Episode 227: AI Fund Explodes, Alan Joyce is Back, Victoria’s Labor Reset, Fauci’s COVID Reckoning and Credit Card Chaos
Fauci’s legacy, Leopold Aschenbrenner’s AI fund blow-up, the “logo CEO” problem (sorry Will), Alan Joyce’s selflessness, Gen-Z drinking habits and why airlines have the worst customer service.
You can watch the full episode on YouTube above, or on the spotify link below.
H3: The Contrarians catchup
Ben Carroll is Victoria’s new Premier after Jacinta Allan was rolled by her own faction. Adam on what Carroll needs to do: “Getting rid of the SRL, which is just the most obvious thing ever, given it’s just an absolute disaster. $100B money-burn donation to the CFMEU that gets funnelled back into Labor.” Adir’s advice: “Don’t go down with this ship. Like this was not really your mess that was created.”
Adir’s theory of the “Logo CEO”: one of the greatest negative signals for a new CEO is how quickly they decide to change the logo. “I cannot remember one CEO that joined an organisation where, in a non-media business, changing the logo was one of the first things they did and it went well.” Will (who changed the logo as soon as he joined The Contrarians) sat nervously in the room… listen to the full episode to hear his response!
The RBA’s card surcharge ban is now producing visible consequences. Adir received a letter from Virgin Money: “Some things are changing. Basically everything good is getting worse and everything bad is getting worse. Your fee’s going up, the points are going down, there’s no insurance.” He called it: “The return of the bank fee era.” Adam: “Well done to the RBA for putting bank fees back on everybody. It’s just crazy.”
Adam booked a pre-arranged British Airways flight from London, only for BA to cancel the entire route. They then changed an internal Canadian ski flight by three hours with no notification. “Airlines are a complete law unto themselves. They don’t care about a customer at all.” Adir: “Can you imagine how everyone else feels? Because you’ve got these relationships with airlines where you give them tens of millions of dollars or more, and this is how you feel.”
Qantas, meanwhile, has become the most on-time airline in the world. Adam: “I’ve had great experiences in the last 18 months with Qantas. They’ve really become a really good airline again.”
H3: Alan Joyce: “Everything I do, I do for you”
Alan Joyce appeared in a new interview, filmed in his apartment, and the backlash has been fierce. He claimed “I’m not here to defend capitalism” when pressed on his $110M payout, and sat in front of a grand piano in what looked like a luxury apartment. Adir’s verdict: if a crisis advisor had been there, none of it would have happened.
Adir: “He did say this, when he was questioned about the $110M that he pocketed, he said, I’m not here to defend capitalism, but that’s how capitalism works. And I feel like you should be here to defend capitalism. Like why are you pretending? If a guy who is running one of the biggest companies in Australia is not prepared to stand up and say we’re in a time where there’s a lot of arguments about socialism, that’s bad.”
Adir: “A guy that took $110M off the table and was getting a lot of hate. Would not have done an interview sitting in a gazillion dollar apartment with a grand piano. Like, that is not, what the hell is he doing the interview there for? It is such bad judgment. He should have gone to a Maccas or something.”
Adam: “I think the tragedy of Joyce is he could have retired in 2019, a hero of Australian commerce. People loved him. He would have had a choice of boards in Australia.”
Adam: “The ghost flights, for me, was the absolute worst. They were charging for flights, they’d cancel, they wouldn’t tell the customer. And why it was so bad is the customer would have to pay double to rebook. That to me was the absolute worst. Completely inexcusable.”
Adir: “Staying too long. I think it’s so few and far between: CEOs, leaders in general, presidents, etc. who are able to call that shot and not stay on too long. And Alan Joyce is a classic example of someone who sat on way too long.”
H3: The hidden $2B electrification winner
OSW is a private Australian business that imports batteries and solar products, selling primarily through a network of 19,000 installers. In 2023 the business made $560M in revenue with a gross profit of $29M (5% margin) and lost $5.5M at the net line. They raised $8.5M. By 2025 revenue has reportedly reached $2B with $83M in EBITDA. The AFR reported the founders may be looking for a strategic investor.
Adir: “So they went and raised $8.5M. So that feels like a bit of a shitty business. But we fast forward to what the Financial Review has just reported: revenue $2B. They claim an EBITDA of $83M. I found it very interesting.”
Adam: “Whenever you’ve got government subsidy, who benefits? It’s the vendors. Same as the first home buyer thing. It’s the same dynamic.”
Adir: “You’ve got tailwinds of electrification and tailwinds of government subsidies. Government subsidies generally invite lots of competitors.”
