Speak Your Mind 2 Cents at a Time
Elevated mortgage rates, weak buyer traffic and ongoing supply-side challenges continued to act as a drag on builder confidence in August, as sentiment levels remain in a holding pattern at a low level.
Builder confidence in the market for newly built single-family homes was 32 in August, down one point from July, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. Builder sentiment has now been in negative territory for 16 consecutive months and has hovered at a relatively low reading between 32 and 34 since May.
“Affordability continues to be the top challenge for the housing market and buyers are waiting for mortgage rates to drop to move forward,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C. “Builders are also grappling with supply-side headwinds, including ongoing frustrations with regulatory policies connected to developing land and building homes.”
“Housing affordability is central to the outlook for economic growth and inflation,” said NAHB Chief Economist Robert Dietz. “Given a slowing housing market and other recent economic data, the Fed’s monetary policy committee should return to lowering the federal funds rate, which will reduce financing costs for housing construction and indirectly help mortgage interest rates.”
In further signs of a soft housing market, the latest HMI survey also revealed that 37% of builders reported cutting prices in August, down from 38% in July. This share has remained at 37% or 38% for the past three months. Meanwhile, the average price reduction was 5% in August, the same as it’s been every month since last November. The use of sales incentives was 66% in August, up from 62% in July and the highest percentage in the post-Covid period.
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The HMI index gauging current sales conditions fell one point in August to a level of 35 while the component measuring sales expectations in the next six months held steady at 43. The gauge charting traffic of prospective buyers posted a two-point gain to 22 but remains at a very low level.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 44, the Midwest gained one point to 42, the South dropped one point to 29 and the West declined one point to 24.
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Click on graph for larger image.
The transcript from this week’s, MiB: Deven Parekh, Insight Partners on PE/VC, is below.
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
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This is Masters in business with Barry Riol on Bloomberg Radio.
Barry Ritholtz: This week on the podcast, I have an extra special guest. What can I say about Devin Pek, managing director at Insight Partners, major venture capital slash private equity shop that has had just countless, countless exits. He was an early investor in Twitter, buddy Media eVestment, Apris Insights, website Pros, Turnitin. They focus on software which is much broader and more varied than you might imagine. They are global in their footprint of where they put money to work. And they’re not just early stage investors. They do a rounds B rounds. They will help provide liquidity for a company that’s looking for a partial exit as well as strategic investments and m and a sort of from a private equity shop. I, I think Insight Partners is unique ’cause they have a foot in both venture and PE worlds. I thought this conversation was fascinating and I think you will also, with no further ado, my discussion with Insight Partners. Devin Pek.
Deven Parekh: Thanks for having me.
Barry Ritholtz: So let’s start out way back when you get a bachelor’s in economics from Wharton. What was your original career plan?
Deven Parekh: Not business. Not business. I actually, in high school was a total science nerd, you know, competed in Westinghouse International Science Fair.
Barry Ritholtz: Really? What, what area?
Deven Parekh: Biochemistry microbiology actually won first place in microbiology, the International Science Fair. So my path was kind of being a doctor or probably being an MD PhD. I didn’t actually start Penn at in Warden. I actually started in the College of Arts and Sciences. I started as a biochemistry major. Hmm. I was doing research at the medical school my freshman year. And you know, I think like at everything in life, there’s a lot of fate in who your roommates are and the people you meet. And you know, my roommates were all business and I was the only kind of science person and I thought, well, maybe I should take, maybe I should take a, a finance course or an economics course. I did freshman year, found it really interesting and after my freshman year I decided rather than doing working in science for the summer, I was gonna work on Wall Street for the summer.
And I managed to get a job in Wall Street between my freshman and sophomore year, which was unusual at the time, but I, but I did, I came back after that and said, well, maybe I can put these two interests together. And I was gonna do biochemistry and finance. I was gonna do the dual degree, you know, with a degree in Wharton and a degree in college. Now they have preset programs for all of these things, but at the time they didn’t. But it would involve taking, you know, between six and seven courses every semester. And not, not, these were not easy classes. These were like organic chemistry and were quantitative finance. And I just thought, this isn’t gonna be a great college experience if I do both. I kind of needed to pick. And so I, I ended up picking Wharton and of course people were like, well, what was the thought process you went through when you did that?
And the thought process probably was not, it was, I was impatient and I saw the route for medical school was I was gonna do four years in medical school. I was thinking at that point, I also wanted to do research. I thought maybe I was gonna get a PhD. It just seemed like a long time in school before I could actually start my career as opposed to business. I could, I could kind of jump in right away. And I always thought that at some point in the future I would somehow bring these two interests together. I didn’t know how. Wasn’t sure
Barry Ritholtz: That was, that was the obvious question. ’cause I, on the list of areas you invest, I don’t see a whole lot of healthcare or biotech or genomics. But did have the twain ever met or…?
Deven Parekh: They, they actually have and they, they they’ve, they have in two different ways. We do not have a team at Insight that does invest in, in kind of therapeutics, biotechnology kind of therapeutics. We have a team that does it. I’m involved in it, but I’m not the one doing those deals or leading those deals. But it’s actually probably also manifested a lot more like philanthropically you, I’m on the board of NYU Langone, we’re funding a bunch of research there as well as a bunch of other, you know, kind of universities. So philanthropically, it’s been a big focus of mine and so it’s been enabled, I’ve been able to bring, bring that kind of interest back into my life in a way that’s been satisfying.
Barry Ritholtz: Really interesting. So from Wharton, how do you end up on Wall Street? What’s your first gig?
Deven Parekh: Well, I worked for the summers. I worked at a small buyout shop after my freshman year, after my sophomore year worked at Credit Suisse. And after my junior year, I, I was actually first Boston at the time, after my junior year I worked at DLJ and then I started at Blackstone. And that was…
Barry Ritholtz: That’s, that’s quite a laundry list of, of it was a laundry list.
Deven Parekh: Yeah, it was a laundry list. And I started as a analyst at, you know, at Blackstone in 1991. And then had the opportunity even kind of before I finished my analyst program to go to a, a startup, but it was just not a tech startup. It was a investment banking startup that was founded by Jeffrey Berenson and Raymond Ella, who used to be the co-heads of merchant banking at Merrill Lynch. And so I left Blackstone to go to what was then a no name. And to some degree it’s still not well known firm. And I remember having a conversation with my dad at the time who was like, he didn’t really know who Blackstone was. And so when I took that job, he was like, well, why would you take Blackstone when you got all these offers from firms you’d heard of? And I was like, well, I think it’s gonna be a really good firm. And, and then finally he got comfortable. That was a good idea. And I leave to go to this firm that no one’s heard of. And I said, well, my downside case is I’ll go to business school. Like, it’s really not. Anyway, so I made that leap and that was a, it was a great experience. They were primarily kind of m and a advisory, but then over time they were trying to figure out how to get into the principle business in some way. How do
Barry Ritholtz: You, how do you go from m and a to venture capital?
Deven Parekh: So the two co-founders of Insight, Jeff Horing and Jerry Murdoch started their pre effectively the predecessor to Insight at Barron Salmonella. And Barella was kind of a, a, a sponsor of these two guys who wanted to do something in technology really early. We were not technology experts. We didn’t, the firm didn’t know anything about technology, but we thought we could help them raise capital, or at least the guys who ran the firm thought they could help. But we didn’t really have a lot of competency in software. I was the closest thing they had to somebody who understood technology, which just means that I used it. And so I was kind of working with, you know, Jeffrey and Jeff Warring and Jerry Murdoch, and then they kind of came to the conclusion that they were gonna kind of go do this on their own. That there wasn’t really, like the partnership didn’t make sense for them.
So they, they went off, they asked me what year was that? They, mid nineties, 95. Yeah. And they asked me at that time if I was interested in joining and you know, I was 25 and a vice president and I was like, oh, well why would I go join a startup? Like, and now all of a sudden I lost my startup kind of bug. And so I didn’t then, but I maintained a relationship with them. And then in, in, in, in 1999 when I was thinking of leaving Barron’s to go do something on the principal side, I ended up kind of joining them when they were raising their first institutional fund.
Barry Ritholtz: So what was that process like going from what was really a startup to going to something that was barely no longer a startup? Or, or was that really their first major outsource fund?
Deven Parekh: No, so they had, so they at that point had raised three funds. They were about to raise their fourth fund,
Deven Parekh: So somewhat seasoned.
Deven Parekh: It was primarily at that point they had very few institutional investors. So their fourth fund, fund four was gonna be their first institutional fund. And so it was, the firm is very small from a number of people standpoint. It’s about 10 people, you know, today we’re four 50 people, so it’s a, you know, a much larger firm today. But it was the, I think the harder part of the transition is, you know, it’s very different being an advisor, which I wanted this transition, but it’s very different being an advisor whose goal it is to kind of get a deal done to being a principal where your goal is not just to get a deal done, it’s to make sure it’s a good deal. Right. And that’s a, that’s a, that’s a shift, that’s a shift in mentality. And you, you know, you, it is not like an on off switch for that. But really the way I looked at it is I was, and the firm that I left very generously offered me the opportunity to take a pool of capital that they had and invest in technology as kinda his way to maybe get me to consider staying there. And, and I said no. And it wasn’t really an economic decision. What I said was, I’m not really qualified to do that at that point in time. Huh. And that I’m, one of the reasons I’m making this shift is to actually learn how to do something. What,
Barry Ritholtz: What was that learning curve like? Because I, I remember the 1990s and the late eighties and it seemed like a ton of people were just jumping into the venture worlds regardless of their credentials or academic qualifications.
Deven Parekh: Well, and I think in, in, I joined it late 99, 2000, you remember that time? Sure. In some ways it was a great time. In some ways it was a terrible time. I think in retrospect it ended up being a very good time for the following reason. Economically, it was not a great decision for years because like, you know, I think I told my wife when I took the job, you know, she was, we just bought an apartment and she was pregnant with her first kid. And I said, don’t worry, I know I’m making less cash, but I’m gonna have all this equity. And well, like, that equity was like five years. I hadn’t really, she was like, I’m not sure. I, I’m not sure I feel like this was the, the right trade. But so you get there in 99 and the deal pace is frenetic. And so you’d think like, oh, I’m learning so much. I’m getting all these deals done. I also got put on a ton of boards, you know, of companies. And the first thing I figured out was, well a lot of these companies didn’t really have a business model without raising a lot more capital. It wasn’t just us, it was just that was, that was that time. Sure.
Barry Ritholtz: It was a land grab in the days. It
Deven Parekh: Was a land in the early, in the early days. And the market corrected very quickly, I think four or five months after I got there. And when you look back, I mean, those were really, really hard years. But I actually think it’s where learn the most, you know, it’s easy to be, it’s easy to be a cheerleader when things are great. It’s a lot harder to have to kind of dig into a business, including businesses that aren’t gonna make it and try to get to the best possible outcomes. So from a learning standpoint, you know, and I think this is sometimes the things I tell my kids is like the worst time sometimes are the ones where you’re gonna learn the most. And there’s always gonna be you. You’re gonna get to the other side. It might not be the side exactly the way you wanted it, but there’s no way you’re gonna look back and say you didn’t get something outta that experience.
Barry Ritholtz: It’s so funny you say that. I started on a trading desk and one of the things you figure out pretty early is you learn much more from your losers than you do from your winners. Same thing in venture.
Deven Parekh: Same thing in venture. I think it’s the same thing in life.
Barry Ritholtz: Oh really?
Deven Parekh: I think it’s true in lots of things. It’s
Barry Ritholtz: True. Stumbles and fails are more instructive than wins
Deven Parekh: Could be jobs, it could be relationships, it could be, you know, even like your, you, you like, you know Right. If you think about the world today where your, your, your world today where there’s a tendency for parents, and I’ll include myself in this to be too involved, right? Oh, my son got a B because he had a bad teacher. Like, well, like guess what? We all have bad teachers and bad bosses and bad roommates and, but you learn to adapt. And I think sometimes you have to go through those things and I think you learn from them. Right? Bad relationships, I think you learn something from. So I think you have to, if you, if you take the mindset that you can learn something in good times, you can learn something in bad times, I’d argue you probably learn more in the bad times. I think that’s a, it’s a valuable mindset to try to have, it’s hard to have it when you’re in, in the bad time. Sure.
Barry Ritholtz: You know, you mentioned the role of serendipity earlier. Michael Moison likes to point out, part of the reasons we may not learn much from the good times is it’s very hard to distinguish between, Hey, is this working out because I’m skillful or is this working out? ’cause I just got lucky?
Deven Parekh: A Rising tide lifts all boats. Yeah, that’s right. And you don’t know whether you’re, you, you, you’re on a yacht or a boat with a hole. And so, but they all rise ’cause the water’s rising
Barry Ritholtz: At least temporarily. Exactly. That’s right. Yeah. So you mentioned you’re on a ton of boards, US International Develop Development, finance Corp, council of Foreign Relations, Carnegie Endowment for International Peace, NYU Langone, what’s the attraction to all these boards?
Deven Parekh: Well, those are the things I do, you know, outside of the office, you know, I think I’ve always had a belief that if you are successful, you kind of owe it to give back. So that’s one. Two is intellectual interest, right? Like the things that I’m involved in are things I’ve always been really interested in. And even in some of these, even in some of the, I talked about how I ended up going to Wharton because who my roommates were. Another story was when I was in college, the fir my freshman year, I went to go write for the newspaper, the Daily Pennsylvania. It was a pretty well known college newspaper. And my roommate at the time went to go volunteer for college Democrats. This is like a first semester of freshman year, second semester of freshman year. I asked my roommate to come check out the dp, the the newspaper. And he came, he asked me to do the same and senior year I was president of college Democrats and he was editor-in-chief of the newspaper, right? Neither would’ve happened without us kind of having totally different interests and ended up, and he’s now in journalism, right? So, you know, I just think that, that there’s a lot of these things. And so those interests, that interest policy related things is interests I’ve had ever since college. And kind of over time I’ve been able to engage in those things in a more meaningful way.
