Vinod Khosla

It's likely as of this morning, the reinsurance websites are all saying it's probably a 40 to $50 billion loss event, which still exceeds the state's reinsurance capacity. So you can kind of think about Florida state's reinsurance thing being effectively bankrupt. It doesn't really have the capacity to underwrite the insurance anymore.

It's likely as of this morning, the reinsurance websites are all saying it's probably a 40 to $50 billion loss event, which still exceeds the state's reinsurance capacity. So you can kind of think about Florida state's reinsurance thing being effectively bankrupt. It doesn't really have the capacity to underwrite the insurance anymore.

So the real question for everyone is, is the federal government gonna have to step in and start to support the price of homes.

So the real question for everyone is, is the federal government gonna have to step in and start to support the price of homes.

The total value of all mortgages and homeowner mortgages in Florida is $454 billion. And those people typically have a debt to equity ratio probably on the 50 to 80% range. So if the value of your home dips by 25%, because everyone starts selling their homes, leaving Florida, or they can't get insurance,

The total value of all mortgages and homeowner mortgages in Florida is $454 billion. And those people typically have a debt to equity ratio probably on the 50 to 80% range. So if the value of your home dips by 25%, because everyone starts selling their homes, leaving Florida, or they can't get insurance,

then the people that live in Florida, most of them have their net worth tied up in their home, are going to see their personal net worth wiped out or cut in half. So it's not just an economic problem. It's a social problem that now there are so many people that have put their entire net worth into their home.

then the people that live in Florida, most of them have their net worth tied up in their home, are going to see their personal net worth wiped out or cut in half. So it's not just an economic problem. It's a social problem that now there are so many people that have put their entire net worth into their home.

The value of their home is written to a point that it no longer makes sense given the frequency at which homes are going to get destroyed.

The value of their home is written to a point that it no longer makes sense given the frequency at which homes are going to get destroyed.

No. It's totally viable. It's just the question is what are you willing to – At what price?

No. It's totally viable. It's just the question is what are you willing to – At what price?

Will you pay 5% of your home value for insurance every year? Will you pay 2%, 3%?

Will you pay 5% of your home value for insurance every year? Will you pay 2%, 3%?

It becomes very, very untenable. Well, it used to be 1 in 500 years. Now it's probably 1 in 15, right?

It becomes very, very untenable. Well, it used to be 1 in 500 years. Now it's probably 1 in 15, right?

Well, I mean, you saw that the range at which these events can happen is all over the place. And the challenge is the events are getting more significant because of this warm ocean weather that we see, this warm ocean temperature.

Well, I mean, you saw that the range at which these events can happen is all over the place. And the challenge is the events are getting more significant because of this warm ocean weather that we see, this warm ocean temperature.

An investment in climate resilience, that's right.

An investment in climate resilience, that's right.

That's right. And that's what happened in California. And by the way, State Farm left a lot of California.

That's right. And that's what happened in California. And by the way, State Farm left a lot of California.

What is this?

What is this?

I need to get a plug in because I want to be found. Go to Arrow One and buy Supergut Bars, $3.99.

I need to get a plug in because I want to be found. Go to Arrow One and buy Supergut Bars, $3.99.

Going in one anyways, we ended up getting the for most homeowners, when the cost of insurance gets to a certain threshold, you don't have budget for it, you can't afford it. And so that's a lot of why the insurers leave, they'll underwrite anything at any price, but they just know that most consumers can't afford it. Here's some other interesting statistics, related but unrelated.

Going in one anyways, we ended up getting the for most homeowners, when the cost of insurance gets to a certain threshold, you don't have budget for it, you can't afford it. And so that's a lot of why the insurers leave, they'll underwrite anything at any price, but they just know that most consumers can't afford it. Here's some other interesting statistics, related but unrelated.

