This Week in Tech Episode 918 Transcript
Please be advised this transcript is AI-generated and may not be word for word.
Time codes refer to the approximate times in the ad-supported version of the show
Leo Laporte (00:00:00):
It's time for TWiT. This week in Tech. There is big news, but I've got a big panel to talk about it. Joining us from semi four.com, read Al Gotti, Lisa Schmeer from no jitter.com Glen Fleischman from glen.fun. We'll be talking about the Silicon Valley Bank collapse, and I think there's good news coming. We'll have that for you. We'll also get an inside look at the end of the show. Jason Kann is gonna drop by. He could be on the full panel, but he's gonna give us what it looked like from the inside last week. We'll also talk about a Canadian law that may kick meta out. And Y Am Radio is no longer gonna be in the Ford Mustang. It's all coming up next on Twitter. Podcasts you love
TWiT Intro (00:00:47):
From people you trust. This, this is TWITTwi.
Leo Laporte (00:00:58):
This is TWITthis week in tech. Episode 918 recorded Sunday, March 12th, 2023. Rational Minds have prevailed. This week. In Tech is brought to you by ZipRecruiter. One of the biggest 2023 hiring challenges is standing out to top talent, breakthrough the clutter, and attract the most qualified candidates for your team with ZipRecruiter's matching technology. Try it free at ziprecruiter.com/twit and buy bid warden. Get the password manager that offers a robust and cost effective solution that drastically increases your chances of staying safe online. Get started with a free trial of a team's or enterprise plan, or gets started for free across all devices as an individual user at bit warden.com/twit. And Buy Collide. Collide is a device trusts solution that ensures that if a device isn't secure, it can't access your apps. It's zero trust For Okta, visit collide.com/twit or a demo. Today,
It's time for tw This week in Tech, the show we cover the Silicon Valley Bank collapse. And maybe we'll do some other news too. We have a very good panel for this. I'm thrilled to have Glen Fleischman, our good friend, all the way up from in Seattle, and very successful Kickstarter operator. We'll talk about that in a bit. The book Shift Happens has done, its, its run. And is is going, is going, man. Hi Glen. Hello. How are you doing? Good to see you, Leo. Great. Doing great. Thanks for joining us. You're good friend. Pleasure. Lisa Schmeer sitting to my left. Well,
Lisa Schmeiser (00:02:44):
Leo Laporte (00:02:44):
How do you guys know each other? We've
Lisa Schmeiser (00:02:46):
Podcasted before together on the incomparable
Leo Laporte (00:02:48):
Lisa Schmeiser (00:02:49):
Incom and our circles have overlapped at Macworld and a few other publications.
Leo Laporte (00:02:52):
It's six degrees of Jason Snell everywhere I go. Yeah, I have a, I have a great story. I can save it, but I have a great story about
Lisa Schmeiser (00:02:58):
Knowing each Oh, you should totally. The story. It's a really good one.
Leo Laporte (00:03:00):
Save It's save it. Save it. I'll save it later in the show. Save it. How, how Flu and her husband, Lisa, is that? No. jitter.com. New. New for you. What is No jitter?
Lisa Schmeiser (00:03:08):
So no jitter. We own the communications technology stack all the way down from P OTs, pots, plain old telephony services, up to collaboration and communication applications, which include the workspaces. We're all used to like teams and Slack and Zoom, but it also branches out into customer service, customer experience, and call centers. So I cover everything. You
Leo Laporte (00:03:31):
Cover a lot. Yeah,
Lisa Schmeiser (00:03:33):
We do. Well, the name No Jitter goes back to the old school days of telephony when the biggest concern you had was about sound quality. Right. On your networks and whether or not you'd have jitter in your audio.
Leo Laporte (00:03:44):
We still care. Zoom. Yeah, zoom. We, we can see what the jitter is. Yeah. We try to keep the
Lisa Schmeiser (00:03:48):
Jitter down. And, and I'm thrilled to report. I've got a contributor who's who just turned into piece. I'll be editing, talking about the emerging issue of sound quality across collaborative platforms, because you have a lot of folks who are using internet telephony, uhhuh, and don't realize it doesn't have to sound like you're talking from the bottom of a fishbowl.
Leo Laporte (00:04:03):
So <laugh>, I think we sound pretty good. We're using Zoom, but we use a special version of Zoom that Annie Caruccio created. Zoom, then acquired this company called Zoom iso. Hmm. That we're all on one call, but we're all iso and it really, I think it works really well for us. Latency's very low. Mm-Hmm. <affirmative> wanna welcome Reid Algan for the first time to this show. He is been on Twitter many times, of course. Now at SEMA four, technology editor at SEMA four. Hi, Reid. Hi. How you doing? Great for you. Very well. I love SEMA four. I've been reading it religiously. It was such a big mystery for like, almost a whole year what these guys were gonna do. And turns out they did something pretty darn good. I really, really, really, I'm glad you like it. Yeah. And I'm glad you're there and you're having a lot of fun.
Yeah. Yeah. We know Reid from of course, the Wall Street Journal and the information now he works for the Smiths mm-hmm. <Affirmative>. And that's right. And that's right. And you're, and the reason you're on it was kind of a last minute booking, and I appreciate your doing that for us is because of the Silicon Valley bank collapse. I wanted to get somebody you've been covering it for some before, so yeah. Actually, I guess you probably all have an opinion in this. Yeah. All right. We'll get to it. I, I will say <laugh>, I was vetoed, but I tried to get Jason Kannon that was vetoed. Kevin Rose, unfortunately is in an airplane. I thought he'd be good. I want to get somebody with a venture capital background. And also o' Malik, who has not only got a venture capital background, but as a man of the people, wrote a very good piece on his blog, om.co.
In fact, let me just kick it off with a little bit of what Om wrote, because I think he he is, is probably he's a very thoughtful guy with, with a foot in every bit of, of, of camp for this. And actually he's got a new, a new post. So I wanna go back to his oh. Yeah. There's been some news out just a couple hours ago. He's writing a lot. Yeah. Cuz Janet Yellen was on the Sunday shows mm-hmm. <Affirmative>. Yeah. So, which saying, by the way, nothing, his piece that I was thinking of is from yesterday. It's called A Tough Weekend. Mm-Hmm. <affirmative>. And he, you
Lisa Schmeiser (00:06:15):
Could not have picked a more beautiful header image, by the way. Yeah.
Leo Laporte (00:06:17):
That's amazing. Yeah. Except for the Salesforce Tower. It's really gorgeous. Oh, that's San Francisco. That's San Francisco
Lisa Schmeiser (00:06:23):
<Laugh>. Oh, my. Are are we gonna beg on that this week too? Is that, is that part of it?
Leo Laporte (00:06:27):
We're gonna, yeah. I think I blame the whole SVB thing on Salesforce Tower. Oh. To be honest, after three, he writes home rights after three decades of being part of the Silicon Valley ecosystem as a reporter, writer, entrepreneur, and investor. I thought I'd seen it all the boom bust cycles, stock market, manias, startup insanity attack on America itself, and the most significant financial calamity in nearly a century. He's probably talking about 2008, I would guess. Living through history prepares you for every eventuality your own struggle with mortality. This is what I love about m as he's, as he's aged a little bit. He's, you know, thinking about things like that. Your own struggle with mortality prepares you for the unpredictability of everything. You embrace the impermanence and become one with it. And yet, despite all that you experience what Silicon Valley has experienced this weekend, a sense of helplessness, of feeling, of dread, and more importantly, a sadness about the fragility of our community. What happened Thursday? Lisa Schmeer, can you, can you synopsize this
Lisa Schmeiser (00:07:29):
<Laugh>? Let me see if I can try. And I wanna encourage River Bales to jump in on the details on either aligning or getting wrong. I believe this was kickstarted by Silicon Valley Bank messaging that they were not quite as they had pumped a lot of money to their bonds, sold the bonds, they're short of money, they need more money. And that in turn prompted a robber
Leo Laporte (00:07:59):
<Laugh> by way. Not a good thing for a bank to say. I'm just saying. Maybe they could have worded that a little differently.
Lisa Schmeiser (00:08:04):
Leo Laporte (00:08:05):
The problem Silicon Valley Bank as around which is the number 18 bank in the nation Yeah. With, with many billions of dollars in, in an customers was the chief Bank for many venture capital firms, startup firms, venture capital funded firms. And the problem with that is, VC startups that are funded by VC are not like you and me. They get a pile of cash at the beginning mm-hmm. <Affirmative>, which they then put in the bank. They don't need loans. Normally a bank that kind of bank you and I bank at, we give them our pitiful little paychecks and then borrow money from them to buy a house. Well, or a car
Lisa Schmeiser (00:08:44):
To interject from a, one of the reasons this has turned into a problem is because the banking protections that are in place cover bank customers for deposits, which is I e the pile of money. You've talked about deposits of up to $250,000. But if you are a startup that got a big cash infusion, you have more than 250,000 in the bank. And you're trying against that for payroll and operations.
Leo Laporte (00:09:10):
So they were using it as a holding, but they weren't borrowing money. So SVB was in this difficult position where they had a lot of cash. And of course, you can't just sit on it, you have to invest it mm-hmm. <Affirmative>. And they made, you know, what I think in hindsight wasn't such a big mistake. They bought T bonds, they bought treasury bonds, which were very low risk, but also very low interest. And then the Fed raised interest rates. There
Lisa Schmeiser (00:09:36):
Was a really good threat on Friday saying, it's not that the bank operated poorly or was a poor steward of money, it's that the messaging that they put out around here's why we need to raise more money, sparked a bit of a panicky overreaction.
Glenn Fleishman (00:09:52):
They, they had the last year to unwind some decisions that were perfectly reasonable mm-hmm. <Affirmative>, and they did not, and they were afraid, I think, I don't know, they were trying to protect their position mm-hmm. <Affirmative>, but it put them in a place where they were, when they hit the crunch, there was no buffer at all. Because they could have slowly unwound, they could have slowly unwound things. They could have sold assets off, they could have taken a small hit, they could have been quietly raising money. So when it hit, no one was quite expecting it, except I think the Financial Times called it like two weeks early. They had looked at the, at where they were exposed and said, Hey, this looks like they're in kind of a bad position. It could get worse, but obviously didn't call the bank run. And, and I've read a few places too, if this were a normal bank, if it didn't have customers who were absurdly plugged in and with lots of very large amounts of cash that have to be used immediately for salaries, that there wouldn't have been a run. Because a normal retail bank, even if you had customers with millions or tens of millions or hundreds of millions of dollars in some accounts would not have, would not have pushed so hard to get the money out so fast. Well,
Lisa Schmeiser (00:10:54):
A bank run happens when, well, there's one
Reed Albergotti (00:10:55):
Leo Laporte (00:10:56):
Go ahead, Reid. Yeah.
Reed Albergotti (00:10:57):
I mean, there's, there's one thing I'd add to that mm-hmm. <Affirmative>, I mean, you're right. But, you know, I think they also had something like 96 or 98% of their, their customers were over the 250 K D I C threshold. Mm-Hmm. <affirmative>. So I think that played into it as well. I mean, that's, they're, they're one of the, I think like the second most you know, the second most customers over that threshold,
Leo Laporte (00:11:20):
They were a Silicon Valley.
Lisa Schmeiser (00:11:22):
Well, to add to what, to add to what Reid is saying, typically and there was a really good question in the Discord saying if you only, if your bank account only protects up to $250,000 and you have more than that, why wouldn't you have multiple protected accounts? You actually have the option in banks to structure your money in trenches of $250,000. However, your bank has to offer that as an option. And it has to be something that you choose as a customer to do. And it's unclear whether Silicon Valley Bank didn't offer that option or whether customers chose not to take it. But the upshot was that that kind of protection for each of your, each of your quarter million dollars, I say like, we all have lots each of your <laugh> there's the option to protect each of your quarter million dollars. And for whatever reason, the either the customers did not know this option was available, or the bank did not offer this option because it's not required.
Leo Laporte (00:12:13):
It's wouldn't expect.
Lisa Schmeiser (00:12:14):
It's, it's a, it's, it's a, it's something you, it's, it's a business feature.
Leo Laporte (00:12:18):
You wouldn't expect a startup that just got a hundred million dollar in venture funds to divide that up amongst 40 banks of a quarter million dollars
Glenn Fleishman (00:12:27):
Each. It's a, it's a product. It's a product. It's called, I just heard about this today. Yeah. It's called Insured Cash Sweep. And there are hundreds of banks that participate. Ah. So it's actually something that some companies do, and they don't,
Leo Laporte (00:12:39):
We don't know if SVB offered that.
Glenn Fleishman (00:12:41):
Yeah. Yeah. It doesn't seem like, from what we're saying, I mean, it sounds like they did Roku with Roku has hundreds of millions of dollars that are tied up, but out of a larger cash dash, they made clear what they have. Excuse me on hand. But it's something that some companies do, but it's also, I, I, I wanna, I think at the outset, there's this notion, this is kind of like when people talk about the Social Security Fund and it's going bankrupt or insolvent, and it's like, well, it means at some point between when Leo is ready to retire and I'm ready, retire the <laugh> to give you the range. That's a
Leo Laporte (00:13:10):
Large range, by the way.
Glenn Fleishman (00:13:12):
I don't know how alarms, that way they might be unable to pay a hundred percent of promised benefits. Doesn't mean Social Security Fund is out. And the same thing Silicon Valley Bank has. I don't know, they think, I don't think they have an estimate at the moment, but it has substantial assets that are tied up in an illiquid short-term format. And there's every chance the F D I C has already, the deadline was 11:00 AM Pacific for bids from other banks. They may already have accepted a bid from another bank to make all depositors whole. This is a very possible outcome. And
Leo Laporte (00:13:45):
Glenn Fleishman (00:13:45):
Though this be resolved,
Leo Laporte (00:13:46):
Usually though, it would be, and re and you and Liz Hoffman had a, had the story on SE four. It hedge funds are also offering 50, 60 cents on the dollar fees, bad assets. So, is there also, even if a bank before, let's, but let's, actually, let's finish the chronology cuz we don't mm-hmm. <Affirmative>, we haven't said yet what happened. Yeah. So when did, when did SVB put out this advisory Wednesday?
Lisa Schmeiser (00:14:07):
Oh gosh. I wanna say we, was it Wednesday? It was in the evening because, because the bank began on, broke Thursday.
Leo Laporte (00:14:14):
So the next thing that happened, though that was perhaps salient mm-hmm. <Affirmative>, is that Peter Teal's founders Fund what is it, founders Fund mm-hmm. <Affirmative> Venture Capital company put out a notice to its startups that they thought they should withdraw their money from S V B, that S V B was unstable. And because Reid, maybe you could pick it up there. What happened? Yeah. When, when Teal put that note out,
Reed Albergotti (00:14:42):
I mean, I would say by the time Teal put that note out, there were a lot of,
Leo Laporte (00:14:47):
It was already a lot of VCs. It was already in the air.
Reed Albergotti (00:14:49):
Were saying this. Okay. Yeah. In fact, I mean, and, and I would just say just, I mean, as an aside, I mean there were, there were firms that were really on top of this and had been taking their money out months and months ago. Cuz they sort of saw this coming. I think everybody else kind of just trusted that, you know, it's Silicon Valley Bank, it's gonna be fine. Mm-Hmm. <affirmative>. But I think what we started to hear, you know, the Liz Hoffman and I, and, and other people heard like early Thursday that VCs were kind of like whispering. Like, you know, Hey, I think you might want to take your money out of, out of Silicon Valley Bank. It's, it, you know, it's looking sort of bad. And then there were, I saw email exchanges on Thursday morning where, you know, people would recommend this.
And then lawyers, whoever, you know, would sort of respond and say, this is irresponsible. You shouldn't be sending, you know, these messages out because, you know, it's sort of this self-fulfilling prophecy. And I think as reporters, we had that thought too. You know, we could report this right now that people are saying this, but then are we actually like, sort of making the story true mm-hmm. <Affirmative> by, by spreading it. Because ultimately, you know, Silicon Valley bank's books were okay. Right? I mean, they had to, they had to raise money, but they were solvent. Yeah. They, after, you know, they did what they needed to do. So it didn't, this didn't really need to happen. But I think once you start, once those whispers started on Thursday morning, it was like, you know, it was a snowball effect and there was no stopping it. And I think Peter Teal obviously, I mean, a lot of people were upset with him for, you know, saying this and then coming out publicly and saying it. But I don't, I don't think it, I don't think he, you know, I think it would've happened. Anyway,
Lisa Schmeiser (00:16:36):
To jump onto something that Reid was saying, I have a friend who works at a fairly high profile startup in Silicon Valley. She sits right next to the CEO O and she slacked me on Friday morning. And she's like, my c e o has been on calls with all of their VC and CEO friends all morning. And they're trying to figure out how to make payroll. Everybody is, is flipping out. And this speaks to the, the thing that I'm still wrapping my head around about this bank run is how much of it is based on word of mouth and watching what everybody else does? And, oh, if they're doing it, I better do it. And oh, if this person says they're going to do it, well I, I trust them. So now I'm off to pull my money as well. Cause it, she, she, she's like, oh, another one's pulling, another one's pulling. And I just kept thinking, really just based on a phone conversation with a friend who's nervous about svp, you're, you're pulling all of your money out.
Reed Albergotti (00:17:25):
But nobody wants to be the last one out <laugh>.
Lisa Schmeiser (00:17:27):
But that's what's happening is people are, are Well, my friend said, and I was like, oh, wow. It's like middle school
Leo Laporte (00:17:33):
<Laugh>. There, there's a good illustration. I think probably people have seen the run in the bank in the it's a wonderful life. Mm-Hmm. <affirmative>, but this is perhaps the best illustration from a much beloved American television show. You may know as The Simpsons <laugh>.
Lisa Schmeiser (00:17:48):
What do you mean
The bank is outta money in solvent? You'll only have enough cash for the next three customers.
Leo Laporte (00:17:57):
I am gonna get, this show will be now taken down on YouTube. But I did that for you so that you would understand
Glenn Fleishman (00:18:03):
Leo Laporte (00:18:05):
How a run the bank starts. Yeah.
Glenn Fleishman (00:18:07):
This is the thing too, that we live in a modern banking era. The F D I C exists. I'm, I'm somebody who will always bang the drum of Sheila Barr, who is the F D I C head. During the 2007, 2008 meltdown, unheralded, I would say, person who helped the economy survive. And you can read her quoted saying very smart, sensible, and non sensationalist things right now. And it's, it wasn't a, it was a run of the bank, but it's not a, the bank doesn't have the money scenario. And I, I do keep emphasizing that because it's the bank, it has a shortfall. Right. Likely a liquidity, how much problem
Leo Laporte (00:18:42):
Glenn Fleishman (00:18:42):
<Affirmative>, it has liquidity problem. And it may have a shortfall but absorbed into a larger bank if it's, you know, it's in the top 20. But there are much larger banks and there's banks who would love to get all this VBC people. Let's, let's get, as their account holders,
Leo Laporte (00:18:54):
Let's continue the chronology, so mm-hmm. <Affirmative>. Yeah. Thursday, there's a run in the bank. And I, you know, I mean, this happened very, very quickly. I mean, I started seeing this, and if you were on Twitter, which really was, seems to be the place mm-hmm. <Affirmative> to watch this bank burn. You, you saw it happen in real time. By Friday, the Federal Deposit insurance corporation had taken over the bank. It was already, it had, it was almost immediately mm-hmm. <Affirmative> taken over by the federal government.
Glenn Fleishman (00:19:20):
I'll tell you, there's an amazing photo that came out of that, is there was a picture of one of the branches of the, of SVP SV V, and it showed a piece of plywood covering a window. And I thought, did someone break the window? I'm like, no, that's where the ATM is. The F DCI I C came, they pulled the at m section out of it, and they put up a piece of plywood on Friday morning. Wow.
Leo Laporte (00:19:40):
That's how, that's how quickly they move. Mm-Hmm. <affirmative>. I also saw a picture, I think it was fraudulent of an SVB bank branch turned into a Spirit Halloween store. <Laugh>. But I don't think, I don't think that was real. Okay. I'm just, I'm just saying I'll, I'll check on it too quickly. But yeah, no. So, so, but that's good. That's what's supposed to happen. Right? Right. The concern at this point, and what I've been reading all weekend, is wait till Monday morning. Now, Janet Yellen, the Secretary of the Treasury, was on the news shows this morning, kind of saying nothing. Mm-Hmm. <affirmative> she said, you'll be, if you're $250,000 you'll be insured. The rest of you'll be made whole, but it's gonna take a little bit longer, blah, blah, blah. There were, I saw lots of calls on Twitter from people saying you know, somebody should buy this bank. So, Reid, explain now what happens next and what is, what's gonna happen Monday morning that we should worry about?
Reed Albergotti (00:20:37):
Yeah. I mean, well, what happens next with S V B is kind of surprisingly up in the air, because I think, you know, there, there's a feeling that the Fed should come in, or the F D I C should come in and ba basically, the government should guarantee everybody's deposits. A
Leo Laporte (00:20:52):
2008 Lehman Brothers style bailout too big to fail. Right. We're just gonna make everybody whole. That is not on the table as far as I could tell.
Reed Albergotti (00:21:01):
No, I think it is. I think it is on the table. I think, yeah, I think, I think it's actually, if you think about it, ave a fairly sensible option because you know, it, like we said earlier, you know, they actually had the funds. I mean, the money's there. It just needs to be distributed. And now there's gonna be this delay. And that's really the problem. Well, there's two problems. One is the delay, which then could sort of force startups out of business because they don't have enough money to make payroll. They'll probably o be okay for the next two weeks. And then after that it's up in the air. The other problem is just the, the, the trust, right? Mm-Hmm. <affirmative>, like, do people trust the banking system? First Republic Bank was an, was a competitor. They were trying to get a bunch of that Silicon Valley business as well.
And on Friday afternoon, people started saying, wait a minute. Like, should I take my money out of first Republican? Because the US banking system is so antiquated, they weren't able to do that Friday afternoon because the wires shut down all weekend. Right. And so people have been, you know, people I've talked to, entrepreneurs, venture capitalists are texting each other going on group chats and talking about like, what are you gonna do Monday? And I think the conclusion is like, we should take our money out of First Republic now Monday. And so there's this feeling that like something has to happen. So the, the government has to step in and do something drastic just to restore faith in the, in the banking industry. And I think it makes a lot of sense to just guarantee all deposits in this case. Because what that would do is it would, you know, people would feel better about the banking system. Like, Hey, you know, somebody's got our back here, but also the government's gonna get that money back because the assets are there. So it's kind of like a short-term bridge loan, if you will. That could sort of like stop a massive financial disaster. But I think there's a political problem, which is like, well, hey, you're bailing out these rich VC types, right?
Lisa Schmeiser (00:22:55):
Silicon Valley elites will be the phrase that gets used. Coastal elites. Techy elites. It will be, but
Leo Laporte (00:23:01):
It really isn't. Yeah. It's not, or it's not just Etsy set out an email to Etsy sellers. Mm-Hmm. <affirmative> saying there's gonna be a delay in processing your payments because our cash, or at least some of it Yeah. Was in a Silicon Valley bank.
Lisa Schmeiser (00:23:15):
Well, what's the name of the payroll service that uses Silicon Valley Bank? There was a really good piece Oh, right. In New York Magazine this
Reed Albergotti (00:23:20):
Lisa Schmeiser (00:23:23):
And the reason I remember, I remember part of the piece, there's just been a tsunami of information. I remember the piece because it's a healthcare services provider in Florida that can't make payroll now because the payroll company they use is with, you know, Silicon
Leo Laporte (00:23:36):
Company. Oh, that's interesting. So it's not that the healthcare provider's money was in svb, but they tra we do this too. We use a payroll provider and we transfer money into their account, and then they cut checks for the employees. Mm-Hmm. <affirmative>, the, the money was in svb mm-hmm. <Affirmative>. And now they can't cut checks to the employees.
