'm going to laugh at any mom joke. Yeah, mom joke is good. He says, is this funny to you? And she said, it's funny to me that you actually consider yourself a journalist. You're a far left hack who nobody takes seriously, including your colleagues in the media. They just don't tell you that to your face. Stop texting me your disingenuous, biased, and BS questions. As far as I know, that's not the press corps understanding of my former colleague, uh, S S V.

47:04So then Caroline herself posted it, uh, for context S V of the Huffington post is not a journalist interested in the facts. The left wing hacked, which she already said in there, just take a look at his feed. It reads like an anti-Trump personal diary. He is pretty anti-Trump. No doubt about that. He had, okay, let's be honest. He has TDS. I cover the white, I cover the white. He's pretty, he's TDS. Listen, I don't care. All right. He's allowed to do whatever he wants to Trump. Yeah. He's, he's, he's full blown. I remember him. in the press corps. I got nothing. Listen, I respect the dogged guys.

47:34Anybody who wants to sit there and fire off questions to the press secretary, that's your job. Your mom jokes, yeah, pretty immature. Not a good look for you, in my opinion. So, yeah, I mean, I don't know what else to say. You could just ignore it. Nobody said that you had to respond to the question. It is a legitimate question. I would tell SV to his face that the premise itself is retarded based on this whole idea of the Budapest memorandum that they deserve. Is that why Zelensky doesn't want to do Budapest No, he doesn't want to do Budapest because Orban is the only person in the EU who has a very different view of the Ukraine conflict, right?

48:08And actually, I mean, a lot of people forget this. There are ethnic Hungarians who lived in Ukraine. I saw many of them who are Ukrainian citizens because when I visited Budapest, they're all living in Budapest now. And they don't want to fight in the war, which is very instructive, isn't it? But the point just broadly around Budapest as the location is because Trump has a great relationship with Orban and Orban has a good relationship with Putin. so it would be neutral-ish territory for the two of them to meet. I do understand the prospect, but also what? Do they expect Putin to meet in Berlin?

48:37Like, what are you guys, are we joking? Like, yes, where, other than Alaska, which was actually good because it was halfway, it's still on US territory, or they could go meet in Vladivostok or something like that. I guess, I don't know, for some reason Trump doesn't want to go to Russia. Yeah, Beijing. Well, that would be a real statement, actually, if that would be the brokering ground. Budapest seems as good as any of a place. to me. Lovely this time of year. Beautiful. Hey, beautiful city. I recommend everybody go. Gorgeous.

49:10What do you do when the headlines don't explain what's happening inside of you? I'm Ben Higgins, and if you can hear me, it's where culture meets the soul. A place for real conversation. Each episode, I sit down with people from all walks of life, celebrities, thinkers, and everyday folks, and we go deeper than the polished story. We talk about what drives us, what shapes us, and what gives us hope. We get honest about the big stuff. Identity when you don't recognize yourself anymore. Loss that changes you. Purpose when success isn't enough. Peace when your mind won't slow down. Faith when it's complicated.

49:48Some guests have answers. Most are still figuring it out. If you've ever felt like there has to be more to the story, this show is for you. Listen to If You Can Hear Me on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

50:07Welcome to the A-Building. I'm Hans Charles. I'm Menelik Lumumba. It's 1969. Malcolm X and Martin Luther King Jr. have both been assassinated. And Black America is at a breaking point. Writing and protests broke out on an unprecedented scale. In Atlanta, Georgia, at Martin's alma mater, Morehouse College, the students had their own protest. It featured two prominent figures in Black history, Martin Luther King Sr. and a young student, Samuel L. Jackson. To be in what we really thought was a revolution, I mean, people were dying. 1968, the murder of Dr. King, which traumatized everyone. The FBI had a role in the murder of a Black Panther leader in Chicago.

50:53This story is about protest. It echoes in today's world far more than it should. And it will blow your mind. Listen to The A-Building on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. China's Ministry of State Security is one of the most mysterious and powerful spy agencies in the world. But in 2017, the FBI got inside. This is Special Agent Regal, Special Agent Bradley Hall. This MSS officer has no idea the U.S. government is on to him. But the FBI has his chats, texts, emails, even his personal diary. Hear how they got it on the Sixth Bureau podcast. I now have several terabytes of an MSS officer, no doubt, no question, of his life.

51:43And that's a unicorn. No one had ever seen anything like that. It was unbelievable. This is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to The Sixth Bureau on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Joining us now is David Dayen. He is the executive editor of The American Prospect and a great friend of the show. It's good to see you, David. Thank you so much for joining us. Thanks for having me on. So, David, I have been fascinated by this term of vendor finance. I didn't realize, you know, I'm too young to actually remember dot com.

52:23But luckily, we have experts like you who can go through and can write all about how we're just living through the exact same crazy scenario. But before we actually even get to that, we wanted to get your reaction to the Amazon Web Service crash that just happened, which highlights this architecture which runs our entire economy, our entire digital life, and a single point of failure, literally a prospect of what it's like to live under monopoly. Let's put this up here on the screen. You know, everybody, especially here on the East Coast, woke up immediately. Multiple apps are not working. Huge outage.