In the early 1900s, the city of Phoenix, Arizona averaged five days a year of temperatures of 110 degrees or warmer. By the 2010s, Phoenix averaged, during the 2010s, 27 days a year where the temperature was 110 or higher. Since 2021, Phoenix averaged- 100 plus days. 42 days. And in 2024, it's been 70 days so far this year that the temperature is over 110.

In the early 1900s, the city of Phoenix, Arizona averaged five days a year of temperatures of 110 degrees or warmer. By the 2010s, Phoenix averaged, during the 2010s, 27 days a year where the temperature was 110 or higher. Since 2021, Phoenix averaged- 100 plus days. 42 days. And in 2024, it's been 70 days so far this year that the temperature is over 110.

So this is affecting, and so there's increased risks in California with wildfires, increased risk with hurricane. There are a lot of these factors, and I have friends that work in reinsurance and in the insurance markets.

So this is affecting, and so there's increased risks in California with wildfires, increased risk with hurricane. There are a lot of these factors, and I have friends that work in reinsurance and in the insurance markets.

Jason, it's called a mutual. And those are like a good chunk of the industry are mutuals where it's the shareholders are the members and they all share the risk and the ownership.

Jason, it's called a mutual. And those are like a good chunk of the industry are mutuals where it's the shareholders are the members and they all share the risk and the ownership.

So if you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have had to re underwrite the rates that they charge for insurance, because the frequency of a disaster has gone up. And the new price that they should be charging is so high, it doesn't matter how the capital structure is set up.

So if you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have had to re underwrite the rates that they charge for insurance, because the frequency of a disaster has gone up. And the new price that they should be charging is so high, it doesn't matter how the capital structure is set up.

It's simply, there's, there's one big event that's going to cause a big wipeout for a large number.

It's simply, there's, there's one big event that's going to cause a big wipeout for a large number.

That's right.

That's right.

I think they're different, but Florida is like, I mean, I don't know how you do the math on, I just don't know what you do on a trillion dollars of real estate value with half a trillion of mortgages. when you have real exposure on loss more frequently than one in 100 years, to your point, they need to be repriced.

I think they're different, but Florida is like, I mean, I don't know how you do the math on, I just don't know what you do on a trillion dollars of real estate value with half a trillion of mortgages. when you have real exposure on loss more frequently than one in 100 years, to your point, they need to be repriced.

And how do you reprice those homes in the significant level that they need to be repriced without causing massive economic and social consequence? That's what's kind of, I think, challenging me in thinking about what's the path here.

And how do you reprice those homes in the significant level that they need to be repriced without causing massive economic and social consequence? That's what's kind of, I think, challenging me in thinking about what's the path here.

Did we predict that they would win the Nobel Prize at the time?

Did we predict that they would win the Nobel Prize at the time?

There's been a long challenge in biochemistry on understanding or predicting or visualizing the three-dimensional structure of proteins. Because remember, proteins are produced by long chains of amino acids. And those amino acids are kind of create like a bead, beaded necklace. And then the whole necklace collapses on itself in a very specific way.

There's been a long challenge in biochemistry on understanding or predicting or visualizing the three-dimensional structure of proteins. Because remember, proteins are produced by long chains of amino acids. And those amino acids are kind of create like a bead, beaded necklace. And then the whole necklace collapses on itself in a very specific way.

And check out Gronk. I'm running a GoFundMe. A GoFundMe? Yeah, go to GoFundMe slash Freedberg. For what?

And check out Gronk. I'm running a GoFundMe. A GoFundMe? Yeah, go to GoFundMe slash Freedberg. For what?

And that three-dimensional molecule, that big chunky protein does something structurally, physically. And so trying to understand the shape of a protein is really hard. I mean, we've used kind of x-ray imaging systems to try and identify it and tried to build models to identify how does that quote protein folding work?

And that three-dimensional molecule, that big chunky protein does something structurally, physically. And so trying to understand the shape of a protein is really hard. I mean, we've used kind of x-ray imaging systems to try and identify it and tried to build models to identify how does that quote protein folding work?