Lisa Schmeiser (00:23:54):
Yeah. The payroll service can't fulfill riping its
Leo Laporte (00:23:56):
Obligation. It was rippling. Yeah. It's a ripple effect. Yeah. No, it's called rippling, right? Yeah. Rip. That's the name of it. <Laugh>. It's rippling and it's a rip effect. We,
Reed Albergotti (00:24:03):
We use riping as well. Yeah. These are like home healthcare Conrad
Lisa Schmeiser (00:24:05):
Workers in, in, these are home healthcare workers in Florida who will have nothing to do with tech elites or they're not venture capitalists. These are people who are busy taking care of your grandma for $14 an hour and are not getting paid
Leo Laporte (00:24:18):
For it. This is Parker Conrad's tweet. We rippling discovered yesterday that SVB at an unexpected solvency challenges. Yeah. Just now we learned that the F D I C had stepped in and effectively shut down svb. This is from Friday. Mm-Hmm. <affirmative> rippling has historically relied on SVB for payment rails for our payroll and other products. Now he says, in light of yesterday's news, we immediately accelerated a plan switch to JP Morgan Chase. That's what a lot of people are doing. In fact, you had on SE four a good graph of percentage of deposits that select banks that exceed the insurance cap. Mm-Hmm. <affirmative> only Bank of New York was higher with 98% svb, 97%. But JP Morgan's 68%, much more like a traditional bank. Mm-Hmm. <affirmative> city groups 85%. So people are looking for a safe harbor. Mm-Hmm. <affirmative>, it doesn't mean they're gonna be able to get their money out of svp, but the, but even
Reed Albergotti (00:25:13):
Well, it takes a while to open up an account. Right. I mean, that, that was another problem. People I talked to were having on, you know, Thursday, Friday, it was like they're trying to transfer the money out and they don't have another account for their business. Right. So they were saying, well, should I just transfer my company's money into my personal bank account?
Glenn Fleishman (00:25:33):
Reed Albergotti (00:25:34):
No. An iffy situation. So I think, and again, it goes back to like the antiquated US banking system. It just takes a while to open up an account. They have all these know your customer rules. So, I mean, JP Morgan was definitely taking a lot of inflow on, you know, Thursday and Friday, but it takes time.
Glenn Fleishman (00:25:52):
There's antiquated, but there's also, that's the know your customer thing, as you mentioned, that's intentional. There are reasons to, to put a curb on it to prevent fraud and illegitimate criminal use. So that's, that's that, that attempt the regulators to prevent that is also putting a curb on this when there's a legitimate reason. And there wasn't time to put in some kind of override as well. But, you know, this isn't, I'm sorry, Al clearly you're still doing the chronology, but this isn't ftx again, it's not a it's not an entry on a ledger that says $8 billion. Oops. Where did it go?
Reed Albergotti (00:26:22):
<Laugh>. There's another issue here with JP Morgan, by the way that came up. So, JP Morgan didn't use to lend to startups like first first Republic, or, well, first Republican also Silicon Valley Bank do. They got into this business I think a few years ago and had been really trying to compete with Silicon Valley Bank. They've been trying to take a lot of people from S V B went over to JP Morgan. So people were saying, well, oh, why, why doesn't JP Morgan just buy Silicon Valley Bank and then just end this whole problem? Mm-Hmm. <affirmative>. But there's, there are rules about how many, what percentage of total deposits in the country you can have. And all the big banks like JP Morgan are like right up against that 10% threshold. So they would've had to get special dispensation to, to be able to buy Silicon Valley Bank. And that's another question I have. It's like, why didn't that happen immediately? Why, why didn't, you know, people come in from the Fed and say, look like, you know, don't worry about that rule. We'll figure it out later. Cuz I'm sure JP Morgan would've loved to have just taken over that business.
Leo Laporte (00:27:24):
There was so much misinformation and Ill-informed opinions flowing all over Twitter. And I really, we're gonna try really hard today to and it's good we have this panel, we're gonna ha try really hard to give you actual facts and and as little speculation as possible. And then there are people like Jason Calen, who I did try to get on the show today who tweet all in caps yesterday on Monday. I should just imagine me shouting. A hundred thousand Americans will be lined up at their regional bank demanding their money. Most will not get it. This is like Bart Simpsons standing in line. This went from Silicon Valley insiders on Thursday to the middle class on Saturday. Main Street finds out on Monday.
Glenn Fleishman (00:28:05):
That's the kind of populism nonsense that is gonna get people hurt. And it's gonna, it hurts the economy because it's not true. It's the American banking system is, is robust. It's well regulated there. This is not a, this is a failure of one bank to manage its risk. Didn't have a a risk officer. I just found out the other day, didn't have a chief per a person in charge. Mm-Hmm. <affirmative> of risk management this last year. The person previously in that position left after selling stock according to one report. So I'm thinking 2021. So this is, this is not a we're a very different position. Like, like all of us who are old enough are having flashbacks. 2007, 2008, 2001, the 1990s. I was in college when Black Monday hit in the eight late eighties. Right? Mm-hmm. <Affirmative>, we all have flashbacks, these previous things, but those, a lot of those involved no money. They involved bad debt, bad mortgages, bad decisions that piled on. This is a structural error where if SVB had handled this correctly last week or in the last year, or even last week, or had privately worked with the F D I C, the regulators, another bank could have sold themselves and become a subsidiary inside another institution. There are many pathways in which this didn't have to happen. It be because it did. I think you can lay that largely at the, at the feet of the people running the institution.
Leo Laporte (00:29:20):
Well, and there are those who wanna also blame Congress because in 2008, the DOD Frank Reform Act was passable in 2010 in response to the 2008 crash. Yeah. That was repealed in 2018. Is it the, is it the lack of regulation that allowed SVB to ignore this impending crisis? They didn't
Glenn Fleishman (00:29:40):
Do anything. I know they didn't do anything that was that I, I have, I don't analyzed
Leo Laporte (00:29:44):
If I'm, you know, if I'm them, I'm saying, but we bought, we bought treasuries, the bonds
Reed Albergotti (00:29:49):
<Laugh>. I I think there was an article in the New York Times that said, you know, that they, they supported those, the rollback of those regulations. You did. Yes. I haven't read, yeah, I haven't read an analysis. You know, to to your earlier point, like on exactly like whether they, this could have still happened. My, my guess is that it could have that it wasn't necessarily just purely because of a rollback of regulations. I think the other question is like, why, what made Silicon Valley Bank think that they could get away with just sort of saying, Hey, everything is cool, we need more money, but don't worry your money, your money's safe and not actually arrange a sale immediately before this all spun outta control. I wonder why they thought that was possible. I, you know, it, I, something went wrong. Legitimate question. I mean, it's not rhetorical question. I just, they're, you know, it, it'd be interesting to hear the thought process.
Glenn Fleishman (00:30:41):
Bri, there's your Pulitzer. Just find out why
Leo Laporte (00:30:44):
Reed Albergotti (00:30:45):
Leo Laporte (00:30:45):
Glenn Fleishman (00:30:45):
Lisa Schmeiser (00:30:46):
Why It seems like all of this is just human nature. Ev everything from the bad judgment calls that Reid has has, has pointed out to how people chose to react as customers, to how people are choosing to amplify specific positions on Twitter. And none of this is any bearing on the realities of where the money is and how long it will take to get to your money, and whether or not it's still safe to have your money in there. It's all just people reacting in a really knee jerk sort of way.
Leo Laporte (00:31:16):
I I, I mean the main reason Janet Yellen was on the news shows this morning was to just say that Yeah, it's fine. Right? The banking system is solvent. Mm-Hmm. <affirmative>, there's no problem. But do you think come tomorrow morning that there will be people who will go to their banks and what are they gonna do, put their money in the mattress?
Lisa Schmeiser (00:31:33):
Can we run outta a toilet paper in 2020? Yes. There will be people going. I'm, yeah. Yeah. You are always gonna have people who, who move from a place where if this is happening, I wanna get mine before it's all gone.
Reed Albergotti (00:31:44):
The rational feeling here, okay, if you have under, you know, 250 K, you're gonna be okay. But there might be a period of time, whether that's a couple of days or a week where you don't have access to that cash. Right. So I think people, the rational thing is like, okay, do, do I have enough cash? That's
Leo Laporte (00:32:02):
German. George said, how much do you need to get through the week
Lisa Schmeiser (00:32:06):
<Laugh>? Oh, have you seen all those memes? <Laugh>?
Reed Albergotti (00:32:08):
Those are, that's an individual, you know, sort of calculus for if you're a business. There's a whole other interesting calculus. But,
Glenn Fleishman (00:32:16):
Well, the F D I C could raise the limit too. They did this during I believe temporarily during the 2007, 2008 crisis. They could come out and say we're raising the insurance limit to a million, 2 million, $5 million temporarily. They could come out and say, we're going to ensure all we're gonna make the Fed could say, we're gonna make all of this liquid temporarily by creating a a temporary bad assets bank. And then we're gonna sell the good assets to a company that's gonna give us par 100 to 100 cent value. Like, there's all these very likely positive outcomes. And so if you have someone like Calis out there shaking a fist and saying, we're all, it's, you know, hopefully those people are not helpful. It's not helpful because it's not, it's not realistic. And if there is a panic, then the feds have to regulate. They'll come in mm-hmm. <Affirmative>, they will actually shut down withdrawals. They will have to invoke a higher level of bank calming that is required for this situation than was probably even required in 2007 and 2000.
Reed Albergotti (00:33:10):
Yeah. Twitter was probably part of the problem. And now it's, and now it's sort of becoming this toxic kind
Leo Laporte (00:33:16):
Of, it's fuel on the fire
Lisa Schmeiser (00:33:17):
Becoming this song.
Reed Albergotti (00:33:18):
Leo Laporte (00:33:18):
Reed Albergotti (00:33:20):
Don't bail out the, you know, don't bail out the VCs. And it's like totally just No. Cutting off your notes. Despite the
Leo Laporte (00:33:27):
Only people who lose money are there are investors in svb. Yeah. Mm-hmm. <Affirmative> equity stakeholders in svb. They may lose money if they probably will lose money.
Glenn Fleishman (00:33:34):
Right. They'll probably lose. Yeah. So the sta tax taxpayers may have, I mean, the TARP program in 2007 to I think, was it well round down to 2011 or 12 or something, it was profitable. The American taxpayers got a return on that outlay. There are disputes about whether it was actually necessary the way it was structured, et cetera. It was not a net loss to the American taxpayer. So the depositors were probably made whole taxpayers may be on the hook for nothing or will be made whole shareholders. The people who people like to complain about the people who are invested in the market, the people who are taking speculative risk by owning assets and not doing enough research or whatever. They're the ones who will take it on the chin. And that's probably the way it should be.
Leo Laporte (00:34:13):
That's how it works. That's why it's called speculative. If it were a guaranteed thing, you wouldn't have to buy t-bills.
Reed Albergotti (00:34:20):
<Laugh>. Yeah. Yeah. So I, I think people that this is like, this sort of like anti billionaire sort of sentiment. Yeah, yeah, yeah. Right. I think there's like,
Leo Laporte (00:34:28):
Reed Albergotti (00:34:28):
Are two kind of like, there are two issues, right? It's like one is, yeah. I mean, there's, income inequality is a big problem in this country. It de it's destabilizing. We need mm-hmm. <Affirmative>, you know, you, you might think we need, you know, universal healthcare, we need, you know, backstops to help people out. But like, that's sort of a different issue from there's this emergency right now, and if we don't solve this problem, there's gonna be a huge, you know, a huge disaster. Right. And I, I, I think people have a hard time separating those two things. Mm-Hmm. <affirmative> is what's going on. Well,
Lisa Schmeiser (00:34:58):
I, I think the challenge is you have to take a look at the SVP and say, okay, how much of this emergency is just a self-inflicted wound and they're just gonna have to like limp around cuz they stub their toe and how much of this emergency is they've stubbed their toe and they're now coring around the room, knocking into other people like stub your toe. That's fine. Just don't take at anybody else on your way down.
Leo Laporte (00:35:17):
So on Friday, the F D I, well the California Department of Financial Protection closed the bank invited the F D I C in AS receiver, the F D I C has now renamed it. The, on Monday morning, a new bank will open, it'll be called some sort of Santa Clara deposit bank insurance, national Bank of Santa Clara.
Glenn Fleishman (00:35:42):
Leo Laporte (00:35:43):
They're saying checks written on SVP Counts will continue to clear. Mm-Hmm. <affirmative>, they're not gonna stop that insured depositors. The F D I C said will have access to their deposits no later than Monday morning. At that time, the branch offices will open. In fact, the F D I C offered big bonuses to employees to stay at work. Not to not to leave. We'll give you a 50% raise or double O OT if you, if you, but you are gonna lose your job in 45 days. So they're gonna, they're gonna, I don't know what's gonna happen. That may not even be true if a bank buys 'em and keeps the branches open. Mm-Hmm. <affirmative>. So, yeah, it's unclear. Let's say
Glenn Fleishman (00:36:22):
There's a piece of news out today, I, you may all have seen this, but it was that it may have been from the morning shows, but the Washington Post is a story describing the process. And it says, bids were expected by with the 11:00 AM pm today. Yeah. 11:11 AM Pacific, 2:00 PM Eastern Right. From banks interested. And then that's when we know whether something more extreme will have to happen. If if Goldman Sachs or JP Morgan or somebody else comes along and says, we're willing to, you know, there's gonna be a, a Dutch bid or something, a reverse Dutch bidding where you like, go to The's, the highest bidder, the one that gets closest to a dollar to a dollar we'll win. And then I don't know the mechanics of it. I mean, this is where Reid I will agree with you on antiquated banking process. Like what happens? Are they, I
Leo Laporte (00:37:01):
Have to say though, it may be antiquated, but I'm impressed at how Yeah. Kind of efficiently and effectively this, this happened. I mean, we have some experience with this going back to the Great Depression. And so we do have a system that seems Oh, yeah. Seems to work so that the auction is over now they haven't yet announced. So according to the post congress is weighing their, the preferred solution would be a bank comes and buys 'em. Yeah, absolutely. But Congress is weighing, protecting all deposits if the plan to sell fails according to the Washington Post. This seems,
Glenn Fleishman (00:37:36):
I just think one of the possibilities to be out there, but it's, I just wonder, like structurally you've got account, you know, my account number 53 at svp, like what happens? Like, oh, JP Morgan bought all the assets, let's say so do you suddenly have a JV Mor, JP Morgan account? Do they reopen the old accounts? Like, I wonder, is it like a minutes, days, or four weeks?
Leo Laporte (00:37:57):
And there's also concern, I mean, this is Williams get out. This is the 17th or 18th largest bank in the country. There's also some reasonable concern that it concentrates the banking system and you don't Yeah. You don't want to do that. You don't wanna make a big bank like JP Morgan even bigger.
Lisa Schmeiser (00:38:11):
Because what happens when the, the, the next largest bank is just the one that has the, the panic in the bank run.
Leo Laporte (00:38:16):
Right. before, okay. In the event. In that event. So, so 250,000 you're covered. Don't worry. That's fine. That's done more than that. A provision of federal banking law, according to the post give the F D I C, the authority to protect uninsured deposits as well. If failing to do so would be a, cause a systemic rest risk to the financial system in that event. Uninsured deposits could be backstop by an insurance fund, which is existing. It's currently paid into regularly by US banks, but two thirds of the fed's board of Governors and the F D I C board have to approve that along with Janet Yellen. So there is a, I think there is a fairly orderly process. And I think really the most important message, and this is Yellen's message on Face the Nation is what Got it. It's under control. Mm-Hmm. <affirmative>, don't run to your bank on Monday and take your money out. That would be silly. And if you're an SVP depositor, hang on, we got you. Even if you're amount, if the money you have exceeds the insured amount, you're gonna be okay. It just may take a little bit longer. Is that accurate to say all of that, Reid? Is that roughly the I,
Reed Albergotti (00:39:35):
Yeah, it is. I think we, I think that to, to stop this though, to stop people from going and taking their money out on Monday, there's gonna have to be something that's more concrete. I mean, I was on a group chat today where, you know, they got a message, somebody got a message from First Republic Bank saying, don't worry, we've got enough money in in our accounts, everything's fine. And they, they screenshotted it and said, oh my God, they're screwed. <Laugh>. And I'm, I mean, there's this, there's this like inverse effect, right? Yeah. Of like, what, as soon as a bank or whoever it is just says, don't worry, everything's fine. Like, it makes people nervous. And the whole system just relies on the fact that people aren't nervous that they trust the system. So I think it needs to be something more like, here's exactly what we're gonna do. We're gonna guarantee all the deposits or whatever it is. And that's what's gonna make people feel better, I think. Yeah.
Glenn Fleishman (00:40:28):
I'll tell you the secret is, have all your money in mortgages and debt, if you like me, if you don't have cash in the bank, you can't lose it. Totally protect.
Leo Laporte (00:40:35):
And they'll be sure to make sure those mortgages continue. <Laugh>.
Glenn Fleishman (00:40:39):
Yeah. I've got, I feel very lucky right now,
Reed Albergotti (00:40:42):
Let's not get into the real estate <laugh>. Fuck. I have all my money in real estate, so that's even more scary. I think <laugh>,
Leo Laporte (00:40:51):
I pro this is not, I mean, I have, I'm close to retirement. So I have all of my retirement funds in a single institution. It's not a bank, it's a, you know, it's fidelity. I presume I'm okay, but I don't, I don't, but
Glenn Fleishman (00:41:05):
It's an investment. Yeah. It's
Leo Laporte (00:41:06):
Investment. A difference. It's not like instead of rules, they actually have to be holding the stock certificates, right? Yeah. Yeah. They can't just lend that to the Glen Fleischman and hope all the works out. Okay. Right. Okay,
Glenn Fleishman (00:41:16):
Good. Oops. No, they're gonna say, oops, all Bitcoin is what they'll tell you. <Laugh>. I understand. We went big on NFTs. We did. I hope that's okay.
Leo Laporte (00:41:22):
<Laugh>. We did, at one point there was an advertiser came to us and said, Hey, yeah, we, we we will now let people buy Bitcoin in their retirement funds. Can you do those ads? And I said, oh my God, no, <laugh>,
Glenn Fleishman (00:41:33):
Leo Laporte (00:41:33):
You. I don't think I want to do that to our fine audience. I try not to recommend things like that. Washington Post, again, talk to a professor at the University of Chicago's Booth, school of Business in Neil Caap. He says, this is not a systemic event. This is a mid-size bank that was badly managed. It may be a little messy, but that's different than if you have somebody at the core of the financial system stop making payments to somebody else at the core of the system. And then the core implodes. This is not a systemic event. We're gonna be Okay. So that's the message. Mm-Hmm. Right? Yeah. Don't listen to Jason, Jason ka Canis. It's gonna be fine. I'd be
Lisa Schmeiser (00:42:11):
Super curious with his, with his tweets. There's a lot of quote tweets and are the quote tweets amplifying and buying in? Or are they like, this is monkey shines. Do
Leo Laporte (00:42:20):
You think people are Well, I think for Jason, it's entertainment. Right? But I, but there are probably people hedge funds you talk about that read in your article at SMA four mm-hmm. <Affirmative> that want to capitalize on this, that hope to make a little money. The hedge funds are offering, what is it you said 60 cents on the dollar. It's
Lisa Schmeiser (00:42:36):
Not an act of charity, man. What
Reed Albergotti (00:42:38):
Do they, but I, I will say nobody's taking that deal. Right? I mean, they, they were coming in and trying to get 60 cents on the do that would be a great deal for them, right. Because they
Leo Laporte (00:42:48):
Know they'll get the money ultimately. Right. That should be the inf that's the information you need. They wouldn't be offering money if they didn't think they were gonna get their money in the end.
Reed Albergotti (00:42:56):
Yeah. It's going to, I mean, I think people are thinking like the worst case, 90 cents, 95. I mean, look, I could be wrong. Everyone could be wrong. I mean, I, I have no idea. But that's what everybody thinks. But, you know,
Leo Laporte (00:43:08):
Well the good news is we don't record this show. So you could say anything you want. No one will ever hold you accountable. There's no record and there's no record whatsoever.
Reed Albergotti (00:43:18):
This just goes, I remember what was going on before this show. You were looking up every episode, <laugh>. Oh
Leo Laporte (00:43:24):
Reed Albergotti (00:43:25):
Glenn Fleishman (00:43:26):
I just wanna point it out that you quoted a guy from the Washington Post who it sounded like his name was Neil Cash app. I know that wasn't his name and I was good. It was ironic that it sounded that
Leo Laporte (00:43:35):
Silly Mr. Cash app said <laugh>, he must, that's should in business, right?
Glenn Fleishman (00:43:39):
Mr. Cash dollar
Leo Laporte (00:43:40):
42 billion in withdrawals on Thursday, 42 billion, which led it on Thursday alone with a negative ambance of nearly a billion dollars.
Lisa Schmeiser (00:43:51):
But they had 41 billion on hand. Which, but they had 42. Amazing. When you think about it,
Leo Laporte (00:43:56):
<Laugh>, what is the, there is a, I mean, maybe this is old-fashioned, but there's a reserve amount that they have to keep in, in, in the vaults, right? It is mm-hmm. <Affirmative>
Reed Albergotti (00:44:05):
Seems like, well that was what forced them to have to do the raises and all that. Right? I mean, they had to Right. You
Leo Laporte (00:44:10):
Reed Albergotti (00:44:10):
Need the reserves and, and sell illiquid assets. Right.
Leo Laporte (00:44:13):
Ah, and that's what triggered this was keeping those reserves.
Glenn Fleishman (00:44:16):
This is still, what's weird about the modern economy too, is whenever, whenever you talk about cryptocurrency, you know, it's all, it's all exists electronically. It's, it's only like 2 billion, or was it 2 trillion of cash in actual physical form that circulates. And I think it's 20 trillion. That is in only as electronic records. So there is a kind of a, I mean it's real, it's real in the sense that we, it's bits all believe in it. Yeah. We all trust it. Yeah. But it's it's backed by the full faith and credit of the US government. But it is a bunch of electronic records. So when they had 41 billion in withdrawals, I'm guessing 40.55, 9,000 of that, or million of that was probably in you know.
Lisa Schmeiser (00:44:53):
Yeah. You don't have some kid and Allbirds running over to the bank with a, with a wheelbarrow. All I need the start phones.
Leo Laporte (00:44:58):
It's so, and the other thing a look at when you're watching Twitter is maybe su is to look at the angle. Yeah. Somebody's working. For instance, if you had a billion and a half dollars in the bank and thought, oh God, what are we gonna do? It would be in your interest to create a run on other banks so that the F D I C would sta step in and bank and cover your one and a half bill. Cuz they're not otherwise. So there may be also some incentive for people who are deeply involved in S V B to get other banks to suffer. So the F D I C steps in <laugh>, things like that, you gotta keep in mind.
Lisa Schmeiser (00:45:37):
So instead of it being a mid-size bank that
Leo Laporte (00:45:39):
Yeah. Let's make it a big failure so that I can get my ass covered. Yeah. But believe me, people, there's
Reed Albergotti (00:45:43):
Been a lot of that on, like, on Twitter, there's been a lot of people sort of talking about First Republic now and saying, you know, it's about, it's like dooms dooms. So
Leo Laporte (00:45:53):
Consider the source a little,
Lisa Schmeiser (00:45:54):
The games, the GameStop stock thing where you just had a group of people who were like, wouldn't it be fun? Oh yeah. To, to juke a bunch of stocks. Let's create buzz and let's create a crowd action and then let's see what happens.
Leo Laporte (00:46:05):
But never underestimate how poorly people will behave if there's money at stake. They really will act badly in their own interest, even if it means a million other people suffer. So just when you're reading Twitter, well, bestest thing would be not to read Twitter ever again.
