The Jamie Dimon Apple Card, Greenland Ideas, WB-Paramount, TBPN x Vanity Fair | Diet TBPN

0:01I wrote about chiching the Apple card minor news yesterday. We have to ask. Somebody sent us a bunch of weights. Yeah. And this one is a 10. There's quite a few of these. Are you trying to say something? Is this, you think, the upper limit? But either way, whoever sent these, please let us know. There was no card. Big sign of respect in our culture. It is. Anyway, there was a minor headline breaking news. Actually, I learned about it from the chat. The Apple Card program is moving from Goldman Sachs to J.P. Morgan. Nothing's really changing about the Apple Card yet. It's merely the bank back end that's always been sort of behind the scenes behind the fold Even though it's a minor headline I think it's an interesting story of just how Apple got to the point where they have a credit card What that means what the decisions with the trade-offs were and I wanted to go back all the way to The Steve Jobs era and think about what how would he be down with credit cards?

0:53You're giving leverage to your customers. You're giving credit. You're in the debt business. It's a different business How did he think about it? And how do we get here? The Apple card program has millions of cards issued There's$20 billion of debt that's accumulated across all the cards and the portfolio is not doing well So normally if you are to if you have a co-branded Credit card like a JC penny or Macy's credit card and it's it's aligned with the brand Typically those get paid off pretty well. They have strict underwriting rules And so when those trade hands companies will other banks will typically say I'm buying a ten billion dollar portfolio and I'll give you 8 % on top because most likely I'm going to be able to recoup all of that from the creditors and also, you know, they're going to pay interest.

1:38So they're going to pay 15 % interest, 25 % interest. Now there will be some defaults, but in general, you typically make money off of owning a portfolio of consumer credit card loans. Not in this case. Goldman is like, we've got to get this off our balance sheet. They've already lost a billion dollars. Their consumer bank overall, which includes Marcus, has lost$3 billion. They're not doing well over the last couple of years. So is this a repayment issue or just an operational issue? There's a little bit of both. The$20 billion card balances, that's trading. JP Morgan's acquiring that at a$1 billion discount.

2:09Instead of an 8 % premium, you would expect that they would pay 21.6. They're actually paying 19 for this. It's not by any means a disaster. And Goldman's a large company. Yeah, sorry. I said Morgan Stanley. Steve Jobs actually thought about launching a credit card at Apple at least two times that we know of. There's two key stories about Steve Jobs thinking about getting in the credit card game. The first was in the late 1990s. He met with Capital One to create a joint credit card that would have worked a lot like the Apple card. There's a lot of things where Apple has a particular brand. I want to talk to you about Apple's brand and what it means, like how it fits into the consumer credit card, consumer financial landscape.

2:47The North Star that Jobs laid down was always amazing customer service and no rejection. So I tend to think of most high-end brands as beneficiaries of exclusivity. You can't just buy an Hermes Birkin bag. You can't buy a Ferrari SB3 Daytona. You have to be invited. You need a relationship. Apple, for some reason, I feel about Apple the same way I feel about Ferrari. And yet it is a wildly different experience. It's a premium brand. It's a premium brand. But because of the design And because of the value of the technology and how innovative they are, I put them in a different category than Equinox.

3:25Jobs wanted Apple to be a no-rejection company. So anyone can walk into an Apple store, buy the most expensive iPhone that they make, as long as they have the money for it. If people want to give us money, they can. They can, which is, you know, it's a standard business practice, but not always in luxury goods. Yeah, which is why I said it's premium, not luxury. even though Apple often presents itself as a luxury brand. Yes, yes. Because of credit risk and underwriting, every credit card has to have an approval process and not everyone can be accepted. That's just the way it works. You cannot underwrite everyone or else you'll just have massive losses.

4:02Apple, when they launched the original card, they actually set the credit score requirement fairly low. And even though it launched in 2019, it felt like a holdover from the jobs era, that jobs philosophy of even though we're Apple, even though it feels it's gonna have the patina of an Amex. It's gonna have this premium look. It really was accessible to a lot of people. I think you needed a credit score of around a 600, which is pretty accessible. The second time Apple was really thinking about doing a card was in 2004. They actually staffed this guy, Ken Siegel, who was the creative director on the Think Different campaigns.

