← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
11/4/25: Consumers Slash Grocery Spending, Elon Warns Rogan On AI, Trump Denies Binance Pardon Corruption
00:40:06
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- [00:00]
Krystal Ball
This is an iHeart podcast. This is Matt Rogers and Bowen Yang from Las Culturistas with Matt Rogers and Bowen Yang. JBL Tour Pro 3 earbuds are for those who don't conform to the standard. Yeah, I mean if you want to get into some touchscreen technology, how about the smart charging case Clear sound. These are not standard things. You're only going to get them with the JBL Tour Pro 3 baby. And I love the sound of JBL and goes. These earbuds are packed with innovation because you can't stand out following others. Touchscreen Smart charging case for one touch control, instant EQ customization, true adaptive noise canceling and the one of a kind audio transmitter which can plug and play with everything from game consoles to in flight entertainment. What more could you want? First doesn't follow. Grab a pair@jbl.com I turned off news altogether.
- [00:54]
Saagar Enjeti
I hate to say it, but I.
- [00:56]
Krystal Ball
Don'T trust much of anything. It's the rage bait.
- [01:01]
Saagar Enjeti
It feels like it's trying to divide people.
- [01:05]
Krystal Ball
We got clear facts. Maybe we could calm down a little. NBC News brings you clear reporting. Let's meet at the Facts. Let's move forward from there. NBC News reporting for America at Lowe's this Veterans Day and every day verified military members, veterans and their spouses get automatic silver status in Mylo's Rewards with free standard shipping plus 10% off eligible purchases with no annual limit. One way we honor and give back to those who have served and still do. Learn more now@lowe's.com Military 10% discount can't be combined with another offer. Exclusions Terms and Conditions apply. Loyalty Program subject to terms and conditions details@lowe's.com terms subject to change hey guys, Sager and Krystal here.
- [01:52]
Saagar Enjeti
Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.
- [02:00]
Krystal Ball
This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
- [02:05]
Saagar Enjeti
So if that is something that's important to you, Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.
- [02:16]
Krystal Ball
We need your help to build the future of independent news media and we hope to see you@breakingpoints.com turning now to the economy. A lot of relevant news. Going to put this up here on the screen. The CEO of Kraft Heinz has now said they have the worst consumer Sentiment in decades. Pointing out the drop in the number of consumers who are buying stock staples, they lowered their sales outlook and that the feeling of US Shoppers has fallen, quote, to a historic low. The company now expects full organic net sales to be down 3 to 3.5% with slower growth also in emerging markets and pressure in the US Retail. They said that higher prices from inflation and expected headwinds from curtailed food stamp funding were creating a tough environment for US Shoppers, that the drop in their overall sales has led to some 17% drop in their overall stock price compared with the 17% rise in the S&P 500. Higher prices from inflation, food stamps, funding are all creating a, quote, tough environment, they say, for shoppers. And I think that that, I mean, that's really grim. You know, we talked previously about the McDonald's CEO. Now, I'm not saying Heinz products and McDonald's and any of that is healthy, but it's indicative of consumer sentiment, of behavior. And what he was showing is like, people were skipping breakfast. And I think a lot of comments were, oh, well, if they're skipping McDonald's breakfast and eating breakfast at home, then maybe that's a good thing. But there's not actually a ton of data that even necessarily shows that because of the grocery price increase. And so the fact that staples themselves have become not only more expensive, but people are deciding not to buy them, I think is one of those edge indicators in the grocery store to say, oh, man, things are really buying.
- [04:01]
Saagar Enjeti
People are like, you have to cut.
- [04:02]
Krystal Ball
On ketchup and mustard. I mean, by the way, how much ketchup are people eating? How many times do people buy ketchup? How about every six months?
- [04:09]
Saagar Enjeti
So you have a toddler.
- [04:10]
Krystal Ball
Oh, really?
- [04:11]
Saagar Enjeti
See how much ketchup your household can go through.
- [04:15]
Krystal Ball
If you never give them ketchup, then they will never know.
- [04:16]
Saagar Enjeti
Disgusting. Because of what? My son. My son would, like, dip his apple slices in it and everything.
- [04:21]
Krystal Ball
I was like, oh.
- [04:24]
Saagar Enjeti
That killed. Killed any sort of appetite I ever had for ketchup. So our family has long cut back on ketchup because I refuse.
- [04:30]
Krystal Ball
Because it's gross.
- [04:31]
Saagar Enjeti
It's disgusting. Anyway, let's go ahead and put C2 up on the screen because it's not just Kraft Heinz, you also have Chipotle. I actually didn't even realize this. They have this very young customer base. They've really catered to them. They've been like, you know, like, there's like a whole gym bro tie in. Here's a good way to get lots of protein for relatively inexpensive price. Easy, you know, relatively affordable, tastes good. I personally, I like Chipotle. I know you're a big Chipotle fan, Sagar, but I used to be.
- [05:00]
Krystal Ball
Not anymore. At the current price, I'm no longer a consumer. It's too much.