Glenn Fleishman (00:46:20):
I was gonna say, I all this, I'm not on Twitter
Leo Laporte (00:46:23):
By the way. Mas on, did you see a whole bunch of stuff in Masada about this? A little bit. Wasn't a lot of freakouts.
Reed Albergotti (00:46:30):
I, I think on that point about just sort of acting in your own interest, it was interesting to talk to venture capitalists. I mean, a lot of them felt they, you know, the thing to remember about Silicon Valley Bank is like, it's, it was a community institution in the Bay Area. Right. For, for the tech industry. They had all these events. They had box seats at the game. They had cabins up in the mountains. They, you know, they were, they were really like, they built these close relationships. Right. And I, I remember talking with a VC or texting with a VC on Thursday morning and I said, what's what's going on with with svb? And he's like, what do you, you know, it's fine. I was there, I was just with people at svd, they told me everything is fine. It's like, it's not a deal. Oh my God. And then it's like, you know, and a couple of hours later, you know, the same PC is like, we're having emergency meetings. Like I think we need to like take the money out, but felt like bad about it, you know. But I think there was this cognitive dissonance in the Valley where I think like these VCs who, you know, had, had the Silicon Valley bank had helped them. Like they, a lot of them had personal mortgages there at like very low, or
Leo Laporte (00:47:40):
They got their first credit card there, or their first there.
Lisa Schmeiser (00:47:44):
Oh. Mallek mentions that they were the only bank willing just take a flyer on him when nobody else watched. Yeah. I mean he talks about that. Oh yeah. There's a lot
Leo Laporte (00:47:50):
Of people there. So they may, they have relationships. Yeah. Which is why, by the way, another bank might want to come along. Mm-Hmm. <affirmative> and reopen under the SVB brand. You
Lisa Schmeiser (00:47:57):
Can't buy those kind of relationships. Those are just built up over Yeah. Time and overseeing how they benefit other people. It's, it's, it's positive reputation.
Reed Albergotti (00:48:06):
But the, even the, you know, the CEO of SVB was like asking pe he was like, look, we were there for you. Mm-Hmm. <affirmative> like, be there for us. And it turns out like that's just not how it works. No, it isn't.
Leo Laporte (00:48:16):
Reed Albergotti (00:48:17):
If they feel threatened, you know, they're gonna take their money out and, you know, it's, it was, it was kind of sad actually to talk to people. I, I talked to one entrepreneur who told me that he had a story about, you know, nine 11. Like he had a term sheet that, you know, went up, like went away with the World Trade Center basically. And like SVB was there with a loan to like, oh my gosh, help him get through it. You know, people just had this emotional connection to it. And, you know, I mean, it's a little, I mean, I, I, maybe I'm getting a little sappy, but, you know, and it's all just business. But, you know, it, it was, I think there was an element to it that wasn't really like a normal bank. And I think that also played into maybe this, this feeling that they could get through this. Mm-Hmm. <affirmative>, you know, they could get through their tough times because they had built up all this, all this goodwill and turns out no. So
Lisa Schmeiser (00:49:07):
It's like the opposite of that scene. And it's a wonderful life where instead of it being like, your money's in, in this, in, in this payroll service, and it's here, and Sarah's like, I don't care. I'm
Leo Laporte (00:49:18):
Yeah. Gimme my money. <Laugh> give, it's OK to just show me the money. It's
Glenn Fleishman (00:49:22):
Okay to be sappy and human about this though, because there's no allegations of fraud. Whatever happened if people made mistakes, would, it seems like, seems like mistakes were made, but they were not totally unreasonable failures. People covering things up. Maybe we'll find out later. There's more to that story, but it just seems like there was that interview with the c e O last Tuesday where he is like, oh, I love to go biking. It's really relax. I mean, you're just like, the guy had no idea this was coming. There was no, this was a a, a storm that hit them. Maybe they summoned that storm, but they didn't do something wrong. Like, these aren't Malfactors who there's gonna be a five part Netflix documentary about. Right. It's gonna be more like a very technical story. I can imagine one of, there's pieces that like Baron's runs this 10,000 words <laugh> explaining every little, you know, financial thing. But it won't be it won't be a Theranos or something doesn't
Reed Albergotti (00:50:13):
Seem like. No, but I think that there will be, I mean, I agree with you, but I, I, I think people will go back and they will write stories about, you know, this bank taking risks mm-hmm. <Affirmative> and, you know, making loans to risky startups and all this stuff. And I think there, I think there is an element where that the bank did sort of take on this, this kind of like, acceptance of risk that the, that their clients had, right? Because that's the culture of, of Silicon Valley is I see, you know, you take these risks and a lot of times these loans, they were sort of almost backstop by just this faith that, you know, Hey, we know the VC firm behind this company. You know, we know those people and not so much. I mean, cuz how, how could it be the fundamentals of the company?
Right? These companies have no revenue, so most of them. So I think and, and you know, of course like the, a lot of the founders who, who took out loans were doing so, so that they could hold onto their equity, right? Not so much because they needed the money when they could have gone out and raised more capital and given away shares. But they wanted to become more wealthy. So I think you could go back and you could spin that story in a way, and I'm sure people will, but I do, I do think that's a spin. Like that's a take on it. I think, I think it's kind of a cynical take personally, <laugh>, but
Leo Laporte (00:51:31):
I gotta tell you, financial Times had an article on February 22nd mm-hmm. <Affirmative> almost a month ago. Silicon Valley Bank profit squeeze and tech downturn attracts short sellers California institution that serves startups seen under scrutiny, over investments that have left it with an unrealized 15 billion loss. I mean, this, this, this shouldn't have been a surprise, right? But it's not malfeasance they invested in long-term to be federal T-Bills
Reed Albergotti (00:52:02):
Glenn Fleishman (00:52:02):
Reed Albergotti (00:52:03):
You know how exactly Prime Morgan,
Glenn Fleishman (00:52:06):
Matt Levina Bloomberg has this, you know, he has that great newsletter and he, he's been
Leo Laporte (00:52:10):
Banging this drum for, he's the first guy I read on this, by the way,
Glenn Fleishman (00:52:12):
Immediately. Yeah. He's been banging the drum for a long time, which I think, I think is generally agreed by very sensible people, is that when you're at a time of, of 0% interest, you invest in weird stuff because you need to get a return and money's free to get, so all the money, free money that flew Yep. Flowed into crypto and all the money that flowed into VC was because you needed something more constructive to do with your money. The minute interest rates go up, everybody who's locked into anything long term at low interest rates, where they're p where they're, they can't get it out where it's a liquid. They're stuck like sdb and anybody who wants to take their money and put it into something safer, but now high interest takes their money out of things that are structured in a worst way. And so crypto imploded, SVP imploded Levine would argue this is just a natural consequence of, of higher interest rates.
Leo Laporte (00:53:03):
Let's take a little break and so I think we've covered this sufficiently. Jason Keans is listening and wants to rebut, but I know you guys would prefer not to do it while you're on the air. Maybe after the show is over, I'll give Jason 10 minutes and he can, he can. Is that okay with you? I won't be here. That's
Reed Albergotti (00:53:20):
Fine. I just, I need, I'll plug in. I need to plug in my laptop. Go
Leo Laporte (00:53:23):
Plug in your laptop, Reid. I'm gonna gonna talk about ZipRecruiter and we'll be back with other subjects cuz I know, you know a lot of our audience says so what? Right. So what we, I think we've tried to explain that this will impact normal people, like mm-hmm. <Affirmative>, your payroll might not be working mm-hmm. <Affirmative>, but ultimately this should be, and I hope it will be as so what Everything goes on. There's no run in the bank at nine o'clock tomorrow morning. And and everybody goes back to life as usual, but it was a big story. Let me tell you, it was a big story in Silicon Valley. Our show today brought to you by Zip Recruiter, if you're hiring for your team, thank you. First of all, despite current headlines, several industries, healthcare, hospitality, cybersecurity, they're all heading for a a hiring boom.
So no matter what industry you're in, if you need to hire, there's one place to go. It's where we go the minute we've got an opening, we go to ziprecruiter.com/twit. And here's the good news, you can try it right now for free. It's, if you're down a person, it's a tough thing. When our continuity person got a different job she wanted, didn't want the commute, she, she left, she gave us two weeks notice. But we're thinking in two weeks everybody's gotta work harder because we've all gotta cover her job. Lisa's freaking out that morning. I'm sitting with her at breakfast. She says, I gotta post this right now. I mean, she literally just got the email. She goes on ZipRecruiter before lunch. Really? Within the first hour she starts going, oh, hey, we got a good one. Oh, this one's great. This one's wonderful.
We got a bunch of great applicants, and in fact, we hired our wonderful Viva thanks to ZipRecruiter. That's what's so awesome. I could tell you all the great things about the ZipRecruiter interface. You don't get emails, you don't get phone calls. It all goes into the ZipRecruiter interface. It makes it easy to screen people, rate them, or hire the right one fast. But I gotta tell you the best thing about ZipRecruiter, it uses its powerful matching technology. When you post that job, instantly, they go out and look at current resumes they have on file to find qualified candidates, people who meet your needs, and then they give you the names and say, if you'd like to invite them, these five people really would be perfect. You send out the invite, which makes a big difference. By the way, when a company you're applying for work in a company comes to you and says, Hey, we'd like you to apply for this job.
You're gonna, you're gonna go to the interview, you're gonna show up, you're gonna be be wearing bells, right? So we got great, we get great people that way. I just think ZipRecruiter is the easiest, fastest, best way to hire. We, that's what we use. Four out of five employers who post on ZipRecruiter get a quality candidate in the first day. We usually get it in the first hour or two. It's amazing. Find quality candidates fast. Let ZipRecruiter keep your team growing strong. Can't have Eva though. We love Eva. We're not giving her up. Ziprecruiter.Com/Twit. You could try it for free right now. Dot com slash t w i t. We thank ZipRecruiter for supporting the show and we thank you for supporting it back by going to that address. So they know you saw it here, right? Ziprecruiter.Com/Twit. Reid, you get plugged in.
Reed Albergotti (00:56:41):
Leo Laporte (00:56:42):
Have power. Have
Reed Albergotti (00:56:44):
Realize, I thought these New Macs were supposed to have like a battery to last forever. It's like I had a hundred percent battery.
Leo Laporte (00:56:50):
Wow. That zoom must suck it down. Yeah. Well also our shows are longer than they feel <laugh> or something. It's actually been five hours, didn't you know? Yeah, I was gonna say,
There's a lot of tomorrow listeners saying, Leo, this show is never longer than it feels <laugh> <laugh> already tomorrow. Oops. Yes, it's already it's already Monday morning. Let's see what else is going on in the world. Meta. Hey, K. Facebook has threatened Canada <laugh>. Why? so there is a bill C 18. We've been talking about it before. Michael Geist, who's a Canadian law lawyer, talks a lot about C 18. It would make Google and meta compensate news organizations when posts or links to their work appear on those sites. So if you know, Lisa, you're on Facebook and you say, oh, here's a great article about svb. You post it there and Meta's gotta pay SEMA for, for that article. Meta doesn't like that too much. A a spokesperson said, the company is planning to remove Canadian's access to both written and broadcast news. If B bill c a team becomes law,
Lisa Schmeiser (00:58:12):
Whoa, whoa, whoa. So what they're doing, in other words, if you're a Canadian who uses Facebook and you wanted to put
Leo Laporte (00:58:17):
Lisa Schmeiser (00:58:18):
You wanted to put a link to a to an article, you couldn't do that in anymore.
Leo Laporte (00:58:21):
Couldn't do that Instagram too.
Lisa Schmeiser (00:58:23):
How are they gonna enforce that? Are they going to use Jew?
Leo Laporte (00:58:26):
I think you could put a link in, but it wouldn't get propagated.
Lisa Schmeiser (00:58:28):
Well, no, no. Like how are they gonna know that? It, so, so the question I have is first off, is this law only for Canadian citizens? So if you travel from Yellowknife down to Miami, are you like, all right, now is the time for me to shine And you have and and you do all your links? Or are they
Leo Laporte (00:58:47):
It would just be Canada.
Lisa Schmeiser (00:58:48):
Well then this is the thing is if you're a US citizen and
Leo Laporte (00:58:51):
It's not gonna affect you,
Lisa Schmeiser (00:58:51):
Lisa. Well, no, no, no, I'm serious. It it could though. Cuz if you go to Vancouver and you're
Leo Laporte (00:58:55):
Like, oh no, I can't do it in Vancouver.
Lisa Schmeiser (00:58:56):
Yeah, well, but I'm a US citizen. So why is Meta, because you're Agh, Mars as a US citizen. You're in Canada. Yeah. Canada and,
Leo Laporte (00:59:02):
And blame Canada baby.
Lisa Schmeiser (00:59:04):
And what are they gonna do about VPNs? What is to stop somebody from using a VPN and saying, ha ha ha ha, I'm not in, I'm not in Yellow Knife anymore. I'm in Venice.
Leo Laporte (00:59:13):
Alisa Laur a me meta spokesperson said mm-hmm <affirmative>, if the Online News Act passes in its current form, we will end the availability of news content on Facebook and Instagram for people in Canada. A legislative framework that compels us to pay for links of content that we do not post. And which are not the reason the vast majority of people use our platform. I'm getting all worked up. It's neither sustainable nor workable. That's a big threat. When Google's done it though, didn't Google do it in
Glenn Fleishman (00:59:47):
Australia or Australia? Australia.
Leo Laporte (00:59:49):
They threatened it in Australia. Did they actually go? That
Glenn Fleishman (00:59:51):
Was the whole thing, yeah. Oh, I think they worked out a negotiation. Yeah.
Leo Laporte (00:59:53):
Murdoch backed down in Australia.
Glenn Fleishman (00:59:56):
But I think it winds up if you negotiate and you wind up agreeing on fees and it means that the biggest players wind up working out their deal, I think, right? Yeah. Because they get and the rest of the deal screwed the smaller players. Yeah. Yeah. Mm-Hmm. <affirmative>, it's I understand why. I mean, yeah, I, I I love that Facebook is threatening to do something they say doesn't matter much to its users. We're gonna do this thing that doesn't matter much to our users. So they are, it's like, doesn't matter much users, then why do, why do you care? Why would your users do?
Leo Laporte (01:00:25):
Well, they don't wanna pay
Glenn Fleishman (01:00:26):
Heritage News Media,
Leo Laporte (01:00:27):
Canadian Heritage Minister, which is by the way, a great title. I'd like that. Mm-Hmm. <affirmative> Pablo Rodriguez said Meta's decision to pull back from news is a threat, duh, intended to persuade the government to make changes that would reduce the amounts that tech pla Oh, it's a negotiation ploy would reduce the amounts they'd be required to pay news organizations. Rodriguez says, it's disappointing to see that Facebook has resorted to threats instead of working with the Canadian government in good faith. This tactic didn't work in Australia and it won't, won't work here.
I, I have to say, I'm a little bit on, I, I hate to admit it. I'm a little bit on Facebook's side here. It makes no sense for face. Well, okay, so how do you feel, Reid, if Facebook put your article from SE four some? So Lisa loves your article. Mm-Hmm. <affirmative> post it in her Vancouver home, or her yellow knife home, post it on Facebook. Do you think Sfor should get paid? Because what you're gonna get is a picture, a snippet, and then a link back to Sfor, right? Yes. Sfor is gonna get the traffic. Ultimately,
Reed Albergotti (01:01:34):
I, yeah, I mean, I'm sort of with you on this. I mean, I think that I, I worked at the information for, for four years, right? They're behind a paywall and they have no advertising. Right? So if you click on that link on Facebook, you're gonna hit their paywall. And you know, that that's, that's what news organization, if they want to have that business model right, then they can have a paywall. And, and it doesn't ultimately matter. But I think if you want to have the advertising business model, then you kind of want that traffic and you want to get that, that click through. The problem is, I think historically, like news organizations just became way too dependent on Facebook mm-hmm. <Affirmative> and on social media. And then it skews all the incentives, right? So I think the problem is more with like, with, I mean, I hate to say it like more with the news business and people just, you know, sort of optimizing these businesses to, to for clickbait. And we've seen, you know, we've seen the trouble that that's gotten us into, right? Mm-Hmm. <affirmative> over the last five to 10 years. So it just, it's a problem I guess that goes beyond Facebook. And I don't think you can blame Facebook for the problem. But I mean, it is, it, it does make sense to think about this and try to, and try to figure out, you know, how do we, how do we fix all these problems, right? So I I don't know if they're going about about it the right way, though.
Leo Laporte (01:02:55):
It seems like the internet has been hard on Rupert Murdoch and other newspaper barons and they blame the internet for the loss of revenue and classified ads, right? Mm-Hmm. <affirmative>, they blame the internet for the loss of revenue and display ads. So their attitude is, well, they oughta they need to, they need to give us money. Do you think it's different though for online sites, like the information or SE four or they kind of, are there more
Reed Albergotti (01:03:24):
Se four? I mean, the information in se four are very different. I mean, the information is just like, okay, we're going to, I, I think the information ha I mean, it's the most pure,
Leo Laporte (01:03:33):
I can't get to the information if I don't subscribe. I could see, see
Reed Albergotti (01:03:36):
The link and so,
Leo Laporte (01:03:37):
But you're probably not gonna get a lot of shared, did you? I mean, I don't, I don't know, but, well, no,
Reed Albergotti (01:03:41):
That's the problem, right? Yeah. I mean, that is the problem. Like, I worked for the information. I, I loved it. But I, we'd have these big stories and then, you know, you people could sort of rip you off and not credit you because you are behind this paywall. And at, and at the time when I started there, 2015, I mean, people thought balls were insane, and then it became all the rage. Now it's kind of like we're, you know, we're in this sort of weird sort of in between area right now with newsletters and all that stuff, <laugh>. But I, the s force business model is kind of in between. It's not like a, it's not a clickbait social media business model. It's a, it's more of a newsletter, premium advertising model. So it's, it we're, we're, we're sort of in between the information and like, you know, whatever, some name any big online publication, right?
But back, back to like the advent of the internet and the classified ads. I mean, newspapers could have just said, we're gonna charge people for our news. For some reason, in the nineties and early two thousands, newspapers decided we're, you know, people are willing to pay us. They pay us to deliver this thing to their doorstep every day, but it now let's just offer it for free online. Which is <laugh> in hindsight, kind of insane. And I mean, I think that was the original sin, really, as, as, as somebody who works in the, in the business.
Leo Laporte (01:05:04):
And I'll, and I, I will say I pay 400 bucks a year for the information, and it's well worth it for me. But I'm in the news business. I pay for Bloomberg too, which is, hurts my heart, but I do <laugh> because I need, you know, that's part of my job. But also I'm very reluctant to share links from any of those paywall mm-hmm. <Affirmative> services cuz no, I, I, and I don't pay for Financial Times, and I just intentionally ignore everything they say because
Lisa Schmeiser (01:05:29):
I think they, I
Leo Laporte (01:05:30):
Think I ticket in there. I think the
Lisa Schmeiser (01:05:31):
Idea of gift links, which has come up, I've seen them at both the New York Times in the Washington Post, where the idea is that you can gift a story as a subscriber. Yeah. Mm-hmm. <Affirmative>, I think that's a great idea. Because, well, it, it, it's great in the sense that I read this cool thing. I want you to read it right from, from a news. It's also really great from a data gathering perspective. Because if you think that, that someone on the backend is not tracking which articles get gifted most often, how many of those gift to articles lead to upsell, right? And further engagement, like that's just a great data pool to act on. But I agree with Reeb that this points to bigger funding and profit model problems within journalism and within publications as a whole. And part of it is journalism is not considered a public utility or a civic utility.
We don't live in a country where it has a lot of government funding. For example, Germany has publicly funded government funded journalism as, as part and parcel of their culture and their, and, and the way they do things. We don't. And building traffic sometimes is the only way. Peop and, and also I'm sure we all know people who the only way they consume news is if someone else spoon feeds it to 'em, Hey, did you see this? Hey, did you know about this? Like your mom used to send you clippings. Now your mom puts them on Facebook and it's foolish not to try to build that audience. But I question why you would need to monetize it when there are probably other ways that are more reliable to make money than shaking down either the dis face, Facebook is a distribution model, or shaking down publications, which would absolutely take small or scantily funded publications out of the running and cause us to lose those contributions.
Leo Laporte (01:07:15):
I do. I mean, I worry about SE four cause I really like SE four and I'm sure the Smiths know what they're doing. But I remember what was the, now I've already forgotten the name of it. The Politico had a similar mm-hmm. <Affirmative> News Operation Protocol, right? Yeah. Which is folded. And I do worry that if, if, if you don't have a paywall and you don't have a robust advertising business, I'm not sure how you succeed. I guess The Smiths know what they're doing. Pro
Reed Albergotti (01:07:45):
Protocol, if you remember, laid off, I think like most of their employees after the first couple of weeks. So we're doing better than that, at least. Yeah.
Leo Laporte (01:07:52):
Good. Congratulations. <laugh> <laugh>,
Reed Albergotti (01:07:56):
I think they also didn't have you know, they, they didn't have the this is just from talking to people, friends who worked there, but they didn't, they didn't build up the business model, you know, side of the operation from the beginning. Right. And I think them before it's really well thought out. And great
Leo Laporte (01:08:15):
People, Ben and Justin have a, a lot of experience in this area, and they know what they're doing, I think. And yeah, you
Reed Albergotti (01:08:20):
Totally, it's a, I think its very
Leo Laporte (01:08:21):
Different team and Yeah. Yeah.
Reed Albergotti (01:08:23):
I mean, I mean obviously I'm talking my book as, as they say mm-hmm. <Affirmative>. but you know, I, I think there's, there's an interesting technology question in journalism, which is like, how do you, how do you actually, how do you rebuild what we're, what we've sort of missed now, which is like these institutions, especially in smaller towns where, you know, you like not the big cities that have the San Francisco Chronicle and those kinds of papers, but like, how do you rebuild those, those community hubs of, of great journalism that covered, like, didn't just cover City Hall and do investigative pieces on corruption and stuff like that, but they covered the high school sports and the local businesses and all that. I mean, I, I know that's not a technology question per se, but, you know, in a way it is because, you know, there aren't, I don't think there aren't, it's not easy enough for local journalists who maybe are older don't have the technological know-how to start their own subscription services. It's not very easy for them to do. And that's kind of what I'd like to see from the tech industry is like more, more thought about that. I mean, it's not gonna be a, you
Leo Laporte (01:09:33):
Don't think sub and medium and places like that are sufficient. There needs to be,
Lisa Schmeiser (01:09:37):
Reed Albergotti (01:09:37):
Think one of the, I think that's how TCK started. Sorry. Sorry. No,
Leo Laporte (01:09:40):
Go ahead. Finish, read, and then we'll then Lisa.
Reed Albergotti (01:09:42):
Mm-Hmm. <affirmative>. No, I think, I think that was the dream of Subs Stack and it's kind of gone in this different direction. That's all I was gonna say. I didn't mean to interrupt.
Leo Laporte (01:09:47):
They've gone for the big jump high dollar bylines,
Reed Albergotti (01:09:51):
Obviously. Yeah. I mean, we love it. We love tck. Right? It's just not, it's not exactly, it's not gonna
Leo Laporte (01:09:57):
Help. Right. It's not gonna help the you know, the journalist on the street, the line, the line, the guy, the guy and gal covering the city council meetings to, well,
Lisa Schmeiser (01:10:07):
Wasn't that the dream of Patch for a while?
Leo Laporte (01:10:08):
Patch? I still read Patch. Patch exists, doesn't
Lisa Schmeiser (01:10:12):
It? I I still figure one, the biggest missed op, one of the biggest missed opportunities of the Audis was the Gothamist Empire. Cuz you had Gothamist and aist and Seattles, right. And Sist and Aist and Cist and Chicago. Why did that fail? Well, what I think should have happened, again, missed opportunity, is they really should have just spun off and sold the different city verticals to different newspapers and Yeah.
