Elon Steps Back from DOGE, Wall Street Whiplash, and Meta’s Antitrust Trial Continues

22:58Supreme Court Justice, again, Thomas and Gorsuch have called for the court to revisit the malice standard for well-known people. If you're not a well-known person, you can suit for defamation much easier. Obviously, Palin is super well-known. So she came back the second time. It was like in two hours. The Times had great lawyers, FYI. And also the person who made the mistakes, James Bennett, who has since left the Times, apologized to Palin on the stand this time and actually cried. I know him pretty well. I thought it was quite dignified for him to do so, like to apologize like that. I think it probably really helped the case.

23:35I don't think he's ever going to win, but I think this is over. This is the last stop for her. I don't know if she can keep appealing, but any thoughts? I think she's just a trivial question at this point. She caught this moment of charisma and fire. And then over the course of the last 10 or 12 years, Governor Palin has just revealed herself to not be a serious person. I thought I was serious. I usually do jokes, but go ahead. Well, and then I think this is actually really important because I think this would have inspired a ton of – the reality is when you're – one of the key tenets of America that's really wonderful is pretty much anyone can say pretty much anything about pretty much anybody.

24:17If it ends up you know you're spreading misinformation against someone less powerful than you, not famous, and it creates economic harm or undue stress, then you have a libel or slander case. And I think, you know, the law mostly gets it right. And they said, in this case, look, you are doing you are such a public figure. You continue to say like kind of, you know, insane things. People respond. People cover you. People are, quite frankly, biased against you. And they're allowed to be biased against you. And she was unable to prove that. To me, this seemed fairly obvious. It did. But people were worried about this case and a lot of others, including why George Stephanopoulos, they settled for that thing that he did to Nancy Mace.

25:00I think there were probably some sort of text that he was warned several times in that case or something. So there was something there for the reason Disney caved. There must have been. But I talked to people at Disney. They were worried that it would go to the Supreme Court. Everyone's worried about a Times v. Sullivan case getting to the Supreme Court, which it eventually will, because the right is very much intent on cutting back. They're trying to get rid of slap laws, which protects journalists from being nuisance lawsuits in many states, not every state, which is why they try to sue in places like Texas and other places.

25:35But they're on the march trying to overturn these things, just like Trump tried to overturn the Civil Rights Act this week. Anyway, it was good for The New York Times. It was the right decision. You're right. And lastly, late Zappos co-founder Tony Hsieh did have concrete plans for his$1.2 billion fortune when he died. The recently found will, according to The Wall Street Journal. This was interesting. I know Tony very well. It was a sad end to a lovely person who was quite troubled. The document notes that if any family member challenges wishes, all will receive nothing, marks$3 million for Shea's alma mater, Harvard, and allocates a whole bunch of money to undisclosed recipients he wanted to surprise.

26:15He left a lot of Post-it notes of things. And so he was sort of, he had a real problem, really essentially a drug problem at the end of his life. They thought he had died without instructions. And he really, the last part of his life during COVID was really disturbing, I think. So, you know, it's a coda. I'm glad he gave money to Harvard and other places, but it just reminded me of a very sad story of technology. It is really sad. And it's a, I remember being invited. He had created this kind of, for lack of a better term, kind of cool e-commerce hub commune kind of thing. In Vegas, yeah. In Vegas.

26:52And he invited me to speak. They used to do these little gatherings. And everyone said, oh, you should go. It's a total party. And I never went. But his is sort of a tragic lesson on if you don't keep some perspective around why people are around you. And also, he's a big boy. He made his own decisions. But there's this, I forget the adage, the more famous you become, the lonelier you get, is essentially. and he struck me as someone who really struggled with loneliness. And when I was with, I met with the head of Warner Brothers film and I like to, we spitball ideas. And one of my ideas, I think the most, you know, there was that whole raft of big tech.

27:36There was Bad Blood, We Crashed, the one about Uber. And I said, the most interesting one hasn't been told. I think the story of Tony Hsieh is actually the most interesting story. I would agree. That's a great idea. It is interesting. I mean, I spent a lot of time with Tony and interviewed him many times. He was a gentle soul. We would have a running joke because he was a hugger. He'd always be like, come in. He did this happiness tour, which sort of was a tell. He was so sad. He needed to have a happiness tour. But he's always like, you know, I'm going to hug you. And I said, I'll break your arms if you do.

28:07I did a video, which I would send you, but you wouldn't watch of my tour of their Zappos office. It was a very cult, like kind of, you know, Japanese companies, they do calisthenics together and that kind of stuff. He was trying to have this sort of happiness thing, and he had a guy who was head of happiness there and would take you on the tour. And, you know, they'd have all this, like, a lot of candy happening, a lot of sugar, a lot of, like, creative stuff in the office with the people, and everyone had their own little teams. It was, I found it, I said, I called it forced fun. I was like, I don't want to have any forced fun with people at work.

28:42But he tried to create these ethos, and he did the same thing in Vegas, you know, creating, trying to revive downtown Vegas. And it was, a lot of it was very much about him. And he had this holacracy thing. We wrote about it a bunch at Recode. He had a whole theory of management. And it just was, I remember the last time I saw him, I thought, which was, he came to Code every year, and he's a very good poker player. and he was drinking, he had a certain drink he drank a lot of, it was not absinthe, but it was like that. It was something, Fernet, he loved Fernet, that was it. And he was so sad, you could tell, and was sort of, was jocular, you know, forced jocularity, but a very gentle soul.

