1 00:00:02,750 --> 00:00:19,020 Speaker 1: Bloomberg Audio Studios. Podcasts. Radio. News. Hello and welcome to 2 00:00:19,060 --> 00:00:22,970 Speaker 1: another episode of the Odd Lodge Podcast. I'm Joe Weisenthal. 3 00:00:23,230 --> 00:00:24,190 Speaker 2: And I'm Tracy Alloway. 4 00:00:24,760 --> 00:00:26,960 Speaker 1: Well, Tracy, I'm glad we did that episode that came 5 00:00:27,020 --> 00:00:30,280 Speaker 1: out Tuesday with Nate Silver because he did go on 6 00:00:30,340 --> 00:00:32,620 Speaker 1: record as like there's going to be a blue wave. 7 00:00:33,250 --> 00:00:35,170 Speaker 1: And it turns out that was actually just this. It 8 00:00:35,190 --> 00:00:37,930 Speaker 1: was correct in some sense, depending on how you measure wave. 9 00:00:38,370 --> 00:00:40,669 Speaker 1: But it was just like, you know, it was a tsunami. Yeah. 10 00:00:40,710 --> 00:00:43,120 Speaker 1: Maybe like maybe bigger than a tsunami. 11 00:00:43,729 --> 00:00:47,309 Speaker 2: It was seismic, for sure. So as everyone knows by now, 12 00:00:47,350 --> 00:00:50,989 Speaker 2: the Democrats took both the House and the Senate. Going 13 00:00:51,080 --> 00:00:53,540 Speaker 2: into it, as we discussed with Nate, I think most 14 00:00:53,580 --> 00:00:55,000 Speaker 2: people thought there was a good chance they were going 15 00:00:55,020 --> 00:00:57,900 Speaker 2: to take control of Congress, right? 16 00:00:57,960 --> 00:00:59,060 Speaker 1: The House was seen as a lock. 17 00:00:59,240 --> 00:01:01,670 Speaker 2: The House was seen as a lock. But the big 18 00:01:01,710 --> 00:01:03,630 Speaker 2: question was the Senate, which was like more of a 19 00:01:03,690 --> 00:01:07,410 Speaker 2: coin flip. But Nate... Nate thought the Senate was actually 20 00:01:07,610 --> 00:01:08,649 Speaker 2: looking pretty good. 21 00:01:08,510 --> 00:01:09,170 Speaker 1: For the Democrats. 22 00:01:09,209 --> 00:01:09,990 Speaker 3: He was right. 23 00:01:10,010 --> 00:01:11,810 Speaker 1: He pushed back. I remember you're like, so the Senate 24 00:01:11,830 --> 00:01:13,730 Speaker 1: is more of a coin flip. He's like, no, it's not. 25 00:01:13,810 --> 00:01:16,229 Speaker 1: It feels like a coin flip in your head. But 26 00:01:16,270 --> 00:01:18,270 Speaker 1: he was like, they just say it's on a coin flip. 27 00:01:18,310 --> 00:01:20,890 Speaker 1: Turned out it was nothing close to. Turned out it 28 00:01:20,910 --> 00:01:22,330 Speaker 1: was nothing close to a coin flip. 29 00:01:22,450 --> 00:01:24,850 Speaker 2: So obviously the big question now for both markets and 30 00:01:24,870 --> 00:01:29,380 Speaker 2: the economy is what changes under Democrat control? What can 31 00:01:29,420 --> 00:01:33,640 Speaker 2: Trump still do? Of course, he posted that photo of 32 00:01:33,700 --> 00:01:35,900 Speaker 2: his veto hat on Truth Social. 33 00:01:35,940 --> 00:01:36,539 Speaker 3: You saw that, right? 34 00:01:36,560 --> 00:01:38,920 Speaker 2: So the implication is that he can veto anything that 35 00:01:38,959 --> 00:01:41,410 Speaker 2: the Democrats try to push through. He still has a 36 00:01:41,440 --> 00:01:44,990 Speaker 2: lot of executive order power for things like tariffs. So 37 00:01:45,170 --> 00:01:48,260 Speaker 2: how much does this really change? The other thing... So 38 00:01:48,300 --> 00:01:51,280 Speaker 2: the expectation going in to the midterms was that if 39 00:01:51,340 --> 00:01:54,360 Speaker 2: Democrats actually win, this would be terrible for stocks, right? 40 00:01:54,380 --> 00:01:57,800 Speaker 2: I know. And you saw Michael Hartnett from Bank of America. 41 00:01:58,040 --> 00:01:59,900 Speaker 2: He said he thought the S & P 500 could 42 00:01:59,980 --> 00:02:04,520 Speaker 2: fall 10% if Democrats win. Yeah, apparently, which turned out 43 00:02:04,560 --> 00:02:06,920 Speaker 2: to be wrong because we saw a Democratic victory. And 44 00:02:06,940 --> 00:02:08,810 Speaker 2: I think the S & P 500 was up like 45 00:02:09,070 --> 00:02:10,530 Speaker 2: one and a half percent yesterday. 