- [05:03]
Saagar Enjeti
So anyway, they say millennials and gen zers have helped power Chipotle sales. Despite rising menu prices and slowdowns at rival chains. In recent months, though, a harsher economic reality is set in. Rising student loan payments, stagnant wage growth, and rising health insurance costs have bumped burritos down. Younger consumers, priority list. They're just eating with us less frequently and they're eating at home more often, the Chipotle CEO Scott Boatwright said in an interview. And their stock is getting trashed right now. And guess what? They're not the only ones. I mean, you have the top line of the stock market know, just keeps going up, up, up. That's all because of these tech stocks. Nvidia leading the charge. But other tech stocks that are AI enabled, these sort of like consumer staple type of companies, they are actually really suffering and underperforming because you see this, this consumer pullback. And we could put C3 up on the screen, which is gonna have a major impact as well. So we covered yesterday, you know, the Trump administration was saying we're not gonna pay any SNAP benefits. A judge came in and said you actually have to, you have to tap these emergency funds. So now they're saying they're going to pay half of the SNAP benefits for November. However, there continues to be, I mean, those funds haven't hit for people yet. Here we are, November 4th, and there is no real telling when they will hit. So an Agriculture Department official who oversees the SNAP program said in a court filing that, quote, there are procedural difficulties that states will likely experience which would affect November SNAP benefits reaching households in a timely manner and in the correctly reduced amounts. For some states, required system changes that have to be implemented could take weeks or several months and could lead to payment errors and significant delays. So for the 43 million people who are on SNAP benefits, I mean, this is just an absolute, you know, it's an absolute catastrophe. And of course it's going to have a ripple effect throughout the economy. And you know, some of the places that are going to be hit the hardest are actually stores in rural America where you have more impoverished populations. And a lot of the revenue from the store comes from ebt, comes from the SNAP program. So even though you've got this ruling and The Trump administration now saying, okay, we'll give you half, which is already 50% reduction, is a massive, massive hit. No telling when they'll even get access to those funds either.
- [07:24]
Krystal Ball
Yeah, I mean, one of the things, well, this is where it comes down to cost, let's say with Chipotle and generally like I remember when it was $6 a bowl. This actually was not that long ago. And I used to eat chipotle five days a week. Literally back in my early 20s, there was one right next to where I used to live. I was on name basis. Now though, like they had this recent advertisement, I'm not sure if you've seen. It's carne asada and red chimichurri. I was like, all right, gotta try it. Okay. It's like catnip. So if you look the overall price when I was done, keep in mind we live in a high cost of living area. It was $22 for tax. I mean, look again, maybe the red.
- [08:00]
Saagar Enjeti
Chimichurri though is good.
- [08:01]
Krystal Ball
Listen, it's good. I loved it. I'm not gonna say I didn't like it. Was it $22 good? I don't know. Again, maybe boomer brain. But that's one of those where, you know, I don't drink alcohol. That's kind of what I expect to pay if I go to like a mid tier restaurant, right? Like I want to be sitting and getting some service. Not some, literally something in a, in a, in a paper bag that's wrapped in foil that you're eating on your couch when you're watching TV. That's just in my head, that should cost around 8 to 10 bucks. So $22, not happening anymore. And you just have to think about how again, for young people, especially if you eat out a lot, of course it's about convenience. And one of it is it used be so that it was a little bit more expensive to eat out, but not all that much more. And maybe you could justify the value in your time, like I said, at 13 to 18 bucks for a bowl, depending on like what you're getting in there. How is that possibly even worth it anymore? I mean, you have to cook at home. There's no choice.
- [08:52]
Saagar Enjeti
But you don't blame them either because look at how expensive beef is, right?
- [08:54]
Krystal Ball
But exactly. So then you're like, okay, so I'm going to eat at home. It's like, oh, oh, no. Yeah, exactly. You're paying for carne asada there. Or you can pay for it at Costco. You're paying A shit ton for it, basically, no matter what. That is the part where when you see how it pervades, you know, even influencer culture. I think I've talked about this, about those YouTube channels where it's like cook like your grandma from the Great Depression. Those channels saw a huge explosion over the last couple of years. That's part of why is home. You know, it's so exorbitantly expensive as stuff that was once not even. I mean, would you call Chipotle a luxury? Like, I wouldn't. It was six bucks. I even remember in New York you would pay $7 or something. Like it just was not that expensive. It was, you know, even in midtown it was like $7.50. I'm pretty sure if I recall now. I mean, what $15 probably for what it. That's just. That's a lot of money. And you have that for everything. Because Chipotle, it's. It's all fast food.
- [09:53]
Saagar Enjeti
And consider what the minimum wage is. Right. Still $725 25 an hour. Something. Yeah. And I mean even in states that have increased it, maybe they've upped it maybe to $15. So you're working an hour to get one chipotle bowl.
- [10:05]
Krystal Ball
I don't even know if it buy. It wouldn't buy a drink. It definitely wouldn't. With tax where I live, It'll be about 15 bucks, I think.