29:29So back to me, and I'll relate this to nitrous. I love nitrous and I have terrible dental hygiene. I've come out of the closet as somebody. I brush my teeth twice a day. That's it. I think I've flossed maybe six times in my life. Oh, I love floss. And it's literally like social shaming. And every time I go into the dentist to get my teeth cleaned, they're like, you know, your gums are a little bit inflamed. You really should do this. I'm like, look, you're going to give me a bunch of shit, a bunch of picks, a bunch of devices. I'm not going to use any of it. I get my teeth cleaned every three months.

29:58I want you to turn the nitrous up. I want you to turn on Tom Petty. I will be back here in three months, but save the fucking speech. I don't have good dental hygiene. You can fix it if you don't do that. You need to have everything. You have to do the water, the pulsing water. What are you, part of the health industrial complex? No. If you get your teeth cleaned every three months, that helps. You're going to have no gums, and I'm going to laugh at your dentures someday. You need to do those things. I'm sending you a water pick. You need a water pick at least. Yeah, I tried that. Water picks are great.

30:28I do a water pick twice a day. I love it. It's great. My gums are excellent. Anyway, let's go on a quick break. Can we come back? Enough with the water pick. No joke, my son, my youngest son won't come to our bathroom anymore because I traumatized him by chasing him around with a water pick. Oh, okay. True story. It's not a weapon. When we come back, Elon heads back to Tesla and Scott makes a great prediction.

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32:31Scott, we're back. Elon says he's a shocker of shocker. Elon says he's scaling back this time at Doge, starting in May, claiming his work is mostly done, which means he got nothing done. He will instead be allocating more of his time to Tesla. The announcement came in the wake of Tesla's brutal earnings report, with net income falling 71 % during the first quarter of 2025. In a letter to shareholders, the company referenced changing political sentiment that could have meaningful impact on demand for our products the near term, you think? Tesla's shares were up over 5 % following his announcement that he's returning to the company, which is shocking because I think him not returning to the company is probably better for it.

33:07And as of this recording, it's still up. We've, of course, been calling for weeks. Scott, let's listen to what you said back in February. Doge and Elon Musk are going to fade away because you can be sure he's doing the math. And he's like, even if I can get rid of all those pesky regulators, I'm still losing money here because my sales are plummeting because the general public across the US, much less Europe, when they see these idiots surrendering to Putin and when they see the type of recklessness and they see that they're not saving any money, all they're doing is making our government less competent.

33:44You're going to see Tesla sales continue to plummet. Tesla stock continue to go down. And I think he's going to fade back to the corporate sector. Boom, goes Scott Galloway. This is why we want a Webby. This is why. This is why. So it all came true. Obviously, besides the shares being up, though, if you look, take apart the report, they would have been drastically non-profitable had it not been for selling emissions, things that Trump is trying to get rid of. And investments, I think, in Bitcoin or something like that. It earned this$595 million. And again, these regulatory credits to other automakers, which are going to be rolled back, was critical to that.

34:27It wasn't because of cars. Do you think the company, let's go for more. Has the company been permanently damaged? And again, I would underscore it's not just the political stuff. They haven't made a great product. They made the Cybertruck, which is a dud. And they haven't rolled out great products at other carmakers because all other carmakers are going up in EVs and hybrids. So more than 47 % of Americans have a negative view of the company, according to a new CNBC survey. And more than 52 % have a negative view of Musk. So how did he get out of the brand hole? Also financially, he's touting robo-taxis, which he says will move the financial needle in a significant way.

35:02But this is not true. He's got competitors with Waymo. He's predicting one million units of the Optimus robots in less than five years. I think Optimus robots is the cyber truck of the next thing that he's doing. So what do you see in the next couple of—let's have some predictions from Scott Galloway on this topic. Yeah, but whatever I predict about Tesla tends to be wrong. I'm not talking about the stock because I think you were right about, I'm talking about can they pull out of this hole, one. Can they pull out? I think they can't, but I'd love to know what you think. Well, it all comes down to one thing.

35:31It's very mundane. It's product. If they come up with a hit product, they're kind of back. The problem is that this has become a meme stock. And keep in mind, automotive revenue declined 20 % year on year, Cara. They're now the fastest declining automobile company, I think, in the world. I'm having trouble thinking of an automobile company that declined 20 % year on year. And what is just so fucking cynical about Elon Musk is he goes after, he parachutes into town with a chainsaw and starts talking about government waste. Without government subsidies, this company would have lost money. It's just so incredibly cynical.

36:13It's government largesse and subsidies. These emissions, these regulatory. That are the only reason that Tesla was in the black. And then the thing about Tesla that said that we're not even an automotive company, and if we are an automotive company, we're an entirely different type of automotive company, is they could point to the fact that electric cars have much fewer parts, dramatically collapsing the supply chain. He milled a lot of his own products, which would increase margin. He was he's technically the most vertical automaker in the world. And also to Tesla's credit, it's the most American made car in America, meaning more parts that go into their car are from America.

36:52And as a result, in 2022, Tesla had operating margins of 20 percent, which is staggering. That's double. That's at least double what the other big automakers report in terms of operating margin. But what's happened this year, this quarter, their operating margins have dropped to 2.1 percent. So this is an unprofitable, government-subsidized—I mean, this is DeLorean. This is a company that's riding on government subsidies right now. Explain for the kids what DeLorean is, just so you know. Oh, do you remember John DeLorean? Yes, I do. John DeLorean was kind of a man's man in the 70s. I think he came from Chrysler GM and he was considered the best automobile designer.