46 00:02:10,650 --> 00:02:13,309 Speaker 1: Yeah, it was. But OK, but now we're recording this 47 00:02:13,350 --> 00:02:14,110 Speaker 1: November 5th. 48 00:02:14,130 --> 00:02:14,350 Speaker 2: Yeah. 49 00:02:15,090 --> 00:02:17,670 Speaker 1: And it's 938 and the NASDAQ is getting hammered. So 50 00:02:17,710 --> 00:02:21,130 Speaker 1: what is true, and it was like isolated in the 51 00:02:21,169 --> 00:02:25,910 Speaker 1: day after like SpaceX and Tesla, which have as companies 52 00:02:25,970 --> 00:02:28,290 Speaker 1: put a lot of money, both in Texas and red 53 00:02:28,330 --> 00:02:31,829 Speaker 1: Texas specifically, they got hit pretty hard. Some of these 54 00:02:31,889 --> 00:02:35,989 Speaker 1: new clouds that have like dreams of expanding their footprint, 55 00:02:36,050 --> 00:02:39,310 Speaker 1: et cetera, got hit pretty hard. Now it was kind 56 00:02:39,350 --> 00:02:41,799 Speaker 1: of a mix. I don't know. Anyway, the other thing, 57 00:02:41,840 --> 00:02:44,799 Speaker 1: by the way, that is relevant of course, is any future. 58 00:02:45,260 --> 00:02:46,940 Speaker 1: Fed governors in our world. 59 00:02:47,030 --> 00:02:47,190 Speaker 2: Yep. 60 00:02:47,410 --> 00:02:49,230 Speaker 1: In our world, you know, if there are any Fed 61 00:02:49,270 --> 00:02:52,170 Speaker 1: governor appointments coming up. Anyway, to talk about all this, 62 00:02:52,710 --> 00:02:55,030 Speaker 1: very excited to say, welcoming back to the show, perfect guest, 63 00:02:55,110 --> 00:02:58,960 Speaker 1: because he knows both worlds. Skanda Amarnath, Executive Director of 64 00:02:59,020 --> 00:03:02,660 Speaker 1: Employee America. Actually, all three worlds, because in addition to 65 00:03:02,680 --> 00:03:06,100 Speaker 1: knowing macro and politics, You're also sort of a markets junkie, 66 00:03:06,160 --> 00:03:08,540 Speaker 1: but you don't really talk about that as much publicly. 67 00:03:08,840 --> 00:03:11,250 Speaker 2: We'll get you to do equity recommendations. 68 00:03:11,260 --> 00:03:18,190 Speaker 1: We'll get Skanda's five lockpicks for Q4. No, but for real, 69 00:03:18,410 --> 00:03:20,589 Speaker 1: let's stick just with the politics for a second. We're 70 00:03:20,630 --> 00:03:24,790 Speaker 1: recording this November 5th, so we all know what happened. 71 00:03:24,870 --> 00:03:28,710 Speaker 1: But are there any dimensions of the earthquake tidal wave 72 00:03:29,090 --> 00:03:32,650 Speaker 1: extinction level event for the GOP that stand out for 73 00:03:32,690 --> 00:03:36,070 Speaker 1: you in some way? I mean, I think people were missing. 74 00:03:36,690 --> 00:03:40,150 Speaker 3: Yeah, I think that the Senate itself, this is more structural, 75 00:03:40,210 --> 00:03:43,660 Speaker 3: just really matters for the American government. It is sort 76 00:03:43,690 --> 00:03:46,500 Speaker 3: of the institution that shapes who serves on the Supreme Court. 77 00:03:46,740 --> 00:03:49,339 Speaker 3: It's the institution that shapes who serves on the Fed board. 78 00:03:49,540 --> 00:03:51,540 Speaker 3: And for a long time, there's been a pretty structural 79 00:03:51,560 --> 00:03:52,800 Speaker 3: advantage for the GOP. 80 00:03:52,820 --> 00:03:53,800 Speaker 1: In the Senate. 81 00:03:53,940 --> 00:03:54,180 Speaker 2: Yes. 82 00:03:54,520 --> 00:03:56,720 Speaker 3: And maybe that advantage is still true and this blue 83 00:03:56,820 --> 00:03:59,000 Speaker 3: tsunami will be a one-off. But I think you at 84 00:03:59,030 --> 00:04:02,190 Speaker 3: least see for Democrats, there is a path ahead for 85 00:04:02,230 --> 00:04:06,150 Speaker 3: how they could sustainably Stay competitive in the Senate. That's 86 00:04:06,190 --> 00:04:09,340 Speaker 3: not reaching to get to 50 to 51 votes. I 87 00:04:09,360 --> 00:04:10,860 Speaker 3: think that can change a lot of different things. 88 00:04:11,060 --> 00:04:13,820 Speaker 1: And the structural advantage for the GOP and the Senate 89 00:04:13,920 --> 00:04:16,440 Speaker 1: comes down to the fact that if you take a 90 00:04:16,500 --> 00:04:20,830 Speaker 1: state like Kansas or Iowa or whatever, they haven't seen 91 00:04:20,850 --> 00:04:24,390 Speaker 1: a lot of population growth. Their share of like is outside. 