4:38Like one of the most iconic marketers in history, in tech history, certainly. Jobs said, if we launch a credit card, it's gonna be called the Apple Card. And they actually wound up using that name, but it had a weird twist. So most credit cards, they'll give you airline miles or cash back, there's diners club. It's usually you get points and then you can spend those points on travel. And you've always been a huge points guy, right? I'm not, I'm actually not a points guy at all. I usually meet whoever the most elite management consultant in my friend group is and just ask them because every management consultant is obsessed with credit card points maxing.

5:08And I just ask them, which one should I get? And then I just get that one. and then five years later, 10 years later, I still have it. And it's probably a bad deal then. So instead of airline miles or cashback, this proposed Apple card from 2004, you would get points and you could only spend the points at the iTunes store to get free songs. I mean, at that moment in time, that was pretty cool. Yeah, yeah, it's kind of a cool idea. I mean, I was a child at that time. So 99 cents was somewhat of a considered purchase. Sometimes I'd just play the preview of the song. Yeah, I'm good with the 30 seconds.

5:43For sure, this is enough. Just rocking out. This is enough. Play it again. But it is somewhat genius because there's sort of zero marginal cost on music, certainly on the distribution of music. Now, they do have to pay royalty fees, but there's already a built-in margin there. So that 99 cents, a lot of that went to Apple. Remember, they take 30%. So they're giving you psychologically a dollar worth of value. You go and spend$100. You get 100 points. one point is one cent, you buy the 99 cent song, but they are taking home another 30 % on top of that. The economics would have been really, really good, but it is sort of gimmicky because people want to spend points on a lot of things.

6:21They're like, I'm happy to get free flights and hotels. I think there's something psychological about having a credit card that you spend money on for a couple of years, you get a whole bunch of points and then you're like, wow, I got a free flight to a vacation that I'll remember forever as opposed to, okay, yeah, I bought a bunch of my favorite music and then four years later Spotify came out and actually my iTunes library is basically useless, right? Tyler? I was just going to say it's like the same thing because it's like instead of a trip, it's like, oh, I bought this Chief Keef album off my Apple card.

6:50I'll always remember that. Now my life is a movie. I hate being sober. We got to watch that. The other key feature that Apple always wanted, and this went back to Steve Jobs, they always wanted with the Apple card, which you don't often think about with credit cards, but is amazing customer service. And so most people, their credit card just works. Apple did a couple of unique things where it'd integrate with the wallet. But mostly, they just wanted extremely high levels of customer service. When you have a problem with your iPhone, you go into the Genius Bar. There's someone who's friendly. They are very good about getting you in at the right time.

7:27Can you imagine one of the people at the Genius Bar breaking your kneecaps? They have a room where they're just like, okay, we're very customer friendly here, but you haven't paid. And we have to break your kneecaps. We're going to take you back. Well, I mean, that was another thing. They wanted to be so customer friendly. They didn't have any late fees, no application fees, and no international fees. No fees at all. That was the whole pitch. since, I don't know, probably the 80s, like the Christmas time was when people would gift each other MacBooks or Mac computers, and they built up, built up, built up.

8:00And so they have a whole workflow for how do we hire a lot of people around the Christmas time? How do we staff the Genius Bar? How do we educate people? How do we pay them? They're in the tier one city, so they can have great people working there. It's a very high dollar revenue per square foot in those Apple stores. Goldman didn't have experience in consumer banking. The default consumer customer service experience is I'm calling my banker, my Goldman banker, and I'm like, I need to sell my company for a billion dollars. Get your M &A team ready. Or I need to go public. But seriously, Goldman, it's the highest finance.

8:33It's the most premier. It's the most elite. So when you call them and you're like, yeah, I got billed for$25 and it should have been$23. Can you fix this? Well, they need a new team for that. And they need to build up that team. And that's not rocket science. But Apple also wanted another consumer-friendly feature. They wanted all of the bills to drop on the first of the month every month. And normally credit cards will stagger it out. They'll be like, your bill comes on the 10th, Tyler's comes on the 15th, mine comes on the 20th. I'm calling on the 20th. Yeah, they do it intentionally. Stupidly, it seemed that it was just sloppy and annoying.

9:07No. I'm like, oh, you're just - Genius. Trust the process. Trust the process. Trust the process. Never lose faith. So Apple insisted, hey, everyone's got to get their statement right on the first. That's the best customer experience. But what that means is that you need like 10 ,000 people ready at the phones. Apple customer service, that level that Goldman wanted to bring was very high. And so you need a ton of people staffed on the first of the month, and then they're not really doing anything in the back half of the month. And while you can maybe do temp work at an Apple store in December and say, hey, we're gonna hire you from November 1st to January 15th.