00:14:46 [Speaker Changed] So, so let’s start chatting about Insight Partners approach a little bit. You guys do everything from software investing to ai. How do you differ from other venture capitalists in the space?
00:15:00 [Speaker Changed] So I think the approach that we take is we’re, we’re really software investors, but we’re stage agnostic, right? And what does that mean? Meaning not
00:15:06 [Speaker Changed] Just seed Angel be
00:15:08 [Speaker Changed] Around, we, so the, probably the only stage that we don’t really play is seed and pre-seed. We’re really, but we’ll do everything from a series A all the way to a buyout. We have the capability to go across the continuum. And I think that’s important both ways, right? Like if you are a, if you’re a buyout investor is an example, particularly in a firm, in a field like technology, which is changing quickly, not knowing what’s going on at the early stage, what could be coming this disruptive is kind of a risky way to be in investing in more mature companies, particularly in an AI world where that transformation is happening a lot faster. And the flip side, you know, I think on the, you know, early stage side understanding what does it take for a company to, to actually be public? What does it take for a company to actually be able to raise the Bs and C’s and D rounds and what are the key metrics to make the, and having the network and ecosystem to be able to help companies do that.
It’s helpful to have your mid stage and growth stage business too. So I think the ability for us to be able to invest across that continuum really makes us pretty unique relative to most other software investors out there. The second thing is, you know, the way we source though more firms are doing it now, which is, you know, we have over 60 people full time, that’s all they do is deal sourcing and, you know, think of it as our outbound sales team, but it’s a really smart outbound sales team that are people who, when they’re successful, end up being partners at Insight. And what we’re able to do is have tremendous market intelligence because we’re talking to anywhere from 20 to 30,000 companies a year, right? Obviously investing in a much smaller set of those. And then the third thing is, is our kind of the value add approach, right?
Because all investors like to say they add value, it’s hard to do. We very early on in 2000 created what we call Insight onsite. And the reason it’s called Insight onsite is because those team members are meant to be onsite at the company as opposed to in our office, right? So think of it, McKinsey or Bain, if you walk into the office, you won’t see a lot of those people in the office because if they’re doing their job, they’re actually at their clients. And our case, our clients are portfolio companies. And what we’ve done is, if you think about every functional area of a software organization, whether that be sales, marketing, product, customer, introduction, strategy, and now AI transformation, we have a team for each one of those areas and we have a team for each one of those areas that’s also stage focused, right?
So we have an team that works with early stage companies, we have a team that works with mid stage companies. We have a team that works with more mature companies because the recruiting needs for a company with $500 million of revenue are very different than the recruiting needs for a company with $5 million of revenue. And that team is over 125 people that’s focused on really making sure that the companies, they’re getting the benefit of not just anything we know best in class thinking outside the firm, best in class, within the portfolio. And that, those three things together is really I think what allows us to have a a very successful strategy. Huh,
Barry Ritholtz: Really interesting. I, I was trying to conceptualize how Insight is sort of a venture fund, sort of a PE shop. Your explanation really explains why those, those titles and those descriptors really only de describe part of, of what the firm
Deven Parekh: Is doing, I think. And I think things just overall things are blurring, you know, in this world. Like, you know, one of the areas that we’re very active in right now is something that we call venture buyouts. And you’d say, well, okay, like that seems like that’s both, and to some degree it is. And, but what is it really? Well, what’s the biggest issue you hear right now in private equity? If you were to interview an lp, they’d say, well, I’m not getting enough money back, I don’t have enough DPI and some over allocated. That’s probably the number one complaint that institutional investors have. Well, if you look in venture, there’s just a massive amount of funding of companies and company creation and funding over the last, so you have thousands of companies out there. Many of them have not reached a scale where they’re ready to go public or have a strategic really be focused on them, right?
They just don’t have the scale yet. And what we’re able to do in those situations is find the ones that are interesting companies and we go to the shareholders and say, we’ll buy 70% of the company, we’ll buy a hundred percent of the company. You can either choose to roll some of your investment if you think there’s upside, if not, we’ll give you, we’ll give you a return. We, whatever it is. And, and then we are able to then take control of those companies. What happens in a lot of these venture companies is they have very diffuse cap tables, right? You have 7, 6, 5 different people, five different opinions. It’s actually hard for the CEO to get alignment with their board on what the strategy should be. We can create that alignment. And so maybe he really wanted to, he or she wanted to execute an m and a strategy, but only half the investors were willing to put up more capital. Were able to, in that case, clean up the cap table and then make whatever changes in strategy team, whatever it might be that, that are necessary with a totally aligned board. That’s a strategy that touches both, it touches some element of venture and it touches some element of private equity.
Barry Ritholtz: Two of the people you work with, Ryan Hickle. Yeah, Hinkel and Richard Wells. A as I’m doing my prep for this anywhere. I search for software as a service. I seem to come across Ryan Hinkels. Yeah. Name. Tell us what it’s like working with those guys and working with the, the other founders, the two co-founders.
00:20:39 [Speaker Changed] Yeah. And others. So, you know, Mike Triplet and Jeff Lieberman and we, we have so many people who’ve kind of contributed to the success of the firm. You know, Ryan actually joined Insight as a summer intern right out of college. Wow. He’s now on the investment committee. Richard Wells joined us out of Harvard Business School after a successful career at TCV and, and some other firms and has been a huge driver of returns. He’s had some great deals that have exited just this year. I think that one of the things that we’re most proud about at Insight, and this is also I think very different than a lot of firms out there, is that if you look at the top four partners, the top six partners, top eight partners, the vast majority of those people all grew up with an insight. And we’ve really created a culture. If you join Insight as an analyst, you can, you can make it to the top. And that’s, that’s very different than a lot of firms out there. And I think that’s created a, a very positive entrepreneurial culture where we give people a lot of autonomy, we give people a lot of ability to find new areas to invest in and, and magic happens.
00:21:53 [Speaker Changed] So let, let’s talk a little bit about that magic. You’ve made over 140 investments in various companies. I’m assuming that you’re doing this as part of a group, as part of an investment committee. How does that work if everybody has a slightly different expertise or focus? Take us through the process of what companies get funded. How does that process go?
00:22:16 [Speaker Changed] Yeah, and look, first of all, it’s the beauty of I think our model too, which is why we might all have slightly different focuses or areas. We’re all just investing in software. Now, if you contrast that to firms where somebody’s a biotech partner and someone’s a software partner and someone’s an industrial partner, that’s much, much harder because you really don’t have any sense of each other’s businesses. Here, the key metrics are common across all of these things. There might be some technical understanding around infrastructure product or what might be happening in a particular vertical that a partner might have, but the key metrics are the same. And so our processes that every deal, no matter how small or how big goes through the same investment committee process, we meet once a week kind of common like a lot of other firms out there. And the team, whoever the team is, presents the deal to the ic.
00:23:09 We debate it, we ask questions, we ask for follow up information. And out of that either comes, this is something we wanna pursue, we don’t wanna pursue, we only wanna pursue, but only at kind of this valuation. And then the team then goes out and kind of executes on that. And then if say we sign a term sheet, they’ll come back with a more detailed diligence package that goes through all the typical diligence things you’d assume that gets reviewed and discussed. Again, sometimes there’s follow up questions that come outta that. Sometimes there’s not. It has to get through that second approval process. And then if it gets through that approval process, then we would then fund. But before anything even gets there, we have a number of teams that are staff with these sourcing analysts and associates and mid-level people that really do the hard work before something even gets the investment committee. So Ryan and Richard both run a team and, you know, they each have their slightly different focuses, but they each run a team and they’re meeting with their team on an even more ongoing basis to kind of prioritize the deals that kind we want to, they wanna pursue. And then if it gets through their own team, then they would bring it to the overall investment committee. So, so
00:24:21 [Speaker Changed] I’ve heard some venture capitalists talk about valuation almost as if it doesn’t matter, which as a public markets guy, I kind of shudder when I hear it, I think it was Mark Andreesen who once said, all right, we were early state investors in Facebook. Had the valuation been double it practically wouldn’t have affected our returns. My immediate answer was, well, they would’ve been half if the initial investment was double, but you know, a hundred x point taken. How do you think about valuations, especially when you’re looking at early stage A or B rounds where it kind of feels like total addressable market growth projections? I don’t wanna say fabricated, but they’re squishy best estimates.
00:25:09 [Speaker Changed] They’re guesses. Yeah. Okay. I mean, I mean, look, but in a early stage deal, like it’s a guess. I think the person who wrote a check in Palantir didn’t know that Palantir was gonna become what Palantir became, but they saw an entrepreneur with a vision with a potentially large market and decided to make the bet that this person could execute and turn it into that larger market. Right? Look, I don’t, I’m, I’m not gonna say the valuation doesn’t matter, but I think what you can say is that we have to, it’s, it’s a line that one of my partners uses that we don’t overpay companies just miss their numbers, which is just, I mean, it’s said in jest, but really the, the, the point is that generally, not always, but generally the price we paid, if the company hit the numbers that we thought they were gonna hit, even if the price seemed high on current revenue is feels reasonable.
00:26:00 So, you know, companies that even recently, AI companies that seemed expensive six months ago don’t look so expensive six months later just based on kind of how their run rate revenue has changed. So the way we think about this is we do care about valuation, we lose deals on valuation, but that doesn’t mean the deals that we win aren’t high absolute valuations. It’s just how much conviction do we have in the growth? Right? And this is why these markets are not efficient. You can have very high conviction on X, Y, Z company’s growth and I can have low conviction and one of us will likely be right. And if I was right and did it good for me and if I was writing didn’t, didn’t do it. It just depends on who’s right. So I think the way we think about it is, we’re all of these deals today, certainly AI deals on a multiple of revenue basis are gonna feel expensive.
00:26:57 Of course you have to look at growth adjustment, right? So even as a public market investor, you’d say that a company that’s growing at 10% is gonna have a different valuation than a company that was gonna grow at 30%. Now how do you even start thinking about a company that’s growing at a hundred percent, right? Right. It’s hard to think about and it’s not hard to think about it for a year, but if something can grow a hundred percent for three years and then even if it decelerates and compounds off three years of a hundred percent growth, that’s a pretty high multiple that you can pay. Yeah. So the way we really think and talk about it is not valuation doesn’t matter, but we think about it in terms of if you’re paying a high multiple, then your conviction needs to be high on the growth rate. Now you’re not always gonna be Right. Right. And that’s part of the business. We just have to be right enough. And
00:27:44 [Speaker Changed] You mentioned software, the first thing that comes to mind is Silicon Valley, San Francisco, the West Coast Insight Partners is New York City based. I know you have offices around the world. Is there an advantage or disadvantage to being based here in, in New York?
00:28:01 [Speaker Changed] We think there’s an advantage now, but, but maybe it’s, you know, maybe we’re just convincing ourselves that because we live here. But you know, I think that not being in, I mean, I can tell you what the disadvantages are, but I think the advantage is not being in the bubble. Like we’re not all having breakfast at Bucks and talking about the same 20 deals. Now maybe that’s bad if those 20 deals are the deals you have to be in, but there’s a tendency to have everybody kind of wanna do the same thing. And I think not being in that every day lets you step back more and kind of decide what you want to do as opposed to what everybody else is doing. You know, I think there’s a disadvantage too, like the strategic buyers are all out there. You know, we’re not in the same flow of those companies sometimes as people who might be seeing those people all the time. But on balance, I mean, I think we’ve done okay and we’ve managed to sell to a bunch of strategics and so it, it, I don’t think it’s hurt us to, to, to be here.
00:28:57 [Speaker Changed] And I mentioned you have offices around the world, you literally, you know, it’s not just New York, Silicon Valley, London, you guys are all over the place.
00:29:05 [Speaker Changed] Well, really it’s, it’s really, it’s really for presence. It’s, it’s New York, it, it’s San Francisco, it’s London, it’s Israel. Those are really the four places we have.
00:29:14 [Speaker Changed] So how does being global help the firm? What do you learn from having that sort of global perspective?
00:29:20 [Speaker Changed] Well, I think we’re pretty disciplined about how we’ve grown. And I, I I, I’d be surprised if you see us have, you know, a lot more offices in five years. If you look at Take Israel, Jeff Horing really drove that strategy for us to get into Israel. I think, and I might get the numbers wrong slightly, but I think we had 60 or 70 companies in the portfolio before we put the first person on the ground. Hmm. And at that point, there were six firms that had, you know, five to 10 people there that had portfolios of five or 10. Right. Because I think the thing that we want to avoid is if you put somebody on the ground before you have a portfolio, then they need to rationalize their existence by creating a portfolio. And maybe that’s a good idea, but maybe it’s a horrible idea. And the bar, by having the bar that if you wanna do a deal in Israel or you wanna do a deal in India, you actually have to get on a plane and go 10,000 miles or fly, you know, 12 hours, you gotta
00:30:17 [Speaker Changed] Be a really good deal.
00:30:18 [Speaker Changed] You gotta be really excited about it. Right? And so it creates a natural like, no, I I like this deal in Long Island better. Okay, well look, you spoke with your, you know, you spoke with, and it probably should have a little bit of a better return in order if it’s that far away, right? And so we’ve kind of waited in these places to have really conviction that that’s gonna be a market, because we have a lot of companies in that market before we add presence there. So there’s plenty of places in the world where we have companies, more companies than funds that are in that local market.
00:30:51 [Speaker Changed] So you guys have a reputation for being software investors. Why have you focused on that one space and how many different sub-sectors are included under software?
00:31:05 [Speaker Changed] Look soft, we’ve been doing software since 1995, and if you look since 1995 to today, I think it, I might be wrong about this and maybe there’s one other category that, for which this is true, but I don’t think since 1995, there’s been a single year where the software industry declined in aggregate revenue through every recession, through every cycle. And as a percentage of GDP, it just continues to increase. The software component continues to increase. So, you know, I think if you’d asked a bunch of us 10 years ago, we maybe thought, oh, maybe we’re gonna cap out on software, we’re gonna have to go do something else. That really hasn’t been a problem. I don’t foresee it being a problem. So it’s a massive industry who’s had great growth, but the projected growth over the next 10 years is very strong. So I think that we don’t need a new category to go after we like this category. This category’s got amongst the highest growth rate of any category out there. And it’s really well downside protected too. If you were to talk, if you had a lender on, they would tell you that software is their lowest loss ratio, huh?