92 00:04:24,410 --> 00:04:27,210 Speaker 1: But they still get two votes, just like New York. 93 00:04:27,750 --> 00:04:29,750 Speaker 1: And if there's ever a time when there's down to 94 00:04:29,760 --> 00:04:33,430 Speaker 1: like 100 people left in Wyoming, they're probably the assumption 95 00:04:33,550 --> 00:04:36,030 Speaker 1: is going to be Republicans. And they're going to have 96 00:04:36,870 --> 00:04:39,470 Speaker 1: infinitely more influence over the rest of the country than 97 00:04:39,490 --> 00:04:40,290 Speaker 1: New York. 98 00:04:40,850 --> 00:04:42,469 Speaker 3: The Senate is about the number of states, not the 99 00:04:42,490 --> 00:04:43,089 Speaker 3: number of people. 100 00:04:43,510 --> 00:04:45,589 Speaker 2: And Corrin doesn't vote, as they say. 101 00:04:45,870 --> 00:04:50,290 Speaker 3: Except in the Midwest. I would say what Bob Dole 102 00:04:50,310 --> 00:04:53,160 Speaker 3: had some quote about basically. way more ag states than 103 00:04:53,180 --> 00:04:55,480 Speaker 3: there are any other kind of state. And that's going 104 00:04:55,500 --> 00:04:58,280 Speaker 3: to always count more. I think that has some implications 105 00:04:58,360 --> 00:05:01,160 Speaker 3: for sort of how kind of power is shaped from here. 106 00:05:01,320 --> 00:05:03,160 Speaker 3: For Democrats, there's also just a sense of, oh, this 107 00:05:03,200 --> 00:05:05,380 Speaker 3: was actually possible. I don't think Democrats expected to win 108 00:05:05,420 --> 00:05:08,700 Speaker 3: in South Carolina unless they were in the Annie Andrews campaign, maybe. 109 00:05:08,760 --> 00:05:10,920 Speaker 3: I don't think they expected to win in Mississippi. And 110 00:05:10,940 --> 00:05:12,599 Speaker 3: it looks like at least that's going to be coming 111 00:05:12,740 --> 00:05:15,200 Speaker 3: really down to the wire. So it just shows that 112 00:05:15,500 --> 00:05:18,460 Speaker 3: there's different possibilities, which will also kind of shape how 113 00:05:18,500 --> 00:05:22,230 Speaker 3: they govern, what kind of map they want to optimize 114 00:05:22,270 --> 00:05:25,120 Speaker 3: towards in subsequent elections, which may just change the agenda 115 00:05:25,150 --> 00:05:25,620 Speaker 3: to some degree. 116 00:05:26,140 --> 00:05:28,680 Speaker 2: Okay. So the Senate is important, but I think the 117 00:05:29,100 --> 00:05:32,359 Speaker 2: consensus assumption is still there's going to be some form 118 00:05:32,420 --> 00:05:35,920 Speaker 2: of political gridlock because, for instance, the Democrats don't have 119 00:05:36,000 --> 00:05:38,870 Speaker 2: the 60 votes they need to push through a Republican 120 00:05:38,900 --> 00:05:41,870 Speaker 2: filibuster and stuff like that. On the other hand, I 121 00:05:41,890 --> 00:05:45,409 Speaker 2: think if we learned anything from Tuesday's elections, it's that 122 00:05:46,050 --> 00:05:49,230 Speaker 2: Trump seems to be politically toxic now on both the 123 00:05:49,270 --> 00:05:52,450 Speaker 2: Republican and the Democratic side. So maybe there's a potential 124 00:05:52,550 --> 00:05:54,870 Speaker 2: to come together on like a few. 125 00:05:54,710 --> 00:05:58,750 Speaker 3: Issues at least. Yes, it's not. In general, divided government 126 00:05:58,770 --> 00:06:01,090 Speaker 3: tends to be gridlock, right? So I think it means 127 00:06:01,310 --> 00:06:03,790 Speaker 3: it's harder to pass policy. It becomes harder to pass 128 00:06:03,850 --> 00:06:06,650 Speaker 3: policy in a crisis. So if you think about it, 129 00:06:06,720 --> 00:06:09,960 Speaker 3: like we're talking about this in 2018, right? We were 130 00:06:10,000 --> 00:06:13,020 Speaker 3: talking about, OK, there was the midterms effect, but Trump 131 00:06:13,040 --> 00:06:15,830 Speaker 3: was kind of going forward with his kind of trade war, 132 00:06:15,890 --> 00:06:20,390 Speaker 3: trade conflict issues. Fast forward 18 months later, and you 133 00:06:20,430 --> 00:06:23,430 Speaker 3: have sort of the CARES Act issues from COVID. It 134 00:06:23,450 --> 00:06:26,150 Speaker 3: just required a lot of coordination. Kind of worked out 135 00:06:26,210 --> 00:06:28,350 Speaker 3: then in terms of at least Congress passed a lot 136 00:06:28,370 --> 00:06:30,770 Speaker 3: of different things. I'm not sure how it's going to 137 00:06:30,790 --> 00:06:32,570 Speaker 3: play out this time, right? Because it does seem like 138 00:06:32,589 --> 00:06:36,500 Speaker 3: there's clearly, I said, the president's quite toxic. How polarizes it? 139 00:06:36,690 --> 00:06:40,090 Speaker 3: Are Republicans willing to peel off? One thing that stood 140 00:06:40,130 --> 00:06:42,190 Speaker 3: out from this election cycle was you could point to 141 00:06:42,300 --> 00:06:45,330 Speaker 3: two very tangible things where Policy really did matter, right? 