Leo Laporte (01:10:38):
But the newspapers are history.
Lisa Schmeiser (01:10:40):
Or they could have sold them to, it's been interesting. LA is now with K C R W, I think a local, oh. And I know that Chicagos was recently revived. But it was from the news, from what I'm saying is from the newspaper perspective, they really should have jumped on the East blogs and the audience, because you had in those blogs, and full disclosure, I wrote for L aist and for S Fest mm-hmm. <Affirmative>, you had really smart, engaged staffs that were hyper local and building out a phenomenal amount of coverage. And it would've been great for the San Francisco Chronicle or the LA Times to be like, okay, we're just gonna lift you and shift you. You're not gonna threaten newsroom operations. You'll still have your metro reporters, but we want you to keep working on that community building and that local feel where you are talking about nonprofits that are doing dog adoption drives every Friday. Or you are talking about the taqueria that just launched or think, because that's, that's another part of what
Leo Laporte (01:11:35):
We have a really nice local paper, but I Yeah. We're lucky in Petaluma. Hey Reid, is your beeper going off? Yeah. Is Liz trying to get ahold of you on Slack? Because the there there's news <laugh>. There's news.
Reed Albergotti (01:11:47):
Oh no. Oh no. What's going on? Sorry.
Leo Laporte (01:11:49):
Joint statement by the Department of Treasury Federal Reserve in the F D I C embargo just lifted a few minutes ago. They are gonna back all depositors. They're gonna back. See we were all
Reed Albergotti (01:12:00):
Deposit. Oh, there, that's what I said earlier. You said that wasn't on the table and
Leo Laporte (01:12:04):
<Laugh> I was wrong. Depositors
Glenn Fleishman (01:12:08):
The back though. This
Leo Laporte (01:12:08):
Is from the press release. After receiving a recommendation from the boards of the F D I C and the Federal Reserve and Consulting with the President Secretary Yellen approved actions enabling the F D I C to complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors, I presume this means beyond the ones with the F D I C insurance beyond the quarter of a million. Right? Right. Depositors will have access to all of their money starting Monday, March 13th. There we go. That's tomorrow. Mm-Hmm. <affirmative> no losses associated with the resolution of Silicon Valley Bank will be born by the taxpayer. So this is very good news. That was the, that stops it cold, right? No run on that way. That
Reed Albergotti (01:12:45):
Was the another That was the common sense thing they needed to do. Yeah. And they needed to do it now before the markets open in Japan and, you know, in Asia. So
Glenn Fleishman (01:12:56):
Yeah. The disclosed signature bank also, which sounds like it was in a similar place, so it'll get folded into this. It had it had quite a lot of money. So at the end of 2021, it had 20 118 billion of assets. It
Leo Laporte (01:13:11):
Was closed today by its state chartering authority.
Glenn Fleishman (01:13:14):
Yeah. So significant. So in the top, I don't know whether that is 50 or 40 or something like that. If yeah, if Silicon Valley Bank would,
Leo Laporte (01:13:20):
So the second bank or 18, the second bank going down. Yeah.
Glenn Fleishman (01:13:23):
But similar sounds like some other thing. They put their money in the wrong kind of paper, but not, didn't blow at all at this, at the track.
Leo Laporte (01:13:30):
The Fed also announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. So easy. This is, yeah. This is very strong action to, to really prevent any further aftershocks
Glenn Fleishman (01:13:47):
From, well, they, they've analyzed the assets now too, so they know when they say no taxpayer money will be put at risk, it means they know what's in there and they can wind it down on their own schedule or they can exchange it for other kinds of debt or what have you. So it'll, it's all gonna be, it's, as we said at the outset, it's all rational minds have prevailed. Yay.
Leo Laporte (01:14:05):
Reed Albergotti (01:14:05):
Imagine if somebody actually sold their deposits for 60 cents on the dollar to some hedge fund. <Laugh>,
Leo Laporte (01:14:11):
<Laugh> hedge funds, hope Hedge, nobody hedge did that are happy now. That's a good point cuz that hedge fund's gonna be a hundred percent whole tomorrow.
Glenn Fleishman (01:14:20):
Hey, I wanted to circle back to the newspaper question, if you don't mind. Yeah, sure. The local newspaper. Well, so I mean, whenever you look at the newspaper market today, you have to look back at a hundred years newspaper ownership largely controlled by families. That dramatically shifted because of a combination of inheritance tax, bad planning, other factors during this transition to internet-based advertising with all these families taking 20 to 30% margin, expecting it as they're due, not going with the times, and then being sucked, you know, then letting corporations buy them out. And sort of, so the families, like the ones that owned the Wall Street Journal, the ones that owned the LA Times, all these other papers, the Seattle Times being one of the rare exceptions with still 51% family ownership. There wasn't a constant reinvestment. They sometimes had big newsrooms, but the, the families and the companies that owned these newspapers for decade after decade just had a, a monopoly on, on a kind of advertising.
They expected 20, 30% margins every year. They spent the money, they did not reinvest it in a way to build a lasting journalism opportunity for the future when things started to look like they were gonna go down. So when things got bad, even when the margins were still relatively high, they took the money, they sold it out, they lit, they saddled themselves with debt because of the buyout provisions. And that all got sucked away into the ether. And all of those, you know, thousands, tens of thousands of jobs lost. And that was a particular like blip in the history of news. Is that gonna be the long term thing? No, but there's a rebuilding period. You can't go from the hundreds of billions of dollars that was, that newspapers were valued at during their heyday in current dollars. And, and then say after this whole transition, newsroom staffs demolished real estate sold off the vestiges of papers existing.
You can't rebuild from that foundation cuz the money isn't there from advertising. You have to find advertising in different ways. And Facebook and Twitter and other networks took the lion share of that. So at some point, you know, Facebook has lost, its kind of a Gemini, things are changing rapidly. There could be new institutions that rise, like S four that figure out models that will succeed that aren't physical media based. Mm-Hmm. <affirmative>. And that can tap some of these billions and billions of dollars being spent for advertising that paper newspapers will, will never probably get back.
Lisa Schmeiser (01:16:37):
No. I think if you're looking at models and coming as I do from B2B journalism at this point, we used to have what's called qualified circulation. Meaning that before people could get our print publication back in the days made of print
Leo Laporte (01:16:48):
Publication week and Mac Week and all this, you
Lisa Schmeiser (01:16:50):
Used to have to qualify for it by listing what is your job title? How big is your company? And then you could aggregate that data and you'd sell it to people and they could then target your, your reader audience with Yeah. It
Leo Laporte (01:17:04):
Seemed like a, a lucrative business when
Lisa Schmeiser (01:17:06):
Happened. Well, it's, it's actually still going. And it's changed because what you can do now is you can build out custom webinars or you can even host events or you can have sponsored newsletters.
Leo Laporte (01:17:16):
Was there less interest in the paper magazine? Is that what happened? So executives just didn't want to receive
Lisa Schmeiser (01:17:21):
The, and the cost and, and you still also had advertising, you still also had advertising to flip the cost of production. Right. Right. And since people were reading articles online before they went into print anyway, why are you paying money for something that people have already read?
Leo Laporte (01:17:33):
Lisa Schmeiser (01:17:34):
But good point. You know, if you're talking about new revenue models for news, you're going to have to start taking a look at things where the i the act of being informed and engaging with either Newsmakers or News Chronicler is going to be as much the product as the the news itself. Yeah. And you can do that either through here, you're subscribing, this is clearly a part of your news consumption identity is you pay for this good in service, but you could also be, you're somebody who goes to see the We Can Tech live and you've, and you've paid money so that you can shout questions at these three while they talk with Leo. Or we're going to give you a webinar, or we're going to give you an opportunity to sign up for a networking event or things like that. I think you're gonna see a lot more of that with publications, especially trade public, especially industry specific publications where tapping into industry expertise is as much the part of coverage is breaking news. And I wouldn't be surprised for one hobbyist too,
Leo Laporte (01:18:26):
Just, just to pile on mm-hmm. <Affirmative> Ford says the next generation Mustangs won't have radios in them.
Glenn Fleishman (01:18:33):
Glenn Fleishman (01:18:37):
Oh, no. Oh,
Leo Laporte (01:18:38):
No. Similar, similar problem. Right. nobody listens to the radio anymore.
Glenn Fleishman (01:18:44):
But they do. I mean, they, they do. But they, you know, as a long time now, retired radio hosts, Leo, you know, and people do listen in surprisingly large numbers, but not in a way that's worthwhile
Leo Laporte (01:18:55):
And not in a way that's growing. And yeah. As I ask you, is there anybody under 40 who listens to the radio? I don't think so. Well,
Glenn Fleishman (01:19:03):
That's a great question. Yeah. I don't, I haven't listened to the radio in, in years. Yeah.
Leo Laporte (01:19:06):
So what do you, what are you defending them for? <Laugh>?
Glenn Fleishman (01:19:09):
I I listened to pod I think called podcasts, and you might have heard of them. Yeah. some of them produced by radio programs, but
Lisa Schmeiser (01:19:15):
To classical music radio.
Leo Laporte (01:19:17):
Well, you're gonna be happy, but we'll talk about that after the break. I have to say you know, one of the reasons I retired mm-hmm. <Affirmative> from AM Radio, which I'd been on for almost my whole life, is there was, the revenue was dwindling. I wasn't, I wasn't getting paid. You know, there really wasn't. So it's a very similar situation. And iHeart who owned my radio show mm-hmm. <Affirmative> has moved dramatically into the podcast business. And mm-hmm. <Affirmative> apparently makes as much money, if not more money in advertising on podcasts than they do on terrestrial radio. But
Glenn Fleishman (01:19:53):
I did think podcast come to a kind of a mm-hmm. <Affirmative> podcast of sort of tapered off on the revenue
Leo Laporte (01:19:59):
Growth. Yeah. We're kind of suffering there too. Hold
Lisa Schmeiser (01:20:01):
Glenn Fleishman (01:20:02):
Points, Tim, I don't,
Reed Albergotti (01:20:04):
I don't know as much about radio, but I just on the, on the print point mm-hmm. I will say, I mean, worked, I worked at the information. Mm-Hmm. And there were, there were several articles that I wrote where it, you know, I spent a lot of ti like months on them mm-hmm. <Affirmative> and they, the, the number of people who subscribed, who actually like, put down their credit cards, if you figure their annual subscribers, like, more than paid for my salary. Oh, that's great. For that year. And I think like, what that kind of taught, that's encouraging. Yeah. I thought it was encouraging. And I mean, obviously it's a different, you know, it's, it's the tech industry, it's business, you know, people can expense the subscriptions, blah, blah, blah. But it, it did teach me that like, readers know what quality is mm-hmm. <Affirmative>, they can tell when you spend a lot of time and, you know, gave them new information and they are willing to pay for that. And that the price they're willing to pay may vary based on the type of, you know, thing you're writing about. But it, it made me think that there are, there are subscription, maybe hybrid subscription advertising business models out there that can really, you know, work if people have the technology, if they're willing to bowl the dice. I mean it, you know, can happen.
Lisa Schmeiser (01:21:16):
Yeah. We're also talking about this because we're people who A, are willing to pay for this content mm-hmm. <Affirmative>, and B, we're in a position where we can,
Leo Laporte (01:21:24):
And we make it <laugh>. Let's not forget we're on the supply side
Lisa Schmeiser (01:21:28):
As well. One of the perils of, one of the perils that I think we should, we should bring up is that you do have people who are on constrained budgets and they should be able to have access to the same great content. Absolutely. Yeah. And I think one of the things we need to look at is what kind of technology can you put out there that allows library users and school children and retirees and other folk to be able to use a library account to read a story in Bloomberg Business Week, or to read a story. The Wall Street Journal. That's point. I like that idea. Simply
Leo Laporte (01:21:59):
Do libraries buy those
Lisa Schmeiser (01:22:00):
Subscriptions? They do. Yeah. some, some libraries have them. Libraries are chronically underfunded though. So this is, it's, it's, I mean, we're not gonna solve all the, we probably could. We're all very smart. We're not gonna solve the problem today, <laugh>, but thank you for that vote of competence. What we've managed to do is, is identify that there's something innately broken in the model with how we fund news. Access to information is something that cuts across all income lines and oh, just buy access is and answer. But it should not be the default answer or the only answer. We have to, I agree. How do you fund good journalism? How do you get into everyone's hands? And for all that? I really don't like the reliance on social media to boost traffic. Like, I feel like chasing after traffic is more a black art than a science. And, oh, do this for engagement, do that for engagement is a bad way to do journalism. I do think you have to acknowledge that for some groups, Facebook and Twitter are the, are, are, are their curated headline feeds. And we have to be sure that we're not cutting these people off from a source of information or news.
Leo Laporte (01:23:03):
That's a very good point. We always have offered free versions of almost all of our shows. It was all of our shows. And now that we have a club twit, we have a kind of a patronage system. Yeah. we do have some stuff that's, that's behind a paywall. Mm-Hmm. <affirmative>,
Glenn Fleishman (01:23:18):
But I've got an actual what do they call it? ATV antenna. What's the the digital receiver? I have a physical one that I put on my roof and a ethernet based receiver partly to watch Jeopardy, frankly. Ooh. Excuse. Mostly, mostly broadcast. Mostly broadcast, not found online. And it's fascinating to scroll through and see the sheer quantity of
Leo Laporte (01:23:40):
Of my pillow ads
Glenn Fleishman (01:23:42):
And over. No, no. There's, there's a lot of high quality stuff being broadcast. Major network.
Leo Laporte (01:23:48):
So you're watching broadcast television with a, with an N antenna.
Glenn Fleishman (01:23:51):
Yeah. I mean, I can,
Leo Laporte (01:23:52):
You're, you're in Seattle record. I can't get broadcast here in Pet Lomo. You can't,
Reed Albergotti (01:23:57):
Glen, I did the same thing. I did, I did the same thing recently because I was paying $70 a month. There's something basically just watching, like the football game that was on the local, it was on
Leo Laporte (01:24:07):
For free, incidentally in higher quality. Yeah.
Reed Albergotti (01:24:10):
We haven't, we don't have
Glenn Fleishman (01:24:11):
Reed Albergotti (01:24:12):
It's antenna for the,
Leo Laporte (01:24:13):
Glenn Fleishman (01:24:13):
Local stuff. We gave up cable 20 years ago, 18 years ago. And did you live in a
Leo Laporte (01:24:18):
Glenn Fleishman (01:24:19):
Yeah. Well, it's true. Well, we, but it's between service stuff we can get from digital and streaming. Right. we're in a, we're in the TV shadow, so initially Oh, you couldn't even get many dv DTV broadcasts. And then the towers got higher and moved around. There's more repeaters or something, but No, it is, I forget, I'm sorry. I forget about that because a lot of rural areas are, are shut out that you're in a rural area per se, but non metro area? No,
Leo Laporte (01:24:41):
We are in a rural area. Metro. Yeah, we don't have channels. I get one channel, a U HF channel outta Santa Rosa Channel 50.
Glenn Fleishman (01:24:49):
That's, that's the, that's the mom pedal channel, isn't it?
Leo Laporte (01:24:51):
20. Exactly. There's no, there's no jeopardy on it though. That's <laugh>.
Reed Albergotti (01:24:55):
Who are you the, are you, is San Francisco the Sutra Tower? The closest antenna? Yeah.
Leo Laporte (01:25:01):
Petaluma. And it's too distant.
Glenn Fleishman (01:25:02):
Oh my gosh.
Leo Laporte (01:25:03):
Reed Albergotti (01:25:04):
Distant. Oh, interesting.
Leo Laporte (01:25:05):
That's okay. Rita, are you in the Bay Area?
Reed Albergotti (01:25:08):
I'm in Marin, so I, oh yeah, so
Leo Laporte (01:25:10):
You could get Sutro for in Marin, but you go a little bit farther north. Yeah. That's amazing. All we get is KC sm No, no, I, I don't know what it is. It's from Santa Rosa. Channel 50. I used to live right before those suture tower. It was, it was fun to hike. I've been on top of, I climbed upstate Sutra tower. You know, there's a mattress and a shack up there. I don't know why you'd wanna spend the night <laugh>. I kinda do though. Is
Reed Albergotti (01:25:31):
That what that's for? I thought you were gonna say, I used to get great signal there.
Leo Laporte (01:25:34):
I used to get a, the signal. So good. You know, the signal was so good, it burned my hands. I came down. What? And I had spots on my hands. I said, I told Tim p said Tim Poser, the chief engineer brought me up there. Tim
Glenn Fleishman (01:25:47):
Leo Laporte (01:25:47):
Yeah. You know, Tim, what, what are those spots, Tim? He said, oh, those are RF burns. Don't worry about that. And so far I haven't gotten these. So Tim, now they make you wear a mesh, metal mesh suit to go up there because of the RF is so strong on the, on the
Glenn Fleishman (01:26:00):
Shot. The funny part is, Leo can now look at a bag of popcorn, of unpopped kernels may pop, pop,
Leo Laporte (01:26:04):
Pop, pop. It's the, it's the only benefit that's the
Glenn Fleishman (01:26:06):
Side of you. Now
Lisa Schmeiser (01:26:07):
Imagine like those metal mesh suits, like you were when you were diving with the sharks
Leo Laporte (01:26:10):
Too. It's just like that. Yeah,
Lisa Schmeiser (01:26:11):
You can basically go from Sutra Tower right over sharks to the phons
Leo Laporte (01:26:13):
Glenn Fleishman (01:26:14):
To Sharks. Fairday cage, A Fairday cage suit. It is,
Leo Laporte (01:26:17):
It's a little, little fairday cage suit. Exactly.
Glenn Fleishman (01:26:18):
Oh, that's neat. That's
Leo Laporte (01:26:19):
Weird. Huh. Wow. Wow. That was a wide ranging segment. Let's take a break. <Laugh>. I don't, we went from Meta and and Canada to shark suits. But anyway we will take a little break and come back with more with our great panel. It's really nice. First time on, read Al Gotti. But it's like you've been here all along. I thank you so much for joining us Technology editor from The Excellence SEMA four Misspelled, but that's okay. S e m A f o R. What is the, is there an E on se four?
Reed Albergotti (01:26:52):
It's, no, it's with a it. Yeah. And with, it's with a pH and there's Neme. Oh, it's P h
Leo Laporte (01:26:57):
O R E.
Reed Albergotti (01:26:57):
That's the, yeah. English spelling. But I think the idea is that it, it's a word that means the same thing in a bunch of different languages, so, oh. You know, you can kind of spell it however you want.
Glenn Fleishman (01:27:06):
You can't trademark an English word like that either, but if you spell it for, as the people at Cool TWiT movies or something figured out, you can you can trademark it.
Leo Laporte (01:27:16):
Well, I love it. And it's and I and what's the story with the the tint on the page? Is there a story there?
Reed Albergotti (01:27:25):
<Laugh> I think we, we want to be different. I think is the idea. And it, it's good. And I think it kind of like, I'm not the one who came up with this, so, you know, I can't, I don't know if I can explain all the, the theories behind it, but I mean, it kind of gives you the, it, it, it's new and we're online and it's, it's different, you know? Yeah. It's
Leo Laporte (01:27:43):
Reed Albergotti (01:27:44):
It all gives you this sort of feeling of like a newspaper, like, like old school and, you know, which I, I think we are, I mean, we're, we're all former newspaper journalists, I think mostly. And, you know, it's it's a, you know, the business model is not exactly like it. It's a little, it's a little bit like the newspaper model, like the, you know, sort of boutique advertising and that sort of thing. I
Leo Laporte (01:28:06):
Love it. I love it. Yeah. You've done a great job. And I take some credit for your own. Can't give any credit, but I, I don't know if you know this, we had somebody, I can't remember who it was on from SEMA four. And at the time, your Globe was rotating the wrong way. The sun was rising in the West <laugh> and I mentioned it, and before the show was over, the little globe in the top of the page started, oh my gosh. Rotating from it went the other way. Started going
Glenn Fleishman (01:28:29):
The other way. Leo, I've got, I have Breaking News from 1893, which is, that's when the Financial Times launched with its Pink Pages. Pink Pages, yeah. With a way to differentiate itself. Yeah. So it's as an old newspaper, as a, as a printing story and an old newspaper person, I'm always thinking about that. And so it's a great, it's a callback to when newspapers might tint, literally tint their pages to be pink or yellow to sort of stand out from the, from the doll Gray.
Leo Laporte (01:28:54):
Yeah. Here's the Financial Times. It's still a little pink online, not as pink as the actual paper edition. And for a long time, the San Francisco Chronicle its tape book section was
Lisa Schmeiser (01:29:05):
Pink. Oh, don't forget the sporting green
Leo Laporte (01:29:07):
Page Green too. Oh, the sporting green was green. Oh. And the date book was pink.
Lisa Schmeiser (01:29:11):
Reed Albergotti (01:29:12):
Poor Dye in the Paper Plant. And there's
Leo Laporte (01:29:15):
Bobs shop, but now it's so easy. You just change your HTML or your css and you got you got a little green. I like it. It's good. It's
Reed Albergotti (01:29:24):
Pretty much newspaper websites. Like somebody pointed this out to me and then once, once, once it gets pointed out to you, you'll see it everywhere. But like, they all look the same. Mm-Hmm. <affirmative>. Yes. I mean, you could be in, in mid, if you can't see the masthead, like, it's hard to tell whose website
Leo Laporte (01:29:38):
You're on. I know where we are when I'm ATS four. That's, that's
Lisa Schmeiser (01:29:41):
Where, so I wonder how many consultants like just made bank by going from like news, organ news, newspaper to newspaper. Oh, we've proven engagement on this. This is what people want. And some poor editors like, yeah, fine. Just do it. Well, <laugh>
Leo Laporte (01:29:53):
It still goes on. <Laugh> ZDNet changed and got a whole new redesign. And then CNET did almost the same redesign. And so there's, it's, there's still, it's still happening. I think it's all going on still. Wonderful to have you read. Welcome to the Family. It's good to have you here. Alicia Myer. Thank you. Longtime member. I thought maybe there'd be Girl Scout cookies.
Lisa Schmeiser (01:30:13):
So would you like me to pop off about what's going on with Girl Scout cookies? Yeah. What's
Leo Laporte (01:30:17):
Lisa Schmeiser (01:30:18):
My gosh. Berry
Leo Laporte (01:30:19):
Lisa Schmeiser (01:30:20):
Rally. So I ordered four boxes. I don't like raspberry. I'm happy to deliver some if you want me on next month. There we go. All right.
Leo Laporte (01:30:27):
That's fixed <laugh>. But it's the time. Last time you were on, you said, well, no, no, you have to wait till the spring.
Lisa Schmeiser (01:30:31):
Yeah. So originally, so originally what was supposed to happen Yeah. Was Girl Scouts of Northern California were like, we're gonna have our cookie sales start in March because that should help with any supply chain issues. Since Girl Scout cookie sales in 2022 were chaos. Oh, wow. There were huge supply chain issues. The Baker that was responsible for Girl Scouts of Northern California, which is Little Brownie Bakers, actually was like, oops, we stopped making cookies. Sorry about that. Leaving their, leaving the Girl Scouts a volunteer workforce. I hasten to add leading the Girl Scouts to have to tell angry customers, Nope. Sorry. You're not gonna get your tag longs anymore. Nope. Sorry. We ran those samos. Right, right. That was last year's disaster. And so our council decided, all right, we're gonna push back the starting date to march because this way this gives the factory enough lead time to make all of the cookies that we expect we're going to sell. Yes. the factory still couldn't get it done. And as a matter of fact, owing to a 1 23 combination of a labor shortage and massive weather events in Kentucky where their bakery is located and a breakdown of their logistics chain, they have managed to not only have delays in production of nearly all of their cookies mm-hmm. <Affirmative>, they have also sharply curtailed our online orders. So the only cookies we're able to sell online this year are the Thin Mints. The top yeah, I know the Thin Mints, the Samoas and like one other
Leo Laporte (01:31:58):
Thing, I'll take a Right, what about Raspberry Rally, which apparently is John's favorite and it's brand news. So
Lisa Schmeiser (01:32:03):
Here's the deal. Raspberry Rallies, were supposed to be an online only cookie. Yeah. <laugh>.