00:32:12 [Speaker Changed] Right. What catches your attention first when you’re looking at either a startup, startup in software or a, a reasonably developed company? Is it the founders? Is it the technology? Is it a combination of both? Well, I
00:32:25 [Speaker Changed] Think it depends on stage. Like, you know, I think in an early, in an early stage company, you know, founder and tech is really, really important, right? And, and, and market. Now, as you said earlier, you’re making a guess sometimes on a market at a very, very early at a series A stage. Now you’re hopefully making an educated guess based on lots of pattern recognition of companies based on lots of data on how big that market is, is measured in different ways. But it’s a common mistake to underestimate a market, right? I mean, when we look back, it’s a little bit more of a consumer example. But when we look back, you know, I remember looking at Uber and we convinced ourselves that how could you ever pay a valuation that’s higher than the total tam, right? And the total TAM was New York and San Francisco of black cars. Well, it turns out that’s not really the total TAM of Uber today, right? Right. Forget about food delivery and groceries. I was just talking about cars, just
00:33:16 [Speaker Changed] Yellow
00:33:16 [Speaker Changed] Cabs. Yeah. Just because they went to UberX and UberX totally changed the tam. So I, I think tams are not static. Right? And I think that’s a very, very hard thing to recognize that okay, maybe they’re going after a smaller problem today, but that might be the Trojan horse to get into a bigger and bigger markets over time. Right? And that’s where intuition and pattern recognition and kind of seeing what a great founder is, which is why look, early stage, I think is much harder than growth stage or buyouts where you have lots of data and financial metrics that you can kind of rely on. Right.
00:33:50 [Speaker Changed] I, I love the idea of the Trojan horse. Somewhere along the lines. Someone said you could practically ignore the seed stage or early stage business model. ’cause there’s always gonna be a pivot. The Trojan horse are the founders. How accurate is that, that point of view? Well,
00:34:08 [Speaker Changed] I mean, I think it, like in everything, when people make statements like that, they tend to focus on the winners, right? So they’ll look at x, Y, Z company that pivoted and say, oh look, everybody can pivot. Well, everybody doesn’t pivot. And you do have a huge, very high loss ratio at seed, early stage, and even series A and the strategy’s different, right? You, you have a power law in series A, you have a power law in seed, and you have a power law even in buyout. It’s just a different power law. In, in buyout you can basically, your power law is not a lot of losses. It’s, you can have some one Xs or 1.5 Xs, but, but you probably need a couple of four X or five X’s in seed. You probably need 100 x and you have a very high loss in series A. You need a bunch of 10 or 15 or 20 Xs, but you can still have losses. So depending on what stage, there’s this view that like power law only applies to venture really applies to all stages. It’s just what a loss is, what a loss is, is defined differently, right? A loss in a buyout might be just a one X or a 0.8 x. You can’t really have a lot of zeros in buyout, right? So I think the power law continuum is true across all these markets.
00:35:19 [Speaker Changed] So AI is obviously a really big sector today. What other sectors excite you the most? Or how much does AI fit into just looking out there as, as game changing technologies?
00:35:34 [Speaker Changed] Well, look, I think every firm, whether they’re a venture firm, a buyout fund, doesn’t really matter what type of investing people are doing. I think it’d be a huge mistake to ignore ai, right? Even if you’re not investing, quote unquote in an AI company, you better be thinking about how AI is gonna affect your business model or how can it improve your business model? And those who don’t, even people in services businesses, like if you’re running a law firm today, you’re running an accounting firm today, you just really need to think about how is AI gonna affect my business? So of course, in our case, in our more mature companies, a lot of what we’re thinking about is how do we accelerate growth and revenue through new AI products? And how do we reduce costs and increase margin through applying AI technology in the companies, or earlier and mid stage companies are often AI native.
00:36:22 They’re actually going after a new market, the legal vertical or a construction vertical with kind of a new AI focused product. I mean, I think what’s true is that every company to some degree is an AI company. It doesn’t mean they’re, they’re dot ai in their name. But every board meeting that we go to in at Insight, we’re talking about ai. And the irony is, even the board meetings I go to at NY Langone, we’re talking about AI board meetings I go to at CFR, we’re talking about ai. Because if you’re a medical, if you’re a hospital today, you’re thinking about how do I have a better experience for my patient? How do I think about increasing throughput? The average weight for a neurologist today across the country is eight to nine months to get an appointment. Now imagine you’re suffering from like a real problem and the doctor says, well, I’ll see you, you know, next year, right?
00:37:13 That’s the average. Now what if we can kinda get AI to be able to help assess these problems earlier and all of a sudden you take the data from the best institutions and you make that available in an AI application. So now people in Appalachia have access to the same level of care as people who have the benefit of being able to be near Mount NYU Lingo or Mount Sinai, right? And so I’m going broader in my answer to your question, which is I think AI is now affecting everything we do. And so I think everything, every company that we invest in, we’re talking about what’s the impact or, and then the other thing we talk about is like the other big debate in, in kind of AI land is what we will get owned by the LLMs and what we will get owned by the application providers, right?
00:38:07 How much of this, how much of the value will accrue to the models, the open ais and the philanthropics, and how much of the value will accrue to the applications? I don’t think anybody can answer that question. We don’t know. But what’s clearly the case is that the valuations of open AI and anthropic would not suggest that they’re gonna be totally commoditized. If that’s the case, they’re probably overvalued, which does not appear to be the case. So I think it’s intellectually, it’s a really interesting puzzle of where kind of the value is gonna come and you know, there’s absolutely gonna be winners, but there’s absolutely gonna be a lot of losers too.
00:38:52 [Speaker Changed] So I, I remember in the late nineties when the.com was just exploding, it kind of felt like a handful of companies were sucking all the oxygen in the room from everybody else. Is AI doing that? Like I would imagine things like cybersecurity and FinTech and other software driven startups are, are they starving for capital or is there just so much money out there that even AI can’t suck all
00:39:23 [Speaker Changed] The money air outta the world? No. There, there, there’s a, you know, there’s a tremendous amount of capital out there and there are lots of companies outside of the ones that everybody knows that are growing really, really quickly, often serving a vertical market. I mean, what’s still true is that if you have an application that is serving a market where there’s a lot of domain expertise or data required, you still have a moat. And so I think this, you know, because one of the big debates is, oh, is does AI mean that the software companies are gonna be dead? We don’t believe that. What we do believe is you have a very generic application that doesn’t have any vertical domain expertise, doesn’t have any data moat, then I think you’re at a significantly higher risk. But I think there’s lots of examples. We’re seeing them, we’re investing in them in specific healthcare applications and legal applications, construction industry, where you have companies that have true business process vertical expertise coupled with data moats.
00:40:25 [Speaker Changed] What, what other spaces have you excited besides ai, which is obviously gonna have a giant, giant impact. What other areas are really interesting in
00:40:34 [Speaker Changed] This space? I mean, I think, you know, cyber continues to be a really important area and one could argue, and we’re just, we, I don’t know if we might just be announcing it’s, I don’t know whether we now the yep. Or you know, investing in something that’s kind of related AI related security. And so all, every time you have these big new PLA platform shifts, you have infrastructure around that platform, platform shift that’s important, right? And so I think we’re seeing a lot of next generation infrastructure investments, cyber investments. So there’s a lot of markets that we’re seeing. And I think what’s happening right now is, if I’d answer this question, you know, a year ago I would say, well, we’re doing vertical applications, we’re doing these types of horizontal applications. And now it’s all getting bucketed into AI because it has an AI angle. But there are subcategories, you know, within, within ai there’s not like just one AI company out there. There’s obviously lots of companies and it’s just becoming that AI is becoming almost like an operating system that all of these new vertical applications are being built on.
00:41:40 [Speaker Changed] Hmm. I haven’t heard you mention crypto. Is that a space you guys explore or is that too specific? It was,
00:41:46 [Speaker Changed] Well I put it in the past tense. We explored and you know, decided, well, one, we didn’t do that well with it. And two, the, the fundamental problem that like we’ve seen in it is that when these companies would come in, we met with hundreds of companies in crypto, when these companies would come in and you’d say, okay, like tell me what it is about your application that makes it better than if it were just in a relational database. Like a very simple question. You’d kind of get back like all kinds of technical answers and white papers. And I’m like, right, but like as a user, what
00:42:24 [Speaker Changed] Problems does this solve that I can’t use,
00:42:26 [Speaker Changed] I can’t solve, you just, we
00:42:27 [Speaker Changed] Use generally can use SQL for
00:42:28 [Speaker Changed] We, we didn’t just generally get a really good answer. Now, I don’t wanna, I don’t wanna say that there’s not gonna be any crypto applications that are gonna be successful. I’m sure there will be. I mean obviously if you talk to Co Visa, you talk to the CO of MasterCard, they’ll talk to you about stable coins and the impact stable coins could have. Obviously administration that’s very procr, procr regulatory. So I think you’re gonna see money being made in that category. We just, I mean Gen, I guess we’re used to trying to find applications where we see here’s a clear business use and here’s a clear payment for that business use and here’s how they can scale. We haven’t really been able to decrypt that in crypto, but I’m sure there are others out there who understand that better. And I’m sure there’ll be some winners, but we’ve just chosen to not focus on it.
00:43:18 [Speaker Changed] So let’s talk about some winners. I see a run of exits that Insight Partners is associated with. You are an early investor in Twitter, which iPod Buddy Media acquired by Salesforce, eVestment sold to Nasdaq, Alibaba, jd.com, duck Creek, Apris, I, the list goes on and on. Tell us about some of these exits. You, you guys really have put together a quite an impressive list.
00:43:46 [Speaker Changed] Well, well, well I’d rather talk about our exits from this year. Okay. So we’ll keep it current. Yeah. Which, you know, so my partner Jeff Hoing, letter investment in Wiz, which sold to, you know, Google, I should say signed a definitive agreement to sell to Google, hasn’t closed yet for $32 billion largest venture backed acquisition by strategic. My partner Richard Wells, led an investment in a company called Central Reach, which does software for autism clinics. We sold that for just under $2 billion to Roper Industries. And then my partner Jeff Lieberman led a deal called Matic, which we sold to Siemens for just over $5 billion. And you know, the interesting thing about both, the interesting thing about those deals is one’s a traditional early, so we did Wiz as a series, I think B, and then kind of continued to participate along the way. Both, you know, central Reach and Matics were, were venture buyouts, but the multiples on money were like venture multiples of money really.
00:44:57 Right? So venture returns with buyout dollar deployment, it’s a good combination. Yeah. And so, and I think we’ve got, we’ve got more coming over the course of this year. So I think we’ve had a really strong year. One of the things that I think contributed to that is I think historically we were not great on liquidity. And by that I mean not that we didn’t have good companies, we just didn’t focus a lot on liquidity. And as big LPs in our funds we’re generally the GPS tied or close to Tide as the largest investor in the fund. So we’re pretty aligned with our investors. We kind of were focused on multiple money and not so focused on IRR, I mean, within reason we’re focused on IRR. But it wasn’t what we, and I think over the last 10 years, 15 years, you’ve seen a massive transition in the institutional LP base of a shift from MOIC to IRR.
00:45:46 [Speaker Changed] So I wanna, I wanna stay there because it’s kind of fascinating. I had no idea, ’cause I don’t play all that much in the venture space or the private equity space that, hey, we have longstanding liabilities that we eventually wanna meet. And even though we knew this was locked up for depending on the fund, 5, 7, 9 years, we’d like to see some exits sooner than later. When did this start happening and what do you think is driving this?
00:46:12 [Speaker Changed] Well, I mean it’s, it’s probably been happening for years, but it’s accelerated in the last, you know,
00:46:17 [Speaker Changed] Two post pandemic Yeah,
00:46:18 [Speaker Changed] Yeah. Post two, post two to three years when you had the correction and people felt over allocated and 21 had this huge peak of investing. And so now there’s this big bubble of investing, but not enough liquidity coming back relative to the deployment in the last two to three years. It’s accelerated. And so we, you know, we, we, we took that feedback seriously. I, I don’t think we’re the only ones who got that feedback, but we actually put a liquidity committee together. It’s from people across the firm. Both, both our financial function, our investment team, our operating team. And we now have quarterly liquidity meetings where we target companies for liquidity. We kind of talk about what the IR is from here and I think the, and that was set, set up about 18 months ago. But I think a result of that is, you know, I don’t wanna say it’s a direct result ’cause you can’t press a button, right? But a focus on it, everyone talking about it, everybody feeling like they have accountability to that process, I think has led to a lot more liquidity over the last. So I think we’ve gotten an ROI on really putting focus against it. Really interesting. I think, and I, you know, our LPs gave us feedback on it. You know, I think we, we, we look, we thought about it, we said, yep, it’s fair feedback. Let’s make a change, let’s make an adjustment.
00:47:33 [Speaker Changed] So, so you mentioned the boom in 21 and then the pullback in 22. You start in the mid nineties, you’ve lived through numerous boom and bus cycles. What, what’s your big takeaway from, from those experiences? Well,
00:47:47 [Speaker Changed] I think when you’re living in the depth of it, it feels like it’s never gonna end. And it always ends. And this
00:47:56 [Speaker Changed] Too shall
00:47:56 [Speaker Changed] Pass. This too shall pass. And I think that’s, it’s a hard, it’s a hard lesson because it’s, it listen, the thing that’s still the hardest to do is, you know, Warren Buffett’s investment, everybody’s scared and you, you know, you get yourself ready and you’ve got your, you know, I’m gonna put move X dollars to the Vanguard Index Fund and then you don’t do it. Why? Because you don’t think it’s ever gonna pass. Right? Because if you thought you were gonna pass, of course you’d do it. And human psychology is really, really hard to change. And I’m including myself in that definition.
00:48:28 [Speaker Changed] It’s so difficult to fight the crowd when everybody’s running for the exit. You have to be built a certain way.