9:41You're gonna deal with some of the returns. It's a three month gig. People will sign up for that. But no one's saying, yeah, I'm good to work at Goldman Sachs on the first of every month and the first week of every month. And then I'll just find something else to do on weeks two, three and four of the month. That doesn't make any sense. So they ran into a bunch of problems there. Obviously, more cost and all of this was just making the actual program less profitable for Goldman. The whole reason why they jumped at the opportunity to to work with Apple and they kind of bent over backwards because Apple had tried this with they went to a whole bunch of other banks.

10:13I remember going back to Capital One, and every bank had said, like, no, are you crazy? You can't do this. Like, you can't give everyone in the world a no-free credit card with great customer service. You're going to lose money, Apple. And Apple finally - They're like, no, we want to give everyone a free lunch. Exactly. Anyways, I texted a buddy who has some context on this whole deal. Yeah, yeah. And so he is in a meeting, but he fired off some notes. He asked him, like, how did this happen, basically. He says, GS effed up the plan. DJ D Sol was told to shut down Marcus and Consumer or get out.

10:51That's David Solomon, the CEO of Goldman. Or get out of the job. So he cut all of Marcus except for savings. Then GS had a multi-year process to find a bank that Apple would approve, right? They're not just going to say, like, some smaller, not systemically important bank, et cetera. Then they had to figure out price, which includes opportunity cost of selling for a discount compared to running out the contract to 2030. GS effed up because it's a transactional org, not a longitudinal org, and really thought they were smarter, but never focused on the fundamentals of running the business. So the question is like, what happens next?

11:29JP Morgan obviously has way more consistency here. Did you ever have one? Apple Card? No. And it's so interesting because I think that if you were trying to do an analysis on the Apple card, you were like every high value credit card customer in America, not every, but the vast, maybe 99 % has an iPhone. Apple is going to put this everywhere. This is going to be one of the biggest credit card business lines of all time. And it's been interesting to see this entire saga because it hasn't really turned out that way. Speaking of deals, Reuters has an exclusive. They say Trump admin moles payments to sway Greenlanders to join the U.S.

12:10Greenland says they're not for sale. European leaders are standing behind Copenhagen. But Greenland talks in the White House have intensified in recent days. U.S. officials have discussed sending lump sum payments to Greenland. Stimmy time. Stimmy time. to Greenlanders as part of a bid to convince them to secede from Denmark and potentially join the United States. While the exact dollar figure and logistics of any payment are unclear, U.S. officials, including White House aides, have discussed figures ranging from$10 ,000 to$100 ,000 per person. Doing the math, even at$100 ,000 a person, Greenland only has like 57 ,000 presidents.

12:50So we're talking about basically a seed round, 5.7 billion. It's like Three AI researchers. Three AI researchers in Greenland. For all of Greenland. I mean, I get that they have a ton of natural resources and whatnot. I doubt that you can just actually buy the votes. You probably couldn't make the payment contingent on them voting. They would have to either vote, and then they get the payment, because we promise, or the payment happens, and then whether or not they vote. I think just start planes with cash. Yeah. Just robbing it out of the air. Because then wouldn't the game theory be just that they hold strong?

13:24There's going to be another plane. We want the second drop. Here's my thing. If I'm a citizen of Greenland or a resident, I'm sitting there being like, okay, we have an idea that they're willing to spend up to around$6 billion. We think we're worth$60. Let's let them keep the Paramount Skydance, the Ellisons. They'll just bid and then say, well, it's not our best and final offer. And then what does Warner Brothers do? They, of course, again, they rejected another bid or recommended against it. Greenland's Prime Minister Jens Frederick Nielsen wrote in a Facebook post. Facebook, let's go. Okay, they are really a decade behind over there.

14:04It says enough is enough, no more fantasies about annexation. He's not a fan. You gotta get on Reels, buddy. You gotta do a front-facing video. Use some AI, get some vibreel music in there. Yeah, get the Sigma male grind set, sound going. Enough is enough. No more fantasies about annexation. And it just cuts to like the Joker. Leaders in Copenhagen and throughout Europe have reacted to comments by Trump and other officials asserting their right to Greenland in recent days with disdain, particularly given that the U.S. and Denmark are NATO allies bound by a mutual defense agreement. On Tuesday, France, Germany, Italy, Poland, Spain, Britain and Denmark issued a joint statement saying only Greenland and Denmark can decide matters regarding their relations.