How do those amino acids collapse on each other to create that three-dimensional construct? And I don't know if you guys remember in the early 2000s, there was a Stanford folding at home distributed computing project. Do you guys remember this? Yeah.

How do those amino acids collapse on each other to create that three-dimensional construct? And I don't know if you guys remember in the early 2000s, there was a Stanford folding at home distributed computing project. Do you guys remember this? Yeah.

Exactly right, yeah. So it was like, it ran on the background of your computer, it used your CPU cycles when you weren't using your computer, and it tried to model protein folding. And so this has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure.

Exactly right, yeah. So it was like, it ran on the background of your computer, it used your CPU cycles when you weren't using your computer, and it tried to model protein folding. And so this has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure.

This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us.

This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us.

And that unlocks this ability for humans to create biomolecules that can do everything from binding cancer, to breaking apart pollutants and plastics, to creating entirely new molecules, to running, in some cases, like what David Baker did at University of Washington, he shared the Nobel Prize, creating micro motors, mini motors, from proteins that he designed on a computer.

And that unlocks this ability for humans to create biomolecules that can do everything from binding cancer, to breaking apart pollutants and plastics, to creating entirely new molecules, to running, in some cases, like what David Baker did at University of Washington, he shared the Nobel Prize, creating micro motors, mini motors, from proteins that he designed on a computer.

And so this becomes, I think this great, like big Holy grail in biochemistry and the alpha fold project at deep mind inside of Google solve this problem. And, and by the way, since, since then they've come out with alpha fold three, they've launched a drug discovery company called isomorphic labs, where they're basically predicting molecules that will do specific things for a target indication.

And so this becomes, I think this great, like big Holy grail in biochemistry and the alpha fold project at deep mind inside of Google solve this problem. And, and by the way, since, since then they've come out with alpha fold three, they've launched a drug discovery company called isomorphic labs, where they're basically predicting molecules that will do specific things for a target indication.

Uh, and then they use the alpha fold models to actually design and develop those molecules.

Uh, and then they use the alpha fold models to actually design and develop those molecules.

And there have been literally dozens of companies that have been started since DeepMind was published, and probably several billion dollars of capital that's gone into companies that are creating new drugs, creating new industrial biotech applications, using this protein modeling capability that was unleashed with DeepMind a number of years ago. So it really has transformed the industry.

And there have been literally dozens of companies that have been started since DeepMind was published, and probably several billion dollars of capital that's gone into companies that are creating new drugs, creating new industrial biotech applications, using this protein modeling capability that was unleashed with DeepMind a number of years ago. So it really has transformed the industry.

It'll be a couple years before we see it transforming the world, but it's an exciting kind of thing, yeah.

It'll be a couple years before we see it transforming the world, but it's an exciting kind of thing, yeah.

Anyway, congrats to the teams. Congrats to Demison Jumper. Yeah. I mean, it's just great. And David Baker at the Baker Lab in University of Washington.

Anyway, congrats to the teams. Congrats to Demison Jumper. Yeah. I mean, it's just great. And David Baker at the Baker Lab in University of Washington.

I think we've talked about this. I mean, look, I've shared in the past, my belief that companies that are big, that have excess capital, that then invest that excess capital in R&D can be a net benefit for all of us. Look at Bell Labs. Bell Labs had a monopoly on

I think we've talked about this. I mean, look, I've shared in the past, my belief that companies that are big, that have excess capital, that then invest that excess capital in R&D can be a net benefit for all of us. Look at Bell Labs. Bell Labs had a monopoly on

through their association with at&t with developing radar microwave the transistor integrated circuitry information theory everything that is the basis of the internet computing even nuclear technology and so on it's because they had this extraordinary capital flow from the scale of the business and they were able to invest in r d similarly google acquired

through their association with at&t with developing radar microwave the transistor integrated circuitry information theory everything that is the basis of the internet computing even nuclear technology and so on it's because they had this extraordinary capital flow from the scale of the business and they were able to invest in r d similarly google acquired