00:48:35 [Speaker Changed] I still remember when the market 2008, the market was, you know, the, was really crashing. And I remember having a conversation with somebody who know, know the Marcus really well, well-known person. He said, yeah, GE can’t roll their commercial paper. Yeah, right. And I was just like, holy
00:48:50 [Speaker Changed] Crap. That was after a IG and Lehman
00:48:53 [Speaker Changed] And, and I eight and I remember it was like a Friday and it was a long week and I called my wife and I’m like, you know, honey, let’s just like go out for dinner. And she was like, let’s stay in. And we’re having this like five minute back and forth. I’m like, I like, why are we talking about this? And she was like, well, I thought maybe we should save some money. I’m like, it’s not that bad. I’m like, we can, we can go out to dinner. Well,
00:49:12 [Speaker Changed] Well, but Ben Bernanke f former chairman of the Federal Reserve famously sent his wife out to the ATM to get cash in case the system went bad to if he was terrified. It just shows you human nature is we’re always gonna be scammed.
00:49:29 [Speaker Changed] So I think that the thing, so I don’t know that you could ever teach people to like, oh, move money. But I think the, the hard part is really size of maybe not making as much money as you could make. The hard part is just feeling like it’s never gonna end. Right. And now having been through this as many times as, you know, I have and my partners have, you know, I think it’s easier to recognize that no, there’s, there’s light at the end of the tunnel there.
00:49:55 [Speaker Changed] Makes, makes perfect sense. Let me throw you a curve ball question before we jump to our favorite questions. So we talked about AI and we’ve talked about cycles. What do you think investors in this space, either technology or startup or m and a or ventures are not really talking about or thinking about, but perhaps should be? What, what’s the most important topic? Asset, geography, policy that’s getting overlooked but shouldn’t.
00:50:25 [Speaker Changed] I think people still, as much as we talk about it, I don’t think people, I think people still underprice what happens if there’s a real cyber risk, a real, we think about cyber as, oh, my Citibank account got hacked. We think about cyber as, you know, I got a phishing email work, by the way, all those things are bad and bad things can happen out of them. And you know, everyone has probably dealt with some version of that.
00:50:45 [Speaker Changed] I mean, I’m more concerned about someone taking control of the electrical grid.
00:50:49 [Speaker Changed] And I think we still, I mean I think the, like, I don’t wanna make it sound like the government doesn’t think about it. I think they do, but I think it’s just people, I don’t think we realize like the level of risk if physical infrastructure we’re kind of taken over and it, there have been examples of it happening.
00:51:07 [Speaker Changed] Like physical infrastructure be like the electrical grid or something more specific. Water, pur water,
00:51:12 [Speaker Changed] Water purification plants, electrical plants, I mean hospital systems going down. Right? Well
00:51:18 [Speaker Changed] We’ve seen, we’ve, we’ve seen a lot of ransomware with that.
00:51:20 [Speaker Changed] We’ve seen that in individual institutions, right. We’ve not seen it system systemically. Right. And you know, that’s a, that’s a pretty, that’s a, that’s a pretty pretty terrifying, that’s a pretty terrifying risk. Now I’m not saying, I mean, I’m answering your question as to something that I worry about that maybe we don’t worry about enough. I’m not necessarily sure. It’s like, I dunno how to price that into the market. It’s not really a market answer. It’s just something that I think like, it, it’s, it’s an asymmetric risk.
00:51:51 [Speaker Changed] No, that’s the right, so I’m not looking for a market, you know, asymmetrical dollar bet you are raising an issue that perhaps we’re not paying enough attention to.
00:52:00 [Speaker Changed] I think as, as the average, the average investor, the average person, I don’t think, I, I think that risk is way bigger than we think. It’s, huh. If you talk to people in government, they would probably, they would agree with that.
00:52:11 [Speaker Changed] Alright. So we only have a certain amount of time. Let, let’s jump to our favorite questions. We ask all of our guests. Starting with who were your mentors who helped shape your career?
00:52:22 [Speaker Changed] Well, you know, I think to a few different mentors. I, I was in elementary school, a pretty indifferent student to the point where, you know, I Indian parents who were like, you’re supposed to have good grades. And, and you know, I did have bad grades, but like, I was kinda an indifferent student. Didn’t really focus a lot on school. I had a teacher in third grade who said, you shouldn’t spend more than 30 or 45 minutes on your homework. I’d go home, look at the clock, 45 minutes, close my book. And, and then I had a teacher in sixth grade, Mr. Brown, I’ll never forget Mr. Brown, who for whatever reason, and I still can’t tell you why, saw some potential, you know, saw something in me that maybe other people didn’t see. And all of a sudden I went from like indifferent student to like a straight A student.
00:53:07 And it was that year he took interest in me. He would say, Hey, look, you’re really good, right? You should focus more on these things. And, and so for me, sixth grade, Mr. Brown, very transformational mentor in a way because he made me believe that I had something that I didn’t really think I had. The, and then my dad told, gave me three important things that he told me was one of ’em is kind of funny. He’s like, you really need to learn how to, you need to be able to speak well, you need to be able to read well. And he is like, if you’re living in this country, you should know how to play a sport. Right? Huh. And so he, the way he tried to implement those is he made me take a speed reading class in elementary school.
00:53:51 [Speaker Changed] Was that useful?
00:53:53 [Speaker Changed] I speed read.
00:53:54 [Speaker Changed] You do? Yeah. No loss of comprehension. No
00:53:57 [Speaker Changed] Loss of comprehension. He made me take a public speaking class with college students when I was in high school. And I was so scared of public speaking. I, I never could imagine then that I’d be doing a, you know, a podcast. And he didn’t, he didn’t succeed on sports. But his idea was, he was like, you know, you should, you should learn how to play golf. You know, like, that’d be a good thing to know. And living State high. Did you? No. Well, I, I, I, I play golf horrifically, but the, but in high school you could join the golf team. It was a no cut team. That doesn’t mean you were gonna get to play, but
00:54:34 [Speaker Changed] Varsity
00:54:34 [Speaker Changed] Letter. But, but you got to, yeah. You got to learn. And I just said, and I’m not doing that. So I got, I got two out of the three. But I think those two outta the three have been really, really important. Huh. Really? And had a very, very positive impact on my life. And of course, along the way there’ve been lots of people at, at all the places I’ve worked that have been mentors as well. Huh.
00:54:54 [Speaker Changed] Very, very interesting. Let’s talk about what’s keeping you entertained these days? What are you watching or listening, streaming, podcasts, anything along those lines?
00:55:04 [Speaker Changed] Oh, we could, we could this, we could do a whole po we could do a podcast. Okay. On the podcast. But I, my wife and I just finished watching Friends and Neighbors with John. So good.
00:55:13 [Speaker Changed] I
00:55:13 [Speaker Changed] Thought it was great. So good. I really enjoyed it. That’s just pure kind of entertainment. Absolutely. On the podcast side, you know, I just like, I speed read. I can only listen to podcasts if I speed, listen. So I listen to all these at 2.4 x, which drives my wife bananas. ’cause I’ll get in the car and, you know, I’m listening to something. It goes to the, you know, the Apple thing and she’s like, turn this off. But, you know, there’s a bunch. Interestingly in, in, in, in reading, I, I tend not to read a lot of business ebook, but in, in, in podcasts I do listen to that. So, but the ones I listen to, I listen to acquired, I listen to business breakdowns. I listen to Nikolai Tangan where he interviews the CEOs. I listen to invest like the best. I listen to you, I listen to Lex Friedman and then I’m
00:56:01 [Speaker Changed] Involved at the ft,
00:56:03 [Speaker Changed] No, Lex Free Friedman’s got his own, he’s a affiliated with MIT in some way. Oh, okay. He’s got his own podcast. He gets really, really interesting people to come on. I’m involved in Carnegie and CFR, so they both have a podcast, one’s called Grand Tamasha, which is on India, which is a policy area. I’m interested in why it matters is CFRs podcast. So I’ve got a, driving to the Hamptons is easy ’cause it, I can, I have hours and hours of kind of content.
00:56:30 [Speaker Changed] Really. Interesting. Let’s talk about books. What are, what are some of your favorites? What are you reading currently?
00:56:34 [Speaker Changed] Well, I, I read a lot and you know, I think two books that I just gave both my, one kid just graduated from college and one is, you know, two years outta college, three years outta college. I gave both of them. I dunno if they’ve both read both, but I gave them both books to read. One is Psychology of Money by Morgan House. Sure. I thought that was a great book. I wish I read that when I was 21. But I still felt like it was valuable. The other is called Five Types of Wealth by Sahil Bloom. Sure. I thought that was a great book. And those are more, I wouldn’t put those as entertainment, but I found those, if you read those books and you kind of try to apply them to life, I thought both of those were really useful. Then I’m right now happening to be reading a book, an associate who works for me, his fiance wrote a novel and she gave it to me a week ago. So I’m reading that right now. ’cause I felt like I needed to. And then a lot of what I read is around topics that like are around our philanthropy. Right. So, you know, one book I read, which is, this is not an Upper, it’s a book called Anatomy of an Epidemic by Robert Whitaker, which is about the use of psychiatric drugs in this country. And this is not an uplifting book. It of course there’s an epidemic of anxiety and depression.
00:57:54 [Speaker Changed] I was gonna say anything about American healthcare or psychology,
00:57:58 [Speaker Changed] But it motivated, it motivated. So one of the areas that we’re philanthropically investing in is next generation ways of dealing with psychiatric conditions. And that book kind of was a starting point, you know, of that. And then the really depressing book I’m reading right now is a, it’s a new book. It’s called Nuclear War by Andy Jacobson. And it’s, we talked about what are these theories, what are, what are the scenarios out there that, you know, were underpricing and you know, I just felt with what happened over the last two years, you know, I think we all, you know, we used to have fallout shelters, right? Everyone just think, oh, nuclear war. That’s, that’s, that’s done. There’s like, there’s no risk of that. And I think the last couple years just reminded me that like, nah, it’s not done. Like, no, it’s not a high probability maybe, but it’s not done.
00:58:47 And what this book does is it actually starts at time zero, a nuclear bomb drops what actually happens, right? What is the defense mechanism that the offensive person uses? What’s the defensive mechanism that the other country uses? What happens from, I mean, and it goes into it in not very uplifting detail. And it was just a good reminder that you have this thing out there that still has the chance to obliterate the world as we know it. Right. And it’s not a 0% probability, it’s a low probability, but I think it is important to understand tail cases.
00:59:21 [Speaker Changed] Yeah. To say, to say the very
00:59:23 [Speaker Changed] Least. That, that we’re ending on a very depressing note. So we
00:59:25 [Speaker Changed] Might wanna start,
00:59:26 [Speaker Changed] You might wanna end on something more, more fun.
00:59:28 [Speaker Changed] No, it’s, listen, you know, sometimes you, you mentioned soda, make this positive. You mentioned Sahil Bloom. I had him as a guest on the podcast. You mentioned Morgan Housel. I’ve had him several times. He wrote the forward to my book. Both those guys younger, all their work is much more uplifting, much
00:59:48 [Speaker Changed] Less hundred percent depressing. Yeah. I should’ve started if thats an age thing or Yeah, I should’ve, I should’ve, I should’ve ended with that, but
00:59:53 [Speaker Changed] No, it’s, it’s absolutely fine. Listen, sometimes you gotta, you know, you gotta shake people up and say, hey, this is a real risk. And you know, non-zero is a, a, a pretty significant risk when the outcome is so catastrophic. Correct. So final two questions. What sort of advice would you give to a recent college grad interested in a career in either startups, venture capital or private equity?
01:00:19 [Speaker Changed] Yeah, so I think that keep your intellectual curiosity broad. And I was just, I was just speaking to our summer interns a a a month ago and somebody asked me like, what’s your advice? And I said like, I think the mistake a lot of people make is they decide, okay, I wanna be in venture capital so all I’m gonna do is read TechCrunch and listen to tech podcasts. And it just doesn make you a very interesting person. And you know, I’ve probably had more dinners or one deals because we found a common interest in art or a common interest in wine. It doesn’t, I’m using the things I happen to be interested in, but it doesn’t have to be those things. Right. And, you know, everyone has intellectual interests outside of the thing that they want to do. And I would encourage them to like, pursue those and pursue those with passion.
01:01:04 ’cause it’s gonna make you a way more interesting, well-rounded person. And don’t just be so micro-focused on that thing. And I just think it makes you a better investor. It makes you a better person. It makes you more interesting. So that’s one, two in a world where, you know, we start getting people to do, you know, varsity soccer when they’re three, allow a little serendipity in your life, right? I wouldn’t have ended up doing what I was doing if I just followed the plan. And, you know, something’s interesting. Try it. And it turns out you might like it now you might not like it and go back to your original plan, but we’ve forgotten serendipity. It’s why I still subscribe to paper newspapers because I’m probably the only person in my building that might still gets paper newspapers. But because there’s serendipity when you’re flipping through the newspaper, it’s the article that you weren’t looking for, right? Is where you learn something. Guess what?
01:01:57 [Speaker Changed] You don’t have that same, same discovery. And I, and I am very aggressive looking for interesting things.
01:02:03 [Speaker Changed] You too. And I think you don’t get that. You, you 01:02:06 [Speaker Changed] Really don’t.
01:02:06 [Speaker Changed] Economists is a great example. If you just get the digital economist and you just see the article on ai, I’m gonna read that. Guess what? I probably already know that, right? I’m reinforcing knowledge that I have. Maybe I learned one tidbit that I didn’t know. It’s when you open it up and, oh, there’s this interesting article about nuclear that I don’t know anything about. And I read it and say, oh wow, this is, maybe this is, this is a, this is a real tail risk. Maybe I should understand this.