37:33He designed the Pontiac GTO and he raised a shit ton of money to start a new automobile company called DeLorean that was famously portrayed in Back to the Future. And he got huge subsidies from the United Kingdom to say the United Kingdom said, all right, we're going to give this company enormous subsidies to try and re-inspire manufacturing domestically, similar to a tariff. And then the car was kind of underpowered and just didn't have any consumer reception. And then this photo came out of, I think it was a warehouse in Ireland showing thousands of DeLoreans just sitting there. He was on the ropes.

38:11The UK said no more subsidies. It was not selling. And basically, they set up a sting, the U.S. government, to try and entrap him. And they did and gave him the opportunity and seduced a guy, in my opinion, unfairly, who was desperate to pull his company out of this tailspin. And he agreed to finance or take part in what was ultimately a cocaine trade. And he was arrested on the spot. But I believe he served some time and then he converted to Christianity. And, you know, he was he was the you want to talk about a fall from grace. He was also married to one of the most beautiful women and a big model at the time at the Christina Ferrara, I think her name was.

38:47But he was an American icon that really fell from grace. And there's a couple I mean, a lot of life lessons here, but more specifically, cars are almost impossible to make on a single platform. Rivian, which is an amazing car, if you buy one for 80 grand, it's costing them 120 grand. It's all about scale. And when the sales of Tesla go down, it's an especially big hit to earnings because this is a business all about scale. And when you start descaling, your profits are the tail of the whip. But it's insane that this company and the stock went up. That's what I don't get. Well, because they think, you know, it's a mean stock.

39:25Like it's never. Here's the problem. He has been warned by his own employees about the Cybertruck. He was warned about, you know, different things where they warn. The other thing is, as we talked about last week, rolling odometers faster, all stuff like that, saying we're going to, like, I think this week he said he keeps going on and on about self-driving. That is not, he's nowhere near, he's been bragging, as you noted, you put the list of things he's told untruths about or just, well, he's dreaming. I'll say his dreams of what's going to happen. And so he's got to deliver and not promise. And the same thing with Doge,$2 trillion.

40:01Oh,$2 trillion. Not$1 trillion,$2 trillion I'm going to save. And then they can say$160 billion. And even that, David Fahrenthold has taken apart. He probably has cost the government more through this Doge thing than he has created. What he's done is he's destroyed things the right wing wants destroyed, like USAID or the regulators that are against him. he's not done any significant changes to the way the government works, which, you know, and again, as we both pointed out, maybe the government works a lot better than you think. There's fewer government officials. Evan Spiegel was pointing this out.

40:36There's fewer government workers than there were 20 years ago. And there's just more regulations, that's for sure. But he's just hasn't, this is like, he has now become an over-promiser, an under-deliverer. And that's what he's doing here with these ridiculous talking about the robo taxi. Let me just, Uber has$12 billion in revenue. That's it. That's far from a trillion dollar business. The second one, Optimus Robots. Are you going to buy an Optimus Robot, Scott? I don't know. Are you like a million units? This is okay. These guys are geniuses in saying that we have to put something out there in the future that's exciting and exotic.

41:15They will never have to deliver up to that people can at least fill their dreams and somewhat justify, so should I can have Kathy Wood say, there's going to be a billion robots and justify my irrational valuation. By the way, just, I need to correct this. He was found, DeLorean was found not guilty. And I just want to go back to this for a second. In 82, he was charged with cocaine trafficking after FBI informant James Hoffman solicited him as a financier in a scheme to sell 220 pounds. It was total entrapment. At the time, you know, Tesla or sorry, DeLorean was on the verge of bankruptcy. And a guy approaches you who's a federal agent and says, I have a way for you to make a lot of money if you sell 200 pounds of cocaine.

41:59And he said, yes. And then they try and charge him. I mean, you want to talk about government overreach. And then anyways, but I don't, I'm sorry, back to Tesla. The robots, give me a fucking break. I mean, come on. That is even more pie in the sky than a million self-driving Tesla taxis. That is just insane. And by the way, the robots they featured at that big event were being controlled by people 50 feet away. Yeah, same thing with the self-driving. Same thing with the self-driving. So you want to talk about Jazz Hands. But people are excited that he's back and focused on Tesla. So good for them.

42:34I have learned to stay away from this stock, but this is a company now that is underperforming Ford Motor by a long shot and yet trades at 70 times earnings and Ford trades at whatever, 10. So, crazy town. I got to tell you, he did the Cybertruck, guys. He did the Cybertruck. And talk about a disastrous car and the cost. When he could have been doing smaller cars the way they were doing them in Japan, adorable ones. I bet they would have done a great job at those, like, and all the different, there's ones in Japan, there's ones in China. Instead, he had to do his ridiculous, I have a small penis, Cybertruck, and this is where we are.

43:17We'll see what he does. We'll see, interesting to see if, one last thing, Steve Bannon, who was at this conference I was at yesterday, was noting, and I can't believe I agree with Steve Bannon on many things, but he said, we need an absolute detailed list of the fraud he found. a detailed and checked independently list of the fraud he found, and a detailed list of any data that he has touched so that we know if he took it anywhere. Like these two things, like the data they've been collecting and coalescing around. What have these people done with the data? Steve Bannon is correct about this because it's going to show that very little was saved.