and invested for many, many years in DeepMind. And we just talked about how Demis and team won the Nobel Prize for the work that they did. And they, by the way, published the protein structure for 200 million proteins for free out of that service. I just want to zoom out for a minute and talk about the fact that this isn't about

and invested for many, many years in DeepMind. And we just talked about how Demis and team won the Nobel Prize for the work that they did. And they, by the way, published the protein structure for 200 million proteins for free out of that service. I just want to zoom out for a minute and talk about the fact that this isn't about

you know, whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition, but is it really worth penalizing any company that's big? Particularly, do we lose the benefit of those big companies investing in technology that pushes us forward? Google also invested in Waymo for years and years and years.

you know, whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition, but is it really worth penalizing any company that's big? Particularly, do we lose the benefit of those big companies investing in technology that pushes us forward? Google also invested in Waymo for years and years and years.

which arguably spurned and drove investment from many other companies in self-driving technology. And if Google hadn't done that, would self-driving have taken off the way it did? I don't know. Same with Kitty Hawk and Larry's investment in eVTOLs, and that spawned a lot of eVTOL investing.

which arguably spurned and drove investment from many other companies in self-driving technology. And if Google hadn't done that, would self-driving have taken off the way it did? I don't know. Same with Kitty Hawk and Larry's investment in eVTOLs, and that spawned a lot of eVTOL investing.

And similarly, if you think about Amazon and their investment in AWS, where they were burning cash for many years, That turned out to spawn arguably a lot of interest and investment in cloud. And so I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy

And similarly, if you think about Amazon and their investment in AWS, where they were burning cash for many years, That turned out to spawn arguably a lot of interest and investment in cloud. And so I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy

those behaviors, versus just saying anyone or anything that's big should be taken apart. Because there is a tremendous benefit to be gained from the R&D dollars that they all put into things that, you know, move the whole industry forward. And I think that leadership is important and needed.

those behaviors, versus just saying anyone or anything that's big should be taken apart. Because there is a tremendous benefit to be gained from the R&D dollars that they all put into things that, you know, move the whole industry forward. And I think that leadership is important and needed.

Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VC is I'm not sure they're going to build a Waymo. And I'm not sure they're going to build Amazon cloud. And I'm not sure they're going to build a deep mind you know, protein folding company and publish it for free. So I don't know, that's just my point of view. What's the likely?

Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VC is I'm not sure they're going to build a Waymo. And I'm not sure they're going to build Amazon cloud. And I'm not sure they're going to build a deep mind you know, protein folding company and publish it for free. So I don't know, that's just my point of view. What's the likely?

We should think about this stuff.

We should think about this stuff.

Well, I think if you'll remember when we talked about this a couple months ago, the sea surface temperature was at kind of a record high in the Atlantic. And warm ocean temperatures drive moist air up that evaporates. The warmer the air, the faster the evaporation. And that starts to cause the movement of the air, which drives ultimately the hurricane.

Well, I think if you'll remember when we talked about this a couple months ago, the sea surface temperature was at kind of a record high in the Atlantic. And warm ocean temperatures drive moist air up that evaporates. The warmer the air, the faster the evaporation. And that starts to cause the movement of the air, which drives ultimately the hurricane.

And then the hurricane sucks up more warm, moist air from the ocean and it creates a feedback loop. So the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms.

And then the hurricane sucks up more warm, moist air from the ocean and it creates a feedback loop. So the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms.

And that's why you get these massive hurricanes that suddenly form seemingly overnight and go, like in the case of Helene, that hurricane went from a cap two to a cap four or a cap five in like 48 hours. because of the energy that's stored up. And 90%, here's an interesting stat, 90% of the energy that we get from the sun is absorbed and stored in our oceans.

And that's why you get these massive hurricanes that suddenly form seemingly overnight and go, like in the case of Helene, that hurricane went from a cap two to a cap four or a cap five in like 48 hours. because of the energy that's stored up. And 90%, here's an interesting stat, 90% of the energy that we get from the sun is absorbed and stored in our oceans.