01:02:28 [Speaker Changed] I will give you the one exception to this is the Times doesn’t do this well, but the Wall Street Journal does. So you could go to the digital edition of the Wall Street wsj.com. Yeah. But you could also click in today’s paper and you get the breakdown by sections
01:02:46 [Speaker Changed] And then you money and
01:02:47 [Speaker Changed] Invest
01:02:47 [Speaker Changed] Business. And then you can
01:02:48 [Speaker Changed] Kind of click through it. And as you scroll through it, it’s the equivalent of flipping a newspaper page where you get those, oh, I never would’ve
01:02:54 [Speaker Changed] No. People always laugh. I show up on a news, I’ll show up on a plane and I’ve got my newspapers and they’re like looking at me like I’m like a martian, you know? And I’m like, no, there’s a reason.
01:03:03 [Speaker Changed] No, absolutely. And, and our final question. What do you know about the world of investing today that would’ve been helpful to know back in 1995 when you were first getting started?
01:03:15 [Speaker Changed] Well, well I think a really important one, it applies to investing, but I also think it applies to life, is oftentimes people don’t trust their instinct because they don’t think their instinct is a real thing. They think their instinct, the gut, they have these words that people use. But the reality is it’s micro slicing a lot of data that you’ve experienced over your life. Now, maybe at 21, your gut’s not worth a lot. Okay? It’s probably worth a lot in certain things. Maybe some human interactions and things like that. It’s probably not worth a lot in investing ’cause you just don’t have a database. But even at my age, you don’t, like, you have this inclination to not trust your gut. Like there’s something about this deal that just doesn’t make sense, but oh, but the revenue looks good and the margins look good. And so I’ll just overlook my gut. And I’ve just generally, when I’ve overlooked my gut has not been, it’s not been a, it’s not, it’s not been a good thing. You,
01:04:04 [Speaker Changed] You mentioned pattern recognition earlier. Your intuition improves as you get more experience
01:04:09 [Speaker Changed] As you, as you get more experience and
01:04:10 [Speaker Changed] Data, you know, blink is perhaps overstates the case, but there’s a lot there. But,
01:04:15 [Speaker Changed] But, but it’s, but it, but it’s, I agree. I’ve read the book and I think it overstates it. But, but there’s a,
01:04:20 [Speaker Changed] There’s something there. There’s
01:04:21 [Speaker Changed] Something there, you know, at the core. And then the second one is, I think what we talked about earlier, good times come bad times will invariably come and good times will invariably follow. And you just have to have confidence that both are gonna be there and that you’re gonna learn from both.
01:04:36 [Speaker Changed] Devin, this has been absolutely fascinating. Thank you for being so generous with your time. We have been speaking with Devin Paek, managing director at Insight Partners. If you enjoy this conversation, well check out any of the 550 we’ve done over the past 11 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, wherever you find your favorite podcast. Be sure to check out my new book, how Not to Invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them, how not to invest wherever you find your favorite books. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Alexis Noriega is my video engineer. Anna Luke is my producer. Sage Bauman is the head of podcast at Bloomberg. Sean Russo is my researcher. I’m Barry Reho. You’ve been listening to Masters in Business on Bloomberg Radio.
~~~
The post Transcript: Deven Parekh, Insight Partners on PE/VC appeared first on The Big Picture.
Click on graph for larger image.
This second inventory graph is courtesy of Altos Research.My back-to-work morning train WFH reads:
• Powell’s Last Stand: His Legacy and the Fed’s Independence Are on the Line at Jackson Hole: The Fed chair’s speech at the annual summit next week may very well be the defining moment of his career. (Barron’s)
• Do You Need to Own a House? Many Older Americans Decide They Don’t: Rising property tax, insurance and home-repair costs are prompting some people 55 and older to consider renting. (Wall Street Journal) see also A $340 Million New York Office Makeover Is Converting Boardrooms to Bedrooms: The city’s embrace of adaptive reuse projects is providing much-needed housing stock. (Businessweek)
• Why Hands-Off Investing Pays Off: Put money into low-cost stock and bond funds, but don’t forget the rest of the recipe: Leave your investments alone. (New York Times)
• How Disney Learned to Love Its Adult Superfans: From bespoke merch to adults-only lounges, the happiest place on earth increasingly caters to a subculture of loyal grown-ups. (Bloomberg)
• The Condo Market Is Floundering: Four Charts That Explain the Downturn: Condo prices fell 1.4%, marking the softest condo market since 2012, while single-family home prices remain high. Prices are declining and supply increasing, as new safety regulations and rising insurance premiums in Florida are contributing to waning buyer interest in condos. (Wall Street Journal)
• The Bogumil Baranowski interview: “Treat everyone with care” The investment advisor and host of the Talking Billions podcast explores childhood curiosity, building networks through kindness, and more. (Big Think)
• Thank You for Finding Me: Reuniting With a Stranger. As a teenager, I met a stranger who changed the course of my life. Twenty years later, I went looking for him. (Longreads)
• Golf Carts Have Taken Over Suburbia. Cue the Resistance. Demand for street legal carts is surging despite complaints from drivers; ‘We all hate you.’ (Wall Street Journal)
• The only actor who’s been in ‘Hamilton’ the whole time is still having a blast: Thayne Jasperson has starred in the Broadway musical phenomenon for 10 years — so long that he practically lives at the theater. (Washington Post)
• When Reggae Went Digital: A new reissue marks the 40th anniversary of “Under Me Sleng Teng,” considered one of dancehall’s first digital songs and, with over 500 versions, among the most recycled. (New York Times)
Be sure to check out our Masters in Business interview this weekend with Deven Parekh, Managing Director, Insight Partners, a global venture capital and private equity firm. He has made 140 investments in enterprise software, data &, consumer internet businesses in N. America, EU, India, Southeast Asia, Israel, Africa, Latin America, and Australia. He was named to CB Insights’ Top 100 Venture Capitalists.
Wellbeing Falls in Northern America, Western Europe and Australia and New Zealand, Rises in Most Other Regions
Source: Gallup
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The post 10 Monday AM Reads appeared first on The Big Picture.
Submitted by Thomas Kolbe
While the green pseudo-economy drags the broader economy into the basement, two-thirds of Germans say they are satisfied with renewable energy or even want to see it expanded more rapidly. Meanwhile, the construction of a European war economy marks the next stage in Europe’s ongoing impoverishment.
The most popular yet most destructive economic strategy remains the modern interpretation of Keynesianism. With his oversimplified view of economic activity, the British economist John Maynard Keynes inadvertently handed postwar politicians a toolkit that they later perverted into an all-purpose “solution” for every economic crisis. The condensed version reads as follows: nearly every recession stems from a demand shortfall by consumers. The state’s job, therefore, is to create artificial credit to fill this demand gap.
Recipe for Bureaucratic ExpansionLower interest rates, print credit, and—so the fairy tale goes—the economy takes off. In reality, what remains is a mountain of state debt, a swelling bureaucracy, distorted financial markets, and declining productivity. These are economic facts, easily verified even by non-economists. Prosperity arises from a growing capital stock that serves consumer demand efficiently and precisely with more goods and services.
Keynesian policy has proven disastrous for Europe, because it hands politicians a permanent excuse to expand their influence, build bureaucracy, and manipulate markets. Political institutions such as the European Commission, most European parties, and the governments of member states operate almost exclusively in this mode.
The Green DealIt was in this spirit that the Green Deal was born—a pseudo-economy disguised as “green transformation” and sold to the public as a contribution to saving the planet. In truth, it is a monstrous contraption, a grotesque response to Europe’s strategic energy dependency, which devours ever-larger portions of the economy each year just to keep its oversized subsidy machine running.
In 2024 alone, Germany poured between €90 and €100 billion into this machine. The federal government provided €58 billion, while the European Investment Bank added €8.6 billion in fresh loans, the EU’s InvestEU program €9.1 billion, and the EU’s Innovation and Environment Funds about €20 billion. Without this constant flow of financing, the zombie economy would collapse. As if to prove the point, the German government has funneled another €100 billion of debt—disguised as a “special fund”—into the ever-hungry green subsidy machine.
Pseudo-economies survive only through new injections of capital, producing continuously against market demand. Internal tensions rise until collapse becomes inevitable. The Green Deal has trapped Europe in precisely this downward spiral.
The SpilloverGermany is now in its third year of recession and recording a record number of corporate bankruptcies. At the same time, the government has added half a million public-sector jobs in just six years, while 1.2 million private-sector jobs disappeared. Combined with uncontrolled migration, the result is extreme pressure on Germany’s welfare system.
Politics has retreated into a purely defensive posture: the welfare state as a catch basin for the hundreds of thousands losing their livelihoods, while the private sector collapses under the burden of energy costs and subsidies.
The diagnosis is clear: the Green Deal is a dead end. Every euro spent on it crowds out private capital markets, misallocates resources, and shackles workers in unproductive sectors. The contrast with Argentina is striking: there, President Milei slashed the state’s share of GDP by six percentage points and triggered an economic boom of 7.7% growth.
Transformation Requires PainThe only way out for Europe is to accept a painful transformation phase, shrink the state, and abandon its eco-fantasies. Rational energy policy means nuclear power and reintegrating Russian energy supplies.
Yet public opinion tells a different story: 64% of Germans are satisfied with renewables or want more of them. Years of state propaganda have erased the link between green subsidies and economic collapse. The climate-change narrative- moralized and weaponized - has cemented itself into public consciousness.
Renewables may have their place, but only in free markets, without coercion or forced levies. The green zombie economy has never succeeded in reviving Europe’s growth. It is time to face reality and tear down this structure before anything new can be built.
The Next AttemptBut Europe shows no signs of changing course. The bureaucracy has grown too large to dismantle itself. From Berlin to Brussels, leaders treat the industrial exodus as a series of unfortunate accidents rather than the direct result of their policies. The cozy “Made for Germany” roundtable between Friedrich Merz and DAX CEOs confirmed the suspicion of corporate-statist collusion.
Having failed with the Green Deal, Europe’s politicians are now trying a new pseudo-economy: a debt-fueled military-industrial complex. According to a study by Ernst & Young, Germany’s DAX companies cut 30,000 jobs in the first half of 2025—except for defense contractors Rheinmetall and MTU Aero Engines, which increased headcount by 17% and 7%, respectively.
The EU’s plan: by 2035, half of all European defense goods—from artillery and cyber defense to precision munitions—will be produced within the bloc, creating up to 660,000 jobs. This will be financed not only by swelling national defense budgets but also by EU programs like ReARM Europe and SAFE, which will raise hundreds of billions in new debt.
Eyes Wide ShutBrussels plans to mobilize an additional €800 billion in defense spending by 2030. Yet no sector produces further from real consumer demand than the arms industry. This is Keynesian pseudo-economics in its most extreme form—buying time with debt while starving private capital markets.
The rise of the defense lobby as Brussels’ new darling will turbocharge corruption, deepen the divide between parasitic EU structures and shrinking productive forces, and cement corporatist cronyism as the EU’s operating system. Von der Leyen’s Pfizer text-message scandal remains the most fitting symbol of this clandestine Brussels machine.
In the end, Europe’s war economy has neither the resources nor the technology to deliver on the dream of a militarized EU. It is a tragic rerun of the Green Deal—propaganda-driven, debt-fueled, and doomed to collapse.
Tyler Durden Mon, 08/18/2025 - 06:30Submitted by Thomas Kolbe
While the green pseudo-economy drags the broader economy into the basement, two-thirds of Germans say they are satisfied with renewable energy or even want to see it expanded more rapidly. Meanwhile, the construction of a European war economy marks the next stage in Europe’s ongoing impoverishment.
The most popular yet most destructive economic strategy remains the modern interpretation of Keynesianism. With his oversimplified view of economic activity, the British economist John Maynard Keynes inadvertently handed postwar politicians a toolkit that they later perverted into an all-purpose “solution” for every economic crisis. The condensed version reads as follows: nearly every recession stems from a demand shortfall by consumers. The state’s job, therefore, is to create artificial credit to fill this demand gap.
Recipe for Bureaucratic ExpansionLower interest rates, print credit, and—so the fairy tale goes—the economy takes off. In reality, what remains is a mountain of state debt, a swelling bureaucracy, distorted financial markets, and declining productivity. These are economic facts, easily verified even by non-economists. Prosperity arises from a growing capital stock that serves consumer demand efficiently and precisely with more goods and services.
Keynesian policy has proven disastrous for Europe, because it hands politicians a permanent excuse to expand their influence, build bureaucracy, and manipulate markets. Political institutions such as the European Commission, most European parties, and the governments of member states operate almost exclusively in this mode.
The Green DealIt was in this spirit that the Green Deal was born—a pseudo-economy disguised as “green transformation” and sold to the public as a contribution to saving the planet. In truth, it is a monstrous contraption, a grotesque response to Europe’s strategic energy dependency, which devours ever-larger portions of the economy each year just to keep its oversized subsidy machine running.
In 2024 alone, Germany poured between €90 and €100 billion into this machine. The federal government provided €58 billion, while the European Investment Bank added €8.6 billion in fresh loans, the EU’s InvestEU program €9.1 billion, and the EU’s Innovation and Environment Funds about €20 billion. Without this constant flow of financing, the zombie economy would collapse. As if to prove the point, the German government has funneled another €100 billion of debt—disguised as a “special fund”—into the ever-hungry green subsidy machine.
Pseudo-economies survive only through new injections of capital, producing continuously against market demand. Internal tensions rise until collapse becomes inevitable. The Green Deal has trapped Europe in precisely this downward spiral.
The SpilloverGermany is now in its third year of recession and recording a record number of corporate bankruptcies. At the same time, the government has added half a million public-sector jobs in just six years, while 1.2 million private-sector jobs disappeared. Combined with uncontrolled migration, the result is extreme pressure on Germany’s welfare system.
Politics has retreated into a purely defensive posture: the welfare state as a catch basin for the hundreds of thousands losing their livelihoods, while the private sector collapses under the burden of energy costs and subsidies.
The diagnosis is clear: the Green Deal is a dead end. Every euro spent on it crowds out private capital markets, misallocates resources, and shackles workers in unproductive sectors. The contrast with Argentina is striking: there, President Milei slashed the state’s share of GDP by six percentage points and triggered an economic boom of 7.7% growth.