Leo Laporte (01:32:08):
Lisa Schmeiser (01:32:09):
And, and the idea was to promote use of the website because 10% of the Girl Scouts total sales are completed through the website. 50% of our sales are now placed online. 10% are online only. And the idea was, oh, raspberry Rally will help bump up the numbers on that. The site was supposed to go live on at midnight on March 8th. However, again, owing to a glitch in Kentucky with the baker, the site went online at 10:00 PM on March 7th. And by 10 32, it sold
Leo Laporte (01:32:36):
Lisa Schmeiser (01:32:36):
By 10 32, every last box of raspberry rallies that had been produced were sold out.
Leo Laporte (01:32:41):
That's not exactly a Taylor
Glenn Fleishman (01:32:42):
Lisa Schmeiser (01:32:43):
Taylor's we're from. So it's been, it's been a little bit Banana pants.
Leo Laporte (01:32:46):
Next time get Ticketmaster to sell 'em. Yeah.
Lisa Schmeiser (01:32:48):
But long story short, in two weeks I'm going, I, I actually am grabbing like a group of eight sixth grade girls. We are unloading a truck next weekend to get the cookies. That's how I and I will be bringing, bringing home cases of Girl Scout cookies and dispersing them for the next month after that. So I'm so happy Yes. To be able to bring them up to Pedal.
Leo Laporte (01:33:06):
So John, want them No, no cookie
Lisa Schmeiser (01:33:07):
For you And John, I promise you, you can have a box of raspberry rallies on me.
Leo Laporte (01:33:11):
<Laugh>. There you go. And this, when we're talking about Girl Scout cookies, we are not talking about GSC and indica dominant hybrid marijuana strain made by crossing OG Kush with Durban Poison.
Lisa Schmeiser (01:33:21):
We were actually blocked from selling in front of dispensaries
Leo Laporte (01:33:24):
Because of this.
Lisa Schmeiser (01:33:25):
No, they're, they're like, you shouldn't sell Girl Scout cookies in front of dispensaries. Cause it's a
Leo Laporte (01:33:29):
Control. But who was hungrier for Girl Scout cookies?
Lisa Schmeiser (01:33:31):
Right. We were like, it's sales of Opportunity.
Glenn Fleishman (01:33:33):
<Laugh> <laugh>. You know, I've, I've got a story about Lisa's daughter. Mm. But I promise it's all the outset. If this is the time, might not be Hold it.
Leo Laporte (01:33:44):
<Laugh>. No, tell it. Please.
Glenn Fleishman (01:33:46):
Well, so, so years ago I knew this guy named Phil Michaels. He's an editor at Macworld at the time, now is at he's still at Tom's, right? Yeah.
Lisa Schmeiser (01:33:53):
He's a managing editor of Tom Guide now. Mm-Hmm.
Glenn Fleishman (01:33:54):
<Affirmative>. Yeah, exactly. Great guy. Phil. Wonderful Hawaiian shirts. I only work with him at, at McWell. No, great guy. And then there's this person named Lisa Schmeer, who I knew through the incomparable podcast network. I was on podcast with her thought, what a terrific person. How neat. And on Facebook, one day I see each of them has had a child. I'm like, this is great news. And then slowly, it's like, your eyes crossed, I can see this same child. They're married neither. It had never come up, never come up in my circle. This was implied. It was like they both named their kids Trixie. Like, coincidence. What? Coincidence? One Bex.
Leo Laporte (01:34:30):
What a coincidence.
Glenn Fleishman (01:34:32):
My eyes went. Okay. One child, not two separate children
Leo Laporte (01:34:37):
Know. And by the way, she's great. She was here last time you were here and it's absolutely adorable. Yeah. And not a baby anymore. You No,
Lisa Schmeiser (01:34:43):
She's a sixth grader now. It's unbelievable.
Leo Laporte (01:34:45):
Oh my gosh.
Lisa Schmeiser (01:34:46):
I know. Oh
Leo Laporte (01:34:47):
My God, that's great. Yeah, she's just, she's great. She was great when she came by last time. In fact, I was a little disappointed cause I thought your husband and doctor would
Lisa Schmeiser (01:34:53):
Be here. Here. They're, they're throwing an Oscar's party.
Leo Laporte (01:34:55):
What's that? What's the Oscars? What's, what are you talking about? What are you talking about? So we're gonna, no, I promise you cuz you're gonna have 45 minutes home. Mm-Hmm. <affirmative>, if we end the show in 15 minutes, you might make it <laugh>
Lisa Schmeiser (01:35:05):
<Laugh>. No, no. You know, this tell is more fun. I don't have a, I don't have a dog in the race. In
Leo Laporte (01:35:09):
Fire Up. Fire. Yeah. We'll get your And
Reed Albergotti (01:35:13):
There's no tech company that is nominated for Best Picture, right? No. Isn't
Leo Laporte (01:35:16):
Netflix in the running? Is isn't Netflix? Were they? I can't remember where I thought for
Reed Albergotti (01:35:21):
Lisa Schmeiser (01:35:22):
Inches of intro. A Netflix photo. A Netflix. No. Cuz I,
Leo Laporte (01:35:25):
No, I'll have to do some research.
Reed Albergotti (01:35:26):
I thought there was no streaming service. There's
Lisa Schmeiser (01:35:28):
No, but there's no code of this. Steven.
Leo Laporte (01:35:30):
Steven Spielberg won. Yeah, cuz he was the guy who said you shouldn't be allowed in the Oscars if you don't put it in a theater. Mm. Like a normal person. All right, we'll take a break. Come back with more amazing stories <laugh> in just a little bit. Our show today brought to you by the password manager. I use and you should use Bit Warden. Okay. You're gonna say, Leo, you told us that about Last Pass three years ago. I didn't know. I didn't know. I'm sorry. I moved. You should move. Bit Warden. It's the, it's open source. That's a big, huge selling point. They're the only open source cross-platform password manager you can use at home, at work, on the go. Trusted by millions. I switched. Steve Gibson has switched over. I tell you where open source really is an advantage in this area because they're more nimble.
For instance significant updates to the key derivation function encryption pbk DF two, we've been talking about that a lot on security. Now it needs to be a high number. O osp was recommending 300 iterations. Bit Warden is now upgrading all of Ya's New Bit Warden accounts, 600,000 K D F iterations. That's the, that's a lot safer. I moved it to 2 million, which bit warden's fast enough on almost every platform out there. I mean, if you can use it, you probably, it's fast enough to turn up to 2 million. But I got even better news because it's open source. A guy named Weston who is a Security now listener heard Steve say, you know, instead of Pbk DF two, we should be using memory hard algorithms like S Crypt or Argon two. He wrote an S Crypt implementation submitted as a pull request to Bit Warden wrote an Argon two implementation, submitted it after consultation, they decided let's go with the Argon two Argon two is now available to bit warden users.
Soon as you get version 2020 3.2 or later, I turned on Argon two. And it gives me great peace of mind. It's little things like that, that open source make possible. A guy could contribute it, they can analyze it, they can look at the code, they can make a decision to add it, and now it's, it's in your hands. That's awesome. Of course, with Bit Warden, all the data in your vault end-to-end encrypted, by the way, that's important. All the data, what sites you visited, when you visited all the data is encrypted. Okay? That's not, wasn't the case with Blast Pass. You can add security your passwords with strong randomly generated passwords for each account. You know, you should be doing that. Never reuse passwords. Never, ever, ever. But you can go a step further with Bit Warden. You can use the username generator to, to create unique usernames for each account or unique emails.
They work with five different email alias services so that you can generate a new email account for every single account, including our other sponsor Fast Mail, that's FA and and Firefox. That's fantastic. There's also other new features in the February release. Master password security checks. New users who create their accounts on mobile apps, browser extensions, and desktop apps can now check known data breaches for their prospective master password using H I B P. That's built in. You can logging in with the devices now available for additional clients. Login requests can be initiated from browser extensions, desktop apps, mobile apps, share private data securely with coworkers across departments or the entire company with fully customizable and adaptive plans. We're moving over to Bit Warden for the business as well, because frankly, we need to, we think it's the only safe option. Bit Warden's Teams organization for the smaller business is $3 a month per user enterprise, $5 a month per user.
What's great about Bit Warden is you always start with that basic free account. So everybody in your company creates a free account. They've got that now for all their personal passwords, then joins the organization and now they've got both. And, and I have talked to Bit Warden. They said our free accounts are always free and free forever because our business model doesn't rely on making money on free users. Now, I decided I was gonna upgrade the premium account. It's only a less than a buck a month. It's 10 bucks a year. So I did that just to support 'em. If you wanna bring the whole family organization in up to six users, all premium features just $3 33 cents a month. You need, everybody knows you need to use a password manager. The one I use is the only one I trust. Bit Warden's the only open source cross platform password manager that could be used at home on the go at work.
Trusted by millions of individuals, teams, and organizations worldwide. Windows, Mac, linnux, iOS, Android. I've used the command line. Now, one of our callers said, do tell me about the command use the command lines, amazing works with your Yuki, everything. It's fantastic. I am you. If you, if you haven't done it, get bit warden free forever across multiple platforms, unlimited passwords. You can get started also with a free trial of the teams or enterprise plan if you're a business or get started for free across all devices as an individual user. Bit warden.com/twit, bit warden, B I T W A R D E n.com/twit. I've tried 'em all. I've used them all. It's, it's the one I use all the time. Bit Warden. Highly recommend it. Thank you bit warden for your support. We really appreciate it. And for the rest of you people watching, if you do, go to bit warden.com. Make sure you do this slash twit so they know you saw it here. Bit warden.com/twit. Back to the show. Trixie.
Lisa Schmeiser (01:41:26):
Yes, Beatrix. Yeah. <laugh>. Trixie. Trixie To her intimate Beatrix is the Beatrix to everybody else. <Laugh>. I like Trixie
Leo Laporte (01:41:34):
Apple's. C e o, Tim Cook and Jeff Williams, c o o have apparently overruled Apple's Divine Design division. This is according to Mark Germond against the wishes of the company's design team. They're gonna release the first generation VR headset this year. This is the Financial Times, not Mark Derman. Sorry. the, the timing is, I'll say it like the times would, the timing of the mixed reality headsets launch has apparently been a cause of considerable contention at Apple. The company's industrial design team cautioned the oh boy, devices in the category. Were not yet ready for launch and wanted to delay until a lightweight AR glasses product had matured several years from now. Tim said, eh, no. Apple's operations team wanted to ship an early version in the form of a VR focused ski goggle like headset probably to get developers on board. There's also rumors that this first one, which will be probably announced in June, the WW d c will cost upwards of $3,000. Interesting speaking to the Financial Times, former Apple engineers who worked on the device described the huge pressure to ship Glen. This you cover Apple. This is unusual for Apple, I think, to have this kind of dissent within the ranks.
No, for us to, yeah, for us to
Lisa Schmeiser (01:43:10):
Hear about it, I think. Yeah, they're usually really tight on leaks. I'm wondering who's, who's in who, whose agenda's being carried out with this story is my question. Like Yeah. When you hit this, put information out
Leo Laporte (01:43:20):
Out there. Well, maybe I could see if you really thought this should not be released. Yeah. I don't wanna have anything to do with it. You might go to the financial time and say, look guys, you know, this isn't ready for prime time. You might reasonably say, users should not pay $3,000 for this. And I want them to know,
Lisa Schmeiser (01:43:38):
Does it mention in the story who this is for? Like, who do they think no, who do they think is gonna pay $3,000 for this and what are they using it for? Does it mention that anywhere in
Leo Laporte (01:43:48):
The story? They, the only thing they said is the company's expecting to sell only a million units during the first year.
Glenn Fleishman (01:43:55):
Lisa Schmeiser (01:43:56):
Leo Laporte (01:43:56):
What all the developers,
Glenn Fleishman (01:43:57):
Right? Yeah. Yeah. I don't know. I don't know. I, I, you know, there's gonna be a point. I I am very uninterested in vr. I mean, that's sort of both personally, but I think also I don't believe substantial use cases has been found outside gaming. And even then it's got a it feels like a continued limited use case. So ar well, but I mean, as a, as a broad consumer applicable technology that could sell eventually hundreds of millions of units,
Lisa Schmeiser (01:44:24):
I don't think it's consumer. I think there's a lot of industrial applications.
Glenn Fleishman (01:44:27):
Oh, absolutely. No, there are compelling uses that they're so niche, they don't talk about them. Yeah. There's tremendous things you could do with it from a a design
Lisa Schmeiser (01:44:35):
Leo Laporte (01:44:36):
That's to me, that's to me that's the also ran, that's Google Glass. Yes. That's Google saying, well, you know, they're still used in industry. That's
Glenn Fleishman (01:44:43):
It's a seg it's a segue. Remember the segue was it's gonna transform transportation everywhere. And it's like, no, but it's really great in warehouses, a per meter meter
Lisa Schmeiser (01:44:52):
Infras security people and Yeah. Yeah. Well, it's the same thing with like Microsoft HoloLens, like my favorite
Leo Laporte (01:44:57):
Lisa Schmeiser (01:44:57):
Flop. Well, my, but my favorite use case for that is nasa.
Leo Laporte (01:45:00):
Yeah. Yeah. You have a look at the Army, which spent bi a billion dollars and decided not to use it. Yeah. Because it's, nobody wanted to wear it. It was making people vomit.
Glenn Fleishman (01:45:09):
I'm totally excited about AR though. And I have been jumping up and down about AR for years. Yeah. And it's the less sexy partner, but I'm like, anything that does an overlay of the world. So, so my wife is deaf in one ear and she uses a a bone anchored hearing aid mm-hmm. <Affirmative>, which is paired with her phone. And so she has the superpower of being able to listen to music in her head, right. Ooh. Through Bluetooth and take calls in her head. And I'm like, I want this augmentation. Like, it's great when it's a supplement, when it helps somebody. And I look at ar as an incredible combination of supplementation for people who need it and augmentation as a tool for the elderly, maybe for the young, for people in all kinds of industries, but also just as a, as a daily life thing. I could see the utility of augmented reality enhancing what I do already.
Leo Laporte (01:45:56):
I I could dig your wife's point of view, cuz I'm good looking in my head <laugh>. You know, I can, I can <laugh>
Glenn Fleishman (01:46:02):
I I can hear how good looking you are in my
Leo Laporte (01:46:03):
Head. Yeah. In my head. I am really smart. I was
Lisa Schmeiser (01:46:06):
Really surprised. Well, I was really surprised when I discovered that one of my favorite use cases for my Apple watch is when I'm in a strange city and my wrist buzz is to tell me when to turn left or right level. I love that while I'm walking because
Leo Laporte (01:46:17):
This thing that's augmented reality, isn't it? Yeah.
Lisa Schmeiser (01:46:19):
Yeah. Because this way I'm not falling out a map. I'm not looking at a phone. I can just Good point, glance down. I don't look obviously TWiTisty, which can be a concern in some places. Yeah. I'm just, I'm still stuck on this apple thing. I'm stuck on who is this for and what are they doing with it? Like,
Leo Laporte (01:46:34):
Lisa Schmeiser (01:46:34):
Sounds like I, I kind of don't care about the palace intrigue. What I'm more, what I'm more interested in is, is if you're selling a million of these things to whom? Why? What's, what's about to happen?
Leo Laporte (01:46:43):
Why did Tim Cook do it? And the headline for Patrick McGee and Tim Bradshaw at the Financial is Tim Cook bets on Apple's mixed reality headset to secure his legacy.
Glenn Fleishman (01:46:55):
I don't know. It all, this all sounds kind of, I mean, there've been, there have been so many leaks and stories the last several years, but apple's on the verge of this and that. Yeah. We know they have a million things going on in the lab. And for all we know this is Tim Cook gives the go ahead to spend another 500 million on this over the next five years and not take it to market this year. I, I, I would not eat a augmented reality, virtual reality headset if I'm wrong. But I, I thought, I mean, John Gruber goes into this in great detail and very fu very amusingly. It's like everything is so ugly. Apple's not gonna release an ugly headset Yeah. Until it looks like something Apple would release. It will not come out. And so I think that's a great, that's a huge stumbling
Reed Albergotti (01:47:36):
Block. But you think it won't come out. You think actually this thing isn't gonna come out this year.
Glenn Fleishman (01:47:40):
I don't think it's, I don't think it's a real thing. I don't think the the hardware power combined with battery life and compact size, unless it, it'd have to be such a niche thing. There's no way they could sell a million of it. Yeah. I could see them having a de an early developer's kit that was not designed to be mobile that was actually designed to be anchored to a studio Mac or a similarly powerful Mac. So, so Apple has done that before where they've released hardware early to developers that's advanced look six months a year, sometimes longer. So I could see them saying, this is our hardware technology preview to give developers a chance for something that's coming in the future. And we're going to sell this to developers essentially on loan for X months, which is, so
Leo Laporte (01:48:19):
This is interesting model that, so you, you disagree. You think the Financial Times is wrong saying that they're gonna come out with that this
Glenn Fleishman (01:48:26):
Year? I don't have the sources, but it just doesn't pass my smell test. Yeah.
Reed Albergotti (01:48:30):
I wrote about this a while ago, Glen and I actually came to the same conclusion without having the sourcing, but I, I thought that the I thought the AR headset was definitely not gonna happen anytime soon. And they would probably shelve the VR headset as well. And I've been really surprised to read these stories saying that it's definitely coming out because I, for all the reasons that you outlined, but I do, and I think ar like an AR glasses in the sense of like, they look like normal glasses. Yeah. is a great, I mean, that's a great product,
Leo Laporte (01:49:01):
I think, but the technology doesn't exist is the
Reed Albergotti (01:49:03):
Product there. And I, I looked into this, I went really deep on this years ago. I did this story on, on Magic Leap and what they were actually trying to build. And you know, it turned out they weren't, you know, it was sort of like they're, they don't have it. You know? Was was the conclusion, and I talked to all these people in the industry. I talked to people who had worked on the hollowlens for instance, which I agree is an amazing piece of technology, but it was never gonna, it just wasn't a form factor that was gonna take off for consumers. People who worked on the HoloLens told me like, AR is just never gonna happen. And I'm like, never. And like never.
Glenn Fleishman (01:49:41):
It's just, that's a, it isn't,
Reed Albergotti (01:49:43):
It isn't possible. And I think there is something to it, I think in, so we've gotten so used to technology sort of progressing on this predictable exponential scale with Moore's Law that we forget sometimes that like there are actual challenges to the physical world. Like, for instance, getting light from somewhere over here. Mm-Hmm. <affirmative> into my eyes and it's just, it's hard.
Leo Laporte (01:50:05):
Well, okay. Do you agree, Lisa, you think Apple will not ship anything this year?
Lisa Schmeiser (01:50:12):
I do think there's a very strong point to be made that so much of Apple that
Leo Laporte (01:50:16):
Lisa Schmeiser (01:50:17):
Well, but it was about, there's so much of their corporate identity and so much of their price point justification comes around how, how well they nail aesthetics and design. Yeah. Because when you pay for an Apple product, you are effectively paying for the design
Leo Laporte (01:50:29):
Experience. They don't wanna release a Google glass. Yeah. Or even a HoloLens.
Lisa Schmeiser (01:50:32):
So again, a lot of this story feels like Palace intrigued to me and I'm, I'm wondering if,
Leo Laporte (01:50:38):
But Mark Germond also thinks they're gonna release it this year. He said the same thing.
Lisa Schmeiser (01:50:42):
I I just don't may
Leo Laporte (01:50:43):
He didn't have the internal How
Lisa Schmeiser (01:50:45):
Does it, so how does it fit? What we know about Apple is we know that they've been pivoting more and more of the revenue towards subscription services towards re recurring repeating revenue. Right? Like this has been talked up in almost every quarterly call where they're talking about, oh, we have these many more subscribers for Apple tv. Apple Music is coming along, repeating services, study stream of revenue. Their hardware is moving to a point where it supports these steady sources of revenue. This isn't to diminish the fact that they still sell boatloads of phones and tablets and watches and computers, but they're looking at a different revenue mix. And the other question I have no answer to based on this story is, where does that headset fit into their plan to lock you into recurring monthly revenue? Like what, what product or service do they have that this headset amplifies or extends the user experience on? Or what service are they planning on putting out? Because right now I don't understand who this is for. I don't understand how this sets up an opportunity to bring back repeat customers for upgrades. Especially if it's three bloody thousand dollars you can buy, you can buy like two MacBook errors for that. Yeah. And, and so
Leo Laporte (01:51:56):
This is an inter
Lisa Schmeiser (01:51:57):
Use them as clamshell moras and you'd probably have a more rewarding user
Leo Laporte (01:52:00):
Experience. <Laugh>, I am saving this, this clip, and we're gonna, we're gonna, we get to December 31st, 2023 and there has been no VR headset. You guys are gonna get big gold stars. I mean mm-hmm. <Affirmative> everybody and their brother says, Apple's doing this. If Apple does, go ahead. If this ft story is true and Tim Cook's gonna force it, is it a flop?
Glenn Fleishman (01:52:22):
It's just everybody wants Apple to have the next big thing. And they, and I think there's a, including
Leo Laporte (01:52:26):
Glenn Fleishman (01:52:27):
Yeah, there's a me but there's a media focus around it outside of this sort of mm-hmm. <Affirmative>, I would say people who co cover Apple and technology media, people who actually understand this, not, it's not to insult other reporters, but people would like a narrative that Apple has a new big thing every X year. Like the iPhone. They had the iPhone, they had the iPad, they had the watch. And it's like, yeah. But each of those is a refinement of a different kind of idea around the same subject. So they're not gonna have a thing that changes a category and becomes a, a multi-billion dollar item every three or four years. It may, you know, what if Apple never had, when I say never, like in 20 years from now, apple never had a product defining category like the iPhone, iPad or watch, which was an existing category. Again, what if it's feasible, would they'll, will they be still gonna be worth 20 trillion in 2043?
Reed Albergotti (01:53:16):
But speaking of the next category, I mean, it seems like AI is turning out to beat this new, you know, the new platform.
Leo Laporte (01:53:25):
Much of the chagrin of Meta, which has put all of its pushed its chips in on on vr. Microsoft has pivoted. Microsoft was thinking, ho is gonna be it. Now they're all about a but no, they, they,
Lisa Schmeiser (01:53:37):
They have both things going on. Okay. Like I went up to, I went up to Redmond shortly before the pandemic and spent two days in analyst and press briefings. And literally a day and a half was us talking to different people from their researchers to their business intelligence team to their, their Azure team talking about what they were doing with ar all the way down from the love of, here's how we're looking at how we collect training data and how to detect bias or how to identify good data versus bad data. All the way up to here's how we're gonna build out a suite of tools so that people can augment and extend the way they use data up to here are the assistive bots and whatnot. We're gonna have, like, they've been working on this for a couple years already. Like the chat G P T partnership is opportunistic.