142 00:06:45,350 --> 00:06:48,930 Speaker 3: You could say tariffs clearly identifiably moved prices and the 143 00:06:48,970 --> 00:06:52,370 Speaker 3: war clearly had an effect. How that does, do any 144 00:06:52,430 --> 00:06:56,010 Speaker 3: Republicans actually change their sort of approach to the president? 145 00:06:56,650 --> 00:06:59,000 Speaker 3: I suspect that it's hard in the context of war 146 00:06:59,060 --> 00:07:02,360 Speaker 3: to change a sort of executive action. Tariffs are more 147 00:07:02,380 --> 00:07:04,460 Speaker 3: interesting because you're talking, we're talking about ag states. They're 148 00:07:04,480 --> 00:07:06,440 Speaker 3: probably the ones who really like really holding the bag 149 00:07:06,480 --> 00:07:09,320 Speaker 3: in terms of the cost of tariffs and sort of 150 00:07:09,339 --> 00:07:10,840 Speaker 3: how they were executed by the president. 151 00:07:11,170 --> 00:07:15,180 Speaker 2: But tariffs are being pushed through now purely by executive order. 152 00:07:15,310 --> 00:07:17,680 Speaker 2: So how much power does anyone else have to change them? 153 00:07:17,780 --> 00:07:20,500 Speaker 3: And the question is, are there Republicans in the ag states? 154 00:07:20,520 --> 00:07:22,300 Speaker 3: There's still plenty of them, right? And I'm talking about 155 00:07:22,340 --> 00:07:25,200 Speaker 3: the middle of the country, west of the Mississippi, who clearly, 156 00:07:25,340 --> 00:07:27,980 Speaker 3: I mean, I don't think John Thune really likes aggressive tariffs. 157 00:07:28,080 --> 00:07:30,780 Speaker 3: It has a lot of costs for farmers and for 158 00:07:30,800 --> 00:07:33,250 Speaker 3: the ag industry. Are you able to peel off some 159 00:07:33,290 --> 00:07:36,110 Speaker 3: of those to actually work on restricting sort of how 160 00:07:36,150 --> 00:07:39,740 Speaker 3: much power the executive branch has over trade policy? These 161 00:07:39,800 --> 00:07:42,060 Speaker 3: are all, again, they're all quite reaches because it's going 162 00:07:42,080 --> 00:07:46,060 Speaker 3: to require pulling off an additional set of Republicans to 163 00:07:46,100 --> 00:07:49,660 Speaker 3: work with Democrats and work against the president. That's, again, 164 00:07:49,680 --> 00:07:52,900 Speaker 3: I'd say more tail scenario considerations. I'm sure Democrats will 165 00:07:52,930 --> 00:07:55,429 Speaker 3: be happy to run on the idea that the president 166 00:07:55,490 --> 00:07:59,110 Speaker 3: is raising costs through tariffs. But, I mean, if you 167 00:07:59,130 --> 00:08:02,370 Speaker 3: think about where policy can change, it would require quite 168 00:08:02,390 --> 00:08:06,150 Speaker 3: a substantial amount of coordination with other Republicans in the Senate. 169 00:08:06,350 --> 00:08:09,250 Speaker 1: Just from a numbers thing, I mean... I was in 170 00:08:09,290 --> 00:08:11,670 Speaker 1: a chat with you on Tuesday night and you're like, 171 00:08:12,030 --> 00:08:14,440 Speaker 1: this is historic. Like what was the early on thing? 172 00:08:14,450 --> 00:08:16,400 Speaker 1: You're like, oh, this is like, we're actually talking about 173 00:08:16,420 --> 00:08:17,640 Speaker 1: a history making election. 