Complex Systems with Patrick McKenzie (patio11)

In this episode, Patrick McKenzie (patio11) is joined by Erik Torenberg, the founder of Turpentine, to discuss the fundamentals of money movement and banking systems. Patrick breaks down how banks facilitate transfers through correspondent accounts and clearinghouses, explaining the evolution from physical check movement to digitization. They cover the gold standard's history, and then dig into stablecoins and their implications for the future of finance.–Full transcript available here: https://complexsystemspodcast.com/money-movement-erik-torenberg–Sponsor: CheckCheck is the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.–Links:Bits about Money - Bank Transfers https://www.bitsaboutmoney.com/archive/bank-transfers-as-a-payment-method/Bits about Money - Stablecoins https://www.bitsaboutmoney.com/archive/stablecoin-mechanisms-and-use-cases/–Twitter:@patio11@eriktorenberg-Timestamps:(00:00) Intro(00:49) What is money?(02:39) How money moves(06:00) Banking and correspondent accounts(07:59) Clearing houses and payment systems(12:09) The gold standard and fractional reserve banking(18:15) Introduction to stablecoins(19:38) Sponsor: Check(21:31) Stablecoin models and issues(27:30) Crypto skepticism and innovations(30:53) Regulatory arbitrage and future of money(36:36) Wrap

In this episode, Patrick McKenzie (patio11) is joined by Ross Rheingans-Yoo to discuss drug development and clinical trials. Ross breaks down how drugs progress from academic research through FDA approval, the challenging economics, and the many systemic inefficiencies in the current approval process. Patrick and Ross discuss historical cases like the thalidomide crisis that shaped FDA policy, the evolution of accelerated approvals during the AIDS epidemic, and lessons from COVID-19 trials. Ross shares his current work rescuing abandoned promising drugs from bankruptcy.–Full transcript available here: https://www.complexsystemspodcast.com/episodes/drug-development-ross-rheingans-yoo/ –Sponsors: Manifold Markets | CheckManifold is my favorite prediction market platform, making it easy to bet on anything from elections to crypto drama. Get started with a bonus at https://manifold.markets/complexsystems when you spend $20. Play money markets open to anyone; cash prizes only available to U.S. residents of at least 18 years of age. Terms and conditions apply.Check is the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.–Links:Ross' newsletter: https://essays.soletta.vc Ross' blog post on drug development costs: https://blog.rossry.net/100x/Ross' blog post on lessons from thalidomide https://blog.rossry.net/thalidomide/ –Twitter:@patio11@_rossry–Timestamps:(00:00) Intro(02:28) Ross’ career transition to drug development(03:12) The drug development process(06:22) Clinical trials and FDA approval(11:48) Challenges in clinical trials(14:50) Case study: COVID-19 trials(18:00) Sponsors: Manifold Markets | Check(19:55) Pharmaceutical economics(38:13) Rare diseases and regulatory strategies(45:18) Advanced market commitments explained(45:54) Operation warp speed and its impact(47:45) How to get accelerated approvals(52:49) The thalidomide tragedy and its legacy(01:03:17) Modern regulatory challenges and patient advocacy(01:07:14) Reviving abandoned drugs(01:12:06) Innovative approaches to drug trials(01:24:26) The future of pharmaceutical development(01:26:34) Wrap–Complex Systems is part of the Turpentine podcast network. Turpentine also has a social network for top founders and execs: https://www.turpentinenetwork.com/