Leo Laporte (01:54:25):
Apple's been working on VR for seven years according to
Lisa Schmeiser (01:54:27):
Ft. Yeah. But physics is
Reed Albergotti (01:54:29):
Not like, I mean, seven years ago,
Lisa Schmeiser (01:54:31):
Seven years is like nothing basically in mechanical engineering and physics. Like, like, like Reid was saying, you have to take into account like the realities of the physical world. And it's super easy to do stuff on a phone cuz the phone is a super closed environment in a lot of ways. It's small, it's held your hand, you download things to it. You just need a network connection. Like vr, it's you in a bunch of wildly variable physical spaces with God knows what kind of connectivity. But
Leo Laporte (01:54:56):
Re didn't we think the the iPhone was gonna be a flop and Oh, you know, we've seen this. There's no way
Reed Albergotti (01:55:01):
To I was gonna say, yeah, I think that's, I was gonna say that I think when a, everybody knew Apple was coming out with a phone and they had this idea in their head of like, you know basically like an em, like an iPod that could make phone calls, right? Mm-Hmm. <affirmative>. And it turned out that they had this touchscreen interface that was so revolutionary. And I think, I think there is a chance that there's some, they have some trick up their sleeve with this VR headset that, that makes it, you know, cool or interesting in some way. Maybe it's a, maybe the, the resolution or the, the screen is so the, the, I guess the display technology is so good that you could just spend all day in this thing, right? I mean that's the big limitation now with with meta. It's like you don't want to be in there more than a half an hour to an hour. Right. <laugh> and I, I think if they have some way of making it so that you could sit and do work on this thing and have like, you know, your graphics all over around you and I, I don't know. I mean,
Glenn Fleishman (01:56:01):
I don't just imagine if they wouldn't dealt with this in like March, 2020. Apple accidentally ships an a VR goggle system that has to be plugged in to an existing computer. They would've sold a billion of them. Didn't matter how bulky it was, how ugly it was, could have had primitive graphics and they would've made another trillion dollars
Lisa Schmeiser (01:56:18):
To embroider A little bit on Reed's Insight. One of the reasons the iPhone took off is it was very fundamentally social. Cuz you could take photos and you could message people and it turned into, again, like the computer you keep in your pocket and shifted how we understand computing and how it's innately a social activity. And vr, if they're gonna do VR and make it a social thing where you want to hang out and spend time because you're having communal experiences or you're having a meeting or something. That could be the killer app. I don't know how they'd do it.
Leo Laporte (01:56:51):
Do you think we would've,
Lisa Schmeiser (01:56:52):
I don't work at Apple
Leo Laporte (01:56:53):
<Laugh>. Do you think we knew though what those synergies would be in 2007 when the iPhone, I
Glenn Fleishman (01:56:57):
Just thought they had a great browser. I was like, I I had just come off, I had just come off in 2006 trying. Yeah. Yeah. I've tried every smartphone available for, oh they're terrible. That with any kind of Mac thing in 2006 for Mac World Magazine and was like, wow, these all stink. Nothing's good. They're all using wap or they have their Nokia was the best thing out there. And then January 27 or 2007 rolls round go into a briefing in San Francisco and Apple says, sure you can play with it. And you're like, right. Pinch, expand, browse. I'm like, okay, this is it. Cuz people just wanted to brow, I mean this is what is fundamentally weird to me about technology and everyone like, oh, we need NFTs web three ar whatever. Like people wanna browse, they wanna send email, they wanna write a document that is most usage and, and gaming is this much broader but like Inco eight boundary thing. So it's like the iPhone did all those things. So everything else has been an extra bonus on top
Leo Laporte (01:57:52):
Of that. Admittedly it would be hitting the Jack box. It would be amazing. Yeah. But they did it before in 2007. And I think that's why people are saying, well maybe there is some secret sauce that Apple could add to vr. Well I think one of the kids, let's not, they got a flop on their hands and that's not good. This is a big,
Glenn Fleishman (01:58:09):
Lisa Schmeiser (01:58:09):
Of the things that Apple does well though, is it puts together a beautifully designed thing that does X, Y, Z and then people still find stuff to do with it that expands its market and it's utility. Same
Leo Laporte (01:58:20):
Thing for Twitter. Right? Well, all the
Lisa Schmeiser (01:58:22):
Things, they did it with the phone. Cuz again, you know, once you're like, Ooh, I have something where I can talk to people, I would submit, I can take photos, I can send photos,
Leo Laporte (01:58:29):
Every great tech product that's been the secret to a success. Yeah. Because here's a thing we didn't know we were gonna be able to use VisiCalc on our Apple Twos <laugh>
Lisa Schmeiser (01:58:36):
To get to, to get back to the Apple thing for Min there. What and this is purely, this was actually covered in New York Times a couple months ago. And I can corroborate with Ann Data. I don't want my kid to have a phone yet. We're not, I I don't want her to have unled. This is great. Yeah. I don't want her to have untrammeled access to the internet. I don't want her to have untrammeled access to social media. But I do want to encourage independence and let her run around the island with her friends. You're
Leo Laporte (01:59:02):
At a very difficult time right now cause she, she's still, she's on the edge of innocence. Yeah. And you want to keep her there. Well,
Lisa Schmeiser (01:59:07):
Apple watch has been great though cuz we gotta watch with, with the, with the, we gotta watch
Leo Laporte (01:59:11):
Where she, with the kid, the kid features. So you could set
Lisa Schmeiser (01:59:13):
It up, can call, she can call us Uhhuh and solves
Leo Laporte (01:59:16):
Lisa Schmeiser (01:59:16):
Problem and it's on a parent thing
Leo Laporte (01:59:17):
And you know where she is. Mm-Hmm.
Lisa Schmeiser (01:59:18):
<Affirmative> and all of her friends have it. So she's got group chats with her friends. Mm-Hmm. <affirmative>, she doesn't feel like she's missing out socially. She gets that autonomy and independence and we get what her effectively training
Leo Laporte (01:59:26):
Was. That's just lucky though that you, there was an intermediate device at work. But
Lisa Schmeiser (01:59:29):
Like, that's the thing is Apple didn't design the watch for that. Like
Leo Laporte (01:59:31):
They didn't know.
Lisa Schmeiser (01:59:32):
Yes. Yeah. And it was pretty evident. They were like, we're we're doing this for health, we're doing this because it ties into the rest of the system. But people were like, okay, this does exactly what I need to do for this completely unanticipated
Leo Laporte (01:59:43):
Example because it, and at first it was like a sidecar for your apples. Like what's the point? Yeah. And they slowly found and it was different for everybody who used it. Mm-Hmm. <affirmative> that sweet thing that Yeah. So that's serendipity is what Apple needs for this VR
Lisa Schmeiser (01:59:55):
Thing. Yeah. And that's the thing is, is if you can find that where there are the use cases that people, oh, this is fantastic. But if you can find that, that thing where people are like, oh, this actually fulfills a social or a vocational need in a way that's much more elegant than my current setup. Like that is where you'll, you'll get your, your million headsets. Here's
Glenn Fleishman (02:00:14):
A's a parenting tip too, is we did this, my younger kid who's now almost 16 and they had a very simple phone that we basically left in the house. I know. And crazy. Right? And and we let them buy a watch, but they asked us to buy a watch. We let them use their own money from dog walking. Mm-Hmm. <affirmative>. So we gave them permission to spend their money. That's a parenting tip. Just tell you. And we're great for a few years.
Leo Laporte (02:00:35):
Yeah. I keep giving my kids Apple watches are trying to and iPads and they don't want 'em, they don't want it. Nothing to do with them. I
Reed Albergotti (02:00:41):
Think so. So one killer out like when you, when you talked about this, like what is the killer? I mean I have, I'm looking over at my office now. I just got like monitors all over the place cuz I can never have enough screen real estate. Imagine
Leo Laporte (02:00:53):
Strapping those to your head. Reid life would be
Lisa Schmeiser (02:00:57):
Different. Oh my god. The i the Ironman dream where like in all of the Marvel movies and they have all the see it all. I absolutely want that. If you, that would be amazing
Reed Albergotti (02:01:04):
If you need monitors, right? Like, if you could just put this thing on and you don't need a monitor anymore. Like that alone is probably worth the money, right? Really? Because hey, yeah, I think so because you could then you sort of like, you have your workspace around you and then
Leo Laporte (02:01:19):
What if somebody sneaks up behind you and bons you on the head? You,
Lisa Schmeiser (02:01:22):
You obviously you have a rear view
Leo Laporte (02:01:23):
Mirror. Oh, you have a rear view mirror.
Lisa Schmeiser (02:01:24):
Like that's gotta be part of it too is the <laugh>.
Reed Albergotti (02:01:27):
That's a new, that's, that's your services. That's your services hu revenue right there. You pay for somebody to monitor your or
Leo Laporte (02:01:33):
Reed Albergotti (02:01:34):
View camera. But I mean, if you could just take that thing off and then you have this nice clean mm-hmm. <Affirmative> and you know, you can do whatever on that. I mean, I think that makes sense. But I am very skeptical that they, that they have made that because just based on the technology that's out there. Yeah. It doesn't seem like it's not, it's not quite there yet. But I, you know, it could be wrong.
Leo Laporte (02:01:56):
Wow. This is great. This is the first time I've had a panel where they said, no, that's not gonna happen. <Laugh> in, in the face of all of, you know, these articles from Germin and the Financial Adams and all everybody else. No. That's, that's not gonna happen.
Glenn Fleishman (02:02:07):
It's physical reality. Remember woman Bloomberg had the, the, that weird article a few years ago that said like the Chinese are mm-hmm. <Affirmative> sticking secret chips and everything. And, and when it came out, I read this and said, this doesn't make physical reality sense to me. It doesn't make manufacturing sense to me. Hardware. It must be me. I'm missing something. Then you've got these expert opinions, including by people who were quoted in the article. That's not really exactly what I was, they only don't only quoted this part that didn't quote the explanation. And then no other news organization of any kind is ever replicated anything Bloomberg has reported. So I know Bloomberg's a reputable organization, the people involved we're all reputable. But it has that smell to me here of where I'm like, this doesn't match my understanding of current manufacturing capabilities combined with Apple's marketing thing. And I think, I mean, Reid, you're in the same boat. At least same boat. We're all, we're all, I don't see how they get a battery screens the technology how to, even if they're working on it for years, we're just not there. Maybe at five years has anybody recording
Lisa Schmeiser (02:03:04):
On this father to go romping through the patent archives to see what Apple's been patent <laugh> No, I'm serious. Maybe
Reed Albergotti (02:03:10):
Patent did everything. I mean they, they have like look through the patent, have so many patent, like look
Lisa Schmeiser (02:03:14):
Through the patent records and then the next thing you do is you take a look at what are their manufacturing loads in China. Because I know this is how other Apple product news has been broken is people figure out. Right. Right. Like, has anyone tried to do this yet for the, for the presumed million headsets that that,
Reed Albergotti (02:03:30):
Well a million is is a low number for compared to iPhones. Right. And that's one of the problems with iPhones is they can't, they can't do anything too crazy on an iPhone because they have to make so many of them. Right. And maybe they don't wanna make a lot of these, so maybe they'll price it really high and I don't know.
Glenn Fleishman (02:03:46):
Listen, Lisa, here's the logic. If they were gonna ship that this year, it is already March. Yeah. They are manufacturing that now. If it were to be out in time for Christmas, there would be reports of tiny displays and other ancillary things that would have made by third parties plus the battery demand on something like that. There would be leaks. There's no way they could be producing, they would literally have to be manufacturing that. Like now it would be being assembled in the next two months or something to ship in September or October. And
Lisa Schmeiser (02:04:11):
Aren't there usually just an army of Apple bloggers who are like all over this? Yeah. Where, where, where they're like, oh, we found out from somebody in Shenzen that they're working on.
Leo Laporte (02:04:19):
But maybe if they're only making a million of them, it wouldn't make as much of a D. Remember they make hundreds of millions of iPhones. No, but
Glenn Fleishman (02:04:25):
They, they gotta source two very specific per unit. Mm-Hmm. <affirmative> screens for it that have very, that are gonna be very, you know, high resolution. There's, there's just all the stuff. Now it could be that they're geniuses. They, and they clearly are in the marketing sense and they set up a factory someplace that is totally dedicated to making a prototype. They dropped hundreds of millions of dollars mm-hmm. <Affirmative> to building certain things and taking resources from elsewhere and repackaging them so that we don't know that they took screens that are usually made into bigger screens, made them into tiny screens. But I just doesn't Yeah.
Reed Albergotti (02:04:56):
Make a good
Lisa Schmeiser (02:04:57):
Point about this story. Makes sense.
Leo Laporte (02:04:58):
<Laugh>. Oh my gosh, this is, this is great. I can't wait to bring this to the the panel on Mac Break weekly and have them throw stones at
Glenn Fleishman (02:05:06):
I don't want it. They're not Baker. They're
Leo Laporte (02:05:07):
Not great. Sound like Devork. That's nuts. Nobody never makes that
Reed Albergotti (02:05:14):
Bag bag. Gruber guy is gonna write a column about us.
Leo Laporte (02:05:18):
Glenn Fleishman (02:05:18):
He's, he's pretty bearish or bullish on it, I should say. No bear.
Leo Laporte (02:05:21):
Everybody thinks it's gonna happen. And I agree with all of you that every piece of evidence we have is that VR is not something people want. It makes 11% of the population nauseated, <laugh>. Which is a not an insignificant problem for any consumer product. I think that maybe if Tim Cook is forcing this against the better judgment of its engineers, this could be a huge mistake for Apple. Mm-Hmm. <affirmative>. But if it's only a million, that's not very many. Maybe they need to get developers on board so that in three years when there's an AR headset, they've got a market.
Glenn Fleishman (02:05:56):
I don't, a million is $3 billion. If it's $3,000 each. It's not a small amount of That's true. The business, which means their, their expense is a billion and a half, $2 billion with their margins or or less they afford. They can afford Well and they've already invested. No, it's true. They've already invested billions. I I mean we know Apple has things in the lab that would make our hair curl because it's so cool and interesting. Mm-Hmm. <affirmative> and it's not productionable it can't be produced in a efficient way. So we know like a car.
Leo Laporte (02:06:21):
Yeah. Yeah. The car. A tiny
Lisa Schmeiser (02:06:22):
Car. It hasn't Apple been doing automotive stuff now for
Glenn Fleishman (02:06:25):
Years. Five years wearable cars.
Leo Laporte (02:06:27):
This is great though. I've been, I swear to God, you guys are gonna look like geniuses at the end of the year when it didn't happen. And every, I swear everybody else says, oh, are doing it
Reed Albergotti (02:06:37):
Or we're gonna look like Steve Ballmer if it does happen. Yeah. Right.
Leo Laporte (02:06:40):
Reed Albergotti (02:06:40):
Yeah. There's the biggest hit
Leo Laporte (02:06:41):
Lisa Schmeiser (02:06:42):
I'm kind, I'm feeling good about Steve Balmer cuz cuz his, his recent and bathrooms in the stadium thing. Like actually I Oh yeah. It identified a user pain point and like he lean, leaned into it and I I don't think that's, I don't think that's a bad move.
Leo Laporte (02:06:53):
Think re talking about the part where he said the iPhone staff going anywhere. Oh, that part.
Reed Albergotti (02:06:57):
That was, that was the
Leo Laporte (02:06:59):
Rest. Thank you.
Lisa Schmeiser (02:07:00):
No, I'm here. I'm, I'm here for New bomber.
Leo Laporte (02:07:02):
You might be right. He might be right about bathrooms, but he was wrong about the Yeah.
Glenn Fleishman (02:07:05):
Classic, classic Bomber was too salty. But New Balmer very soon.
Lisa Schmeiser (02:07:08):
Leo Laporte (02:07:08):
Exactly. Let's take a little break cuz there's a lot of little stories. I want to get them out of the way quickly. But before we do that, I wanna talk about our great sponsor. Cole Lied. K o l i d e A device trust solution that solves a problem. A lot of businesses have unsecured, insecure, dangerous devices accessing your apps. Collide has some big news. If you are an Okta user, collide can get your entire fleet to 100% compliance. Collide patches, one of the biggest, the best, the most best worst, I guess holes in a zero trust architecture, which is device compliance. I mean, think about it. Your identity provider only lets known devices log into apps. Right? Right. But just cuz the device is known doesn't mean it's secure. In fact, just ask last pass. <Laugh>, right? The DevOps guy had access to the S3 buckets.
He also had an out of date plex bad guy was able to get in and disaster, reputational business disaster for a company. Plenty of the devices in your fleet probably should not be trusted. Maybe they're running out date OS versions, maybe they've got unencrypted credentials lying around. Maybe they're running an out date version of Plex. If a device isn't compliant or isn't running the Collide agent, it just can't get in, it can't access the organization's SaaS apps. It can't access the other resources. The device user can't log into your company's cloud apps until they have fixed the problem on their end. It's that simple. I mean, wouldn't it have been awesome if the DevOps ops guy had gotten a message from Collide saying, Hey, we'll be glad to let you in, but first could you update your Plex problem solved? Right. A device will be blocked if an employee doesn't have, let's say, an up-to-date browser.
And the best part of this is the end user fixes it. So it doesn't burden your IT team. The end user is gonna remediate the problem. They're, they, they learn what's wrong. They learn how to fix it. They fix it, and it drives your fleet to 100% compliance without overwhelming your IT department. With that collide IT teams have no way to solve these compliance issues or stop insecure devices from logging in. With Collide, you can set and enforce compliance across your entire fleet. And it's completely cross-platform. Max Windows Linux collides unique. It makes device compliance a part of the authentication process. So when the user logs in with Okta collide, the Collide agent alerts them to compliance issues, prevents unsecured devices from logging in. It's security you could feel good about because Collide puts transparency and respect for users. That's really important at the center of their product.
So sum it up. Collides method means fewer support tickets for you, less frustration for your end users, and most importantly, a hundred percent fleet compliance collide. You gotta get this K O L I d e.com/TWITlearn more. Book a demo collide.com/twit. We thank them so much for their support of the show. We love Collide and we encourage you to try it. And please, if you do, do us a favor, collide, K O L I D e.com/twit.
Leo Laporte (02:12:19):
<Laugh>. After that show I had to go out and get a bucket of Popeye's. I, I admit it. <Laugh>, I admit it. <Laugh>, I admit it. Didn't go to the Chick-fil-A, but, you know, had to have something. The great Steve Gibson and a great week. Thank you all for being a part of us. And also a special thanks to our club TWITmembers who make so much possible. We wouldn't, for instance, have this week in space if Club trip members hadn't supported in the early days. We can't watch new shows because they don't have a big enough audience. They don't advertisers. It's cost us money. And the $7 a month you pay as a member of Club Twit makes those shows possible. We've got a lot of stuff in there that we hope someday we can make public hands on. Macintosh with Micah Sergeant a Hands-on Windows with Paul Thoratek and Title Lennox Show with Jonathan Bennett.
That gives fizz with Dick de Bartolo. I can go on and on. Stacy's book club. The club makes that possible. You also get access to a discord that is second to none. It's actually the best social network I've ever been a part of because these are all great people, all twit listeners. And then by the way, the conversations aren't just about Twitch shows. They are about all the other things geeks are interested in. From comic books to coding, to cooking to ham radio and pets and photography, science, software, sports and travel. And on and on and on. Hang out with us in the Discord. Get ad free versions of all the shows, support, development of new shows, and get the twit plus feed with some stuff that no one else gets any other way. It's a simple thing. Join Club Twit. Just go to twit tv slash club twit. I won't harang you. I thank you for your support. Now, more than ever, we really need this support. It really helps us a lot. Twit TV slash club twit. So you all got here on time, even though the clocks for some reason, mysteriously in the middle of the night changed. Is this a medieval thing? No, actually it's not. It's from the seventies, but it feels like this is just some sort of medieval torture. Are you, are you, do you agree with me? Should we stop this insanity?
Reed Albergotti (02:14:22):
Yes, yes, yes. I have a, I have a five and a six year old, so. Oh,
Leo Laporte (02:14:26):
Yes. See, they don't know. They didn't get the message. No,
Reed Albergotti (02:14:30):
Glenn Fleishman (02:14:31):
It's mommy, daddy. It's 6:00 AM
Lisa Schmeiser (02:14:33):
I feel like we should make the a Its better video for you because like, once they hit puberty, they'll sleep in. I promise. Yeah.
Leo Laporte (02:14:38):
<Laugh>. They still hate the clock change though. I bet you Trixie's not a fan.
Lisa Schmeiser (02:14:42):
Yeah. Oh God. Watching her stumble sideways out of the room at 10 0 8 this morning was
Leo Laporte (02:14:46):
Reed Albergotti (02:14:47):
I know eight. Oh my gosh.
Leo Laporte (02:14:50):
I don't, I don't know what the answer is. The American Academy of Sleep Medicine says the switch to daylight saving time, which we just under underwent this morning. Mm-Hmm. <affirmative> carries many health and accident risks and is misaligned with human circadian biology. They wanna move to permanent standard time. Yeah. Others wanna move to permanent sa daylight time. Now I'm, I'm glad you're here, Glen, because it's easy for people in Florida. Marco Rubio has a bill. Mm-Hmm. <affirmative>. It's easy for people in Florida to say, yeah, let's just, let's stop this because they have a lot of sun, but you're up in the north where if, if we went to daylight saving time, your kids would be, well you, your kids would be going to school in the dark.
Glenn Fleishman (02:15:31):
Well, they go in the dark. I mean, we <laugh> kids go to school in the dark now if they're gonna school. Mm-Hmm. <affirmative> whole other discussion. No, they, if they were going to physical schools one has graduated the, we get in Seattle, it's the light comes up in the winter at like, I don't know, the sun comes up at, what is it, like eight something am and it goes down at like four. Yeah. 30. And we have a hill nearby. So this
Leo Laporte (02:15:54):
Doesn't fix that
Glenn Fleishman (02:15:54):
Problem. It's three 30. You got
Leo Laporte (02:15:56):
Eight hours. This is a short day. That's all you get anyway. Period. No matter what. So
Glenn Fleishman (02:15:59):
Our, our kids used to go to school, they'd get up in the dark, they'd come home sometimes to the dark. And it's a, it's this life in the summer when daylight savings kicks around. Like, I don't mind if it's offset by an hour. We get you know, 18 hours a day or something. Mm-Hmm. <affirmative>. So it works out here 17 hours a day. We don't get 18 hours. That would be, we'd have to be a little further north for that.
Lisa Schmeiser (02:16:19):
No. Like the strangest thing was being in Paris in June and it not getting dark until after 10. Well, they, we went for the Women's World Cup in 2019 and it didn't get dark until like 10 30 at night.
Leo Laporte (02:16:28):
It was, would you be in favor summertime or wintertime? Which one would you like to make? Permanent. It's easy, by the way, the US time zone is standard time. Mm-Hmm. <affirmative>. Right. Whatever it is in your time zone. But that's our, that's an official time zone. If you wanted to make it saving time, I think it, that's a little more complicated. Right. Cuz that's, that's changing our time zone. Yeah.
Glenn Fleishman (02:16:49):
Some parts of the United States don't change their time.
Leo Laporte (02:16:51):
Arizona doesn't doesn't Hawaii doesn't. Yeah.
Glenn Fleishman (02:16:54):
Co counties in Indiana, if I remember right, counties in Nevada,
Leo Laporte (02:16:58):
That was weird. I, my first wife lived in Ohio right over the border. And you'd go over, you'd go a mile and the clocks would jump back an hour. Mm-Hmm. It was very weird. Let's just all figure this China figure this out.
Glenn Fleishman (02:17:08):
Can we, it could be in China where there's one time zone for the entire country.
Leo Laporte (02:17:12):
Glenn Fleishman (02:17:12):
Which is historically problematic. Or Spain, where they, because of the fascists, they set the time, the wrong time in World War. Before World War ii. I think, you know,
Leo Laporte (02:17:22):
Generalissimo, Francisco Franco, he is at it again.
Lisa Schmeiser (02:17:25):
So do we, so if we, if we've got, if we've got statistics on like, if it's, if it's bad for your health or if it leads to its, or if it leads to
Leo Laporte (02:17:33):
Heart attacks, crashes.