174 00:08:17,840 --> 00:08:19,760 Speaker 3: Yeah. I think when you get early returns, the thing 175 00:08:19,780 --> 00:08:23,260 Speaker 3: you want to look for is county comparisons where you 176 00:08:23,300 --> 00:08:25,210 Speaker 3: actually have all the vote in, not just the early vote, 177 00:08:25,270 --> 00:08:28,190 Speaker 3: because who votes early changes the cycle to cycle. But 178 00:08:28,210 --> 00:08:30,050 Speaker 3: when you actually get those like first few counties that 179 00:08:30,330 --> 00:08:33,640 Speaker 3: whether it's in Florida or Kentucky or Indiana. And you 180 00:08:33,660 --> 00:08:36,059 Speaker 3: were seeing in some cases, obviously the Florida, some of 181 00:08:36,100 --> 00:08:39,840 Speaker 3: the swings were narrower relative to 2024, something closer to 182 00:08:40,520 --> 00:08:43,220 Speaker 3: five to eight points. But then you saw like outlier 183 00:08:43,280 --> 00:08:45,360 Speaker 3: changes in a lot of other counties where it was 184 00:08:45,800 --> 00:08:48,140 Speaker 3: closer to 20 points. And then it was okay. If 185 00:08:48,160 --> 00:08:51,240 Speaker 3: it's 20 point swing from 2024 to 2026 in the 186 00:08:51,280 --> 00:08:54,480 Speaker 3: same house race. Yeah. Those might be outliers, but it's 187 00:08:54,520 --> 00:08:56,679 Speaker 3: telling you like, this is the distribution, right? And that 188 00:08:56,920 --> 00:08:59,140 Speaker 3: distribution is there's like a long tail of outliers on 189 00:08:59,160 --> 00:09:01,819 Speaker 3: them side. You're going to see like pretty big swings. 190 00:09:02,300 --> 00:09:04,040 Speaker 3: In the end, what Texas, it seems like it's going 191 00:09:04,059 --> 00:09:08,740 Speaker 3: to be close to double digits for. I've said it, but, you. 192 00:09:08,679 --> 00:09:11,850 Speaker 1: Know, I've known a lot of people who work in 193 00:09:11,910 --> 00:09:14,730 Speaker 1: Texas politics and they had like dream of like, well, 194 00:09:14,770 --> 00:09:17,870 Speaker 1: maybe Texas will be a purple state one day. Oh, 195 00:09:17,920 --> 00:09:19,860 Speaker 1: I see you wore a purple sweater today, by the way. 196 00:09:19,900 --> 00:09:24,120 Speaker 1: Very bipartisan. No, no, like, and I used to just 197 00:09:24,160 --> 00:09:26,770 Speaker 1: make fun of those people. That was so naive. And 198 00:09:26,809 --> 00:09:29,170 Speaker 1: then to wake up, and I know so many, and 199 00:09:29,190 --> 00:09:31,610 Speaker 1: it's like, it's not even a purple state. It's like 200 00:09:31,670 --> 00:09:35,260 Speaker 1: a deep blue state now. I mean, the scale, it's a, 201 00:09:35,309 --> 00:09:39,079 Speaker 1: what's that bomb where people, the new, like, A neutron bomb? 202 00:09:39,140 --> 00:09:39,460 Speaker 3: Yeah, yeah. 203 00:09:39,640 --> 00:09:42,380 Speaker 1: Where there's not even any destruction. It just, the people 204 00:09:42,400 --> 00:09:44,740 Speaker 1: just disappear. It's everyone. 205 00:09:44,800 --> 00:09:47,360 Speaker 2: It's like, and it's also not just the things that 206 00:09:47,380 --> 00:09:50,870 Speaker 2: you hear about. It's like the comptroller, the lieutenant governor. 207 00:09:50,880 --> 00:09:54,390 Speaker 1: The education board. They're going to like change the University 208 00:09:54,410 --> 00:09:57,290 Speaker 1: of Texas regents because someone just told me like that 209 00:09:57,350 --> 00:09:59,570 Speaker 1: person's coming out for retirement and Hinojosa is going to 210 00:09:59,590 --> 00:10:02,939 Speaker 1: get to work. appoint his replacement. Like the entire state 211 00:10:03,420 --> 00:10:07,819 Speaker 1: in one night essentially goes like hard party rule. Like 212 00:10:08,020 --> 00:10:10,400 Speaker 1: no one like, look, I know like the purple Texas 213 00:10:10,420 --> 00:10:12,900 Speaker 1: stuff has been like for years. But now it's like 214 00:10:12,920 --> 00:10:15,400 Speaker 1: you wake up one morning and Texas is not just like, 215 00:10:15,440 --> 00:10:18,040 Speaker 1: at least for two years, it's not just like a 216 00:10:18,320 --> 00:10:23,440 Speaker 1: blue state, but like a hardcore. It's really weird. Like 217 00:10:23,500 --> 00:10:25,329 Speaker 1: everyone is just like, this is like a very surreal 218 00:10:25,380 --> 00:10:25,970 Speaker 1: thing to see. 219 00:10:26,150 --> 00:10:28,270 Speaker 3: Yeah, I mean, I think that the scale of the 220 00:10:28,830 --> 00:10:31,949 Speaker 3: victory itself points to, there's just like newer possibilities in 221 00:10:31,970 --> 00:10:33,650 Speaker 3: a lot of these states. And when you kind of 222 00:10:33,670 --> 00:10:36,890 Speaker 3: think about Texas, when I think about what the business 223 00:10:37,050 --> 00:10:39,830 Speaker 3: class sort of corporate America tends to tout certain states 224 00:10:39,890 --> 00:10:42,200 Speaker 3: is like, this is the state you want to be. And, like, 225 00:10:42,260 --> 00:10:44,079 Speaker 3: obviously it was Texas for a long time. Wait, tell 226 00:10:44,120 --> 00:10:47,370 Speaker 3: us about this business court in Texas. No, this is important. 