The other kind of fact that's playing into this, if you pull up that nature article, and this is something that I think you guys may remember we talked about. So this was an article that came out, a paper, a science paper that came out a couple of months ago. And in this paper,

The other kind of fact that's playing into this, if you pull up that nature article, and this is something that I think you guys may remember we talked about. So this was an article that came out, a paper, a science paper that came out a couple of months ago. And in this paper,

For a venture firm to return capital, they need to have at least one or two big winners.

For a venture firm to return capital, they need to have at least one or two big winners.

And so if that winner needs to be a 10X or a 20X or a 30X of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for it to make sense. So in a market where there is excess venture capital,

And so if that winner needs to be a 10X or a 20X or a 30X of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for it to make sense. So in a market where there is excess venture capital,

where valuations are at a premium, and where you don't see the exit path, the M&A or the IPO events that make sense that you can actually realize that model, you should take less capital and make fewer, surer investments. And I think that that's what some folks have realized.

where valuations are at a premium, and where you don't see the exit path, the M&A or the IPO events that make sense that you can actually realize that model, you should take less capital and make fewer, surer investments. And I think that that's what some folks have realized.

They don't wanna be chasing highly valued inflated opportunities and they don't wanna be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can kind of see who are the right folks in terms of thinking long-term in Silicon Valley, long-term in terms of building an investment practice and private venture.

They don't wanna be chasing highly valued inflated opportunities and they don't wanna be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can kind of see who are the right folks in terms of thinking long-term in Silicon Valley, long-term in terms of building an investment practice and private venture.

And maybe who are folks that are trying to build their AUM stack. And folks who have done reasonably well, like Founders Fund has probably the most exceptional track record in Silicon Valley as a venture firm. They are very cognizant of the market conditions. And I think that they're being very smart.

And maybe who are folks that are trying to build their AUM stack. And folks who have done reasonably well, like Founders Fund has probably the most exceptional track record in Silicon Valley as a venture firm. They are very cognizant of the market conditions. And I think that they're being very smart.

By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. So they're trying to put more capital to work in fewer managers. And so there's a real wheat from the chaff moment happening in Silicon Valley venture right now. What I think a couple of years ago was, hey, everyone's going to go do a startup.

By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. So they're trying to put more capital to work in fewer managers. And so there's a real wheat from the chaff moment happening in Silicon Valley venture right now. What I think a couple of years ago was, hey, everyone's going to go do a startup.

A few years ago became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared out.

A few years ago became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared out.

the scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans. And the reason is that the sulfur dioxide forms cloud formations as they travel across the oceans. And those cloud formations reflect sunlight.

the scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans. And the reason is that the sulfur dioxide forms cloud formations as they travel across the oceans. And those cloud formations reflect sunlight.

And in the absence of those cloud formations, that sunlight makes its way into the ocean and you get more ocean warming. And by their estimation, removing sulfur dioxide, which causes acid rain, and that's the reason it's been pushed to be removed, and they started removing it in 2020, 2021 from cargo vessels. By removing sulfur dioxide, we are now gonna see a doubling

And in the absence of those cloud formations, that sunlight makes its way into the ocean and you get more ocean warming. And by their estimation, removing sulfur dioxide, which causes acid rain, and that's the reason it's been pushed to be removed, and they started removing it in 2020, 2021 from cargo vessels. By removing sulfur dioxide, we are now gonna see a doubling

of the rate of warming of the oceans in the 2020s and going forward.

of the rate of warming of the oceans in the 2020s and going forward.

Zero.

Zero.

No, like 5%. I think that's very unlikely. Because someone said that that was... That was a there was some code that enabled that in the early version of the app. And then some other people audited it. And they said they did not find evidence that there was any technology. And Apple's got a very good audit system for this.