52:57You had banks. You had music services. So many different things where you had the single point of failure from a single server here in Northern Virginia, in our area. And I mean, just from a monopoly point of view, David, and especially the fact that their stock went up even after the crash, what does that tell you about this world that we live in? Well, I'm painfully aware of it because we couldn't get our newsletters out yesterday. They've run on with a company that was involved in the mess. Yeah, I mean, I'd go back to a different recession, which is the Great Recession of 2008, which was characterized by what is known as tight coupling.

53:40In other words, the banks were all tied in with one another. And so when there was a failure in the mortgage-backed securities market, that cascaded throughout the rest of the economy. And you see similar couplings here with respect to the cloud service. and the internet. And it's a really dangerous situation, obviously, because it's not just my newsletter and Netflix and things like that that are on there, but actually really important things on the cloud that people need to have every day. You know, like healthcare technology would be the first that I would think of, like, as the kind of thing you don't want to go down, transportation as well.

54:30How did, and then we'll get into this other reporting because it very much is related. How do you think AI and crypto and blockchain played into this crash? And, you know, it was concentrated in Virginia that apparently the DSN finishes like right in here in Virginia, which also happens, I don't know if it's coincidence, also happens to be where the CIA and a lot of the other infrastructure around, you know, surveillance and backdoors is as well. So you've got the surveillance, AI, blockchain, and then monopoly. Like, what do you think is the driving factor here that produced this cascading collapse?

55:14Well, Virginia is maybe the data center, you know, head of the entire country. There is a tremendous amount of data centers there, and it stands to reason because there's so much compute needs. I just think that when you layer on and layer on onto these systems, and AWS is the biggest cloud infrastructure that we have in the world. And when you just keep adding and adding and adding to it, you do create these single points of failure. You do create the ability for things to break down. And they have bigger consequences when that happens. You see this in airlines where one glitch creates thousands of delays on flights.

56:03It's the same kind of dynamic. Yeah. And this really gets to the heart of what I wanted to talk to you about. Can we go ahead and put G3 up on the screen? And you write about these circular finance deals that continue to see in the economy. this prospect of vendor finance, where basically what happens is you sign a deal with a company, they give you a part of that company, the stock goes up, which effectively erases the so-called price that you paid. Billions of dollars in so-called value have been created, but nothing has actually happened, been produced, and or been paid. It doesn't seem to make any sense, but it's fueling the rise of all of these different companies.

56:44And even more importantly, We talk about single point of failure. It's the only reason our stock market is up at all. Without it, we would be in a recession. Yeah, something like 80 % of the stock gains this year are related to AI-linked companies. And something, I've heard another stat that data center infrastructure build-out is responsible for maybe 50 % of the gains in GDP. So obviously, we've put a big bet on AI. And companies like NVIDIA in particular, but there are others, these big companies that sell things. They sell, in the case of NVIDIA, GPUs, which are the high-end chips that run these AI data centers.

57:33They need customers. So what they're doing is actually creating their own demand. They sell or they invest in companies, startup companies, whether they are companies that make data centers like CoreWeave or even companies that make AI models because NVIDIA just did a huge deal with OpenAI for$100 billion. So they invest in these companies, and then these companies turn around and use that money to build data centers, which need GPUs, which NVIDIA makes. So it's really circular. I've heard it called round tripping as well. And our contributor at the Prospect, Brian McMahon, referred to it as the Ouroboros, the snake eating its own tail.

58:19So help me understand how this keeps going. Because I want to try to, it's very hard for me to get my head around this. So let's say I run an apple orchard, right? And I make a ton of apples, but nobody wants to buy my apples. So I take money that I have and I give it to my neighbor and my neighbor uses the money to buy my apples. So now I have the same amount of money that I started with, but I don't have my apples anymore. Right. Explain to me how this doesn't just all end in tears. There are all these people on the sidelines that say, oh, you created another demand for your apples. And so we're going to give you more money because you're obviously running a very good business where you have a lot of demand.

59:10So I've doubled my money. More money is coming in. That's the stock market, right? That's investors on the sidelines saying, this sounds good, NVIDIA. You're creating your own demand. And so it doesn't stop until the music stops. And we've seen this before, as Cigar alluded to. In the 1990s, there was an infrastructure build out of fiber infrastructure that was needed for the web. And Cisco was really the company at the center of it. And they were engaging in this vendor financing for these startups that were creating fiber-opped layout. And it was all great until it turned out that nobody really needed Pets.com anymore.

59:56And at that point, Cisco lost 80 % of its value. So we have been here before. It sounds great and it works great until it doesn't. We don't know when that time is going to be. If I knew that, I would be a very rich man. But what we know is that it doesn't feel like it can last forever. So that's my last question, David. One way I've been kind of coping on why it won't is the economy, in my opinion, was a lot more real in 1999. In 2000, we actually did build stuff. It wasn't great. It was still financialized, but it was still – there was something actually happening in the US economy. Now, this is it.