227 00:10:47,610 --> 00:10:48,750 Speaker 1: We'll have to do a separate episode. 228 00:10:48,790 --> 00:10:50,469 Speaker 3: I think you'll probably need to get a separate episode. 229 00:10:50,590 --> 00:10:51,790 Speaker 1: What's the story here? 230 00:10:51,809 --> 00:10:53,970 Speaker 3: So Texas has created a new business court, right? And 231 00:10:54,030 --> 00:10:54,469 Speaker 3: there's a lot of. 232 00:10:54,790 --> 00:10:56,350 Speaker 2: We did an episode on this. Oh, yeah. 233 00:10:56,410 --> 00:10:58,729 Speaker 1: This is a compete with the Delaware. Yeah. 234 00:10:58,750 --> 00:11:01,429 Speaker 3: So there's a lot of corporate law competition in terms 235 00:11:01,500 --> 00:11:03,480 Speaker 3: of where you want to set up your corporation. And 236 00:11:03,500 --> 00:11:06,360 Speaker 3: there have been some lawsuits in Delaware that have rankled 237 00:11:06,440 --> 00:11:08,420 Speaker 3: certain founders to say, oh, I have to do all 238 00:11:08,440 --> 00:11:11,000 Speaker 3: this for shareholders. and I find a more friendly place 239 00:11:11,010 --> 00:11:11,580 Speaker 3: to incorporate. 240 00:11:11,600 --> 00:11:14,040 Speaker 2: This was supposedly one of the reasons why Elon Musk 241 00:11:14,100 --> 00:11:14,640 Speaker 2: moved to Texas. 242 00:11:14,660 --> 00:11:17,780 Speaker 3: That is right. And so Texas has created a new 243 00:11:17,820 --> 00:11:20,740 Speaker 3: business court also to kind of support that. And I 244 00:11:21,080 --> 00:11:23,760 Speaker 3: think it's like all the statewide races Dems won. So 245 00:11:25,040 --> 00:11:27,420 Speaker 3: it's a little farcical where I think that is probably, 246 00:11:27,580 --> 00:11:29,540 Speaker 3: this is the place where I feel like the surprise 247 00:11:29,600 --> 00:11:32,060 Speaker 3: is probably in some ways most underrated. It's like, oh, 248 00:11:32,520 --> 00:11:34,579 Speaker 3: this guy like, oh, Texas is perfect. Texas is the 249 00:11:34,620 --> 00:11:37,600 Speaker 3: perfect business environment. It's like, well, Political conditions can change, 250 00:11:37,620 --> 00:11:38,500 Speaker 3: and it clearly wasn't that popular. 251 00:11:38,559 --> 00:11:41,699 Speaker 1: And California just rejected the wealth tax, and didn't they 252 00:11:41,720 --> 00:11:44,400 Speaker 1: ban all wealth taxes going forward? Like, wasn't there two 253 00:11:45,620 --> 00:11:46,980 Speaker 1: measures on the ballot? 254 00:11:47,040 --> 00:11:49,220 Speaker 3: I'm not as familiar with the specifics of the California... 255 00:11:48,920 --> 00:11:50,700 Speaker 3: I know that the wealth tax didn't pass. Clearly, there 256 00:11:50,720 --> 00:11:50,910 Speaker 3: was a lot. 257 00:11:50,920 --> 00:11:52,959 Speaker 1: I think they also... I could be wrong. I think 258 00:11:52,980 --> 00:11:55,680 Speaker 1: they also banned future wealth taxes. 259 00:11:56,340 --> 00:11:58,840 Speaker 3: I think there were probably some constitutional changes, I'm guessing, 260 00:11:59,450 --> 00:12:02,270 Speaker 3: but it is... Yeah, I could be wrong. Clearly, that 261 00:12:02,309 --> 00:12:04,760 Speaker 3: was very... controversial for a lot of reasons and a 262 00:12:04,760 --> 00:12:06,400 Speaker 3: lot of money thrown at it, even in a state 263 00:12:06,420 --> 00:12:08,819 Speaker 3: that is as blue as California, where it's basically Dem 264 00:12:08,840 --> 00:12:11,400 Speaker 3: versus Dem in most races. I think these are, it's 265 00:12:12,000 --> 00:12:14,320 Speaker 3: just telling that the state, the state landscape just looks 266 00:12:14,440 --> 00:12:17,260 Speaker 3: a lot different for sort of what corporate America perceived. 