Lisa Schmeiser (02:17:35):
Wasn't there something about like more kids getting hit on the way to school? Yes. Yeah. Like just, yeah. Pick, pick a time. <Laugh>.
Leo Laporte (02:17:41):
Just pick a time. Alright.
Glenn Fleishman (02:17:43):
We're all in agreement. I I, I particularly liked that we changed the time so that older clocks that had built-in daylight saving time broke, and then also for two weeks we're out of sync twice a year. Oh yeah.
Leo Laporte (02:17:53):
Cause Europe, that's always good. We extended it. Yeah. So it's,
Glenn Fleishman (02:17:57):
That's ridiculous. I was, I was arranging a call for pants in the boot, the language podcast I do over at mm-hmm. <Affirmative> being comparable. And we had people from it was during a daylight transition and we had someone in New Zealand and Sweden, and we did manage to use a world clock and get everybody in at the correct time. But we are across five time zones in two different, it's crazy. Daylight saving standards.
Leo Laporte (02:18:20):
Golia who lives in Israel doesn't have this problem, but she notes that Arizona doesn't do daylight savings time except for the Navajo reservation, which does, except for the Hopi reservation. Within the Navajo reservation. Which doesn't, which is like having a freezer and an ice box and a heated house. It's math. It's too hard. Let's just stop the insanity.
Lisa Schmeiser (02:18:40):
Someone, someone in the discord is posting gifts and react.
Leo Laporte (02:18:44):
Oh, we got lots
Reed Albergotti (02:18:45):
Of things. Actually. The, the post pandemic, like everyone working from different places will mm-hmm. <Affirmative> will accelerate that too. We'll, we'll push people to move toward one time zone.
Leo Laporte (02:18:55):
Oh, that's interesting. Because we don't go outside anymore. We don't even know where the sun is.
Glenn Fleishman (02:19:00):
<Laugh> one. You have a good, you have one time.
Leo Laporte (02:19:02):
One, you know, I'm not against the idea. I mean,
Lisa Schmeiser (02:19:05):
I have an editor who lives in Newfoundland, which is actually like a half hour.
Leo Laporte (02:19:11):
Lisa Schmeiser (02:19:12):
Problem ahead of Eastern standard time too. And one of the things I've ended up using a whole lot in Outlook is the ability to display multiple time zones at once. So just so I can try and schedule meetings and not really impact disproportionately the people who live in the UK Yeah. And the people who live in Newfoundland. Or, or me, frankly on the West Coast.
Glenn Fleishman (02:19:34):
<Laugh>. Technically I think we should all be using al times. So it's depending on where we are when the sun is noon over. That's right. It's always automatically calculated by our watch. There you go. So all of our appointments,
Leo Laporte (02:19:45):
We changed by a minute.
Glenn Fleishman (02:19:47):
Well, I I guess that is in our own zone. This
Lisa Schmeiser (02:19:49):
Comes back to the internal question. Does this need to be a meeting or can it be an email?
Leo Laporte (02:19:52):
<Laugh>? Yeah. Yeah. Well, it would eliminate a lot of meetings. I can tell you Gigi's son, this is sad. This is not good, Gigi. So. Oh,
Glenn Fleishman (02:19:59):
Man. Yeah. Oh,
Leo Laporte (02:20:00):
This is very frustrating. The currently, the way it stands, the FCC has five commissioners, well, four commissioners and a chairman. Two Republicans, two Democrats and a chairman, usually of the party of the current president. In this case it would be Democratic. Congress does not want to approve Biden's nomination for the Democratic commissioner. Gigi son, they fought, they fought for months, 16 months. Her nomination has been stalled. Oh my. She's finally withdrawn. Which is a, a loss for all of you listening because she understood net neutrality. Mm-Hmm. <affirmative>, she was fighting for the good fight for us, not for the telecommunications industry. Which is of course why, you know, certain members of Congress decided, and, and cable and media industry lobbyists decided to hit below the belt and attack the fact that she was gay. And, you know, it's it's appalling. It's appalling. It also means that there's a tutu split, which means a lot of the things that we would like to see the FCC do to make the world a better place. Mm-Hmm. <affirmative> won't happen.
Glenn Fleishman (02:21:04):
Thanks. Drill manchin among
Leo Laporte (02:21:06):
Other people. Yep. Joe Manchin. Well, it's also thanks to the influence of money in politics, because yeah. A lot of billboards were bought in states where democratic members of Congress were in, you know, purple states mm-hmm. <Affirmative> where their seats were kind of at risk. So Mark Kelly of Arizona is against it. Let's see. There's a, I think in Nevada member of Congress who didn't support it. And you, you, if you don't get those votes, you can't get the nomination through.
Glenn Fleishman (02:21:36):
It's, it's just so frustrating. Especially after they put Lena Kahn in as the chair of the Federal Trade Commission. I'm like the, the distance between Gigi so, and Lena Kahn in terms of like where they are on the political spectrum, how they align with Biden's positions on regulation. It's very small. Gigi's absolutely qualified. She is all the history. We know all about her. We know who she stands. She doesn't, I mean, the problem is when people don't have vested interests that makes vested interest very unhappy. And I, I think that's, that's what
Leo Laporte (02:22:04):
Happened among the groups. Opposing Gigi son was the fraternal order of police. Oh. Who criticized her rights? Her, her tie to the Electronic Frontier Foundation. Her ties. Yeah. Because the EF f mm-hmm. <Affirmative> is fighting to protect encryption. Mm-Hmm. <affirmative> and the fraternal order of police wants law enforcement have access to encrypted data. And since the EF F is fighting for, and she is somehow associated with it the senator Jacqueline Rosen from Nevada, the Democratic senator from Nevada also didn't vote for her. Hmm. So,
Glenn Fleishman (02:22:39):
Well, and, and Biden didn't put, you know, Biden do, didn't do a full court push on her. He didn't, I
Leo Laporte (02:22:42):
Don't think he, he, it didn't support her in the way he should. His
Glenn Fleishman (02:22:44):
Administration. Yeah. His administration didn't see it as an, as important a fight to get her in place. And he should have, cuz I think it affects you know, the role of the FCC has overseeing media.
Leo Laporte (02:22:54):
It affects some of his infrastructure plans too, because that has to go through the fcc and
Lisa Schmeiser (02:22:59):
Especially since he's pushing to make more tech infrastructure defined as infrastructure. Infrastructure as we underst understand it.
Leo Laporte (02:23:06):
Good news. There is some good news coming out of the White House. The, what administration has proposed a new security framework, which interestingly would hold software companies liable for security issues with their software.
Lisa Schmeiser (02:23:22):
They've been pushing for this since they got into the White House. Yeah. If you take a look at the first year of the Biden administration, almost every month there was either an executive order or a meeting with somebody where they've been really focused and consistent on the messaging that companies need to be held responsible for data security. Data security is a national security issue. Companies have an obligation if they're gonna operate within the US to uphold a reasonable standard of security for both nation and citizens. They've been hammering this message home for years and for, for, for two years now. And, and this honestly just feels like more of the same.
Leo Laporte (02:23:59):
They also now say that cloud security is a huge problem. Yeah. government is saying they're embarking on the nation's first comprehensive plan to regulate the security practices of cloud providers like Amazon, Microsoft, Google, and Oracle. Because they say if it's disrupted mm-hmm. <Affirmative>, it could, you know, it could create a large potentially catastrophic disruption to our economy and our government. It would take the internet down like a stack of dominoes,
Glenn Fleishman (02:24:29):
Leo Laporte (02:24:31):
So that's, I think, sensible.
Lisa Schmeiser (02:24:33):
It's a really broad stroke. Yeah. there's a lot of regulatory issues in cloud computing that I think we're going to see both state and federal governments and diplomatic organizations grappling with for the next few years. Because in addition to just physi the, the data security in the sense that we don't want bad actors hopping onto our hosted cloud service and, and sucking down everything, you're also going to have industry-specific compliant issues along the lines of our industry. Req industry requires all conversations to be recorded. Right. These recordings have to be secure. Right. And you have to be able to guarantee the methods of security up to our country or our state requires that this data has to be kept secure and private. And you have to make sure that individual users privacy is respected in all cloud transactions. And what we've seen from companies overseas is the art, especially the e the u is on this like, you know like <laugh>, like, like, like like cheese's on a pizza <laugh> where they're, they're arguing it doesn't matter where the data is hosted, what matters as if people within the EU jurisdiction are affected by how you're hosting the data and what the privacy measures are.
And since one of the chief attractions of the cloud is you don't have a one-to-one, the data's in this physical location. I'm in this physical location. That's it. We're genuinely looking at something where the US is gonna have to really coordinate aggressively with other countries on what does it mean to, to, to, what are, what are the minimum security requirements? What are the minimum minimum privacy requirements? What are individuals rights when it comes to their data in the cloud or their privacy in the cloud, surveillance, et cetera, et cetera, et cetera. This is a, again, I feel like the Biden administration is kind of very carefully and quietly building up a comprehensive national security policy. And they're doing so in a way where, how does this advance the interest of something like Microsoft, which has been talking about this for seven or eight years now. Like, you know, <laugh>, how can we advance the interest of all of these US-based cloud providers who are operating in the us in in the U and Middle East and in, you know, in Southeast Asian markets and, and make sure they can do business without, without a a, a lot of friction.
Leo Laporte (02:26:59):
Oh, good thing. Yes. Mm-hmm. <Affirmative>, we need it. Right? Yeah. Okay.
Reed Albergotti (02:27:03):
I think it's, with security, it's about incentives. You know. Mm-Hmm. <affirmative>, I think, I think these companies, it's just, it's, it's viewed, security's just viewed as this like lost feeder, right. A, a cost center, I think. Until, until it isn't, until it takes the company down or Yeah. You know, something along those lines. But it has, I mean, it's been a real source of, like you said, national security issues and, and information flowing to China. And I think companies haven't really been bothered by that so much because it doesn't affect your quarter to quarter. It
Lisa Schmeiser (02:27:33):
Hasn't affected their bottom line yet. Like when it's more expensive to not comply than it is to pay a fine, then they'll, then they'll comp, then they'll comply. But I think this might actually be part of what the Biden administration is doing too, is beginning to be like, okay, how can we make this hurt
Leo Laporte (02:27:50):
<Laugh>? But at least we're gonna ban TikTok. And I think that'll solve the problem. If you
Lisa Schmeiser (02:27:54):
Ask me, where will we learn our dances? That's
Reed Albergotti (02:27:56):
Right. We won't have any, there's no data after. No
Leo Laporte (02:27:58):
Problem. It's all how many, show of hands, how many of you have a video doorbell? I do. I have the Google. Hello? Not you, Reid. Do you have one? No.
Reed Albergotti (02:28:08):
Got a ring. Ring.
Leo Laporte (02:28:09):
Mm-Hmm. <Affirmative> and Glen, you got a ring or a a what? I have an en I have an encrypted end-to-end. Bloody blow. Shit. I don't have shit. A doorbell. <Laugh>. Oh, you don't have a doorbell. You know what, that's what I should get rid. I had a doorbell. Who needs people to ring the doorbell? <Laugh>,
Glenn Fleishman (02:28:22):
Forget. I got a doorbell. Doorbell, but it, it doesn't have a camera on, but I have a camera nearby that uses home kit for end to end. Oh, there
Leo Laporte (02:28:27):
You're a little safer Politico story. Wow. Gave me kind of shivers. Mm-Hmm. <affirmative>, Michael Larkin business owner in Hamilton, Ohio. Last Thanksgiving got a call from local police. They said, we see you have a a, a ring doorbell and we're surveilling a house in your neighborhood. Could we have the footage? He his doorbell was among 20 run ring cameras that he had in and around his house and his business. 21, 21. But his business two, right? Mm-Hmm. <affirmative>, I guess the police said they were conducting a drug related investigation on a neighbor. They wanted videos of suspicious activity. Small thing between two hours, five and 7:00 PM one night in October. Mm-Hmm. <affirmative>. He said, you know, I see the same car driving by 12 times in that two hours. Let me send you the video. I think you're onto something. He thought that was all the police would need. They asked for more footage now, the entire day's worth of records. And a week later he got a notice from Ring itself. The company had received a warrant signed by a local judge saying, we want all 21 cameras. We want all footage indoors, outdoors, even from your business, which is not even near the house.
Glenn Fleishman (02:29:41):
Leo Laporte (02:29:42):
And they're gonna give them, and they, and they're gonna hand it over cuz it's ring. They said, well, fine. You know,
Glenn Fleishman (02:29:46):
<Laugh>. Well, no, they got a, they didn't fight it. Right. They got a, got a search warrant. Yep. Right. It's, yeah. I mean, it's well, part of Amazon just to point out mm-hmm. <Affirmative> and Ring is also added end-to-end encrypted data. So you'd have to
Leo Laporte (02:29:58):
You have to go to
Glenn Fleishman (02:29:58):
Amazon subpoena. You have to go, well, you have to go to the individual to get them to retrieve it. You have to actually service a, a warrant on a person.
Leo Laporte (02:30:05):
So had he turned on encryption, he would've had to give them the footage, not ring.
Glenn Fleishman (02:30:11):
Yeah. Conceivably. And I would imagine that would be a more complicated process. I think the police can more easily get a judge to say, right, company X has video. We need, it happens to be owned by an individual than this individual. We need to go to their house and compel them with a court, with a judge signed order to deliver us stuff. At which point, you know, is that person, I mean, if it were me, am I suddenly thinking, do I need to spend $20,000 on a lawyer to defeat a subpoena about my, if I actually felt principled about this and wanna do that? I don't know. It's still a big burden.
Leo Laporte (02:30:42):
Yeah. Just a word of warning. And there's
Lisa Schmeiser (02:30:43):
Nothing in there that says how long they can keep the footage. No.
Leo Laporte (02:30:46):
Glenn Fleishman (02:30:47):
What, what the Well,
Reed Albergotti (02:30:48):
This, this, I gave my footage to a cop once they came, they knocked on the door. Mm-Hmm. And they said, you know, there was a van driving around and they were, they asked a kid if they wanted to get in the car. And I thought, well, there's
Leo Laporte (02:30:59):
That time. So you wanted to help your
Reed Albergotti (02:31:01):
Yeah. Yeah. Like, okay, here's the footage. And it turned out it was like a parent of one of the friends who actually was like, knew the girl, but she didn't recognize him. And, you know, it was all fine. But,
Leo Laporte (02:31:13):
But, and that's, you know what, I think that's a reasonable request. And I think it was good that they asked you and you said, yes, it's fine. I mean, we don't, I don't, it's not that we don't want to help the police investigate this stuff. Mm-Hmm. <affirmative>, but that's really overreaching to say, oh, just give us everything you got on this guy. He wasn't even suspect disrespect forever. Yeah.
Reed Albergotti (02:31:32):
It just often it turns out it's not, it just isn't that useful. That's right.
Leo Laporte (02:31:36):
That's the other side of it, isn't it? Yeah. Mm-hmm. <Affirmative>. Yeah. Yeah. Hey, good news. Youtubers can swear in their videos again. <Laugh>, gosh darn. It
Won't be demonetized anymore. I guess they heard from YouTubers saying, Hey, what are you talking about? Listening very strongly. What the ery you're talking about <laugh> de demonized, not demonetized demonized. Don't demonetize. And finally mm-hmm. <Affirmative> Apples. Finally, finally, gonna give us the replacement for Prime phonic a year and a half ago. Aw, I love classical music. A year. I was a subscriber to this classical music service. Apple bought it within a week. Cut it off. I got a refund. But I said, well, apples said, don't want, if you're not, we're gonna add this. We're gonna have our own app. A year and a half later, finally, March 28th, apple Music's classical app will launch. It's about time. I don't know what took 'em so long, but it looks pretty good.
Lisa Schmeiser (02:32:32):
Metadata. I'm, I'm gonna guess it's a
Leo Laporte (02:32:34):
Metadata. It's all the metadata, but they had it very carefully. Okay, fine. What a great panel for all of the stories we had this week. Rebel read. Albert Gotti, thank you so much for joining us. Now that you've been here and, and you know, it's not so scary or horrible and it's only eight hours of your life, you'll come back, I hope. Yeah,
Reed Albergotti (02:32:56):
Definitely. Definitely. I'll plug in my laptop next time. Yes. This would be great.
Leo Laporte (02:33:00):
Anything you wanna plug? Thank you. Speaking of plugs
Reed Albergotti (02:33:03):
No, you talked about SEMA four. I mean, I, I would just add that our newsletter is free. Sign up for the tech newsletter. I think you'll like it. And that's, that's about it.
Leo Laporte (02:33:13):
Yes, I do like it. It's very good. And I also actually go to the website and, and read stories in their beautiful colored paper. So
Reed Albergotti (02:33:22):
Our yellow site. Your
Leo Laporte (02:33:24):
Yellow site. Great.
Reed Albergotti (02:33:25):
Leo Laporte (02:33:25):
The eyes. I'm really pleased. I was a little nervous, you know, cuz Ben and Justin were a little cagey about what they were up to, turned out great. And I, and they hired one of the best tech reporters out there. It's great to have you you on the show. Thank you, Reid. I
Reed Albergotti (02:33:39):
Really appreciate. Really fun. Thanks for having me. Good.
Leo Laporte (02:33:41):
Lisa. Za, next time you gotta bring the fam. I guess they're having fun right about now as the red carpet. I'll bring
Lisa Schmeiser (02:33:48):
'Em next time. I'll bring cookies next time. <Laugh>,
Leo Laporte (02:33:51):
Did I say anything? I guess I did <laugh> getting on a plane. <Laugh> mm-hmm. <Affirmative>. Yep. Lisa of course is at jitter. No jitter. No jitter. Sorry. Yeah, no jitter.
Lisa Schmeiser (02:34:01):
And I'm excited to report that Enterprise Connect, which is a show that I'm also the co-chair for and covers the communications and collaboration space. We are held live at the Gaylord Palms in Orlando, Florida from March 27th to 30th this year. But we also have an option to stream the entire event virtually. Oh. Where you'll have playback. So if you, if you feel a little bit iffy about traveling or you're like, oh, this is the first I'm hearing of this amazing show, you do have the option to go virtually. We're gonna have full coverage on no jitter for the whole week. We're there. Nice. And post-show synopsis and analysis for the week or two after as well.
Leo Laporte (02:34:37):
Very nice. Orlando, Florida, two weeks from today. You can find out firstname.lastname@example.org. Yep. Or enterprise connect.com. Yep. So this is the big annual thing.
Lisa Schmeiser (02:34:46):
It's a big annual thing. Yep.
Leo Laporte (02:34:47):
Is it fun?
Lisa Schmeiser (02:34:48):
I loved it. Last year's, my first year in person. And what I really got excited about is you get everybody from folks who make it their mission in life to figure out how to wire hospitals for the best wifi. Oh, everywhere. Oh, yeah. And it's, it's astonishing to, to talk to people who get deep in the weeds with how is this gonna work in radiology? How is this gonna work up, down in pathology? How is this gonna work in nicu? And they'll explain all of the different considerations they have. That was great. And then you also talk to people who are responsible for migrating 200 year old companies onto a, a unified communications platform. And they'll talk about, all right, my challenge was how do I make sure people can get access to records that have been stored on a mainframe? It's just a really great opportunity to talk to people who are super passionate about supporting people's ability to collaborate and communicate. And they recognize that there's so many different obstacles to doing it and so many different conditions in everybody's everyday working life.
Leo Laporte (02:35:47):
Hear from your enterprise peers at the leading communications and CX event Enterprise Connect coming up in two
Lisa Schmeiser (02:35:52):
Weeks. These are the folks who are figuring out how to keep people working virtually nice. And how to, and how to do hybrid work. Busy time to hear them talk and to hear them talk about the considerations they have. Nice. it's, it's really, it's, it's, it's nice to get outside of the, oh, I sit on my laptop and report all day. It's nice. It's nice to get out and talk to the folks who are
Leo Laporte (02:36:10):
Lisa Schmeiser (02:36:11):
Making it possible for me to send my laptop and report all day.
Leo Laporte (02:36:13):
<Laugh>. So glad to have you in here. Lisa Schmeer, editor-in-chief at No jitter dot mm-hmm. <Affirmative> dot com and Mr. Glenn Fleischmann's shift happened big time. Tell us about it.
Glenn Fleishman (02:36:25):
Well we, you know marching Muhar wrote a book about keyboards that turned out to be 260,000 words and 1,216 pages. And we said, I wonder if people will like this book. Would they wanna pay say $150 for it? Turned out over 4,000 people said. Sure. so our Kickstarter campaign, we'd hoped to sell, you know, like 2,500 copies. We were aiming for three 50. Ultimately, we thought that would be a great outcome. And finished at $750,000. Wow. Plus some change. We're gonna print maybe 6,000 copies. I don't know. We have 4,500 or so committed. We'll, we'll probably sell 'em all out. It's a big book. And as part of it, he and I are gonna go to Maine where the book's being printed at a family run, multi-generation business and be on press for six days to 10 days, 18 hours a day. Well, 16 hours a day working with press people and making sure it comes out right. So
Leo Laporte (02:37:21):
That's, it's a beautiful book you sent me the preprint of, and it was just gorgeous. And I love the images. So many great images, including this one 1987 per parade and East per lye of the, of a socialist's computer, the V e b Rob Robotron pc, and the young women in their bunny suits, drawing 'em along on wagons down the street of East Berlin. The great success of the Soviet Republic.
Glenn Fleishman (02:37:49):
People who love the Sinclair ZX series as the 80 and 81, if you like.
Leo Laporte (02:37:53):
Oh yeah. Those are
Glenn Fleishman (02:37:54):
Leo Laporte (02:37:55):
Glenn Fleishman (02:37:56):
Yeah. If you, if you like the ibm, the classic IBM m I'm forgetting the model numbers. The model m I think is the best one. Electrics like, it's, you know, it's a lot of models, but really the fun part about working on it with Marcine was that he had great stories and kind of my role as editor of this project was to make sure the stories came forward right. Is so that this, this is a story led thing. And so you'll find out about people throwing typewriters to hide crimes into rivers and like the type, the keys that are illegal to type or used to be in Turkey because they could be used with Kurdish words and Oh wow. It's, you know, it's, it's like typewriters and keyboards all tied up with geopolitical events, technology, technology advances of course. But always comes back to, to people.
And it's got a good chapter in there about sort of the role of women in the workplace and how keyboards sort of made a place for women. And then also became a economic disparity thing. I know this from the type sitting world is hot metal type was really controlled by men. It was almost all men unions. And when prototype came around, they would hire women to do it because it was a different kind of job and they'd pay them half as much. So this book covers that kind of issue as well as sort of the more you know, fun things like people thinking when typewriters are invented. No one thought you could touch type, like of course you would never have had any experience with that because no device existed that you would ever touch. There were no reason to do it. So it was seen as both impossible and undesirable. And I just think that's a fun <laugh>. It's a fun chapter. Untouch typing
Leo Laporte (02:39:27):
The Kickstarter's over, but it's not too late to pre-order. But do it quickly cuz I, I know you're gonna sell out. Okay.
Glenn Fleishman (02:39:34):
Finite number of copies so we can
Leo Laporte (02:39:36):
Print. Yeah. And, and this is it, right? You're not gonna do a second press run.
Glenn Fleishman (02:39:40):
It's just, it's so much work. We'll, I mean, it's, it's plausible. I don't think we'll do another edition this big. Yeah. Because it's so big. And so it's got a slip case and the third volume course stretch goals. It's got a third volume of extras. It's just, it's, the index is gonna be like 60 pages if we're lucky. It'll be that short. So yeah, this was, this was reaching for the brass ring and he did it, first book he wrote. And
Leo Laporte (02:40:05):
It's really good. Most, most successful technology. Kickstarter of all time. Technology book. Yeah.
Glenn Fleishman (02:40:08):
Tiny book. Yeah.