No, like 5%. I think that's very unlikely. Because someone said that that was... That was a there was some code that enabled that in the early version of the app. And then some other people audited it. And they said they did not find evidence that there was any technology. And Apple's got a very good audit system for this.

That's roughly it. And... What is the pollution again?

That's roughly it. And... What is the pollution again?

Yeah, that goes into the fuel of cargo vessels. And a couple of years ago, they started to implement these mandates that sulfur dioxide no longer be used in the fuel. As a result, when sulfur dioxide is emitted from these vessels, it goes into the atmosphere and it actually triggers cloud formation. So now you have these clouds that are forming. And Nick's going to pull up this image right now.

Yeah, that goes into the fuel of cargo vessels. And a couple of years ago, they started to implement these mandates that sulfur dioxide no longer be used in the fuel. As a result, when sulfur dioxide is emitted from these vessels, it goes into the atmosphere and it actually triggers cloud formation. So now you have these clouds that are forming. And Nick's going to pull up this image right now.

Yeah, here you can see that. So all of these tracks... are these cargo vessels moving across the ocean. And as they move across the ocean, they create cloud cover, that cloud cover actually reduces the warming in the ocean because it reflects sunlight. So now that sunlight energy gets absorbed into the ocean.

Yeah, here you can see that. So all of these tracks... are these cargo vessels moving across the ocean. And as they move across the ocean, they create cloud cover, that cloud cover actually reduces the warming in the ocean because it reflects sunlight. So now that sunlight energy gets absorbed into the ocean.

So this is another driving force that some people are now speculating, maybe accelerating the warming of the oceans that we're seeing, which drives this extreme storm and hurricane events. And so this becomes a more frequent event. Now, a lot of people- So sorry, can I ask you a question?

So this is another driving force that some people are now speculating, maybe accelerating the warming of the oceans that we're seeing, which drives this extreme storm and hurricane events. And so this becomes a more frequent event. Now, a lot of people- So sorry, can I ask you a question?

You know, there's the polling data.

You know, there's the polling data.

I didn't see her interviews. Okay. I saw some excerpts on Twitter.

I didn't see her interviews. Okay. I saw some excerpts on Twitter.

Yeah.

Yeah.

No, I'm just thinking it seems like Sacks, if she comes and has a conversation, you'll be respectful?

No, I'm just thinking it seems like Sacks, if she comes and has a conversation, you'll be respectful?

He wanted that.

He wanted that.

I agree. I was wearing back to him his style. He likes to come out. He likes to do his thing. That's exactly what he wanted.

I agree. I was wearing back to him his style. He likes to come out. He likes to do his thing. That's exactly what he wanted.

Yeah, so in addition- No, no, I'm asking you the question.

Yeah, so in addition- No, no, I'm asking you the question.

Um, so yes, we are no longer reflecting as much sunlight. And so for several decades, we had bad fuel sources. We had artificial cooling.

Um, so yes, we are no longer reflecting as much sunlight. And so for several decades, we had bad fuel sources. We had artificial cooling.

Oh, well, the argument is that we've actually been warming the atmosphere, which we have been. We can see the data that shows that everywhere all over the earth, not just about sunlight coming in on the oceans and not just ocean warming. But the atmosphere is warming. The planet is warming. And so this is by blocking the sunlight above the oceans, we were artificially dampening that effect.

Oh, well, the argument is that we've actually been warming the atmosphere, which we have been. We can see the data that shows that everywhere all over the earth, not just about sunlight coming in on the oceans and not just ocean warming. But the atmosphere is warming. The planet is warming. And so this is by blocking the sunlight above the oceans, we were artificially dampening that effect.

and we were reducing the amount of heat energy that was getting into the oceans. So now by taking that away, we're seeing the heat energy in the oceans accelerate, and now the oceans are getting much, much warmer.

and we were reducing the amount of heat energy that was getting into the oceans. So now by taking that away, we're seeing the heat energy in the oceans accelerate, and now the oceans are getting much, much warmer.