Transformation Requires PainThe only way out for Europe is to accept a painful transformation phase, shrink the state, and abandon its eco-fantasies. Rational energy policy means nuclear power and reintegrating Russian energy supplies.
Yet public opinion tells a different story: 64% of Germans are satisfied with renewables or want more of them. Years of state propaganda have erased the link between green subsidies and economic collapse. The climate-change narrative- moralized and weaponized - has cemented itself into public consciousness.
Renewables may have their place, but only in free markets, without coercion or forced levies. The green zombie economy has never succeeded in reviving Europe’s growth. It is time to face reality and tear down this structure before anything new can be built.
The Next AttemptBut Europe shows no signs of changing course. The bureaucracy has grown too large to dismantle itself. From Berlin to Brussels, leaders treat the industrial exodus as a series of unfortunate accidents rather than the direct result of their policies. The cozy “Made for Germany” roundtable between Friedrich Merz and DAX CEOs confirmed the suspicion of corporate-statist collusion.
Having failed with the Green Deal, Europe’s politicians are now trying a new pseudo-economy: a debt-fueled military-industrial complex. According to a study by Ernst & Young, Germany’s DAX companies cut 30,000 jobs in the first half of 2025—except for defense contractors Rheinmetall and MTU Aero Engines, which increased headcount by 17% and 7%, respectively.
The EU’s plan: by 2035, half of all European defense goods—from artillery and cyber defense to precision munitions—will be produced within the bloc, creating up to 660,000 jobs. This will be financed not only by swelling national defense budgets but also by EU programs like ReARM Europe and SAFE, which will raise hundreds of billions in new debt.
Eyes Wide ShutBrussels plans to mobilize an additional €800 billion in defense spending by 2030. Yet no sector produces further from real consumer demand than the arms industry. This is Keynesian pseudo-economics in its most extreme form—buying time with debt while starving private capital markets.
The rise of the defense lobby as Brussels’ new darling will turbocharge corruption, deepen the divide between parasitic EU structures and shrinking productive forces, and cement corporatist cronyism as the EU’s operating system. Von der Leyen’s Pfizer text-message scandal remains the most fitting symbol of this clandestine Brussels machine.
In the end, Europe’s war economy has neither the resources nor the technology to deliver on the dream of a militarized EU. It is a tragic rerun of the Green Deal—propaganda-driven, debt-fueled, and doomed to collapse.
Tyler Durden Mon, 08/18/2025 - 06:30Submitted by Thomas Kolbe
While the green pseudo-economy drags the broader economy into the basement, two-thirds of Germans say they are satisfied with renewable energy or even want to see it expanded more rapidly. Meanwhile, the construction of a European war economy marks the next stage in Europe’s ongoing impoverishment.
The most popular yet most destructive economic strategy remains the modern interpretation of Keynesianism. With his oversimplified view of economic activity, the British economist John Maynard Keynes inadvertently handed postwar politicians a toolkit that they later perverted into an all-purpose “solution” for every economic crisis. The condensed version reads as follows: nearly every recession stems from a demand shortfall by consumers. The state’s job, therefore, is to create artificial credit to fill this demand gap.
Recipe for Bureaucratic ExpansionLower interest rates, print credit, and—so the fairy tale goes—the economy takes off. In reality, what remains is a mountain of state debt, a swelling bureaucracy, distorted financial markets, and declining productivity. These are economic facts, easily verified even by non-economists. Prosperity arises from a growing capital stock that serves consumer demand efficiently and precisely with more goods and services.
Keynesian policy has proven disastrous for Europe, because it hands politicians a permanent excuse to expand their influence, build bureaucracy, and manipulate markets. Political institutions such as the European Commission, most European parties, and the governments of member states operate almost exclusively in this mode.
The Green DealIt was in this spirit that the Green Deal was born—a pseudo-economy disguised as “green transformation” and sold to the public as a contribution to saving the planet. In truth, it is a monstrous contraption, a grotesque response to Europe’s strategic energy dependency, which devours ever-larger portions of the economy each year just to keep its oversized subsidy machine running.
In 2024 alone, Germany poured between €90 and €100 billion into this machine. The federal government provided €58 billion, while the European Investment Bank added €8.6 billion in fresh loans, the EU’s InvestEU program €9.1 billion, and the EU’s Innovation and Environment Funds about €20 billion. Without this constant flow of financing, the zombie economy would collapse. As if to prove the point, the German government has funneled another €100 billion of debt—disguised as a “special fund”—into the ever-hungry green subsidy machine.
Pseudo-economies survive only through new injections of capital, producing continuously against market demand. Internal tensions rise until collapse becomes inevitable. The Green Deal has trapped Europe in precisely this downward spiral.
The SpilloverGermany is now in its third year of recession and recording a record number of corporate bankruptcies. At the same time, the government has added half a million public-sector jobs in just six years, while 1.2 million private-sector jobs disappeared. Combined with uncontrolled migration, the result is extreme pressure on Germany’s welfare system.
Politics has retreated into a purely defensive posture: the welfare state as a catch basin for the hundreds of thousands losing their livelihoods, while the private sector collapses under the burden of energy costs and subsidies.
The diagnosis is clear: the Green Deal is a dead end. Every euro spent on it crowds out private capital markets, misallocates resources, and shackles workers in unproductive sectors. The contrast with Argentina is striking: there, President Milei slashed the state’s share of GDP by six percentage points and triggered an economic boom of 7.7% growth.
Transformation Requires PainThe only way out for Europe is to accept a painful transformation phase, shrink the state, and abandon its eco-fantasies. Rational energy policy means nuclear power and reintegrating Russian energy supplies.
Yet public opinion tells a different story: 64% of Germans are satisfied with renewables or want more of them. Years of state propaganda have erased the link between green subsidies and economic collapse. The climate-change narrative- moralized and weaponized - has cemented itself into public consciousness.
Renewables may have their place, but only in free markets, without coercion or forced levies. The green zombie economy has never succeeded in reviving Europe’s growth. It is time to face reality and tear down this structure before anything new can be built.
The Next AttemptBut Europe shows no signs of changing course. The bureaucracy has grown too large to dismantle itself. From Berlin to Brussels, leaders treat the industrial exodus as a series of unfortunate accidents rather than the direct result of their policies. The cozy “Made for Germany” roundtable between Friedrich Merz and DAX CEOs confirmed the suspicion of corporate-statist collusion.
Having failed with the Green Deal, Europe’s politicians are now trying a new pseudo-economy: a debt-fueled military-industrial complex. According to a study by Ernst & Young, Germany’s DAX companies cut 30,000 jobs in the first half of 2025—except for defense contractors Rheinmetall and MTU Aero Engines, which increased headcount by 17% and 7%, respectively.
The EU’s plan: by 2035, half of all European defense goods—from artillery and cyber defense to precision munitions—will be produced within the bloc, creating up to 660,000 jobs. This will be financed not only by swelling national defense budgets but also by EU programs like ReARM Europe and SAFE, which will raise hundreds of billions in new debt.
Eyes Wide ShutBrussels plans to mobilize an additional €800 billion in defense spending by 2030. Yet no sector produces further from real consumer demand than the arms industry. This is Keynesian pseudo-economics in its most extreme form—buying time with debt while starving private capital markets.
The rise of the defense lobby as Brussels’ new darling will turbocharge corruption, deepen the divide between parasitic EU structures and shrinking productive forces, and cement corporatist cronyism as the EU’s operating system. Von der Leyen’s Pfizer text-message scandal remains the most fitting symbol of this clandestine Brussels machine.
In the end, Europe’s war economy has neither the resources nor the technology to deliver on the dream of a militarized EU. It is a tragic rerun of the Green Deal—propaganda-driven, debt-fueled, and doomed to collapse.
Tyler Durden Mon, 08/18/2025 - 06:30Authored by Melanie Sun via The Epoch Times (emphasis ours),
As Microsoft moves toward ending its support of Windows 10, PC users who haven’t yet upgraded to Windows 11 now have less than 60 days to take action to make sure their devices are receiving updates for cyber threats.
Visitors try out Windows 10, the latest operating system from software giant Microsoft, during a launch event in Seoul on July 29, 2015. Jung Yeon-Je /AFP
On Aug. 16, Windows 10 users may have noticed a message on their devices, warning that they have 60 days left to take action before security and feature updates and technical support for their PC ends on Oct. 14.
Microsoft announced in 2023 that it was ending support for its Windows 10 platform as it rolled out Windows 11—calling it its “home for AI”and its “most secure version of Windows ever” due to “hardware-based” advanced security features.
“Companies and organizations that operate Windows 10 may find it challenging to maintain regulatory compliance with unsupported software,” Microsoft said in a blog post in June.
Not all PC users are able to or want to switch to a new operating system that offers new AI functionalities. Some older devices are not compatible with Windows 11, due to the system’s increased processing and hardware requirements. According to market share data, around 700 million PC users, or 43 percent, are still using Windows 10, which was launched in July 2015. Windows 11 holds about 53 percent of the market share.
The company has faced legal action demanding that it extend free support for Windows 10 users until their market share drops below 10 percent, although it’s yet to be seen if the complaint will succeed in court. Windows 10 has been one of Microsoft’s most popular operating systems.
Currently, Windows 10 users will have to take action before the Oct. 14 deadline to make sure their devices don’t fall off support after critical security updates end.
“With Windows 10 support coming to an end in October, we’re here to provide information and resources to help you choose the path that works best for you—whether that’s exploring the next generation of Windows, staying on your current PC with the Extended Security Program (ESU) or moving to a cloud-based solution,” the company said on the transition.
Although users’ Windows 10 devices will continue to function, “they will no longer receive regular security updates, making them more vulnerable to cyber threats, such as malware and viruses.”
Microsoft is rolling out enrolment in its transition program, which allows those on the Windows 10 system to continue to receive security support until October 2026.
“The Windows 10 Extended Security Updates (ESU) program is designed to keep your current Windows 10 PC protected after support ends—helping you stay secure during the transition,” the company said.
The company has also said it plans to continue offering security updates for Microsoft Defender Antivirus through October 2028. Microsoft 365 Apps will also continue to receive security updates until Oct. 10, 2028. However, feature updates for the apps will be discontinued from August next year. Technical support will also not be extended for Windows 10 users.
“These updates are intended to help ease customers’ transition to Windows 11 and will be delivered through standard update channels. These updates do not include technical support,” Microsoft said.
To continue receiving support from Microsoft, users have two options: enrol in the ESU program with an annual payment or link their devices to Microsoft’s cloud.
The first option will cost individual users $30. The payment can be made using a Microsoft account, and will cover as many as 10 devices through to Oct. 13, 2026. Alternatively, accounts can use 1,000 Microsoft Rewards points as payment.
Users have also been offered a cloud-based solution. In this option, they can choose to sync their Windows 10 device to Microsoft’s cloud service, Windows 365, which will allow them to access Windows 11 Cloud PCs on Microsoft’s servers. Those with a lot of data can sign up for a Windows 365 cloud service plan.
The link for ESU enrolment can be found on the company’s Windows Update page.
Tyler Durden Mon, 08/18/2025 - 05:45Authored by Melanie Sun via The Epoch Times (emphasis ours),
As Microsoft moves toward ending its support of Windows 10, PC users who haven’t yet upgraded to Windows 11 now have less than 60 days to take action to make sure their devices are receiving updates for cyber threats.
Visitors try out Windows 10, the latest operating system from software giant Microsoft, during a launch event in Seoul on July 29, 2015. Jung Yeon-Je /AFP
On Aug. 16, Windows 10 users may have noticed a message on their devices, warning that they have 60 days left to take action before security and feature updates and technical support for their PC ends on Oct. 14.
Microsoft announced in 2023 that it was ending support for its Windows 10 platform as it rolled out Windows 11—calling it its “home for AI”and its “most secure version of Windows ever” due to “hardware-based” advanced security features.
“Companies and organizations that operate Windows 10 may find it challenging to maintain regulatory compliance with unsupported software,” Microsoft said in a blog post in June.
Not all PC users are able to or want to switch to a new operating system that offers new AI functionalities. Some older devices are not compatible with Windows 11, due to the system’s increased processing and hardware requirements. According to market share data, around 700 million PC users, or 43 percent, are still using Windows 10, which was launched in July 2015. Windows 11 holds about 53 percent of the market share.
The company has faced legal action demanding that it extend free support for Windows 10 users until their market share drops below 10 percent, although it’s yet to be seen if the complaint will succeed in court. Windows 10 has been one of Microsoft’s most popular operating systems.
Currently, Windows 10 users will have to take action before the Oct. 14 deadline to make sure their devices don’t fall off support after critical security updates end.
“With Windows 10 support coming to an end in October, we’re here to provide information and resources to help you choose the path that works best for you—whether that’s exploring the next generation of Windows, staying on your current PC with the Extended Security Program (ESU) or moving to a cloud-based solution,” the company said on the transition.
Although users’ Windows 10 devices will continue to function, “they will no longer receive regular security updates, making them more vulnerable to cyber threats, such as malware and viruses.”
Microsoft is rolling out enrolment in its transition program, which allows those on the Windows 10 system to continue to receive security support until October 2026.
“The Windows 10 Extended Security Updates (ESU) program is designed to keep your current Windows 10 PC protected after support ends—helping you stay secure during the transition,” the company said.
The company has also said it plans to continue offering security updates for Microsoft Defender Antivirus through October 2028. Microsoft 365 Apps will also continue to receive security updates until Oct. 10, 2028. However, feature updates for the apps will be discontinued from August next year. Technical support will also not be extended for Windows 10 users.
“These updates are intended to help ease customers’ transition to Windows 11 and will be delivered through standard update channels. These updates do not include technical support,” Microsoft said.
To continue receiving support from Microsoft, users have two options: enrol in the ESU program with an annual payment or link their devices to Microsoft’s cloud.
The first option will cost individual users $30. The payment can be made using a Microsoft account, and will cover as many as 10 devices through to Oct. 13, 2026. Alternatively, accounts can use 1,000 Microsoft Rewards points as payment.