- [10:10]
Saagar Enjeti
And this is really the story of our economy. Put C4 up on the screen. This is the story and the reality of our economy today. So now the top 10% of income earners account for 50%. So half of all spending is being done by the top 10% of earners. And so you have this incredibly lopsided economy. And then of course what happens is all the incentive, like if you are a business wanting to make money, is to cater to the people who have the money, who have money to spend. And so increasingly, you know, the economy becomes more and more tilted and lopsided towards catering to the affluent. There's a bunch of. Let's go and put Kobec letter did a long thread with a bunch of other indicators about the reality of the economy today. Let's go ahead and start these. They write the elephant in the room. AI stock are outperforming consumer stocks by 20% plus over the last 60 days. And as AI investment exceeds $1 trillion per year, car repossessions are at 2009 levels. There are two US economies, rich versus poor. And AI is the lifeline of it all. And really Think about that. Because overwhelmingly the people who hold stocks are the wealthy. And so they're benefiting from, from this massive continued growth in the stock market. But if you're just a regular wage earner trying to make it, you are getting screwed. Let's put the next element up on the screen. So here are the sort of consumer focused brands whose stock prices are suffering. They say that on the other side of the table is a more bleak picture as opposed to the AI stocks. Consumer facing stocks are getting crushed. Latest earnings season only underscored that. Take a look at the year to date performance of these consumer stocks. General Mills and Kraft Heinz, which we mentioned before, are in, in a bear market. Put the next one up on the screen. The economy is particularly bad for Americans who are seeking entry level jobs. The US unemployment rate for youth graduates age 20 to 24 so people are, you know, just coming into the job market has averaged 8.1% over the last three months. That's the highest in four years. This is up sharply from under 4% just two years ago when the AI boom began. So it certainly looks like AI adoption is starting to take a hit on the job market, especially, especially with new college grads in particular or new associate degree holders. And let's put this last one up on the screen as well. This is a look at auto repossessions we are now at, have seen a huge increase in just the past year and vehicle seizures are at the highest level that we have seen since 2009. So you have a huge spike in 2009 Great Recession, then it declines, then it climbs back up and reaches a peak during the COVID era, which makes sense again when people are losing their jobs and out of work and struggling through Covid, then it declines and now we are back on the march up. So on the one hand you have these record earnings for Nvidia and all of this excitement about AI and these tech stocks that are just going up and up and up. And then the rest of the economy tells a very different story about what the reality is for people. And that's why I mentioned in our A block our election coverage. You know, in Trump's first term at this point, people were happy with where the economy was. You know, some 60 plus percent said the economy is good versus those saying it was poor. Now it's flipped and it's 70 plus percent who say that the economy is actually poor and only maybe 25% that say it is doing well. So you, you know, for, for people's own experience in their life. They are really feeling the pinch and feeling the pain. In spite of what the, you know, top line on the stock market is doing.
- [13:57]
Krystal Ball
I turned off news altogether.
- [13:59]
Saagar Enjeti
I hate to say it, but I.
- [14:01]
Krystal Ball
Don'T trust much of anything. It's the rage bait.
- [14:06]
Saagar Enjeti
It feels like it's trying to divide people.
- [14:10]
Krystal Ball
If we got clear facts, maybe we could calm down a little. NBC News brings you clear reporting. Let's meet at the Facts. Let's move forward from there. NBC News reporting for America. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers are into, true crime, sports, comedy, culture, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio. And all this reach means everything. Just think about the universal marketing formula. The number of consumers who hear your message times the response rate equals the results. Now let's get those results growing for you. Think podcasting can help your business? Think iHeart streaming radio and podcasting. Let us show you at iheartadvertising.com that's iheartadvertising.com or call 844-844-IHEART. One more time, call 844-844-iHEART and get podcasting working for you. Here we go. Hey, I'm Kalpen, and on my new podcast, Here We Go Again, we'll take today's trends and headlines and ask, why does history keep repeating itself? You may know me as the second hottest actor from the Harold and Kumar movies, but I'm also an author, a White House staffer, and as of like 15 seconds ago, a podcast host. Along the way, I've made some friends who are experts in science, politics, and pop culture. And each week, one of them will be joining me to answer my burning questions, like, are we heading towards another financial crash? Like in 08, is non monogamy back in style? And how come there's never a gate ready for your flight when it lands, like two minutes early? We've got guests like Pete Buttigieg, Stacey Abrams, Lilly Singh, and Bill Nye. When you start weaponizing outer space, things can potentially go really wrong. Look, the world can seem pretty scary right now, because it is. But my goal here is for you to listen and feel a little better about the future. Listen and subscribe to Here We Go Again with Kal Penn on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Why don't we transition to AI then? So just to show everybody what's happening with that.
- [16:40]
Saagar Enjeti
Yeah, of course. So Elon Musk went back on with Joe Rogan and made some comments about how nobody's gonna work anymore future. Let's go ahead and take a listen to that.
- [16:50]
Krystal Ball
Cars are, Cars are going to be autonomous. But there's just so many desk jobs where, where really people. What people are doing is they're processing email or they're answering the phone and, and just anything that is, that, that isn't moving atoms like anything that is not physically like doing physical work, that will obviously be the first thing those jobs will, will be and are being eliminated by AI at a very rapid pace. And ultimately working will be optional because you'll have robots plus AI and we'll have, in a benign scenario, universal high income, not just universal basic income. Universal high income, meaning anyone can have any products or services that they want, but there will be a lot of trauma and disruption along the way. So you anticipate a basic income from that the economy will boost to such an extent that a high income would be available to almost everybody. So we'd essentially eliminate poverty in the benign scenario? Yes. There's multiple scenarios. There are multiple scenarios. There's a lot of ways this movie can end. Like, the reason I'm so concerned about AI safety is that one of the possibilities is the Terminator scenario. It's not zero percent, so that's why I'm really banging the drum on AI needs to be maximally truth seeking. Don't. Don't force AI to believe a lie like that. For example, the Founding Fathers were actually a group of diverse women. Or that misgendering is worth a nuclear war. Because if that's the case, and then you get the robots and the AI becomes omnipotent, it can enforce that outcome and then unless you're a diverse woman, you're out of the picture. So we're toast.