Well, I mean, let's talk about economics, right? So what how much real estate do you guys think is on the Florida coastline? What's the real estate?

Well, I mean, let's talk about economics, right? So what how much real estate do you guys think is on the Florida coastline? What's the real estate?

Right, so what happens typically when storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop going. So the storm cycle starts to break down. All hurricanes, when they hit land, they start to break apart. And so the category which measures the wind speed actually reduce it. This is just a natural thing that happens.

Right, so what happens typically when storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop going. So the storm cycle starts to break down. All hurricanes, when they hit land, they start to break apart. And so the category which measures the wind speed actually reduce it. This is just a natural thing that happens.

But this was a category five hurricane when it made landfall, I believe it was category four. So, you know, it was a massive hurricane as an approach.

But this was a category five hurricane when it made landfall, I believe it was category four. So, you know, it was a massive hurricane as an approach.

Yeah, so that's right. But what happened when Helene hit North Carolina, it was not a cat four. What happened is, as that storm moved inland, it hit the mountains and the first mountains it hit are on Western North Carolina. That area is elevated, there's mountains there. So when a heavy hot storm runs into cold mountains, all the moisture dumps out.

Yeah, so that's right. But what happened when Helene hit North Carolina, it was not a cat four. What happened is, as that storm moved inland, it hit the mountains and the first mountains it hit are on Western North Carolina. That area is elevated, there's mountains there. So when a heavy hot storm runs into cold mountains, all the moisture dumps out.

It's like it runs into it and suddenly everything precipitates out of that storm. And that's why some parts of Western North Carolina got like 18, some people measured as high as 30 inches of rainfall in a couple of hours. So this insane dumping happens when that hot air hits a cold region and suddenly everything, all that warm moisture precipitates out and dumps to the ground.

It's like it runs into it and suddenly everything precipitates out of that storm. And that's why some parts of Western North Carolina got like 18, some people measured as high as 30 inches of rainfall in a couple of hours. So this insane dumping happens when that hot air hits a cold region and suddenly everything, all that warm moisture precipitates out and dumps to the ground.

So it ran into a mountain. It's effectively why everything fell out of North Carolina.

So it ran into a mountain. It's effectively why everything fell out of North Carolina.

Who did it, Sachs?

Who did it, Sachs?

Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I don't think so.

Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I don't think so.

There's a lot of theory online that there's a ton of late geoengineering being run by government agencies to drive these storms.

There's a lot of theory online that there's a ton of late geoengineering being run by government agencies to drive these storms.

Are you Alex Jones? Is that what we're doing? Well, no, I'm not saying Alex Jones.

Are you Alex Jones? Is that what we're doing? Well, no, I'm not saying Alex Jones.

OK, so so let's just talk about the hurricane.

OK, so so let's just talk about the hurricane.

Yeah. Putting particulates in clouds to accelerate precipitation. is, I mean, we've done that for a hundred years. You know, you can do, you can increase the precipitation rate when there's already clouds that have formed, but that has nothing to do with creating 200 mile an hour wind speed.

Yeah. Putting particulates in clouds to accelerate precipitation. is, I mean, we've done that for a hundred years. You know, you can do, you can increase the precipitation rate when there's already clouds that have formed, but that has nothing to do with creating 200 mile an hour wind speed.

That requires an extraordinary amount of energy, all of this energy, but the oceans are like giant batteries. And when a hurricane gets going, that battery is accelerating the hurricane, and the hurricane sucks up more power from the battery, and it creates this incredibly dynamical system. There is no human-created energy system that can form a hurricane.

That requires an extraordinary amount of energy, all of this energy, but the oceans are like giant batteries. And when a hurricane gets going, that battery is accelerating the hurricane, and the hurricane sucks up more power from the battery, and it creates this incredibly dynamical system. There is no human-created energy system that can form a hurricane.