Users have also been offered a cloud-based solution. In this option, they can choose to sync their Windows 10 device to Microsoft’s cloud service, Windows 365, which will allow them to access Windows 11 Cloud PCs on Microsoft’s servers. Those with a lot of data can sign up for a Windows 365 cloud service plan.
The link for ESU enrolment can be found on the company’s Windows Update page.
Tyler Durden Mon, 08/18/2025 - 05:45Authored by Melanie Sun via The Epoch Times (emphasis ours),
As Microsoft moves toward ending its support of Windows 10, PC users who haven’t yet upgraded to Windows 11 now have less than 60 days to take action to make sure their devices are receiving updates for cyber threats.
Visitors try out Windows 10, the latest operating system from software giant Microsoft, during a launch event in Seoul on July 29, 2015. Jung Yeon-Je /AFP
On Aug. 16, Windows 10 users may have noticed a message on their devices, warning that they have 60 days left to take action before security and feature updates and technical support for their PC ends on Oct. 14.
Microsoft announced in 2023 that it was ending support for its Windows 10 platform as it rolled out Windows 11—calling it its “home for AI”and its “most secure version of Windows ever” due to “hardware-based” advanced security features.
“Companies and organizations that operate Windows 10 may find it challenging to maintain regulatory compliance with unsupported software,” Microsoft said in a blog post in June.
Not all PC users are able to or want to switch to a new operating system that offers new AI functionalities. Some older devices are not compatible with Windows 11, due to the system’s increased processing and hardware requirements. According to market share data, around 700 million PC users, or 43 percent, are still using Windows 10, which was launched in July 2015. Windows 11 holds about 53 percent of the market share.
The company has faced legal action demanding that it extend free support for Windows 10 users until their market share drops below 10 percent, although it’s yet to be seen if the complaint will succeed in court. Windows 10 has been one of Microsoft’s most popular operating systems.
Currently, Windows 10 users will have to take action before the Oct. 14 deadline to make sure their devices don’t fall off support after critical security updates end.
“With Windows 10 support coming to an end in October, we’re here to provide information and resources to help you choose the path that works best for you—whether that’s exploring the next generation of Windows, staying on your current PC with the Extended Security Program (ESU) or moving to a cloud-based solution,” the company said on the transition.
Although users’ Windows 10 devices will continue to function, “they will no longer receive regular security updates, making them more vulnerable to cyber threats, such as malware and viruses.”
Microsoft is rolling out enrolment in its transition program, which allows those on the Windows 10 system to continue to receive security support until October 2026.
“The Windows 10 Extended Security Updates (ESU) program is designed to keep your current Windows 10 PC protected after support ends—helping you stay secure during the transition,” the company said.
The company has also said it plans to continue offering security updates for Microsoft Defender Antivirus through October 2028. Microsoft 365 Apps will also continue to receive security updates until Oct. 10, 2028. However, feature updates for the apps will be discontinued from August next year. Technical support will also not be extended for Windows 10 users.
“These updates are intended to help ease customers’ transition to Windows 11 and will be delivered through standard update channels. These updates do not include technical support,” Microsoft said.
To continue receiving support from Microsoft, users have two options: enrol in the ESU program with an annual payment or link their devices to Microsoft’s cloud.
The first option will cost individual users $30. The payment can be made using a Microsoft account, and will cover as many as 10 devices through to Oct. 13, 2026. Alternatively, accounts can use 1,000 Microsoft Rewards points as payment.
Users have also been offered a cloud-based solution. In this option, they can choose to sync their Windows 10 device to Microsoft’s cloud service, Windows 365, which will allow them to access Windows 11 Cloud PCs on Microsoft’s servers. Those with a lot of data can sign up for a Windows 365 cloud service plan.
The link for ESU enrolment can be found on the company’s Windows Update page.
Tyler Durden Mon, 08/18/2025 - 05:45Years ago, I was invited to give a talk at Arizona State University in Tempe. My host told me to fly in early in the day, so he could take me walking in the desert. I’d never seen anything like it: mostly cactus and rocks. Seemed like Middle Earth. Since then, we’ve vacationed in Arizona […]
The post The future of the American southwest appeared first on Angry Bear.
Denmark's Prime Minister Mette Frederiksen said on Sunday that Benjamin Netanyahu has become a "problem," and that she does not rule out sanctions on the Israeli Prime Minister, or even on Israel as a state.
Speaking with Danish newspaper Jyllands-Posten, Frederiksen stated that "Netanyahu himself is a problem now," and that Israel would be better off with a new leader. She said that Netanyahu's government "goes too far," both in its war on Gaza and its ongoing colonization of the occupied West Bank. "It is settler violence, the additional settlements in the West Bank backed by Netanyahu, and the government's opposition to a two-state solution, which blocks peace."
Via Associated Press
Earlier this week, a minister in Netanyahu's cabinet, Bezalel Smotrich, announced Israel would build over 3,000 new housing units for Israeli Jews in the illegal settlement of Ma'ale Adumim in the so-called E1 zone of the West Bank.
If constructed, the new project would divide the occupied West Bank and eliminate the chance to create a contiguous Palestinian state.
While criticizing Netanyahu and his government, the Danish Prime Minister nevertheless expressed her strong support for Israel. "We have a huge political problem with a very, very right-wing government in Israel, which, in my opinion, is currently working against Israel's interests as well," she said.
"I can say that because we, from the Danish side, have always been very active in supporting the state of Israel since the Second World War."
Frederiksen suggested Denmark could use its current position in the EU to impose sanctions on Netanyahu, Israeli ministers, or the Israeli state. Denmark currently holds the EU Council Presidency, which is the co-legislator of the EU alongside the European Parliament.
"It is about political pressure, about sanctions. It can be against settlers or ministers, and it can also be against Israel as a whole," she said.
"We do not rule anything out in advance. Like with Russia, we structure sanctions to target where they will be most effective. We are one of the countries that will apply additional pressure on Israel, but we have not yet gained support from the EU member states."
Despite her criticisms of Netanyahu, Frederiksen declined to commit to arresting him should he travel to Denmark.
"I have no expectation that Netanyahu will come to Denmark. But I expect Danish authorities to handle it if it happens. I have nothing further to add."
In November 2024, the International Criminal Court (ICC) issued an arrest warrant for the Israeli Prime Minister on accusations of using starvation as a weapon of war against the over 2 million Palestinians in Gaza. ICC member states are legally obliged to enforce ICC warrants.
Amid growing starvation in Gaza, Frederiksen wrote on Facebook that "the greatest need is to get humanitarian aid to the civilians in Gaza."
"Blocking humanitarian aid is completely unacceptable," she added. Frederiksen refused to recognize Palestine as a state, however, claiming it would be a reward for Hamas for its attack on Israeli settlements and military bases on 7 October 2023.
"We must also be sure that there is mutual recognition from a Palestinian state by Israel," she added. "I do not want to do anything that could seem like a reward for Hamas."
Some 1,200 Israelis were killed and 253 taken captive during the Hamas operation, which it said was launched to break the siege on Gaza, known as Operation Al-Aqsa Flood.
Many, if not most, of the Israelis killed during the attack were allegedly killed by Israeli forces, including by fire from attack helicopters, drones, and tanks, per a policy known as the Hannibal Directive.
Israel's war on Gaza may have killed over 100,000 Palestinians - according to some estimates - displaced virtually the entire population of 2 million, and flattened most of the strip. Israel is now seeking to ethnically cleanse Gaza to pave the way for building Jewish settlements on the enclave's ruins.
Tyler Durden Mon, 08/18/2025 - 05:00Denmark's Prime Minister Mette Frederiksen said on Sunday that Benjamin Netanyahu has become a "problem," and that she does not rule out sanctions on the Israeli Prime Minister, or even on Israel as a state.
Speaking with Danish newspaper Jyllands-Posten, Frederiksen stated that "Netanyahu himself is a problem now," and that Israel would be better off with a new leader. She said that Netanyahu's government "goes too far," both in its war on Gaza and its ongoing colonization of the occupied West Bank. "It is settler violence, the additional settlements in the West Bank backed by Netanyahu, and the government's opposition to a two-state solution, which blocks peace."
Via Associated Press
Earlier this week, a minister in Netanyahu's cabinet, Bezalel Smotrich, announced Israel would build over 3,000 new housing units for Israeli Jews in the illegal settlement of Ma'ale Adumim in the so-called E1 zone of the West Bank.
If constructed, the new project would divide the occupied West Bank and eliminate the chance to create a contiguous Palestinian state.
While criticizing Netanyahu and his government, the Danish Prime Minister nevertheless expressed her strong support for Israel. "We have a huge political problem with a very, very right-wing government in Israel, which, in my opinion, is currently working against Israel's interests as well," she said.
"I can say that because we, from the Danish side, have always been very active in supporting the state of Israel since the Second World War."
Frederiksen suggested Denmark could use its current position in the EU to impose sanctions on Netanyahu, Israeli ministers, or the Israeli state. Denmark currently holds the EU Council Presidency, which is the co-legislator of the EU alongside the European Parliament.
"It is about political pressure, about sanctions. It can be against settlers or ministers, and it can also be against Israel as a whole," she said.
"We do not rule anything out in advance. Like with Russia, we structure sanctions to target where they will be most effective. We are one of the countries that will apply additional pressure on Israel, but we have not yet gained support from the EU member states."
Despite her criticisms of Netanyahu, Frederiksen declined to commit to arresting him should he travel to Denmark.
"I have no expectation that Netanyahu will come to Denmark. But I expect Danish authorities to handle it if it happens. I have nothing further to add."
In November 2024, the International Criminal Court (ICC) issued an arrest warrant for the Israeli Prime Minister on accusations of using starvation as a weapon of war against the over 2 million Palestinians in Gaza. ICC member states are legally obliged to enforce ICC warrants.
Amid growing starvation in Gaza, Frederiksen wrote on Facebook that "the greatest need is to get humanitarian aid to the civilians in Gaza."
"Blocking humanitarian aid is completely unacceptable," she added. Frederiksen refused to recognize Palestine as a state, however, claiming it would be a reward for Hamas for its attack on Israeli settlements and military bases on 7 October 2023.
"We must also be sure that there is mutual recognition from a Palestinian state by Israel," she added. "I do not want to do anything that could seem like a reward for Hamas."
Some 1,200 Israelis were killed and 253 taken captive during the Hamas operation, which it said was launched to break the siege on Gaza, known as Operation Al-Aqsa Flood.
Many, if not most, of the Israelis killed during the attack were allegedly killed by Israeli forces, including by fire from attack helicopters, drones, and tanks, per a policy known as the Hannibal Directive.
Israel's war on Gaza may have killed over 100,000 Palestinians - according to some estimates - displaced virtually the entire population of 2 million, and flattened most of the strip. Israel is now seeking to ethnically cleanse Gaza to pave the way for building Jewish settlements on the enclave's ruins.
Tyler Durden Mon, 08/18/2025 - 05:00Denmark's Prime Minister Mette Frederiksen said on Sunday that Benjamin Netanyahu has become a "problem," and that she does not rule out sanctions on the Israeli Prime Minister, or even on Israel as a state.
Speaking with Danish newspaper Jyllands-Posten, Frederiksen stated that "Netanyahu himself is a problem now," and that Israel would be better off with a new leader. She said that Netanyahu's government "goes too far," both in its war on Gaza and its ongoing colonization of the occupied West Bank. "It is settler violence, the additional settlements in the West Bank backed by Netanyahu, and the government's opposition to a two-state solution, which blocks peace."
Via Associated Press
Earlier this week, a minister in Netanyahu's cabinet, Bezalel Smotrich, announced Israel would build over 3,000 new housing units for Israeli Jews in the illegal settlement of Ma'ale Adumim in the so-called E1 zone of the West Bank.
If constructed, the new project would divide the occupied West Bank and eliminate the chance to create a contiguous Palestinian state.
While criticizing Netanyahu and his government, the Danish Prime Minister nevertheless expressed her strong support for Israel. "We have a huge political problem with a very, very right-wing government in Israel, which, in my opinion, is currently working against Israel's interests as well," she said.
"I can say that because we, from the Danish side, have always been very active in supporting the state of Israel since the Second World War."
Frederiksen suggested Denmark could use its current position in the EU to impose sanctions on Netanyahu, Israeli ministers, or the Israeli state. Denmark currently holds the EU Council Presidency, which is the co-legislator of the EU alongside the European Parliament.
"It is about political pressure, about sanctions. It can be against settlers or ministers, and it can also be against Israel as a whole," she said.
"We do not rule anything out in advance. Like with Russia, we structure sanctions to target where they will be most effective. We are one of the countries that will apply additional pressure on Israel, but we have not yet gained support from the EU member states."
Despite her criticisms of Netanyahu, Frederiksen declined to commit to arresting him should he travel to Denmark.
"I have no expectation that Netanyahu will come to Denmark. But I expect Danish authorities to handle it if it happens. I have nothing further to add."
In November 2024, the International Criminal Court (ICC) issued an arrest warrant for the Israeli Prime Minister on accusations of using starvation as a weapon of war against the over 2 million Palestinians in Gaza. ICC member states are legally obliged to enforce ICC warrants.
Amid growing starvation in Gaza, Frederiksen wrote on Facebook that "the greatest need is to get humanitarian aid to the civilians in Gaza."
"Blocking humanitarian aid is completely unacceptable," she added. Frederiksen refused to recognize Palestine as a state, however, claiming it would be a reward for Hamas for its attack on Israeli settlements and military bases on 7 October 2023.
"We must also be sure that there is mutual recognition from a Palestinian state by Israel," she added. "I do not want to do anything that could seem like a reward for Hamas."
Some 1,200 Israelis were killed and 253 taken captive during the Hamas operation, which it said was launched to break the siege on Gaza, known as Operation Al-Aqsa Flood.
Many, if not most, of the Israelis killed during the attack were allegedly killed by Israeli forces, including by fire from attack helicopters, drones, and tanks, per a policy known as the Hannibal Directive.
Israel's war on Gaza may have killed over 100,000 Palestinians - according to some estimates - displaced virtually the entire population of 2 million, and flattened most of the strip. Israel is now seeking to ethnically cleanse Gaza to pave the way for building Jewish settlements on the enclave's ruins.