43:56And we have to have an independent assessment, which we're not going to have until the end of the Trump administration. but you know i would agree with that and we're not going to get that but that's that's we'll see well we don't know what's going to happen this stock because people have a thing with this guy but he's definitely on a downward blunge i think well let's talk a little bit about doge he's claimed on stage he was going to find two trillion dollars in savings um he's claimed 150 billion which is obviously a lot less than two trillion and so far it looks as if it's approximately uh they claim, now they're saying$150 billion.

44:29It looks like it's more like$60 billion, and they can't even validate or confirm those savings. If you were to look at this as an audit of a$7 trillion company, the fact that they have gone in with full license and what I'll call incredible adjectives and embellishments and exaggerations around quote-unquote fraud and waste, the U.S. government has come out with literally the cleanest bill of health of any organization that would undergo this type of reckless audit. The people, the auditors weren't there to give them a clean bill of health. The auditors were there to try and make them look stupid and exaggerate inefficiencies.

45:02And get rid of certain things, as I noted. Yeah. And every time they think they found something, or not every time, but most of the time they think they found fraud, waste, or inefficiency, and they posted it, someone did a little bit of research on Google and said, actually, that's not accurate. You're exaggerating the savings or the waste or fraud here. And by the way, I don't think there's been a single case where they've said there's fraud here and we're charging these people. So what entity, what organization in the world could you have this type of bias, aggressive, unbridled audit that's doing 700 billion a year in sales, much less 7 trillion, and get this clean bill of health?

45:43Although I don't even think they did a very good job. Like who knows what's there? I'm It's certain there's fraud all over the place, Medicaid and everything else. But they didn't even do it. It's like now do the Pentagon. It was all, it was all. And a lot of this spending we can't, it's already, it's stuff we can't touch. And that's the real problem. Whether it's Medicare, whether it's defense spending. There's certain stuff that can't be touched, Social Security. And it's a bigger problem of, listen, at the heart, we shouldn't be, have these deficits, these enormous deficits. We overspend. We have too many regulations.

46:13And that's a really good thing to attack. But this has just been a ridiculous jazz hands. This was nothing but a weapon of mass distraction. If the U.S. was a household, it makes$50 ,000 a year, it spends$70 ,000. And it has household debt of$370 ,000. And the bad news is that all of the kids in that house are going to have to inherit that debt even after mom and dad die. And we don't want to have an adult conversation. The adult conversation is the following. It's a chainsaw. If you believe that fiscal responsibility means not spending$7 trillion and$5 trillion in tax revenue, all roads lead to the same place, folks.

46:52You either have to cut costs or cut spending or you have to raise taxes. And if you want to cut spending, you have to go after one or all of three areas. And that's either entitlements, Social Security, Medicare, Medicaid, defense spending, or the interest rate, the interest on our debt. Those are the three. If you don't go after one or all of those things, you're not serious about cutting our expenses. Or you have to acknowledge that the wealthiest in our society have figured out a way to weaponize the tax code and have an alternative minimum tax. The majority of very wealthy people pay very little in tax relative to their income or increase corporate taxes.

47:32And what's the answer, folks? All of the fucking above. Yeah, but they're not going to do. They talked about it this week, Trump people, and then they just have been indicating no taxes on rich people. When we interviewed Leader Jeffries, I think there's an opportunity for the Democrats to say, we're the adults in the room. We're going to have to means test Social Security, move the age up. People like Kara Swisher and Scott Galloway should not get Social Security. It's called a Social Security tax, meaning you pay into it, it might not get it back. It's for the better common good. It's not called the Social Security pension fund.

48:04We are going to have to figure out a way to get our medical costs from$13 ,000 a person down to 6 ,500. We're going to do that by lowering the age eligibility of Medicaid and Medicare, which do a great job, until we have nationalized health care. So we're going to have to cut military spending at some point or make it more efficient. And we're going to have to announce that we are going to put$40 billion a year,$7 ,000 a year, and every baby's 401k that they don't have access to their 65 and announce that we are doing away with all Social Security in 65 years. And in 30 years, interest rates will come down as people see a light at the end of the tunnel.

48:37We'll get to do away with this$1.3 trillion and growing tax on young people. But nobody wants to have a fucking serious conversation. Galloway is running for president. That's a really nice, I like all that. But the Democrats have an opportunity here because the reality is the swing voters in every election that determines the president, it's not based on transgender rights. It's not based on Ukraine. As much as important as those issues are, they don't swing elections. What swings elections is people in their 30s who are moderates who basically vote on who they think will give them the best prospects to establish economic security and have a reasonable life.

49:10And it swings back and forth. It's a swing issue. And over the last 40 years, Democratic administrations have created 40 million jobs. Republicans have created 1 million. Democrats need to seize. We're the adults in the room. We have to have an honest, hard conversation around our deficits and our fiscal and monetary policy because this is not sustainable. And you know what? People will respect it. And then when I asked Leader Jeffries, what they say is, well, at some point, we're going to have that conversation. At some point, tomorrow needs to be today. I think citizens are ready for this conversation.

49:43Yep. I agree. I think you need to run for president, as Ed said. Apparently, Ed was telling you should run for president. That's a very good, you should be more involved in politics, Scott. I think you should. Anyway, by the way, Tesla, we think, is in the crapper. By the way, I just want to acknowledge, I've been doing research. You blew my mind with the notion of a combined Tesla, XAI, and SpaceX. And I'm just like, that has totally blown my mind about Good. As long as you attribute it to me. Just attribute it. I do. But the idea of him merging all of those companies, I can't wrap my head around what that would mean.