1:00:36Like if 80 % of stock gains and 50 % of Jada Center is GDP, the system cannot afford a crash. Now, that hasn't necessarily stopped it before, but why wouldn't they just pull out all the stops to say, actually, no, the crash is not happening because our entire economic livelihood depends on it? It's certainly possible that that's only that's only operative. You believe in a they if you believe that there's no other force that can can thrust reality into into being. I mean, the similarities, people are making a lot of connections to 1990, the 1990s and the dot-com buildout. And by the way, you can have a buildout of a physical good but still have it end with a financial crash.

1:01:26I mean, railroads had bubbles when they were being built out. The Transcontinental Railroad led to the panic of 1873 and things like this that were really terrible depressions. So technologies can be useful, but the financing behind them can still be really, really bad. And so I relate this as much to the financial crisis as I do to the dot-com build out. And there are even some of the same players. Ryan might remember the name Magnetar. They were a hedge fund that they would basically build these mortgage-backed securities and then bet against them. This is like right at the end of the bubble.

1:02:06Magnetar is the leading institutional investor in CoreWeave, one of these companies that builds data centers. Magnetar's still around? Yes, they never went away. And so here we are 20 years later, close to 20 years later. And CoreWeave is at the heart. This is one of these companies that they've never made any money, but they have a lot of investment. And it's kind of Wile E. Coyote not looking down at the ground and seeing nothing. situation. And so when I heard Magnetar was involved, I got heart palpitations a little bit. And Zuckerberg, actually, I'm sure you noticed this. He brought up the railroad example himself.

1:02:50You know, he said, you know, just like in the railroad example, you know, this was infrastructure that was needed and there was a huge bubble and a lot of rail lines got built that went to nowhere because the companies went bankrupt and there was just money to be made in saying that you were going to build a railroad and then money would come in. You'd pay off the politicians who would then give you the easements and you'd pay the politicians off in stock in the railroad. That was some of those big scandals at the time. And then the bubble popped and as Zuckerberg said, and a lot of companies got wiped out, but we had some rail lines laid down.

1:03:28And then the oligarchs could come in and buy up cheap assets, which also Zuckerberg said. So what's going to happen? From Zuckerberg's perspective, there will be a bust. I don't know if it'll be as bad as like the 1873 or the 1890s. But then the oligarchs that survive come in and buy up everything for very cheap and then kind of do it all again. And, you know, it took us until the progressive era and then the New Deal to sort that out. I don't know if we're on a shortened time frame or what this time around. Well, I mean, certainly if you think about what would happen in the aftermath of something like this popping, and the pop can come from any way, whether it's China coming up with models that turns out they don't need a ton of infrastructure to be built to do.

1:04:21Or, you know, we find out that AI has a plateau and it's, you know, cat videos aren't, you know, God and machine, whatever it is. What do we think if it happens under this administration? We're pretty sure that there's probably going to be a bailout of some sort because, you know, we're seeing it right now in farming. I mean, you know, if if you have a connection or a closeness to this administration, they're they're going to take care of you. And so that scenario that you just put out there where the oligarchs, tech lords come in and and they're kind of it's almost that they're incubating themselves or isolating themselves from the pain by engaging in this in these financial games.

1:05:17Because ultimately, it's going to be retail investors and these small companies like Corweave that can be sort of jettisoned off. And then the oligarchs that are throwing off their own cash flow can come in and take over. Yeah. Thank you so much for your insight, David. Really rely on the work that you guys do. And I think that this is genuinely one of the most important issues in the U.S. economy. So thank you for breaking it down. We'll see you later, man. Thank you so much for being here, Ryan. We appreciate you very much, brother. And Ryan and Emily will be on tomorrow with CounterPoints. So we'll see you all then.

1:06:15faith, and everything in between. Celebrities, thinkers, everyday people, some have answers, most are still figuring it out. And if you've ever felt like there has to be more to the story, this show is for you. Listen to If You Can Hear Me on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Over the last couple years, didn't we learn that the folding chair was invented by Black people because of what happened in Alabama? After Montgomery Brawl. This Black History Month, the podcast Selective Ignorance with Mandy B unpacks Black history and culture with comedy, clarity, and conversations that shake the status quo.

1:06:50The Crown Act in New York was signed in July of 2019, and that is a bill that was passed to prohibit discrimination based on hairstyles associated with race. To hear this and more, listen to Selective Ignorance with Mandy B from the Black Effect Podcast Network on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. 1969, Malcolm and Martin are gone. America is in crisis. And at Morehouse College, the students make their move. These students, including a young Samuel L. Jackson, locked up the members of the Board of Trustees, including Martin Luther King Sr. It's the true story of protest and rebellion in Black American history that you'll never forget.

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