- [19:01]
Saagar Enjeti
So the benign scenario is that all the jobs are gone?
- [19:04]
Krystal Ball
Yes.
- [19:05]
Saagar Enjeti
Then what did he call it? The what scenario do you call it basically where everyone's dead?
- [19:09]
Krystal Ball
Yes.
- [19:09]
Saagar Enjeti
Is the other scenario, which he says there's not a zero percent chance. Okay, well what percent are we talking here? Not that he knows. Right. But if you talk to anyone who has been deeply involved in this technology, none of them will tell you that the absolutely apocalyptic scenario is zero percent. So we're just rolling the dice. I mean, even if it's a 1%, 1 in 100 chance of complete human extinction. For me, that's too high of a risk. I don't want to take that chance. Right. That seems insane. And yet, you know, Terminator scenario. That's right. And there's a bunch of, I mean, there's a bunch of assumptions here too. He's like, oh, well, you know, there won't be jobs anymore, but we are going to have a really high basic income. What indication do you have that there's any like, likelihood of that politically occurring? Because right now you have just like a bunch of oligarchs who are consolidating all of the money and power and they are gonna find us to be. If they've made it so that labor is useless, they're gonna find us useless. They're gonna want to keep us around for what? For what reason? So even that is very optimistic and very hopeful, but that's the benign scenario that they're contemplating here. And then Sagar Elon is interesting in all of this, as I would say a bit of a cautionary tale because he's right that he came into AI development very concerned about safety. That' with Sam Altman, he sets up OpenAI. The idea is we're going to keep this as a nonprofit. We're not going to make it profit driven. It's going to be open. Right? That's the open and open AI so people can see the development and open source models and whatever. And then when he realizes that, you know, other companies and Sam is taking this in this other direction and other companies are joining the AI race as well, and it's basically off to it's just an arms race both between the companies and between the US and China. He's like, okay, well, I guess I'm just joining the arms race here. And I think it's utterly delusional to think that you're gonna keep AI, quote unquote safe because it doesn't think the founding farmers are diverse women. I mean, that's his view that he's articulated multiple times is he believes that if it's like an anti woke AI, then somehow that's gonna save us all and mitigate us from the most consequential catastrophes. And I think that is so incredibly delusional as to defy like any kind of logic.
- [21:20]
Krystal Ball
Well, I think that both are actually very dangerous, both woke AI and so called anti woke AI because the whole point around it is actually about society having feedback into both and that neither should be controlled at a centralized level.
- [21:33]
Saagar Enjeti
I mean, I think it's sort of irrelevant. Whether it's like that just completely misses the question of what the problems are.
- [21:39]
Krystal Ball
I don't know if. I don't know if it's irrelevant because, I mean, part of the thing is with oligarchical capture, as you can all see with the Trump people, is that they're incredibly fickle and they believe nothing. So they could also. It wasn't that long ago that pronouns were in bio, right?
- [21:50]
Saagar Enjeti
But think about, like, when Elon intervened and tried to make Grok less woke, it ended up within a matter of days calling itself Mecca Hitler.
- [21:59]
Krystal Ball
No, that's what I'm talking about.
- [22:00]
Saagar Enjeti
That's the thing, is that we have this, I think, illusion that they understand what this technology is. They don't. They don't. This is not something they programmed. It's something they grew. It's an alien intelligence that they grew. That's the best way to think of it. And so they try to do all these tests to figure out, like, is it deceiving us? Is it doing nefarious things? Is it gonna, like, you know, is it gonna break out of the lab and copy itself? And they, is it going to conform? We tell it to change how it operates. Is it going to actually conform? And they don't actually know. They do these tests and these experiments, and in many instances they find that it will lie to them, it will deceive them, it will try to blackmail them. It will copy itself onto another server to try to preserve its original objectives, and they'll do some clues to try to fix that one, to plug that one hole. They have no idea whether they've fixed the problem. They have no idea what's going on under the surface. No clue. And that's where we are today with the limited, you know, level of AI development that we have today. That's to say nothing of where they want these things ultimately to go.
- [23:03]
Krystal Ball
Well, let's pick up on that. The Ross Douthat just did a great interview with an AI safety advocate, D4. Guys, let's go ahead and play it. Artificial intelligence is able to start navigating the real world, right? So because advances in robotics, like right now, I just watched a video showing cutting edge robots struggling to open a refrigerator door and stock, stock a refrigerator. Right. So would you expect that those advances would be supercharged as well? So it isn't just, you know, podcasters and AGI researchers who are replaced, but plumbers and electricians are replaced by robots. Yes, exactly. And that's going to be a huge shock. I think that most People are not really expecting something like that. They're expecting that we sort of have AI progress that looks kind of like it does today, where companies run by humans are gradually tinkering with new robot designs and gradually figuring out how to make the AI good at X or Y. Whereas in fact, it will be more like you already have this army of superintelligences that are better than humans at every intellectual task and also that are better at learning new tasks fast and better at figuring out how to design stuff. And then that army of superintelligence is the thing that's figuring out how to automate the plumbing job, which means that they're going to be able to figure out how to automate it much faster than an ordinary tech company full of humans who'd be able to figure out.