50:19He's got to. It's the only move. And he would do it. That's the two things. Knowing him, I don't know him well anymore, but knowing him as I had known him, and it's the move. It's a jazz hands move of all time. It'll be loud, noisy. It'll be what a genius. Here's the last thing I'm going to say about this. All you people that were slathering over Elon when he was visiting Congress. We all love Doge. You don't all love Doge. The Republicans should be embarrassed for all the kiss-assery they did to this guy and what he was doing and abrogating their responsibilities as legislators. Just handing it over to this guy and saying, you fix it, was the most irresponsible thing.

51:02And someday there is going to be a reckoning at some point. And you are not going to be looked. You have not bathed yourself in any kind of glory. You've bathed yourself in embarrassment and suck up a reason. So that to me is really the lesson here. We'll see where it goes. But, you know, I see why Donald Trump did it. The rest of you are grotesque. So is Donald Trump. But anyway, I'll note alphabet earnings are coming after we record. So we don't know what's going to happen or anything they might say about the case that they both case they've lost. But we'll discuss next week because they're really at a crossroads.

51:34Google certainly is. All right, Scott, let's go on a quick break. When we come back, we'll talk about Trump trying to calm the markets down after his own comments created chaos.

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53:41Scott, we're back. It's another whiplash week on Wall Street. President Trump's attacks on the Fed chair, Jerome Powell, calling him a major loser and criticizing his policies, rattled the market earlier this week, triggering a major sell-off of stocks and bonds. Trump later said he had no intention of firing Powell. By the way, he can't. It's very hard to do so, so it doesn't matter what he thinks. He also indicated some easing of tariff tension with China. But as of Thursday morning, China is calling any reports of tariff talks, quote, baseless rumors, directly aimed at Trump there, sending the Dow down briefly, although the S &P 500 has been staying steady.

54:17Once again, the markets seem to have spooked Trump, as they should. He met with CEOs of Target, Walmart and Home Depot on Monday. I was interested Amazon wasn't there, but who reportedly warned about tariffs leading to price surges and empty shelves within weeks. A dozen states also sued to block Trump's tariff, arguing he doesn't have the authority to impose them. Even though he says he's not firing Powell, he's been undermining him. He's trying to blame. He's going to blame him for all this with the attacks. He continues to act like he has some sort of control over this. Let's talk about that for a minute.

54:51Well, actually, let me go through everything. And with China, Trump said this week that tariffs on Chinese goods will come down substantially, but won't be zero, and that they weren't before. And the U.S. and China are actively talking, which I said China denies. One White House senior official told The Wall Street Journal that China tariffs would likely get reduced roughly between 50 and 65 percent. Another Trump blink seems imminent. Again, Scott Bessent and Elon Musk got in a fight. I think it's sort of in our rearview mirror. Scott Bessent won with the IRS pick. This kind of chaos is just insane, it seems.

55:25Like he's just shooting himself in the foot over and over again and then pretending, declaring victory when he goes back on the stupid thing he did. Let's hear what you think about this guy, Galloway. Well, the only two things you have to remember in a negotiation are not to make it emotional, not to have it be a win-lose, and to always show a credible willingness to walk away. This guy gets an F on each of those. He's insulted them. His vice president has called them peasants. He makes it emotional. He pisses off. People are human. If I'm a Canadian, I don't want to work with you. I'm willing to sacrifice my own economic prosperity.

56:04Travel's down. Everything's down. You want to talk about, and I was thinking about it today, Bill Ackman, on an unrelated to note. Bill Ackman came out with this tweet that sent Hertz stock up 100%. And he said, he'd been aggregating a stake for a long time. And he said that because of these tariffs, the value of Hertz's automobile fleet is, it's a$14 billion fleet or$12 billion fleet. The cost of cars is going to go up so much because of these tariffs, but that it's an underappreciated asset in the sense that their Hertz fleet is now worth$1.2 billion more. And I'm like, this is the ultimate interpretive dance.

56:43Because one, that's like saying my liver and my lungs are more valuable than they are to me. Well, I'm sort of fond of them. Like, how are you going to harvest, unless Hertz announces it's selling its auto fleet, which they're not going to. Well, they sell some of it. They do have a division that sells cars. Yeah, but they have a division that buys cars. Yes, that's correct. So it should be a net neutral, right? Actually, a net negative because new cars will be more, those costs will be more than the increase in the value of the used cars you sell. And then the countervailing force of this, what I'll call gymnastics and interpretive dance to try and turn chicken shit into chicken salad, is that the majority of the automobile rental market is based on tourism.

57:25And tourism is absolutely crashing. And let's just talk about reality here as we're trying to boost the manufacturing sector that employs 11 million people. Has anyone noticed while we were sleeping that tourism is fucking crashing and also employs 12 million people? So all of this interpretive dance around these sycophants trying to either pump a stock they have an activist position in or trying to claim that this guy's playing 4D chess just can't look at data. And also, back to Trump. He's been very emotional. I like that you turned on Blackmun the way I had. But go ahead. He's been, I mean, it's like, I would describe the day he announced that as, remember when you go to interpretive dance, you look at modern art and you're like, oh, you want to be cool and you want to say, oh, it's beautiful.