Tyler Durden Mon, 08/18/2025 - 05:00Authored by Steve Watson via Modernity.news,
A retired British Army Colonel is warning that he believes a civil war in the country is now inevitable because politicians are unwilling to take meaningful actions to fix societal collapse.
Colonel Richard Kemp, who has served on the Joint Intelligence Committee and the Cabinet Office crisis centre COBRA, urges that an alliance “of the hard left and Islamist extremists” will clash with broadly conservative British people and that it will lead to widespread prolonged unrest.
Kemp suggests that “together with other causes,” these Islamist leftists will “come together to threaten the cohesion and the culture, the entire culture and political existence of the West.”
"The more it develops, the more unrest we’re going to see… I would go as far as to predict not just civil unrest but civil war in the UK, in the coming years… I would hate to be right on this, but I believe I know that there is no political solution.”
— Connor Tomlinson (@Con_Tomlinson) August 14, 2025
I spoke to former Colonel… pic.twitter.com/kxBJlkbqdF
Kemp, who fought counter insurgency in Northern Ireland, served in the Gulf war, Bosnia, and commanded in Afghanistan, asserts that the agitators are “fostered by,” and “funded to a large extent, by our international enemies like Russia, China, Iran, and other countries as well.”
In an interview with podcaster Conor Tomlinson, Kemp remarks that politicians in the UK are “in a state of bewilderment, they’re like rabbits in headlights,” and that while they understand how the unrest is being fomented, they are unable or unwilling to put a stop to it.
Kemp says of political leaders that their “horizon is four years,” and “They want to keep a state of equilibrium for that time, they want to do what they can to make sure they win the next election.”
“They don’t want to take the radical sort of action that might be necessary to address these sorts of problems,” the Colonel stresses, highlighting mass migration as one major issue.
“There’s only so much that I think people can take of that, and they’ve been very quiet up until now, the people in the UK have not really raised their voices against this, or in a very limited way only. But the more it develops, and it is going to develop more and more, the more unrest we are going to see,” Kemp emphasises.
He adds, “they have no option. I’m not encouraging or supporting this, but I think the people will feel they have no option than to take action into their own hands rather than rely on political leaders who are doing nothing, in their eyes.”
“I think there is every likelihood, I don’t know what the timeframe is, but I would go so far as to not just predict civil unrest, but civil war in the UK in the coming years if this situation continues which I believe it will,” he urges.
“I’d hate to be right on this, but I believe that I know there is no political solution to the situation Britain faces today,” Kemp further declares, adding “When I say there is no solution, I don’t mean there actually isn’t a solution, but there is no solution that any of our politicians are willing to take… because they are afraid of doing anything significant.”
As we’ve previously highlighted, these views are shared by London King’s College war professor Dr David Betz, who believes the UK is already “past the tipping point,” for near future civil war.
Betz stated earlier this year, “There isn’t anything they can do, it’s baked in. We’re already past the tipping point, is my estimation… we are past the point at which there is a political offramp. We are past the point at which normal politics is able to solve the problem… almost every plausible way forward from here involves some kind of violence in my view.”
Kemp’s interviewer Conor Tomlinson notes that Colonel Kemp has never even heard of Professor Betz and arrived at the same conclusion completely independently, Which “makes his well-informed warnings all the more alarming.”
The YouTube version of the interview is also below:
Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.
Tyler Durden Mon, 08/18/2025 - 04:15Authored by Steve Watson via Modernity.news,
A retired British Army Colonel is warning that he believes a civil war in the country is now inevitable because politicians are unwilling to take meaningful actions to fix societal collapse.
Colonel Richard Kemp, who has served on the Joint Intelligence Committee and the Cabinet Office crisis centre COBRA, urges that an alliance “of the hard left and Islamist extremists” will clash with broadly conservative British people and that it will lead to widespread prolonged unrest.
Kemp suggests that “together with other causes,” these Islamist leftists will “come together to threaten the cohesion and the culture, the entire culture and political existence of the West.”
"The more it develops, the more unrest we’re going to see… I would go as far as to predict not just civil unrest but civil war in the UK, in the coming years… I would hate to be right on this, but I believe I know that there is no political solution.”
— Connor Tomlinson (@Con_Tomlinson) August 14, 2025
I spoke to former Colonel… pic.twitter.com/kxBJlkbqdF
Kemp, who fought counter insurgency in Northern Ireland, served in the Gulf war, Bosnia, and commanded in Afghanistan, asserts that the agitators are “fostered by,” and “funded to a large extent, by our international enemies like Russia, China, Iran, and other countries as well.”
In an interview with podcaster Conor Tomlinson, Kemp remarks that politicians in the UK are “in a state of bewilderment, they’re like rabbits in headlights,” and that while they understand how the unrest is being fomented, they are unable or unwilling to put a stop to it.
Kemp says of political leaders that their “horizon is four years,” and “They want to keep a state of equilibrium for that time, they want to do what they can to make sure they win the next election.”
“They don’t want to take the radical sort of action that might be necessary to address these sorts of problems,” the Colonel stresses, highlighting mass migration as one major issue.
“There’s only so much that I think people can take of that, and they’ve been very quiet up until now, the people in the UK have not really raised their voices against this, or in a very limited way only. But the more it develops, and it is going to develop more and more, the more unrest we are going to see,” Kemp emphasises.
He adds, “they have no option. I’m not encouraging or supporting this, but I think the people will feel they have no option than to take action into their own hands rather than rely on political leaders who are doing nothing, in their eyes.”
“I think there is every likelihood, I don’t know what the timeframe is, but I would go so far as to not just predict civil unrest, but civil war in the UK in the coming years if this situation continues which I believe it will,” he urges.
“I’d hate to be right on this, but I believe that I know there is no political solution to the situation Britain faces today,” Kemp further declares, adding “When I say there is no solution, I don’t mean there actually isn’t a solution, but there is no solution that any of our politicians are willing to take… because they are afraid of doing anything significant.”
As we’ve previously highlighted, these views are shared by London King’s College war professor Dr David Betz, who believes the UK is already “past the tipping point,” for near future civil war.
Betz stated earlier this year, “There isn’t anything they can do, it’s baked in. We’re already past the tipping point, is my estimation… we are past the point at which there is a political offramp. We are past the point at which normal politics is able to solve the problem… almost every plausible way forward from here involves some kind of violence in my view.”
Kemp’s interviewer Conor Tomlinson notes that Colonel Kemp has never even heard of Professor Betz and arrived at the same conclusion completely independently, Which “makes his well-informed warnings all the more alarming.”
The YouTube version of the interview is also below:
Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.
Tyler Durden Mon, 08/18/2025 - 04:15Authored by Steve Watson via Modernity.news,
A retired British Army Colonel is warning that he believes a civil war in the country is now inevitable because politicians are unwilling to take meaningful actions to fix societal collapse.
Colonel Richard Kemp, who has served on the Joint Intelligence Committee and the Cabinet Office crisis centre COBRA, urges that an alliance “of the hard left and Islamist extremists” will clash with broadly conservative British people and that it will lead to widespread prolonged unrest.
Kemp suggests that “together with other causes,” these Islamist leftists will “come together to threaten the cohesion and the culture, the entire culture and political existence of the West.”
"The more it develops, the more unrest we’re going to see… I would go as far as to predict not just civil unrest but civil war in the UK, in the coming years… I would hate to be right on this, but I believe I know that there is no political solution.”
— Connor Tomlinson (@Con_Tomlinson) August 14, 2025
I spoke to former Colonel… pic.twitter.com/kxBJlkbqdF
Kemp, who fought counter insurgency in Northern Ireland, served in the Gulf war, Bosnia, and commanded in Afghanistan, asserts that the agitators are “fostered by,” and “funded to a large extent, by our international enemies like Russia, China, Iran, and other countries as well.”
In an interview with podcaster Conor Tomlinson, Kemp remarks that politicians in the UK are “in a state of bewilderment, they’re like rabbits in headlights,” and that while they understand how the unrest is being fomented, they are unable or unwilling to put a stop to it.
Kemp says of political leaders that their “horizon is four years,” and “They want to keep a state of equilibrium for that time, they want to do what they can to make sure they win the next election.”
“They don’t want to take the radical sort of action that might be necessary to address these sorts of problems,” the Colonel stresses, highlighting mass migration as one major issue.
“There’s only so much that I think people can take of that, and they’ve been very quiet up until now, the people in the UK have not really raised their voices against this, or in a very limited way only. But the more it develops, and it is going to develop more and more, the more unrest we are going to see,” Kemp emphasises.
He adds, “they have no option. I’m not encouraging or supporting this, but I think the people will feel they have no option than to take action into their own hands rather than rely on political leaders who are doing nothing, in their eyes.”
“I think there is every likelihood, I don’t know what the timeframe is, but I would go so far as to not just predict civil unrest, but civil war in the UK in the coming years if this situation continues which I believe it will,” he urges.
“I’d hate to be right on this, but I believe that I know there is no political solution to the situation Britain faces today,” Kemp further declares, adding “When I say there is no solution, I don’t mean there actually isn’t a solution, but there is no solution that any of our politicians are willing to take… because they are afraid of doing anything significant.”
As we’ve previously highlighted, these views are shared by London King’s College war professor Dr David Betz, who believes the UK is already “past the tipping point,” for near future civil war.
Betz stated earlier this year, “There isn’t anything they can do, it’s baked in. We’re already past the tipping point, is my estimation… we are past the point at which there is a political offramp. We are past the point at which normal politics is able to solve the problem… almost every plausible way forward from here involves some kind of violence in my view.”
Kemp’s interviewer Conor Tomlinson notes that Colonel Kemp has never even heard of Professor Betz and arrived at the same conclusion completely independently, Which “makes his well-informed warnings all the more alarming.”
The YouTube version of the interview is also below:
Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.
Tyler Durden Mon, 08/18/2025 - 04:15Submitted by Thomas Kolbe
The United States is fighting against EU opinion control on digital platforms. From the perspective of the European Commission, this constitutes an unacceptable interference in internal affairs, which is why it is now delaying the ratification of the trade deal. In the meantime, the cost of higher tariffs due to the delay is being borne by the European economy.
Dealing with the EU is truly a headache. To be precise: The European Commission, under the leadership of its President Ursula von der Leyen, is currently squandering the last remnants of respect and trust it had left after the Pfizer scandal, the strict lockdowns, and continuous attacks on freedom of speech. The issue at hand in the continuation of trade negotiations with the United States concerns exactly this fundamental right of free citizens.
Clear RulesEverything was essentially settled: The EU conceded and accepted the unilateral tariffs of 15 percent. Moreover, it committed to purchasing U.S. energy, such as liquefied natural gas, worth $750 billion spread over three years. Whether the market can actually absorb this volume and whether private industry can manage the coordination is another question.
The rules are unambiguous: The EU grants U.S. businesses free access to the EU single market, while, of course, the jungle-like harmonization and climate protection regulations still apply. These form the true, complex, and largely insurmountable trade barrier for most international competitors. This intricate framework, the core of the European Commission's interventionism, was accepted by the Americans. From the perspective of European industry, this is unfortunate, but the devastating domestic effects of EU protectionism and the climate fight under President Trump are irrelevant. It is the responsibility of European citizens to put an end to this disastrous policy.
Root of the ConflictDuring the negotiations in Scotland, the U.S. side also made clear that it would not tolerate the massive attacks by Brussels on American communication platforms like X or Meta without pushback. And that is exactly what this is about.
Until the final signing of the trade deal between the U.S. and the EU, the pre-set higher U.S. tariffs remain in effect. For Germany’s key industry—the automotive sector—the delay is disastrous. Instead of 15 percent, manufacturers must still pay the higher tariff of 27.5 percent. The burdens add up: BMW, for example, expected tariffs of one billion euros this year. VW reported a tariff damage of 1.3 billion euros in the first half of the year alone due to U.S. tariffs that only came into force in April.
The tariffs strain already heavily restricted margins due to climate and energy policies. BMW estimates the margin loss from the trade dispute with the U.S. at around 1.25 percent. A quick deal would therefore be crucial to provide the German economy with much-needed relief in its struggle to stay competitive.
Calculation Without von der LeyenA conclusion of the trade deal would be both possible and reasonable. But the German economy did not count on Ursula von der Leyen. The negotiations could now be finalized quickly to provide legal certainty for German businesses. Washington is ready, and President Trump has likely turned to more important matters. His tolerance for Brussels’ whining and endless trickery is probably limited. Everything points to a quick deal.
Yet for von der Leyen and her Brussels allies, other priorities take precedence.
What this exactly means was made clear last week by U.S. Secretary of State Marco Rubio. He instructed U.S. diplomats in the European Union to actively oppose the increasingly aggressive implementation of the Digital Services Act (DSA) by Brussels. Cases of abuse and attacks against U.S. citizens should be reported immediately. Rubio also wants active lobbying by U.S. representatives in EU political circles to counter this open attack on freedom of speech.
EU Censorship AttackMore than a month ago, the accompanying Digital Markets Act (DMA) became the focal point of the transatlantic dispute. At that time, Donald Trump insisted on having a say in interpreting the rules, which, like the DSA, primarily targets dominant U.S. communication platforms.
At its core, Brussels aims to enforce its censorship policies precisely on those platforms that are becoming increasingly important for public discourse. Disguised in the politically overused formula of “hate and incitement,” the digital communication space is to be brought under public censorship control.
Brussels has likely noticed that counter-narratives targeting centralized eco-authoritarianism are forming primarily on these platforms. They increasingly expose the functioning and objectives of the EU power apparatus.
To secure its censorship policy, Ursula von der Leyen and her Brussels apparatus willingly accept that, in the end, both companies and European consumers pay the price of the EU’s control mania through higher tariffs.
The U.S. will maintain the current tariff regime until a robust agreement is reached on handling European censorship policy.
Washington’s hardline stance gives hope that Brussels will suffer a significant setback in its attempt to establish a digital speech dictatorship.
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About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.
Tyler Durden Mon, 08/18/2025 - 03:30
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