267 00:12:17,800 --> 00:12:19,800 Speaker 3: And when you think about the states that are kind 268 00:12:19,830 --> 00:12:22,790 Speaker 3: of the leaders of kind of data center construction, AI, 269 00:12:23,290 --> 00:12:26,590 Speaker 3: it's like, actually they're all, I think, now controlled by 270 00:12:26,630 --> 00:12:30,550 Speaker 3: democratic governors. So if you think about Texas, Georgia, Pennsylvania, Ohio, Virginia, 271 00:12:32,980 --> 00:12:36,140 Speaker 3: even Wisconsin, the landscape has shifted in quite a way. 272 00:12:36,500 --> 00:12:40,450 Speaker 3: Most power-related data center construction kind of resides at the 273 00:12:40,470 --> 00:12:42,610 Speaker 3: state level, state and local, not federal. 274 00:12:43,270 --> 00:12:47,270 Speaker 1: Okay, so I'm just reading killmatters.org. So the billionaire tax failed, 275 00:12:47,550 --> 00:12:51,210 Speaker 1: but then there was a separate Proposition 42, which prohibits 276 00:12:51,309 --> 00:12:54,710 Speaker 1: new taxes on personal property, such as business holdings, intellectual property, 277 00:12:54,730 --> 00:12:57,940 Speaker 1: and financial assets. So this one was put on by 278 00:12:58,020 --> 00:13:01,020 Speaker 1: billionaires in the hopes that if the wealth tax passed, 279 00:13:01,040 --> 00:13:03,859 Speaker 1: that this one would cancel it out. And this one 280 00:13:04,059 --> 00:13:07,100 Speaker 1: is also winning by a wide margin. So California might 281 00:13:07,140 --> 00:13:08,939 Speaker 1: be just like the best place to do business. 282 00:13:09,720 --> 00:13:29,460 Speaker 2: Yeah. Can we talk more about data centers? So you 283 00:13:29,500 --> 00:13:33,420 Speaker 2: mentioned things shifting very quickly, like literally overnight for a 284 00:13:33,460 --> 00:13:35,900 Speaker 2: lot of states. And one of the headlines on the 285 00:13:35,940 --> 00:13:39,100 Speaker 2: Bloomberg terminal this morning is open AI to change how 286 00:13:39,160 --> 00:13:43,260 Speaker 2: it handles data center efforts after outcry. So it feels 287 00:13:43,300 --> 00:13:45,520 Speaker 2: like the change is kind of filtering down to a 288 00:13:45,559 --> 00:13:47,580 Speaker 2: corporate level pretty quickly. So they're not going to do 289 00:13:47,679 --> 00:13:50,600 Speaker 2: NDAs anymore. They're not going to have actual residents pay 290 00:13:50,640 --> 00:13:53,579 Speaker 2: for electricity of the data centers and things like that. 291 00:13:54,260 --> 00:13:56,020 Speaker 2: The obvious question is, are we just going to see 292 00:13:56,040 --> 00:13:58,000 Speaker 2: a big slowdown in data center construction? 293 00:13:58,460 --> 00:14:00,920 Speaker 3: I suspect what will matter most there is economics more 294 00:14:00,940 --> 00:14:04,130 Speaker 3: than the politics. And I do think that we were seeing, 295 00:14:04,750 --> 00:14:07,010 Speaker 3: we're definitely seeing whispers and whiffs of this before the 296 00:14:07,050 --> 00:14:10,710 Speaker 3: election itself. Oh, there's like, markets aren't always rewarding more CapEx. 297 00:14:11,170 --> 00:14:13,189 Speaker 3: How useful is this? Oh, now we start to see 298 00:14:13,290 --> 00:14:16,540 Speaker 3: the S1 from Anthropic. We haven't yet seen that on OpenAI. 299 00:14:16,559 --> 00:14:18,219 Speaker 3: It's like, this is a lot of investment. It's a 300 00:14:18,240 --> 00:14:20,400 Speaker 3: lot of risk. Do we just kind of keep greenlighting 301 00:14:20,460 --> 00:14:23,300 Speaker 3: it because it's progressing the frontier? Or is there actually like, 302 00:14:23,580 --> 00:14:25,760 Speaker 3: because CapEx is also a burden. So I think we're 303 00:14:25,780 --> 00:14:27,479 Speaker 3: seeing some of that, some of the rewarding of capital 304 00:14:27,520 --> 00:14:32,300 Speaker 3: efficiency over just raw CapEx. Nevertheless, I feel like this 305 00:14:32,360 --> 00:14:33,700 Speaker 3: is going to be a bit of a sea change 306 00:14:33,720 --> 00:14:36,340 Speaker 3: in terms of the politics now where, yeah, look, if 307 00:14:36,400 --> 00:14:39,580 Speaker 3: you take five or six governors and they all are 308 00:14:39,600 --> 00:14:42,980 Speaker 3: of the same party, could presumably even coordinate their own 309 00:14:43,040 --> 00:14:46,350 Speaker 3: efforts if they really wanted to. That sort of changes 310 00:14:46,490 --> 00:14:49,280 Speaker 3: how easy