A hurricane is an extraordinarily powerful natural phenomenon that arises from the amount of energy that can come out of very, very, very hot oceans, relatively speaking. So that's really where these hurricanes are coming from. Now they're going to be more frequent if the ocean temperatures remain elevated as they seem to be and continue to be elevated.

A hurricane is an extraordinarily powerful natural phenomenon that arises from the amount of energy that can come out of very, very, very hot oceans, relatively speaking. So that's really where these hurricanes are coming from. Now they're going to be more frequent if the ocean temperatures remain elevated as they seem to be and continue to be elevated.

And this can be a function of generally the temperatures warming on earth, generally the removal of sulfur dioxide, generally these El Nino La Nina cycles. There's a lot of factors, but it seems to be the case that we are having a very significant trend of continuously warmer oceans.

And this can be a function of generally the temperatures warming on earth, generally the removal of sulfur dioxide, generally these El Nino La Nina cycles. There's a lot of factors, but it seems to be the case that we are having a very significant trend of continuously warmer oceans.

And those continuously warmer oceans means that we're going to have what used to be called a one in 500 year storm, which is what Asheville is being termed at, one in 500 year. These sorts of storm events can happen every couple of years. And we're now looking at one in 100 year events happening every two to three years. in the United States with the hurricane activity that we've been seeing.

And those continuously warmer oceans means that we're going to have what used to be called a one in 500 year storm, which is what Asheville is being termed at, one in 500 year. These sorts of storm events can happen every couple of years. And we're now looking at one in 100 year events happening every two to three years. in the United States with the hurricane activity that we've been seeing.

Let's talk about the economics. There's $500 billion to $1 trillion of real estate value on the Florida coastline. And what used to be a one in 100 year event, the average Florida homeowner historically has been paying about 1% of the real estate value in insurance.

Let's talk about the economics. There's $500 billion to $1 trillion of real estate value on the Florida coastline. And what used to be a one in 100 year event, the average Florida homeowner historically has been paying about 1% of the real estate value in insurance.

So now if your real estate is likely to be wiped out one out of every 20 years, instead of one out of every 500 years, the cost of insurance gets to the point that it is untenable for most people to pay for their insurance. Florida has a state-backed reinsurance provider called the Florida Hurricane Catastrophe Fund.

So now if your real estate is likely to be wiped out one out of every 20 years, instead of one out of every 500 years, the cost of insurance gets to the point that it is untenable for most people to pay for their insurance. Florida has a state-backed reinsurance provider called the Florida Hurricane Catastrophe Fund.

And this fund issues debt to meet its coverage demands because it reinsures insurance companies in order to incentivize them to come into the state and underwrite homeowners insurance.

And this fund issues debt to meet its coverage demands because it reinsures insurance companies in order to incentivize them to come into the state and underwrite homeowners insurance.

That's right, and what's happening is they would normally underwrite that risk. They would say, this is gonna cost, you're gonna lose the value of your home every 100 years or every 200 years.

That's right, and what's happening is they would normally underwrite that risk. They would say, this is gonna cost, you're gonna lose the value of your home every 100 years or every 200 years.

But now, the models are showing, because of the frequency of these sorts of hurricane events and the severity of the hurricane events, that maybe you'll lose the value of your home once every 20 years or once every 30 years. And no consumer is going to be willing or able to pay that much for the insurance on their home.

But now, the models are showing, because of the frequency of these sorts of hurricane events and the severity of the hurricane events, that maybe you'll lose the value of your home once every 20 years or once every 30 years. And no consumer is going to be willing or able to pay that much for the insurance on their home.

So the state over the last several years has had to step in and effectively subsidize the insurance. And now the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season. Now, I think they got lucky with Milton today, but some were estimating that the Milton losses were gonna be in excess of 100 billion, bigger than Katrina.

So the state over the last several years has had to step in and effectively subsidize the insurance. And now the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season. Now, I think they got lucky with Milton today, but some were estimating that the Milton losses were gonna be in excess of 100 billion, bigger than Katrina.