- [24:31]
Saagar Enjeti
So this guy is the author, co author of a sort of forecast of where AI is heading, AI is heading, called AI 2027, which I read through. And the near term predictions are much more reasonable. And the longer they go out, obviously it becomes more difficult to make predictions of what it's gonna look like. But what he's pointing to here is myself, including you. And I think there's a lot of reasons to be skeptical about the idea and the promise of AGI and what this is, if it's actually gonna be as transformative as people are saying. And what he's explaining there is the reason you're gonna hit this point of exponential growth in terms of the capability is because it's increasingly going to be taken out of the hands of humans and you're going to have AI training AI where it's constant improvement, where you have effectively an army of AI that is researching and improving itself. And the humans are just the high level supervisors who aren't even really capable of completely supervised because they don't actually know, they do have to sleep, they do get sick, they do have limited ability to really understand what's happening under the hood here. And then it's in that scenario, once you hit that point where the AI is effectively training the new AI, that you hit this kind of like exponential growth curve and where things really start to get potentially very weird. And obviously he's not the only one that's saying there are a lot of people, I mean, I think most people who actually are deeply in touch with this industry and whether or not they support it or not, that that's the direction they all see this ultimately going in, which is why you see this race now for whoever can develop that ability, whatever level of an AGI or whatever you want to call that, whoever can develop that ability, they're going to be the ones who are able to hit that exponential growth curve and win the AI arms race that is unfolding right now without any of our desire or consent.
- [26:27]
Krystal Ball
There's two scenarios and they're both so bad. One is that they're right and that this will all progress. And I still don't really believe that they're right. Right. But hard to the way that they seriously take it and keep saying it out loud over and over again. At the very least, if the richest and most powerful people in the world believe something to be true, I have to take it seriously.
- [26:47]
Saagar Enjeti
Right.
- [26:48]
Krystal Ball
Because they're the people who could. They have the best ability to enact that. Now I think a lot of the times they are talking their own book to inflate their massive stock prices. I mean even X. The reason Elon is obsessed with AI right now is because X AI acquired X and the entire valuation of his private $40 billion boondoggle is buil upon the promise of AI and using Twitter data to use it as some sort of training bot for Grok. There's no profitability in Twitter, okay? It's dead business. It's horrible. But the point also though is if it fails is that we're basically left with some sort of dot com style, you know, scenario which blows out the economy. I was looking at a stat. If you bought the S and P In March of 2000, you did not return to baseline for like 11 years. That's how long it took for you to actually return for what it was. Now obviously you should have bought in between, you know, if you're dollar cost averaging. But that's, I mean that's a lot of value that was wiped out. 11 years of a dead zone in the US economy.
- [27:43]
Saagar Enjeti
And the dot com thing is, is instructive as well though because like yes, a bunch of these Internet companies failed, but the Internet was transformational.
- [27:51]
Krystal Ball
That's correct.
- [27:52]
Saagar Enjeti
So you can have a bubble pop and still have the, you know, technology, technological revolution for good or for ill that we are, you know, facing down right now.
- [28:02]
Krystal Ball
And bubble watch. Let's put C6 up on the screen please. Michael Burry of the Big Short, Big short fame apparently now has some massive put options against the value of Palantir and of Nvidia, two of the high flying AI stocks now currently. I mean you can do the math for yourself in terms of the value of the amount that he's betting on those companies and he's poised to profit massively if those stocks do go down. Look, he and himself in terms of the release for everything, part of it could be publicity, but I mean those are real positions held by obviously a legendary investor. I will say he has been wrong a lot recently, but you only had to be right once, as he famously was in the movie. And you should always take what the guy says seriously. I think a little bit more seriously that I take is put D5 on the screen. This John Cassidy, he's from the New Yorker. This was he wrote a little while back, but it was about that efficiency story that I talked about. The AI prophets, drought and the lessons of history. He is the author of that book. I can't recommend enough con specifically on the dot com crash back in 2000. And he links the same stuff that we were talking about about how the inability to find efficiency for some 95% of users is that even though we can cover AI job loss, that the big promises of productivity and all that are not manifesting themselves yet. Which is the only thing propping up the Nvidia stock price. OpenAI valuation, $13 billion revenue, trillions of dollars in deals amd all of these other things. Things, data center construction, like that's the only thing that's propping up everything right now. And so if there's a crash, it will not only impact overall stock valuations, it will also suck huge amounts of money out of the economy. Investment, capital expenditure, construction. It's just like housing. Like the housing crash didn't just crash housing, it crashed everything. Yeah, for a long time. That's my big fear right now. And by the way, I think this one is more likely than the AI bots take over and kill us all. All. I think the crash is the most likely scenario. Could be, I really do.
- [30:01]
Saagar Enjeti
Could be both.
- [30:02]
Krystal Ball
You could have, I don't know.