58:14And then you look at the next person and you're like, this makes no fucking sense. I mean, this is, his announcement that they have this undervalued asset is really modern art slash interpretive. Also, may I note, they have a lot of Teslas that nobody wants to rent. They did this whole, remember, they have tons of Teslas they can't move. When's the last time you rent? It's a shitty business in structural decline. I agree, but I'm just saying they did that whack deal. Well, every time they try to give me one, I'm like, no, I shall not. And apparently nobody wants to rent a Tesla. Anyways, it speaks to his brand, to Bill Ackman's brand, that he puts out a tweet of an insane thesis that makes no sense if you actually look at the data.

58:48So thirsty. Well, the stock doubled. You got to give it to him. The guy's brand clearly still means something in the market. But back to Trump. Highly emotional, creating enemies and agitatives where he doesn't need to that will only reduce our negotiating leverage when people will put their own ego now, like him, ahead of actual credit. prosperity and fidelity to their stakeholders and to citizens and to their economy. And two, a credible willingness to walk away. He imposes 145 % tariff and then hours later says that the tariffs on Chinese goods will come down substantially, but won't be zero.

59:23Then why the fuck did you go to 145 %? This guy has, he is competing against people who are willing to starve of millions of their own people. And he thinks he's going to intimidate them with 145. I meant, no, but they're going to come down. They're going to do, we're about to enter the stage where they try to figure out a way to basically somehow put lipstick on a pig here and call victory and stop all this nonsense. The tariffs are going to be remarkably similar to what they were before all of this nonsense. But you're going to have all these people trying to spin how it's some sort of great victory.

1:00:03And then the deals, they're coming to me for deals. They're trying to kiss my ass, that whole thing. And all we have done here - Stop, you sad, pathetic. All we have done here is massively erode brand America. It's gone from freedom, generosity, military might, prosperity, risk aggressiveness, opportunity, rule of law, to toxic uncertainty. And that brand does not command margins. It commands negative margins. So what does he do? Okay, look, first of all, Besson's trying to affect him, obviously, and he seems to have gained a bit of an upper hand against the two clowns, the clown show of Howard, whatever his name is, and Elon.

1:00:42And there was an altercation, a very loud altercation between Besson and Musk over IRS head, which the Treasury Secretary should pick, FYI, not Elon Musk. He was trying to pick a sycophant to take over the IRS, where our money comes from. And what would you do if you were Besant right now? Like what, besides leave, like immediately, what would you do? Well, he's kind of already done it. He clearly leaked that interaction. And he's saying, I'm on top and I've had it with this guy. Trump is scared. He's seen as, Besant is seen as like a sycophant, but is potentially the guy in the Oval Office that will take stuff off his desk so he doesn't even see it, that he is sort of an adult in the room.

1:01:26He has a reputation versus Lutnick that's just considered, you know, a clown that is now engaged in full scale corruption with his son starting a crypto company. Jesus Christ. I know the crypto stuff. Just when you thought this couldn't get any more corrupt. The set is seen as a very credible guy and behind the scenes is basically saying, OK, I'm going to do my best here. I know this is fucking batshit crazy. This is we know where this goes. blink, blink, blink, try and run Vaseline over the lens of incompetence here and pretend this is a victory. I never made this mistake and I'm not. The tariffs are going to be look remarkably similar to where they were before.

1:02:08And all that's happened is we have eroded our image around the world to the detriment of our. So what would you do? You're sitting in the Oval Office. He has you in you for some reason go and he listens. He's listening to you. What would you say to Trump to do right now? If he would listen to me, I would immediately, I would pretend to have discussions, declare victory and leave. Just like literally find a country that's willing to do something for you, come up with a bunch of fake reasons for why this was anything but what it was, which was insanely damaging, and literally get back to the economy and try and repair as many of our alliances as possible and go on the mother of all behind the scenes apology tours, because this is going to start showing up in earnings calls.

1:02:55I think China might say, oh, you want to go back to where we were? Fuck you. You've been out banging hookers and doing blow and ignoring our children. Now you've decided you want to be married again. Sorry, boss. Sorry, I'll be at my sister's. That's a nice metaphor. Isn't it? Yeah. Anyways, speaking for a friend. Yeah, I think I don't know. I think the Chinese and the and the Europeans are now like, huh, what would a life without these obnoxious Americans? Hundred percent. Like, hey, I think a divorce sounds great. Like, I I'm sure that's what they're thinking. Do you know what I mean? My tennis pro is texting me a minute.

1:03:33My friends are going to St. Bart's. That sounds pretty good. He needs to. Oh, what an idiot. What a fucking idiot. I mean, the thing is, if he did a couple of things, all his stupid followers would would like clap, clap like. Yeah, they'll they'll they'll pretend that it was genius and 40 chess. So move to that part of the program as soon as possible. You you I mean, you you literally have to put the fire out here. You have to put the fire out. But I don't know if he's he won. He wants to. He's been listening to Wall Street. Wall Street is the one that speaks with the adult in the room is the tenure.

1:04:04We've been saying that I like I don't I'm glad the sense is there. But I do think the raft of them, I think we're on the cusp of a few of them being fired. Yeah, Lutnik should go. What a thirsty clown he is. Well, not even, most of them should go. But I think he's going to try and blame a lot of this on incompetence and saying, you know, I got some bad information. These folks did the wrong thing. I moved them out. He's going to throw a bunch of them into the volcano, if you will. Right. Yeah. But they're certainly not going to tax the rich. A step back from the wrong direction is a step in the right direction.

