E88: First principle politics, China chaos & outlook, state of private/public markets & more

In the November 2022 U.S. midterm elections, JD Vance will win the Ohio U.S. Senate general election, Republicans will experience a broad 'red wave' nationally, and Blake Masters will win the Republican primary for U.S. Senate in Arizona and perform strongly in the November 2022 general election.

“JD's already won the primaries, and I expect he will win. I mean, it's going to be, I think, a red wave in November and Ohio is a pretty red state these days. Blake stalls to win the primary in Arizona. That's a little bit more of a toss up, but I think he'll do well.” View on YouTube

During the 2021–2022 Congress, despite having the opportunity and sufficient potential Republican votes, Senate Democratic leadership will not bring forward and pass legislation to codify Obergefell (federal protection for same-sex marriage) before the end of that Congress in early January 2023.

“is there any intention of the Democrats to bring this up in the Senate and pass it and codify Obergefell when they have a chance? I think the answer is no. Why? Because the Democrats would rather fundraise off this issue.” View on YouTube

In the November 2022 U.S. midterm elections, the Republican Party will gain a majority in the U.S. House of Representatives for the next Congress.

“Well, the Republicans are going to win the House.” View on YouTube

China's total population will decline by roughly 50% from its current level by the year 2100.

“it was a projection of China's population, which essentially showed it contracting by almost 50% by 2100.” View on YouTube

If China’s fertility rate remains around 1.15 children per woman, China’s population will shrink by roughly 40% each generation and will fall below 600 million people (potentially significantly below) by the year 2100.

“the birth rate or the fertility rate in China slipped to just 1.15 in 2021... So they've got a huge demographic problem. To Gemma's point, it's going to be something like, well, the population is shrinking by 40% with every generation. That's what these numbers imply... it's going to be under 600 million by the year 2100. But I would I don't understand how it wouldn't even be less than that if it keeps going at this rate.” View on YouTube

According to Peter Zeihan’s analysis, which David appears to endorse in this context, China will experience a demographic collapse (a sharp, structurally driven decline in working-age population and overall demographic sustainability) within roughly the next 10 years from 2022 (i.e., by about 2032).

“the commentator Peter Zeihan has... pointed out that China is facing demographic collapse in the next decade or so.” View on YouTube

Over the next couple of decades (roughly by the early-to-mid 2040s), China will build around 400 nuclear power plants, reducing industrial electricity costs there to under $0.05 per kWh, which will give Chinese manufacturing a significant cost advantage over U.S. manufacturing, where electricity costs around $0.11–0.12 per kWh.

“China announced that they're building 400 nuclear power plants, that drops the cost of electricity to under $0.05 a kilowatt hour in the US. Manufacturing, um, electricity typically cost around $0.11 per kilowatt hour, $0.12 per kilowatt hour in that range. So if factories become much more automated, they start to become a function of the price of electricity in terms of what they can output. China's going to have a huge advantage as these nuclear power plants come online over the next couple of decades, and these facilities get upgraded.” View on YouTube

Following the 2021 boom, venture capital firms will shift their behavior over the subsequent period by moving later stage—investing at higher ARR thresholds rather than at very early stages—so that, compared to 2021, a larger share of VC capital will go into later-stage SaaS companies (e.g., at $5M+ ARR) instead of very early-stage ($1M ARR or below) companies.

“So what I'm saying is there's a lot of risk in going from 1 to 5. You find out whether the product is really scalable. So what is the better deal... Well, like you said, the SaaS index is trading at roughly six times... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... So what I'm saying is there's a lot of risk in going from 1 to 5... you’re going to start seeing a dynamic where in the same way that last year, everyone went earlier and earlier, you're going to see VC start to sit back and go a little later and later.” View on YouTube

Within one year after Amazon’s acquisition of One Medical closes, Amazon will significantly expand One Medical’s telehealth footprint (e.g., materially increase the availability and scale of One Medical-style telehealth services to Amazon’s existing customer base).

“I will bet you I will bet you a dollar that within a year after closing the deal, they're going to massively expand the telehealth footprint of what we're doing, because one medical had to go out and do customer acquisition to go and acquire customers to make money doing telehealth services... Amazon's already got the customers.” View on YouTube

Over the next 3–4 years (starting from July 22, 2022), the SEC will pursue a series of enforcement actions against multiple venture firms and related parties involved with crypto tokens that resemble securities, resulting in massive settlements and prolonged litigation spanning roughly 2022–2026.

“I think the SEC, now that everybody's lost their money, is going to just tick off one firm after another and it's going to be massive settlements. It's going to be 3 or 4 years of litigation.” View on YouTube