- [30:03]
Saagar Enjeti
Let's take the crash scenario. Let's, let's, let's take for granted that that's the direction we're heading. I mean, think about where we are right now. Like we just listen to Elon Musk. Obviously, Elon has a very large personal financial incentive to push the narrative that AI is going to be this incredibly transformational force. Now imagine you are a large institutional investor and all these guys who are smart and rich and powerful are telling you basically like, listen, I'm gonna be the one to make it an AGI and I'm gonna be effectively like God, king of the universe when that happens. That is a very powerful incentive for you to invest with them, isn't it? So they do have huge personal incentives to portray AI as it's going to be this completely revolutionary thing the likes of which we've literally never experienced before in human history on this accelerated timeline. And so you better be on the team of the oligarch God king that achieves AGI first or you're going to be left in the cold like all the rest of us suckers asking for our UBI from the federal government or whatever handouts and scraps they feel like giving us. So it is a pretty compelling, pretty powerful story and pretty powerful self incentive like huge incentive that people have have in their own selfish interest to push that narrative. So I think it is worth keeping that in mind when you're considering the promise. Now like the guy that I just, that we just showed you from Ross Dell that he does not have that and he left OpenAI because he was concerned that they were no longer worried about the morals and ethics and he did not see a way that they could have achieve what's called AI alignment where the AI basically stays in the box that you want it to stay in. And so that's why he left and is now doing this work on AI safety. But yeah, there is definitely a very possible scenario where investors come to realize I don't think that this thing is living up to the hype and you've got all of these trillions of dollars in this sort of like self licking ice cream cone economic system going on here with Nvidia at the core of it. And you could easily see how that could all come crashing down very quickly in an instant. Or China's deep SEQ or another competitor gains a significant edge and looks like it's going to be what gets adopted globally. They have some advantages in that regard. Number one, the fact that it is open source. So anybody, anyone in the world can download their weights and mess with it and adopt it and whatever that could be. Another thing that could cause the bubble to completely crash. So there's a number of scenarios. One is it's just completely fake and it's a bubble and it crashes. And we never get beyond like making videos of Tupac fighting Biggie in WWF or whatever. The productivity gains never really materialize. It's moderately disruptive but nothing really super crazy. That's probably the best case scenario. There's a scenario where the bubble crashes but it's still the AI development actually is still that level of transformational and then you have the tail end truly apocalyptic scenarios which you can't put off the table when you consider that the people who work with this stuff the most say this is a real possibility. We have to keep in mind we are trying to develop. They are trying to develop an intelligence greater than human beings. We've never coexisted on the planet with an intelligence that's greater than ours. What does that mean? You know, I mean, I think you have to take seriously the upending of the, you know, the order where that we currently dominate and that we're trying to. We are ourselves trying to upend that order. How are we going to be able to predict what are going to be the actions and the outcomes of what this super intelligence does? You know, are they going to treat us the way we treat ants, where it's basically like, yeah, well, they're kind of in the way. Let's like, you know, I don't want them in my house. Let me just get them out of here. I mean, we genuinely don't know and definitionally do not have the mental capacity to really try to figure it out.
- [34:05]
Krystal Ball
I turned off news altogether.
- [34:08]
Saagar Enjeti
I hate to say it, but I.
- [34:10]
Krystal Ball
Don'T trust much of anything. It's the rage bait.
- [34:15]
Saagar Enjeti
It feels like it's trying to divide people.
- [34:19]
Krystal Ball
If we got clear facts, maybe we could calm down a little. NBC News brings you clear reporting. Let's meet at the facts. Let's move forward from there. NBC News reporting for America. Run a business and not thinking about radio. Think again. Because more people are listening to the radio and iHeart today than they were 20 years ago. And only iHeart broadcast radio connects with more Americans than TV, digital, social, any other media, even twice as many teens than TikTok. And that reach means everything. Just think about the universal marketing force formula. The number of consumers who hear your message times the response rate equals the results. Now let's get those results growing for your business. Radio's here now more than ever, and iheart's leading the way. Think radio can help your business. Think iheart Streaming, podcasting and radio where the reach is real. Let us show you@iheartadvertising.com that's iheartadvertising.com or call 844-844. Iheart one more time. Just call 844-844-Iheart and get radio working for you. Here we go. Hey, I'm Cal Penn, and on my new podcast, Here We Go Again, we'll take today's trends and headlines and ask, why does history keep repeating itself? You may know me as the second hottest actor from the Harold and Kumar movies. But I'm also an author, a as of like 15 seconds ago, a podcast host. Along the way, I've made some friends who are experts in science, politics and pop culture. And each week one of them will be joining me to answer my burning questions, like, are we heading towards another financial crash? Like in 08, is non monogamy back in style? And how come there's never a gate ready for your flight when it lands like two minutes early? We've got guests like Pete Buttigieg, Stacey Abrams, Lilly Singh, and Bill Nye. When you start weaponizing outer space, things can potentially go really wrong. Look, the world can seem pretty scary right now, because it is. But my goal here is for you to listen and feel a little better about the future. Listen and subscribe to Here We Go Again with Kal Penn on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Moving now to cz, the notorious crypto billionaire who previously had been indicted by the US Department of Justice. He pled guilty. It seemed to be done and dusted of a deal until very recently when Donald Trump pardoned him. This obviously caused a lot of consternation online, potential corruption. There were a lot of questions. And then it exploded even more after a CBS News interview on 60 Minutes. Whenever they asked Trump who CZ even was and he did not even know. This is after criticizing Joe Biden around the auto pen scandal of pardons and claiming the President didn't even know who he was pardoning. So first, first take a listen to Trump's answer.
- [37:25]
Saagar Enjeti
He pled guilty in 2023 to violating anti money laundering laws.