14:53If you alone, on your own, decide to come over and hang out with us, we got some cash for you apparently. Trump has long argued that the U.S. needs to acquire Greenland on several grounds. One, it is rich in minerals needed for advanced military applications. There has been renewed urgency after his government captured Venezuelan leader Nicolas Maduro in a daring snatching grab operation. Not an invasion, apparently. Their average gross income in Greenland is 40 ,000 to 45 ,000 USD. So people could be looking at that 100K saying, i'm gonna retire a couple years early 100k is big yeah i don't know i mean it's such a it is a tough sell as much as i love this great country you mean if i'm in greenland yeah just just if you're in greenland and you're kind of looking over at the us with binoculars i want that crazy stuff over here yeah it's just massive massive infighting uh governors you know you know constantly going to war with with washington constantly right it is interesting the us is like one of the most entertaining countries.

15:53It feels like a lot of people are obsessed with our national politics. People don't really follow our local politics or our state level politics or global politics. They mostly follow American national politics. So I don't know, maybe they get it on it. So Puerto Rico famously has just a 3 % tax rate on income. So a lot of people go there. And this is why when Jake Paul fights for$90 million, he's actually fighting for basically that number. I didn't think about that. the few jobs that you can actually do very well from Puerto Rico, which is just train in boxing with a team that you build yourself.

16:28So yeah, his - That's insane. Like Jake Paul will actually be a billionaire probably fairly quickly, simply because he's gonna do a handful more fights, I imagine, and then he needs about a 2X from there, and he'll be good to go. But Puerto Rico, famously people go there because it has a low tax regime. You'd pay just 3 % of your income. uh greenland 97 taxes that's what they should do why would anyone go there it's cold and now you have high taxes well but a lot of people want desperately want to raise taxes yeah basically i mean i'm assuming some people actually want to take it to 100 um yeah and so if you could create go there you zero yourself and then and then you're in favor of ultra high taxes you could go to greenland that's a good idea i like this idea you just land in the country Yeah.

17:19And then you lose all your money. Connect all your accounts with Plaid. But everyone knows you're out everything and then you're zeroed out. And then Tyler, you had a different proposal. What was it? Well, so the bull case for just 97 is that like it's like flex, right? I can live in Greenland. I'm so, I make so much money that. Yeah. Yeah. I only have 3 % left and I'm still balling. It is hard. I can still afford it. Every billionaire has a plane. They all have boats. It's like, who's really got money? Well, if you can go to Greenland, lose 97 % of your wealth and still be flexing, it's like, okay, that guy's actually really rich.

17:53Yeah, but then if you're not Uber-Uber-Wealthy, it still makes sense if you basically just have the 97 % tax rate the first year. The first year. So then maybe it's, if you look at a 10-year increments, right? So first year, you're basically zeroed out. Yeah. But then you get a super low tax rate. Then you just grind. Zero for five years. So you lock in. It's almost like you get dropped on an island and you've got to fight your way out. Yeah, sort of Lord of Flies situation in Greenland. Did you see Jensen came out yesterday and said he doesn't care about California's proposed billionaire tax?

18:24Jensen Huang said he wasn't worried about a potential tax on billionaires in California breaking from a cadre of ultra-wealthy residents who have spoken out against the first-of-its-kind proposal. We chose to live in Silicon Valley and whatever taxes I guess they would like to apply, so be it. I'm going to say it's kind of a pick me behavior for a bean air. He says, I'm perfectly fine with it. It never crossed my mind once. Let's head into the comment section and put a hazmat suit. It's not really relevant what he thinks, according to Jeff. It's a question of what the policy effect impact is. All the billionaires want to stay in the state and don't mind giving up 5 % of their wealth each year or whatever nutso thing the state cooks up.

19:01The state government will certainly not invest the money as intelligently as the average billionaire. it will largely go to fraud, waste, lazy government, employees, etc. So Juan can have whatever opinion he wants. It's a free country, but that doesn't make it a wise policy. I agree. The term carry in venture capital actually comes from video games. You just need to find one founder good enough to carry your entire career. That is fantastic. This is a banger, and it's a banger because it's so true. When I look across 60, 70 different investments at this point, if you take out like two or three of these founders, it's just like, okay.

19:39Much like being on Rust with an absolute killer who can 360 no scope, while you're still figuring out how the sticks work. But you're getting carried, you're like, we won. Did I ever tell the story of how I got my Overwatch account carried to like the absolute top? My account was like ranked one of the best in the world for a little bit, but it was very interesting. It was me. So I played the first season of Overwatch, Then my password was included in some sort of hack or some sort of leak And so some hacker figured out how to get into my overwatch account Which is not important because like what are you gonna do?