In this episode, Patrick McKenzie (patio11) is joined by economist and fraud researcher Professor Jetson Luis-Leder to examine the systemic issues underlying government program fraud. Jetson and Patrick discuss healthcare fraud cases, including hospice eligibility manipulation and ambulance transport schemes, and other fraud practices against unemployment and the PPP program. The discussion reveals how institutional constraints, technological limitations, and policy design choices create opportunities for both beneficial and harmful rule violations. They also analyze the ROI of fraud prevention measures, the effectiveness of whistleblower incentives, and how bureaucratic systems can be redesigned to prevent abuse.–Full transcript available here: https://www.complexsystemspodcast.com/defrauding-government-jetson-leder-luis–Sponsors: Check | WorkOSCheck is the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.Building an enterprise-ready SaaS app? WorkOS has got you covered with easy-to-integrate APIs for SAML, SCIM, and more. Start now at https://bit.ly/WorkOS-Turpentine-Network–Links:Jetson's website: https://sites.bu.edu/jetson/ Paper: Ambulance Taxis by Jetson Leder-Luis Ambulance Taxis: The Impact of Regulation and Litigation on Health Care Fraud Paper: Did FinTech Lenders Facilitate PPP Fraud by John M Griffin, Samuel Kruger, Prateek Mahajan https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3906395Paper: Is Fraud Contagious by John M Griffin https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4599654Paper: Unemployment Insurance Fraud in the Debit Card Market by Jetson Leder-Luis with Umang Khetan, Yunrong Zhou and Jialan Wang  https://www.nber.org/papers/w32527 Book: Recoding America by Jennifer Pahlka https://www.amazon.com/Recoding-America-Government-Failing-Digital-ebook/dp/B0B8644ZGYPodcast: Jennifer Pahlka on Ezra Kleinhttps://open.spotify.com/episode/2VPErCIG1pbcnYFBojrKcG Podcast: Dave Guarino on Odd Lots https://open.spotify.com/episode/43HI3NuxZGsl13U365xZxa Bits About Money https://www.bitsaboutmoney.com/Related Complex Systems episodes: Dan Davies and Dave Guarino's episodes–Twitter:@patio11@jetson_econ–Timestamps:(00:00) Intro(02:04) Overview of Medicare/Medicaid(02:41) Estimated $50-100B fraud losses(03:31) Taxonomy of healthcare fraud(08:04) Hospice fraud; potentially saved money(16:33) A $10 billion asterisk: ambulances for dialysis patients(21:30) Sponsors: Work OS | Check(24:45) Complexities of fraud detection and prevention(39:02) Pandemic fraud (41:34) Findings on PPP loans fraud(48:19) Supply chain of fraud(52:06) Policy and enforcement challenges(01:08:32) Whistleblower programs (01:14:54) Final thoughts–Complex Systems is part of the Turpentine podcast network. Turpentine also has a social network for top founders and execs: https://www.turpentinenetwork.com/

In this episode, Patrick McKenzie (patio11) is joined by Moses Kagan, co-founder of Adaptive Realty, ReSeed, and Reconvene. Their deep dive into real estate investing and property management covers the different classes of apartment buildings, the challenges of property management, and the complexities of financing structures in the industry. They examine how the internet has transformed capital raising, the significance of cap rates, the effects of supply and demand on property values, and a comparison of the real estate markets in different major cities. The episode is in many ways a follow up to Patrick’s conversation with Jim McKenzie and offers a window into the opaque world of real estate investment.–Full transcript available here: https://www.complexsystemspodcast.com/episodes/real-estate-moses-kagan/–Sponsor: CheckCheck is the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.–Links:Moses Kagan's blog: https://kagansblog.com/Reconvene Conference: https://www.reconvene.com/Seth Godin’s book Permission Marketing: https://www.amazon.com/Permission-Marketing-Strangers-Friends-Customers/dp/0684856360Bits About Money: https://www.bitsaboutmoney.com/Jim McKenzie on Complex Systems: https://open.spotify.com/episode/6ocJirzGTStuf0K9ITM21X–Timestamps:(00:00) Intro(00:25) Understanding the stigma of the maligned landlord(04:07) Landlord spectrum: from mom-and-pops to institutional players(05:29) Inside Adaptive Realty(06:13) Owner vs. property manager(07:34) Challenges and complexities of property management(15:00) Capital stacks and loans(18:17) Sponsor: Check(26:25) The role of banks and underwriting in real estate(40:28) Federal subsidies and small scale landlords(44:26) Understanding commercial real estate classes(46:20) Challenges of Class C assets(47:13) Explaining cap rates(52:20) Raising equity for real estate deals(54:16) The syndication process(56:30) The role of brokers and execution risk(01:00:52) Legal structures and documentation(01:10:52) The power of networking and reputation(01:23:14) The impact of supply and demand on rents(01:28:03) Wrap