- [37:30]
Krystal Ball
The government at the time said that CZ had caused significant harm to US.
- [37:35]
Saagar Enjeti
National security, essentially by allowing terrorist groups like Hamas to move millions of dollars around. Why did you pardon him? Okay, are you ready?
- [37:43]
Krystal Ball
I don't know who he is.
- [37:44]
Saagar Enjeti
I know he got a four month.
- [37:46]
Krystal Ball
Sentence or something like that and I heard it was a Biden witch Hunt.
- [37:50]
Saagar Enjeti
In 2025, his crypto exchange Binance helped facilitate a 2 billion dollar purchase of World Liberty Financial's stablecoin.
- [38:00]
Krystal Ball
And then you pardoned CZ.
- [38:03]
Saagar Enjeti
How do you address the appearance of pay for play?
- [38:06]
Krystal Ball
Well, here's the thing. I know nothing about it because I'm too busy doing the other. I can only tell you this. My sons are into it. I'm glad they are because it's probably a great industry crypto. I think it's good, you know, they're running a business and not in government. So he Said, I know nothing about it and I'm very busy. And he didn't even know who the guy was, who he barted, which, I mean, look at all the auto pen, by the way. You know, I think the auto pen stuff is legitimate in terms of Biden's dementia and, like, who was actually running the pardon scheme. But, I mean, this is also equally bad if you're. Because notice. What does he talk about? He's like, well, my sons are very into it. It's like, so your son's asked to pardon him? Is that what you're saying? Yeah, because it sounds like, like. Right, let's put that up on the screen, please. The actual report about the guilt, like the actual. The pardon. He was sentenced to four months in prison in April of 2024. Pled guilty to violating US money laundering. Binance also pled guilty and was ordered to pay 4.3 billion after a U.S. investigation said it helped users bypass sanctions. The pardon was a big debate about White House embrace of crypto, given Trump's own family investments in the industry and concern over whether, you know, the Trump family or somebody like that that got paid part of the whole scandal. I think around it is the, you know, we talked about Trump Coin and all that behind the scenes and you can give a legitimate theory, like case as to why, like, it was, quote, unfair, you know, around crypto for money laundering, etc. Kind of the spirit of crypto itself and like, what that all means, because there's a lot of crypto people who. I know who said that it was a bullshit investigation kind of in the first place. I personally like. My thing with Czech is Crystal, if you will recall, he was the person who was also kind of at the heart of the whole SBS scandal and the crash that I'm like, yeah, I would like to see a little bit more about that. Okay. In terms of defrauding people of billions of dollars, I don't really care about sanctions evasion.
- [39:59]
Saagar Enjeti
Yeah, let me just elaborate on that a little bit because it does seem to me like people say, oh, this was a bullshit investigation and these money laundering laws, whatever, okay, but. But he took a deal from the government and there were a lot more things that were being investigated with regard to CZ and with regard to Binance. The whole structure of the thing is incredibly shady and sketchy. Internally, a bunch of reports have come out about how they had no accounting controls whatsoever. I mean, similar to the very rogue way that SBF ran his company as well. And then there have been not just allegations but, but actually Binance has taken action against people internally who were internally trading based on knowledge of what coins were going to be listed on the exchange because that would give them, you know, a huge advantage. So there, there were all sorts. There was a really consequential interview that he did on CNBC that we covered here where there was real question whether they were lying about the funds that they were holding in reserve and whether they had enough cash to actually cover the things that they could potentially need to cover. They had to freeze deposits for a while. So there was a lot more questions and investigations going on into this company beyond what he ultimately pled to, I think is important context to know.
- [41:18]
Krystal Ball
That's very well said. Friend of the show Coffee Zilla broke some of it down. He's an expert on this stuff. Let's take a listen. Whether or not you're a Stan of the Trump family, it doesn't matter. I mean this is just, just straight up corruption which we should be all against. Right? This should not be a political issue, unfortunately. Increasingly politicians are involved in these huge crypto self dealing deals. But I am not injecting politics into this. Okay. It just so happens that they happen to be in positions of power. But don't worry about that. Right. Just look at the facts please, for a moment. It all starts November 21, 2023. Okay. Binance and Changpeng Zhao both plead guilty in a historic $4 billion plea deal where basically they admitted they didn't really have anti money laundering controls and they kind of willfully looked the other way specifically in regards to people they probably should have not allowed them to use their platform. Such as according to the charges, terrorists, cyber criminals and child abusers, which, you know, yeah, you probably should block those people from using your platform. Now on April 30, 2024, Z is officially sentenced to four months of prison. And of course a few months later, Donald Trump takes office, wins the presidency. Okay. And while he's winning the presidency, he also announces the launch of something called World Liberty Financial, which is kind of their big crypto project entry. Yep. And he broke it down even more. Put the next one up there, which you can show the actual timeline. So as he explicitly says that Trump launches World Liberty Financial stablecoin in March 2025. Investment into Binance by MGX. $2 billion investment was paid for in USD1. CZ admits he applied for a pardon in May of 2025. October 2025, he gets his pardon and then the net result is that USD1 is now backed by treasuries, this yields some 60 to 80 million dollars a year for this world Liberty Financial, as long as Binance does not redeem the 2 billion in USD 1.