Adir: “If I was the owner of this business, I would be going to a business valuer and saying, get me a valuation of $1B on this business so that my CGT event when I sell it in two years’ time under this government is not going to kill me.”
Adam: “I think you’d be a fool to buy that business for $600M. If I’m an owner of this business, I’m probably not crystallizing a tax event and selling. I’m just gonna hope it’s gonna last for more than four years, essentially. It’s very different being a buyer and a seller here.”
H3: The pandemic fraud becomes undeniable
Anthony Fauci was compelled to appear before Rand Paul’s congressional committee after Joe Biden gave him a preemptive pardon covering 2019 to 2024. He invoked the fifth amendment (his right to silence) more than 100 times. Separately, his 1,000-page diary, left on government servers, was released. It revealed he tracked his own media performance obsessively. The word “press” appeared 641 times, “award” 80 times, “hero” 49 times, while “peer review,” “meta-analysis,” “risk benefit,” “learning loss,” and “mental health” were not mentioned at all. Most damningly, Fauci publicly claimed COVID had a 2% case fatality rate. His private diary said 0.2%.
Adir: “I’m very hesitant to say this, but I think we have been proven to be absolutely 100% correct for the deep cynicism we had about everything to do with this pandemic lockdown and the information it was based on.”
Adir: “What I was most scared about during that period was how easy it is to make human beings scared. And then to do whatever you want to them. Be careful of scared people and what politicians do to them to take away their own liberties.”
Adir: “These lockdowns are based not on science but on politics. I don’t think anything has more conclusively come out now than how right that view was. Like you got a little insight into it when you had the curfews in Melbourne and eventually Daniel Andrews said, no, I just made it up.”
Adir: “Epidemiologists who are meant to be dispassionate scientists, they were seduced with the allure of fame and they basically sold out themselves and their profession. And it was very unpopular to say that.”
Adam: “There were actual scientists, Jay Bhattacharya, great epidemiologists who were silenced and criticised and humiliated. And they were right all along.”
Adir: “One of the things both of us were saying was that these lockdowns were going to cause very long-term damage. Now we can see the health and mental health damage they’ve caused. It’s irrefutable now. Go and talk to any paediatrician about what’s happened as a consequence of the pandemic. They’ll tell you about the lockdowns. Like it’s terrible.”
H3: The AI bubble’s most spectacular blow-up
Leopold Aschenbrenner, author of the viral 165-page AI manifesto “Situational Awareness,” saw his $45B fund of the same name partially liquidated after a 67% drawdown in July. The fund used 3-4x leverage on AI stocks. Despite the carnage, the fund is still up 80% for the year, having previously been up 270%. Citadel’s Ken Griffin stepped in to buy the liquidated positions. Aschenbrenner reportedly retains a stake in Anthropic believed to be worth US$5B.
Adir: “Directionally, he’s largely right about where the world’s going. But he’s not trying to make long-term bets on the future. He’s running ultra-leveraged short-term bets on a bubble. When they’re leveraged that high, they’re gonna be short-term. Because the minute it unwinds, you’re dead.”
Adam: “It feels like when you lose that much leverage, you’re gonna explode because the market never goes straight up. You can be right on the long-term. But when you lever so much, you only need like, we saw SK Hynix, which is a big investment of his, like those chip manufacturers had 45-50% pullbacks in July. And when you leverage 4X, you just can’t cover that.”
Adir: “In the dot-com boom, smart people bought stuff and people said, yeah, they know what they’re doing. It must be good. And then everything goes and jumps 25%, right? We’re back to the same ridiculous boom bubble we had two weeks ago.”
Adir: “Smart rich people that have made their money investing, the one human emotion they definitely have is greed. And so that is not the greatest emotion to be rational.”
H3: Five other stories worth following:
The US bought Japanese yen for the first time in a decade, supporting efforts to lift the currency from 40-year lows. The intervention weakened the dollar and signalled American backing for Japan’s monetary action.
Spider-Man: Brand New Day earned $355M in the US alone, the second-biggest opening ever. Combined with The Odyssey, also starring Tom Holland and Zendaya, the films delivered a record $430M collective box-office weekend in history.
Google removed its new Earth image-generation feature after one day amid deepfake and disinformation concerns. Although outputs were watermarked and private, researchers showed it could easily fabricate realistic scenes involving conflict, disasters, and borders.
SpaceX briefly fell below its IPO price before its first earnings report as a public company. Investors now await results, an expiring lock-up releasing 900 million shares, and a rocket crashing into the moon.
AI startup LemonLime faced backlash after offering instant interviews to attendees who tattooed its logo. Seven people participated, prompting the founder to apologise publicly and promise the company would pay for tattoo removal costs.