1:04:41So if you were really advising the guy, you'd say as elegantly, as gracefully and as respectfully as possible, you need to stop this shit really, really quickly. And behind the scenes, say, call Prime Minister Carney and say, congratulations. And by the way, you're a fantastic friend. A lot of this was posturing. I want to apologize to you personally. What can we do that makes this better for both of us? All he needs is affirmation. It's so sad. It's such a sad, sad state at this age in his life that this is all he needs. But here we are. Anyway, Scott, one more quick break. We'll be back for predictions.

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1:08:05Okay, Scott, let's hear our predictions. You've kind of let loose a few during the show here. Well, this is always dangerous, but I'm going to do it anyways. Alphabet's reporting, we're talking about Thursday, Alphabet's reporting at the end of the day. And I think rumors of Alphabet's struggles have been greatly exaggerated. I still think while ChatGPT is ascending dramatically and does present an existential threat to search, YouTube is just an absolute juggernaut. And you talk about Waymo. I just think this company is so well run. And Google continues to be the largest toll booth in the history of mankind.

1:08:41I think that they're going to beat. And I think they're going to have, I think they're going to beat expectations this afternoon. Because I think some of those expectations have been beaten down. And then another one, I think in the next 12 to 24 months, we're going to see a spin prophylactically in big tech for the first time. And then I love - Pick one. We'll each pick one. I say YouTube. Well, maybe the advertising. I think it's the ad business. Ad business, you're right. I'm sorry, ad business for Alphabet. We would like YouTube, but it's probably the ad business. And then the most interesting one, and this is, I'm putting words in your mouth or taking your words and I will credit you.

1:09:19Tesla right now has, I think it's like a$750 billion market cap, right? Right. And when you think about if when you're essentially when you're doing acquisitions or mergers, you want to do them when you're stock. It's 806 billion. You want to do mergers when you have a really strong valuation because you end up. Steve Case sold AOL when he knew there was no way it was going to be worth a fraction of that in a matter of months or years. So that's when you sell your company. The problem is no one will buy Tesla for 805 billion dollars, except XAI, right? Or SpaceX. And so your idea is so interesting because what he could try to do is say, okay, jazz hands will only last so long.

1:10:08At some point people start saying, okay, enough is enough here, folks. That$800 billion market cap is gonna come way down. So the idea of taking a large revenue base, which you get from an automobile company, putting on top of it the impression and the valuation of AI with the data set of X and also maybe some of the gross and Riz and unbelievable coolness of SpaceX, which would, that would be a lot. Maybe it keeps that independent. But I think your idea is really insightful that the way to maintain that ridiculous$800 billion valuation is to cash it in now, and he'll have, maintain a huge stake and potentially do kind of one that's going to 0.5 plus one plus one equals four or five.

1:10:55I think you're right. I think there's going to be, I think Tesla is going to be folded in to another or merged. Or an AI company that makes robots. Yeah, I just, I love that because when you said it, the moment you said it, I thought, oh, that would be really fucking smart. From a shareholder perspective. Yeah, it makes sense. It's also like him. It's very like him. He's hiding things. Very bold. And he has control of his board. Right, yeah. He doesn't care. He'll tell the board, this is what we're doing. Yeah. He's not scared of shareholder lawsuits. Well, I wonder if he'll take it private then.

1:11:28There's not a lot of revenue in any of these things, right? Oh, no way. Can't take it private. No one will fund it. Yeah, that's right. No one will finance it. There's not a lot of revenue. Well, you know, I don't think the Starlink part, I mean, SpaceX is part of it. They have, they don't, my guess, they don't make that much money. They probably, and they've been hurt themselves, but I think they're very expensive to run that thing. And I'd love to actually see the numbers from that. If someone wants to send them to me, I'd love to see them. I don't think they're wildly profitable by any stretch of the imagination, but, you know.

1:12:00And finally, Cara, the prediction, the geopolitical prediction. So Donald Trump is having a huge impact globally, including what leaders are elected or not elected. but it wasn't the impact he thought he was going to have in the Canadian elections for prime minister. My prediction is that Mark Carney of the Liberal Party is going to prevail. And that is after overcoming a 25 point deficit coming into the year. And why is the Liberal Party going to prevail here? Donald Trump, he has so pissed off Canada and the Conservative Party nominee for prime minister is aligned with Trump and considered a more Trumpian candidate.

1:12:46And boy, has Canada turned off Trump. So in sum, Trump has elected, in my opinion, or will elect Prime Minister Mark Carney of the Liberal Party and has swung the Canadian elections 25 points because of how repellent they find Donald Trump and the Conservative Party has been contaminated by Trump. So he is getting world leaders elected, just not the world leaders that everyone had anticipated or certainly not the ones he had hoped for. In sum, I think the underdog here, Mark Carney is about to be the next prime minister of Canada solely because of the unpopularity of our American president. Do you have a prediction?

1:13:30I don't. I don't. I predict I'm going to go to White House correspondent dinner parties this weekend. Oh, I was going to go, but I'm not in town. Why not? I got asked by a friend of yours to be their date. And I was really excited. She's totally cool. I won't say who it is. A friend of mine asked you to be their date? Well, a friend of ours. Oh, okay. Oh, yeah. You should have. Oh, I know who it is. You should have come. Emily Ratajkowski. Just saying. No, it's not Emily Ratajkowski. Yeah, there's a bunch. Every single media comes. Like Axios is having something. Substack. It looks like so much fun.