20:15You're just gonna like my credit card information isn't there. You can't do anything with it You just play overwatch but overwatch was like a$60 game or something And so if you were hacking you didn't want to buy$60 every time you got banned So this hacker played on my overwatch account for like multiple seasons and ranked way up and was like a sniper. I think he played Hanzo main. And then years later, I got back in with my friends and I'm like, oh, let's play some Overwatch. And we queue up. Like, John, what are you up to? And I'm like, oh, I need to do placement matches. And so I do the placement matches and I'm just like losing because I'm playing with all these incredible, like, you know, the top tier.

20:51And everyone's like, why are you guys, like, we know you're good. Why are you sandbagging? Like, why are you trying to de-rank your account? And I'm like, I'm not, I'm playing as hard as I can. I'm doing my best. And they're like, no, we can see that you're like one of the greatest Hanzo players ever. Like, you're the greatest sniper in Overwatch. We've seen your account history. You're amazing. Why are you playing poorly?" And then I finally figured it out that my account had been stolen and then rocketed to the top of the rankings. So finally, I had to make up a lie because whenever I'd hop on a game, everyone would be like, you're terrible and you're supposed to be good.

21:25And I'd have to say, ah, like I broke my hand, so I just, I'm not as good as I It used to be like, please go easy on me. Like I'm relearning everything. Over to Warner Brothers. Warner Brothers has rejected Paramount's latest $108.4 billion hostile bid and remain committed. I called it. Loyal. I knew nothing about this deal, but I just randomly said that I think Netflix is gonna run away with it, but we'll see. How high can they go? Can they go to 200 billion? It seems like Paramount has - They're holding out for the$1 trillion. Endless, endless coffers. Paramount continued pushing its$77.9 billion bid for Warner Brothers Thursday, a day after Warner said it plans to stick to its existing deal with Netflix.

22:13Yeah, unless the price gets really crazy and they appeal directly to shareholders and the shareholders go crazy or something. It feels like it's in the bag. You can feel the code red here. Google is absolutely crushing it with Gemini 3. Gemini's market share is now at 21.5%. Three months ago, it was at 12.9%. 12 months ago, it was at 5.7%. And I remember a year ago when it launched, it felt like a lot of the numbers that we were hearing out of Google were big, but it was because they were including generative AI snippets in Google search. Or they were sort of bending it into other products that already had big DAU numbers.

22:49And it was not people going to Gemini, installing the app, really daily driving it. It was more demo, more testing. Well, this similar web data seems to show that Gemini's been growing and taking share. Yeah, it's also worth noting that this is just like site visits. And so not every visit is created equally, right? Somebody can land quickly on a site. That's very different from them being in the app multiple times a day. So this is not looking at app traffic. The code red is real. And it shows that Google's been taking the distribution of Gemini very, very seriously. And they've gotten more traffic, which is good.

23:25This company, Flip, said Flip is hiring. We're hiring posters, engineers, product growth, ops, designers, interns, and roles that do not yet have names. And then 24 hours later, they quoted their own post and said, you've just deleted half the applications at random. We do not want unlucky people working for Flip. I'm assuming it has to do with gambling. Of course. I think the product, what they're trying to do is basically you pay more for a product or get it free. Oh, it's that meme. I've seen people joke about that. And then I saw there's this poster that does these. They're bringing gambling into credit cards, bringing gambling into debt.

24:05On the topic of luck, at one point, very early in my career, I wanted to create a direct-to-consumer product called Five Hour Luck. And the whole concept would be like it would be a five-hour energy shot. But the promise, the pitch was that it would make you lucky. It would increase your luck. Just because people, you know, energy is a stat. Why not increase luck? I was not thinking about the gambling application. I mean, the placebo element. Yeah, I mean, that product would crush in Vegas. Yeah, imagine just taking it and being like, okay, I have the stat boost. I'm lucky. Maybe you could put some snake oil in it.

24:35Asking someone long memory. Who's long memory. Oh, who's long memory. If they got any new ideas for 2026. It was already rich. Yes, memory has been on a tear. Yeah, Bubble Boy over on X had some pretty great calls late last year. I'm going to try to pull. We can also pull up, I want to watch this intro from This Week in Startups. Can we move on to this? Now that you're doing so well financially, what is a purchase that you'd like to make but can't bring yourself to do so because it feels too extravagant? Answer this honestly. Tell the people what you, even Jason Calacanis, will not break out the checkbook for.