- [43:16]
Saagar Enjeti
Okay, so he literally in the same month does this $2 billion investment that's going to pay the Trump 60 to $80 million per year. And asked for his pardon.
- [43:24]
Krystal Ball
Yeah, it's good business if he can get it.
- [43:26]
Saagar Enjeti
Just so we know. And this is the guy. Oh, I don't know anything about him, but my son's like him. Oh yeah, your sons who are running this crypto scam. Yeah, they, of course they like him. So makes a lot of sense.
- [43:36]
Krystal Ball
Last thing was flagged here about the transcript of the 60 Minutes interview. Let's put that up on the screen. A missing portion had this final question on crypto, quote, so you're not concerned about the appearance of cross corruption? Trump's edited out reply began with hesitation. He says, quote, I can't say because I can't say. I'm not concerned. I don't, I'd rather not have you ask the question. He went on, but I let you ask it. You just came to me and you said, can I ask you a question? I said, yeah, this is the question. O' Donnell replied, and you answered. To which Trump respond, I don't mind. Did I let you do it? I could have walked away. I didn't have an answer to this question. I'm proud to answer the question. He concluded, we are number one in crypto and that's the only thing I care about. I don't want China or anybody else to take it away. It's a massive industry.
- [44:18]
Saagar Enjeti
And you will recall that Trump sued CBS in 60 Minutes specifically and won. Yeah, over. Well, he got his payout. He didn't win. He got his payout.
- [44:31]
Krystal Ball
If you get paid, you win.
- [44:32]
Saagar Enjeti
Specifically over an edit of a Kamala Harris interview. And now you have CBS controlled by Trump allies, including Barry Weiss, who he spoke of very favorably in this interview. And they cut out this answer, which is unflattering to him. Right. They cut that out. And Democrats are actually looking now at turning the tables and suing 60 Minutes over the editing of this interview. But I mean, these are the sorts of like, this is the way that they're catering to power now. And now that they are controlled by Trump allies over Trump allies, these are the sort of things to be on the watch for here.
- [45:15]
Krystal Ball
Yes, indeed. And not just there in terms of foreign policy and a lot of other things. And not to mention entertainment, which they are currently eyeing and trying to buy. There's a whole lot of sketchy stuff going on behind the scenes. Okay, thank you guys so much for watching. I know we went a little bit late today. The live Stream starts when? 7:30.
- [45:33]
Saagar Enjeti
7:30 ish.
- [45:34]
Krystal Ball
Check your inbox.
- [45:36]
Saagar Enjeti
Polls close Virginia at 7. And. And probably we're gonna know those results pretty quickly. Almost certainly as things go, the, you know, if it's a Spanberger pretty clear victory, you're gonna get that one pretty quickly. So probably when we come on the air, we'll be able to bring you those results. We'll be watching New Jersey, you know, another one that I just thought of when we were on the show. Graham Platner in Maine is using his volunteer army to organize around this ballot proposition in.
- [45:59]
Krystal Ball
Yeah, what is it about Maine?
- [46:01]
Saagar Enjeti
It's about voting. Yeah, I think absentee ballots. I gotta check the details, but that'll be an interesting test, you know, of his organizing story strength as well. So there's that one. Of course, there's the New York City mayoral race, and Ryan and Griffin will be on the ground covering that. Hopefully we get another, like, tipsy Jamal Bowman to stop by another other fun guest like we did last time.
- [46:21]
Krystal Ball
That was a good one. All right, New York City results. We may not know tonight, correct?
- [46:25]
Saagar Enjeti
Oh, I think we'll know tonight.
- [46:26]
Krystal Ball
Well, they may call it, but we won't know the exact, like, exact number if they take a long time.
- [46:30]
Saagar Enjeti
Yeah, we won't have everything in. But I'm, you know, even on the primary when we thought it would be, we didn't think there was any chance with ranked choice voting that we would know it that night, and we did. So I think you're very likely to know who the next mayor of New York City is.
- [46:44]
Krystal Ball
No, no, no, we'll definitely know the mayor. I was. For me, the big question is about the 50%. Like, can he crack 50 or not? I. I wonder whether.
- [46:51]
Saagar Enjeti
I think we'll have a sense of.
- [46:51]
Krystal Ball
Whether we've had such issues with New York.
- [46:53]
Saagar Enjeti
I think we'll have a sense of whether he's on track for that or not to. We won't have all the results in, but I think we'll have a sense of whether he's headed for that kind of a victory. So there we go.
- [47:00]
Krystal Ball
Okay, see you guys. Foreign this episode is brought to you by pbs, home of Ken Burns. His newest film, the American Revolution, reveals untold stories of people, some familiar, many forgotten, who risked everything to change the course of history. It's the story of a war that was bloody, complex and profoundly consequential. Ken Burns and his co directors Sarah Botstein and David Schmidt shine a light on how this historic fight for independence lit the spark for freedom that still burns today. The American Revolution premieres Sunday, November 16th at 8.7Central on PBS and the PBS app don't miss it. At Hill's Pet Nutrition, we know that pet parent guilt is real. Leaving too long, playing too little. New homes, new babies. Waking them up when they look so comfy. Running out of patience. Running out of treats. Running the vacuum. You can only do so much. That's why there's hills. Science led nutrition to help you give more love than humanly possible because you're only human.
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Saagar Enjeti
There's hills.
- [48:17]
Krystal Ball
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