Leo Laporte (02:40:09):
Yeah. Kickstarter of all time. Well done. You are very
Glenn Fleishman (02:40:11):
Happy. Thank you. Thank you. Happy for your support of it.
Leo Laporte (02:40:13):
Yeah. glen.fun with two Ns. You'll find 'em all over the place in our many of our shows, but also in the incomparable and the other six colors stuff. And hey, it's great to have all three of you. What a wonderful show. Really appreciate your time. Thanks to all of you for joining us. We do twit on Sunday afternoons, 2:00 PM Pacific, 5:00 PM Eastern. That's a little bit different now because we are in summertime. Darn it. Now I have to do some math. That's 2100 utc. The live stream is at twit tv slash live. There's live audio and video. There's a chatroom, IRC chatroom at IRC dot twit tv. There's the discord. If you're in the club after the fact, you can get copies of the show at our website, twit tv. There's a YouTube channel dedicated to this week in tech. And of course you can subscribe in your favorite podcaster podcast application. And I hope you will. I thank you for your support. Thank you for being here. We've been doing this 18 years, kind of hard to believe. Woo. Our anniversary is next month. We're gonna have to have a little party. But for now, after 18 years, I'm still saying it. Another twit is in the can.
Leo Laporte (02:41:33):
So we couldn't get Jason on until the end, but I'm glad to get him on now. Jason Kakais joins us. His hair as far as I could tell, is not on fire. You put out the No, you put out the flames.
Jason Calacanis (02:41:48):
Yes. You were nice to see you on friend.
Leo Laporte (02:41:50):
I was great to see you buddy. Welcome back. I, I see you were in Japan,
Jason Calacanis (02:41:55):
Did a little Japan trip. You've been many times on TWiT.
Leo Laporte (02:41:58):
Love Japan. Yeah, I was watching. So, great. You're all in podcast and you made me very hungry. Ah, you made me very hungry.
Jason Calacanis (02:42:03):
Leo Laporte (02:42:05):
Hey, wait a minute. I gotta ask you something. First of all,
Jason Calacanis (02:42:07):
Yes. Ask me everything. Yes.
Leo Laporte (02:42:08):
How is it all
Jason Calacanis (02:42:09):
Leo Laporte (02:42:09):
Touch up time gets a special glyph on Twitter.
Jason Calacanis (02:42:12):
Oh, <laugh>. Who? You guys
Leo Laporte (02:42:15):
Got some in there or something like that?
Jason Calacanis (02:42:18):
<Laugh>. Yeah. My friend liked it, liked the product so much he bought the company. Yeah. As they said in the business. And
Leo Laporte (02:42:25):
If you the company, you could get a plug for your podcast in there. Yeah,
Jason Calacanis (02:42:30):
Sure. Why not? It's at that actually what you're talking about is says a little icon that goes next to your verified badge. Yeah. So if you had people, like if I was or if you had like all the Twitch shows, you could put the Twit logo and then you could affiliate all the twit hosts. How
Leo Laporte (02:42:42):
Much is that gonna cost me?
Jason Calacanis (02:42:45):
I think they're gonna have some like enterprise thing and then I think they announced it's gonna be like a couple of bucks per person per month. Oh, that's not bad. And I don't think it's gonna be that bad. And I think it will have some features that make it really interesting to, it's
Leo Laporte (02:42:57):
Actually a good idea.
Jason Calacanis (02:42:58):
Yeah. Yeah. And so what will happen is if you actually click on the all-in icon there. Yeah. and David Sachs architected a lot of this,
Leo Laporte (02:43:05):
Who is gonna be the new ceo, right? He's gonna be the guy running Twitter.
Jason Calacanis (02:43:09):
Oh no, definitely not. Definitely not. I don't
Leo Laporte (02:43:12):
Think any, no, that was scut butt.
Jason Calacanis (02:43:13):
You know, there was a lot of palace intrigue around Elon and Twitter obviously was like two of the most popular topics in the world. So like, people were just running with things. But you, you know, I've known Elon for 20 years. I, and did he ever come up? I think he might have come up to
Leo Laporte (02:43:27):
Some point. Oh no, when I was oh.
Jason Calacanis (02:43:29):
Oh. I came up with my, I, when I
Leo Laporte (02:43:31):
Up Model X you said you were gonna help me out. <Laugh> get me up. I
Jason Calacanis (02:43:35):
Was trying to get
Leo Laporte (02:43:35):
Up, get up on the list back in the day. It's ok. It worked out fine.
Jason Calacanis (02:43:39):
But you know, the what's interesting about it is when you click it, it's gonna let you put a tab next to your replies column. So you'll be able to do like interesting functionality with it. Like you would, it'll almost be like a list. So I, I think if you had to,
Leo Laporte (02:43:52):
Well, I see by the way, all four, all the other hosts are now exactly recommended, which is awesome. Yes. And then if I click on it, I get the podcast itself.
Jason Calacanis (02:44:02):
But then look at the second tab on the all ends handle, it says affiliates.
Leo Laporte (02:44:07):
Jason Calacanis (02:44:09):
So you would be able to change that word. But it shows the four of us there. And so this would mean on the TWIT show, or if you did it on, you know, your Mac show, whatever show, security show, you would be able to then see who the hosts were. Or maybe you put the guests there or regular. That's guests. So that's actually,
Leo Laporte (02:44:26):
It's kind gonna, I'm kind of, I
Jason Calacanis (02:44:28):
Think it'll drop, I'll be honest.
Leo Laporte (02:44:28):
Followers, I'm kind of off Twitter these days, but still, I
Jason Calacanis (02:44:32):
You've always had an interesting relationship with it, right? Yes. Because it
Leo Laporte (02:44:36):
Was your name challenging. Yeah. Yes, sure. A little
Jason Calacanis (02:44:38):
Challenge. Well, chief Twit, right? Like Yeah. You're the chief twit by the way. G 20 the
Leo Laporte (02:44:42):
Way 15 years ago. Can I say? Yeah. I figured it was you that told Elon you can't be the chief twit. Lisa Leos are the chief twit. Did you tell him that?
Jason Calacanis (02:44:51):
I tried <laugh>, I did not talk about anything I talk about with Elon
Leo Laporte (02:44:54):
Because Okay, okay.
Jason Calacanis (02:44:55):
It becomes like, literally
Leo Laporte (02:44:56):
It's a thing I understand.
Jason Calacanis (02:44:58):
I, it's crazy like Elon for clicks because I did like, I was playing with the Twitter spaces and you know, we follow each other whatever on Twitter. So he follows me, he jumps in my spaces when I was testing my microphone <laugh>. And then there's 20 stories. Elon and Jason are doing fart noises with the sound panel <laugh> at 2:00 AM <laugh>. And I'm like, it's just, I can't even test my microphone
Leo Laporte (02:45:21):
<Laugh> without a's good to have friends who stay up as late as you do
Jason Calacanis (02:45:25):
It. It is, it's, but
Leo Laporte (02:45:26):
Anyway, the reason I wanted get, the reason I wanted to get you in here is Silicon Valley Bank. Of course. Yeah. Do you have money in Silicon Valley Bank?
Jason Calacanis (02:45:34):
Yeah. So let me give all the disclaimers. I have no money in Silicon Valley Bank. I have no money in First Republic. I have no short position. I don't own either of the stocks. Everything I've been talking about is strictly for three reasons. One, to let the public know what I'm seeing from the inside. Cuz I am an angel investor. I'm on the board of a lot of companies with exposure number two I want to influence the government to do the right thing and make sure that this constituency startups and the people who work at them are heard. And number three, I, you know, I I really wanna see them take action because I have a, I had a real concern that it would be three or four banks and I can explain why, but I'll let you direct the interview. Well,
Leo Laporte (02:46:14):
The good news is
Jason Calacanis (02:46:15):
I'm not talking my book.
Leo Laporte (02:46:16):
And, and the good news is, well that's important. There's no conflict of interest. Yeah. But the good news is I think you won because an hour and a half ago a joint statement from the Treasury Federal Reserve, and F D I C said that all depositors, even those who had deposits bigger than the quarter of a million dollar insured will have their access to all of their money tomorrow.
Jason Calacanis (02:46:39):
Leo Laporte (02:46:40):
That means the government, the government, the government's gonna back it all. They're gonna back it all.
Jason Calacanis (02:46:45):
And it's important, I think, Leo, for the public to understand that this isn't a bailout of the Silicon Valley Bank equity holders, the shareholders, the board or
Leo Laporte (02:46:53):
The, so if you had stock leadership there or you were a board member or you were an owner, you're not getting made whole. That's not what this is about. No. This is the depositors. And in most importantly, companies like Roku, half of their cash was at svb. Correct. They can now make payroll tomorrow.
Jason Calacanis (02:47:10):
Yeah. I mean this is the reason I was in an, an actual panic last night is because I'll tell you the sequence of events that I saw up close and personal. Now you know, me as a journalist and a media creator, blog or podcaster, but for the last decade, for people who don't know I started angel investing in companies. I invested in 350 of them. Some of them got large, some of them would receive large amounts of capital and put it in a place like Silicon Valley Bank, first Republic, et cetera. And these are great banks. They're, they're very customer focused as you talked about on Twitter. And they've built a great relationship with the wineries and startups and venture firms. And what I saw was literally on Thursday, Leo people started spreading rumors, Hey, you gotta get your money outta Silicon Valley Bank. People immediately start running for the exits. Now
Leo Laporte (02:47:52):
Actually, this, this might have started earlier because Financial Times on the 28th of February Yes. Had a, had a piece saying this strategy, this, this bank might be in trouble because they are long on all these treasuries. Yeah. And, and the interest rates on 'em are single digit or less. And Yep. As interest rates go up, as the Fed raises interest rates, those holdings are become less and less valuable. They're really problematic
Jason Calacanis (02:48:16):
If you have to sell them. Yeah. If you have to sell them, you have to sell 'em at a discount. And they
Leo Laporte (02:48:20):
Did have to sell them cuz their cash position was so low. Right? Correct. The reserves weren't
Jason Calacanis (02:48:25):
High enough, they saw this. Yeah. Correct. Now if they had held them to maturity, these governments be fine. Yeah. Right. So this is,
Leo Laporte (02:48:31):
But the maturity is in some cases 10 years.
Jason Calacanis (02:48:35):
Correct. So what what's happening here is people I, I think didn't understand what's happening saying, oh, we're gonna bail out a bunch of Silicon Valley, you know, Dbags or
Leo Laporte (02:48:43):
Whatever. Billionaires. Yeah.
Jason Calacanis (02:48:44):
Billionaires. Right. That that's not what's happening here. And to be clear, people did see this happening and I think Fred Wilson at Union Square Ventures, or the team at Union Square Ventures let people know about it in maybe even December, January. So people had seen this coming. But you never think that everybody's gonna pull their money out of a bank at once. Once people realized, Hey, I, I have all my eggs in one basket. I'm not gonna make payroll, whether it's Roku or I have companies that have 20 people. Right, right. And have $2 million in place.
Leo Laporte (02:49:12):
There's tiny companies, I saw a tweet from a woman who says, Hey, I drive a Honda Odyssey, I got 25 employees, I'm not gonna make payroll because Correct. As a startup, and this makes sense, you're a startup, you get a big cash infusion in your a round F and, but you don't spend it, you right away you're gonna, that's your runway. So you're gonna put it somewhere that you as liquid so you can continue to make payroll. The problem is, it's more than $250,000.
Jason Calacanis (02:49:36):
Right. And so what then happened to, so there were, people saw this and then some savvy people, in fact, the smartest people I've ever met in my career, and as you and I experience, we get to meet entrepreneurs, capitalists, media people who are some of the smartest people on the planet. Just, you know, really smart people. And I'm watching the smartest people I know on the group chats, moving their money out of certain banks at a really fast pace. And I'm like, wow, I'm, I'm actually witnessing a bank run here because you would have a discussion. This
Leo Laporte (02:50:05):
Was Thursday morning?
Jason Calacanis (02:50:07):
This is Thursday. Yeah, Thursday. Yeah. Morning into afternoon. And I was literally in a board meeting Thursday afternoon and which had a Silicon Valley Bank customer
Leo Laporte (02:50:16):
And some of your portfolio have, have big in big, big Yeah. Accounts there.
Jason Calacanis (02:50:22):
Leo Laporte (02:50:22):
Advise your portfolio to people to to do this, to withdraw?
Jason Calacanis (02:50:26):
Yeah. Well, I, I'll tell you exactly what happened. We're we're like literally in a board meeting or I'm having other conversations and you'd have one person say, Silicon Valley bank's not gonna go under, it's it's Hop 20 bank. And if it did, the government would backstop it. Then you had another group of people were like, you know, maybe take half our money out. And then, you know, founders are asking me and I'm like, well, we could take the money out and then if there isn't an issue, we could put it back in. Right. Right. And that was my advice. You know, now that
Leo Laporte (02:50:51):
Makes sense. Better safe than sorry. Right.
Jason Calacanis (02:50:53):
But that's what I thought. Cuz I was like, I'm seeing, you know, and, and this is why I was tweeting at all caps last night, because I felt like people were ignoring something.
Leo Laporte (02:51:00):
Your hair was on fire. <Laugh>,
Jason Calacanis (02:51:02):
My hair was on fire. Because I'll, and I'll tell you why Leo, when you watch a whole swath of companies not be able to get their cash out. Yeah, that's true. And then everybody on the weekend pass the hat and say, how do we make payroll Monday? Yeah. And I was working with maybe six or seven companies that were in the process of doing this. And I'm giving literally a hundred thousand, $200,000 short-term loans to these companies arranging for them to be wired on Monday. It was very stressful. And
Leo Laporte (02:51:28):
So you were taking money outta your pocket for these companies to keep 'em
Jason Calacanis (02:51:30):
Solving. Yeah, exactly. Exactly. Yes. Wow. I would probably have put at least a million dollars out, you know, and I'm a seed investor and so I'm like, oh my God. Cuz then what I saw happen was the second order effects, the third order effects. Then I see, oh, wait a second. This payment processor who does people's payroll, right? Just missed all the payrolls because Ripple, I won't say what's coming or anything like that. Ripple. Okay. You can say, I don't wanna, you know. Well,
Leo Laporte (02:51:54):
No, they tweeted. Oh he did. He tweeted about it. Yeah.
Jason Calacanis (02:51:57):
Yeah. So all of a sudden payrolls are being missed before Silicon Valley bang. So as people,
Leo Laporte (02:52:03):
People understand this, we use a, we use a poe as well. You, you, we don't do our payroll. We have an independent third party. We transfer money when it's payday. We transfer a big chunk of money into their holding, they disperse the checks. So Ripple had all this cash and suddenly they can't access it. They can't pay these payrolls. And a lot of small businesses, as you pointed out, a lot of Main Street businesses mm-hmm. <Affirmative>, this isn't just billionaires or VCs or startups. This is normal people who aren't gonna get paid
Jason Calacanis (02:52:34):
On money person, a developer on Monday or a PR person. Yeah. It's, it's just rank and file. Yeah. And, and then what happened was, well their whole system, the rails were built on Silicon Valley Banks api. So now they gotta rip that out and put another bank's API in. Obviously that takes time. Then as people were moving their money out of one bank into another or many others, I saw another series of very savvy people say, you know what, this bank is too small and this bank is too small. I'm taking my money out of those other two and then I'm putting it in one of the top four banks. So then it, it all just crystallized for me on Saturday. I'm like, oh my God, there are three bank runs going on that I know about. People are moving money out of multiple banks, you know, the regional banks, the, you know, not in the top 10 let's say, or top four. Really. And so when I saw that, I was like, okay, there is a bank run occurring. Do you blame? People need to know about this. Your
Leo Laporte (02:53:25):
Teal, he was the first to tell his founder funds portfolio companies get out
Jason Calacanis (02:53:30):
If you yeah, this is a, like a, I think this is called the Prisoner's dilemma in you know, the sort of philosophy and logic. It,
Leo Laporte (02:53:38):
It is prisoner's dilemma, isn't it? It's
Jason Calacanis (02:53:40):
Right. It's like either I rat you out or you rat me out. It's game theory. One of us is, yeah, it's game theory. We're, we're in game theory territory, so I don't blame anybody who had to take the money out to hit payroll. But we also know what happens if everybody takes their money at the bank because we've all seen it's a wonderful life 50 times
Leo Laporte (02:53:54):
<Laugh>. Yeah. We all know what a bank run is, thanks to how
Jason Calacanis (02:53:57):
Much do you need? Need to get through the week. Yeah, right.
Leo Laporte (02:53:59):
Here's your Chavat Fretty. So Parker Conrad, who it's rippling by the way, who is the founder of Rippling was very, actually I give him a lot of credit. He tweeted it. Yes. It was very public. He explained what happened and now he, by the way, he and rippling are very pleased that the F D I C, the Federal Reserve and the Treasury is gonna back those deposits cuz those payrolls will get paid on Monday that the money has been freed up. So that's huge.
Jason Calacanis (02:54:27):
And that's what we all wanted. Yeah. Because here's what happens in a bank run. The people who are insiders see it happening and you know, who doesn't see it happening? This is what I found like was profoundly unfair. I was at a dinner party Saturday night with four couples and two of the couples were in venture capital and two weren't. And the two who didn't like, they had accounts at regional banks and they're like, can you explain to me what's going on? I saw a headline and I'm like, oh my god. You know these small business owners. And one of 'em was in construction, one of them is in fitness, one of 'em is something else. They had bank accounts and they didn't even know this was happening. So they're gonna be the suckers at the table who didn't take their money out. And then the insiders took all their money out. But
Leo Laporte (02:55:03):
Let's be clear, no one should take any money out now. Don't need
Jason Calacanis (02:55:07):
You at this point. No, it's over. And that's what we were lobbying. And there was many, I wasn't involved in the inside lobbying, I wasn't talking directly. I just said, you know what, I got a couple of hundred thousand followers on Twitter. I'm gonna be from Republic about this. And I said, it's on Monday the logic, what's gonna happen because I'm seeing it increase. The people at the dinner party were saying, Hey, I'm going to the bank. And then I saw the pictures at first
Leo Laporte (02:55:29):
Republican Lawn lines in Brentwood. Yeah,
Jason Calacanis (02:55:31):
Yeah. And I'm like, okay, I live there in Brentwood right by that one on San Viente. The parking lot was always empty there. They, they never had a line. It was like, it's a, those people online are gonna be non-tech people. You know, they're civilians, they're not venture capitalists. These are normal folk. And in some cases normal folk are under two 50. In some cases they're over it. It wouldn't be uncommon for a small business owner who owned a, let's say a medical practice in LA and I, I believe those are the people who were probably online. I don't know that, but there were multiple people who went to that bank and confirmed that. And I think on Monday, if they hadn't done this, it would've been 20 banks this week because wow. I dunno if you saw the announcement, but another bank in New York Yeah. Went under
Leo Laporte (02:56:11):
That's right. Signature Bank
Jason Calacanis (02:56:13):
And they took ownership.
Leo Laporte (02:56:14):
Jason Calacanis (02:56:14):
I wasn't even aware of that one. I'm talking about other banks. That
Leo Laporte (02:56:17):
Was close today. Yeah. So, so
Jason Calacanis (02:56:19):
If two banks in 48 hours, Leo. Yeah. What would've happened on Monday when they reopened? I think it would've been another 2008. So the government did absolutely the right thing here.
Leo Laporte (02:56:28):
It was certainly the risk. Do you know if they found a buyer the auction was ended Today
Jason Calacanis (02:56:33):
The back channel I'm hearing is that it's gonna be announced in the next hour. And I don't know who it could possibly be, but there, the other back channel that's going on is we've tried to have, I you remember all these hearings and stuff like that, Elizabeth Warren, yada yada, the top couple of banks are too powerful. Yep. So we need to have more banks. We
Leo Laporte (02:56:53):
Don't want more concentration that's top. That's right. Exactly. We don't want JP, jp, JP Morgan to buy it cuz it just concentrates it.
Jason Calacanis (02:56:59):
Correct. And so what's happening now is there's that as a factor. So they d those big four probably do wanna buy it and, and, and get all those relationships in Silicon Valley. Sure. I think they wanna probably get it to merge or be part of like a First Republic or a smaller one. So they're probably trying to make one of those bids win. And that mechanically could be complicated. And I think there was another thing which is we live in a very polarized time. I can tell you that as a polarizing figure, like some tweet
Leo Laporte (02:57:25):
That may it's all your fault, it's your fault.
Jason Calacanis (02:57:28):
It kind of is. I agree. Me or Trump <laugh> one or the other lady, I'm not sure who to blame. You know
Leo Laporte (02:57:33):
What? It's funny cuz I I love you Jason. I understand. I love you too. I understand there were some people who did not wanna to be on with you. And I understand that and I honored that, but I Sure it's fine. I love you and I also know that you're, you're a, you could be, you can, you can stir the pot. Yes. but I think in your heart you are a good person and you're a deep, I know from a fact you're a deep person. So and I was really glad I could get you on. I got one more question for you.
Jason Calacanis (02:57:59):
Leo Laporte (02:58:01):
Do you have money on the Oscars? Who's the best picture winner this year?
Jason Calacanis (02:58:04):
Okay, this is an important question. Yes. I think there were two films that I would see again multiple times that are extraordinary. The first is Top Gun and the second is Tar. These two
Leo Laporte (02:58:18):
Films I love Tar. That's, I'm voting for Tar
Jason Calacanis (02:58:20):
And Tar is my pick.
Leo Laporte (02:58:21):
Yes. Yeah. I know Everything everywhere, all at once Will win. But I thought Tar was amazing and I watched it several times. Todd Field is an amazing director, but there is a deep picture and there's a lot going on that you don't get on the first view.
Jason Calacanis (02:58:35):
No, it's, I've watched it twice too and it, it, it is an extraordinary film for our time. I think it's one of those films that like, we'll appreciate in 10 years. Yeah. Or five or 10 years and you know, everything all at once is good. The well was good. Top Gun I would see over and over again is fantastic. Very entertaining. Yeah. Really fun. Tar is an important, tar is an important film. Yeah. That, you know, you and I would talk for two hours after seeing Absolutely. Over a meal. Absolutely. Based on the nuance. And that felt my highly recommend people see it and give it a shot. Maybe it's a two sitting kind of thing cuz it is three hours, but the performance also is the best performance. I,
Leo Laporte (02:59:07):
Oh, she's amazing. She should definitely win best.
Jason Calacanis (02:59:09):
Unbelievable. All. Well great to catch up brother.
Leo Laporte (02:59:11):
Jason, I thank you so much. Yes. I'm glad I could get you on. I think it's important to hear all perspectives and it's really important to hear from somebody on the ground and you are definitely there in the middle of this and I'm glad you don't have to write those big checks to your portfolio. Yeah,
Jason Calacanis (02:59:27):
Me too. Yeah. I always hope that was gonna be rough. Yeah. There was gonna be a lot of wires going out in
Leo Laporte (02:59:31):
20. Yeah. I think it's the right thing to do. It cost the taxpayers nothing. There's no loss here. The bank, in fact, there was no fraud. It was just a simple liquidity crisis. And the government can solve that without any danger to anybody else and solve a big, big problem.
Jason Calacanis (02:59:45):
Thank the lord. All right, Leo, all
Leo Laporte (02:59:47):
In podcasts. That's Jason's. He's good. And this week it's startups, brother. You're still
Jason Calacanis (02:59:51):
Doing that? Yeah. Still checking along. And you
Leo Laporte (02:59:52):
Got the great Molly Wood working with you. God bless her.
Jason Calacanis (02:59:54):
Fantastic. Yeah. Yeah. She's the, she's the best. Okay. Thanks
Leo Laporte (02:59:57):
Jason. See you later brother. Bye-Bye.
Jason Calacanis (02:59:58):
Cheers, now. Bye.