1:14:01You've been, right? The parties are fun. I hate to say it. Parties are fun. I'd love to go. I don't go to the event itself ever, but there's like NBC's having a party after the French embassy. Oh, the NBC party. No, it's fun. It's fun. I love that French embassy. It's so ridiculous. It's so like end times kind of partying kind of stuff. The NBC party. Will David Hasselhoff or Courtney Cox be there? I was wrong. I don't want to go. You have literally said nothing that sounds remotely fun. Let me think. Oh, UTA has a really cool party. It's really fun. Oh, I had that. You just take erythromycin.

1:14:37Oh, wait, I'm sorry. UTA? No, they're fun. They're fun. They're fun parties. They are indeed fun parties. And my friend Tammy Haddad has the famous White House correspondence in her brunch. I'm convinced Tammy's running the CIA. She's so quiet. And then she'll pop up and be like, the president of Gabon wants to meet with you to talk about a shipping lane deal. And I'm like, what the fuck? Who is this woman? She has a famous brunch that's really fun. That's really fun, actually. Where does she get all her power? I know her. She's everywhere. She's everywhere. I couldn't get into, I couldn't get my visa done.

1:15:11I couldn't get my passport. And she's like, give me five minutes. And all of a sudden, like, the ambassador to Britain is calling me and sending me a car with my passport. It's like, who is this woman? Tammy Hutt is the queen of White House Correspondents Weekend. She is. She's Michael Clayton. She's a total fixer. Seriously. She's also lovely. May I say she brings the best toys for my children. And went to Pitt. Went to the University of Pittsburgh. She did. She's from Pittsburgh. She was in Pittsburgh this weekend. She's the best. We love that Tammy Haddad. Anyway, so I wish you were here. We'd have a good time.

1:15:41I met Tammy Haddad before I met you. We were doing a conference together. I don't think I'd ever met you, or I'd met you for a podcast. But we went to, I think it was South by Southwest. But I showed up, and this woman came up to me, and she was so nice and so on my face. I'm like, who is this very friendly woman? And I said, and I saw, it was so adorable. In the back, it was in the makeup room. There was this little adorable boy asleep on the couch. and I'm like, I should probably pregame with Kara. And they go, where is she? And she goes, and then they pointed at the little boy. You were sleeping on the couch.

1:16:11You look like a nine-year-old boy. It was so loud. I'm like, she can sleep here? I can sleep anywhere. That was one of my first images of you where you were just on a couch sleeping with hundreds of people around you. I love to sleep. I'm such a good sleeper. You're like Winston Churchill. I can sleep anywhere. It's so true. Anyway, Tammy, that's great. She's very tall and she's got this great shock of white hair. She's fantastic. She's a fantastic lady. Anyway, Tammy, good luck this weekend. I will see you at the party. We want to hear from you. Send us your questions about business tech or whatever.

1:16:44It's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. I also are in the Scott and Kara universe this week on Prof G Markets. Scott, who's on a tear, spoke with Ryan Peterson, the founder and CEO of Flexport. who was, he replaced someone that he brought in from Amazon. It's a leader in global supply chain management about the impact of terrorists. What a great person to tap. Let's listen. If they don't change anything and this 145 % duty sticks on China, it'll take out like mass bankruptcies. You're talking like 80 % of small business that buys from China will just die.

1:17:20And millions of employees will go, you know, will be unemployed. I mean, it's sort of why I'm like, they obviously have to back off the trade. Like that can't be that they just do that. I don't believe that they're that crazy. That's a great idea to do an interview there, Scott. That's great. I love supply chain stuff. I invested, one of my best investments of the last few years was I invested in a company called Zero 100, which was supply chain research. I think if you look at every - You like dull investments. That's where you make your big bucks, isn't it? Dullish. Quick lesson, quick lesson.

1:17:49When you're thinking about how to allocate and invest your most precious assets, your financial capital, and even more precious, your human capital, it's very easy. ROI on the X side of the scale, sex appeal on the X axis, it essentially the sexier the business, the lower the ROI. If someone wants you to invest in a members club downtown for artists and creatives, join the club, do not invest. If someone wants you to invest in software as a service for scheduling healthcare maintenance workers, if it sounds so fucking awful, you wouldn't want to work there, that's where you write a check. Because anything that's sexy is over-invested, which drives down returns.

1:18:26The less sexy, the more return on your invested capital. Also think about that in terms of your career. If you're going for something sexy, you better get bright green lights that you're in the top 1%. Otherwise, find something boring. And this is what creates passion, mastery, artisanship, and be able to take care of your kids and your parents. I love that, Scott. So don't invest in Scott Galloway because he's dead sexy. Hello, ladies. Okay, that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out. Today's show was produced by Lara Neiman, Zoe Marcus, and Taylor Griffin.

1:19:00Ernie Intertide engineered this episode. Jim Mackle edited the video. Thanks also to Drew Burrows, Ms. Severo, and Dan Chalon. Nishat Kerwa is Vox Media's executive producer of podcasts. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business.

1:19:30Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on. Modern solar panels, half a century. Lithium batteries, decades to go from their debut to daily use. It's a pattern. Energy tech breaks through, stalls, and then something tips the scales. But for every success, there are even more almosts. So what if there was a breakthrough sitting at this crossroads right now? SAF, or sustainable aviation fuel, could forever change the future of flight. Learn more about how Airbus is contributing to accelerate this journey at fly.airbus.com slash the flight path.