it is to do business For a long time, 311 00:14:49,370 --> 00:14:50,670 Speaker 3: even in a lot of blue states, there were like 312 00:14:50,690 --> 00:14:52,810 Speaker 3: a lot of tax breaks for data centers. And it 313 00:14:52,830 --> 00:14:53,930 Speaker 3: was sort of seen as like, oh, we want to 314 00:14:53,950 --> 00:14:57,450 Speaker 3: invite this economic activity. It's very good. And at least 315 00:14:57,510 --> 00:15:01,050 Speaker 3: for the past 12 months, it got super toxic in 316 00:15:01,090 --> 00:15:03,490 Speaker 3: terms of politically. That might not be the case going forward, 317 00:15:03,570 --> 00:15:05,010 Speaker 3: or at least there may be a better path ahead. 318 00:15:05,670 --> 00:15:07,820 Speaker 3: But yeah, clearly there are new variables for a lot 319 00:15:07,860 --> 00:15:10,420 Speaker 3: of the hyperscalers, a lot of sort of the companies 320 00:15:10,440 --> 00:15:12,220 Speaker 3: that are really kind of leading this sort of construction 321 00:15:12,240 --> 00:15:13,840 Speaker 3: effort to kind of grapple with that they did not 322 00:15:13,880 --> 00:15:17,300 Speaker 3: have to deal with before. Josh Shapiro and Greg Abbott 323 00:15:17,980 --> 00:15:20,460 Speaker 3: probably two of the most pro-data center governors I can 324 00:15:20,500 --> 00:15:22,980 Speaker 3: probably point to. I think they both made pivots, and 325 00:15:23,080 --> 00:15:25,700 Speaker 3: Josh Shapiro seems to have pulled off the pivot very successfully, 326 00:15:25,720 --> 00:15:27,580 Speaker 3: Greg Abbott less so. That might just be a function 327 00:15:27,600 --> 00:15:30,070 Speaker 3: of the macro environment more than data center messaging in 328 00:15:30,110 --> 00:15:32,690 Speaker 3: any way. But I think it's quite telling, right? That 329 00:15:33,090 --> 00:15:35,670 Speaker 3: even those who are the most favorable towards this type 330 00:15:35,690 --> 00:15:39,250 Speaker 3: of activity have had to read the room, recognize that 331 00:15:39,270 --> 00:15:42,470 Speaker 3: things have to change, at least to manage the electoral cycle. 332 00:15:42,590 --> 00:15:44,220 Speaker 3: And I think the question from here is, is there 333 00:15:44,290 --> 00:15:46,480 Speaker 3: an ability to rebrand any of this stuff, or will 334 00:15:46,500 --> 00:15:48,410 Speaker 3: there just be a focus on Maybe we don't need 335 00:15:48,430 --> 00:15:50,090 Speaker 3: to have such a heavy footprint. We can find other 336 00:15:50,130 --> 00:15:51,790 Speaker 3: ways to kind of do what we need to do 337 00:15:51,890 --> 00:15:55,680 Speaker 3: without attracting so much nimbyism or any kind of like 338 00:15:55,980 --> 00:15:58,200 Speaker 3: specific detractors in political space. 339 00:15:58,900 --> 00:16:05,520 Speaker 1: Maybe we short USD-MYR, short the dollar-ringgit pair on the 340 00:16:05,640 --> 00:16:08,990 Speaker 1: expectation that, well, yes, there will be the big semi, 341 00:16:09,110 --> 00:16:12,130 Speaker 1: there will be the big compute shortage that everyone is 342 00:16:12,190 --> 00:16:15,550 Speaker 1: expecting on a certain maybe medium timelines. It's just not 343 00:16:15,610 --> 00:16:17,500 Speaker 1: going to be built in the United, maybe it won't 344 00:16:17,540 --> 00:16:20,400 Speaker 1: be built in the United States, but there are other 345 00:16:20,440 --> 00:16:24,260 Speaker 1: jurisdictions where they're building a lot of data centers, including Malaysia. 346 00:16:24,440 --> 00:16:27,360 Speaker 1: It's also interesting, you know, there's, again, you sort of 347 00:16:27,380 --> 00:16:30,090 Speaker 1: hinted at it, the economics, this sort of theory. Well, 348 00:16:30,110 --> 00:16:32,710 Speaker 1: maybe it's good for just like the existing hyperscalers already 349 00:16:32,730 --> 00:16:36,730 Speaker 1: have pretty big footprints. Maybe like this means that implicitly 350 00:16:37,630 --> 00:16:40,410 Speaker 1: Meta gets to charge higher chip rents and it's a 351 00:16:40,810 --> 00:16:44,479 Speaker 1: Louisiana data center, et cetera. It feels like there's a 352 00:16:44,580 --> 00:16:47,350 Speaker 1: lot yet. There's a lot we don't know about. 353 00:16:47,470 --> 00:16:48,610 Speaker 3: Yeah, yeah. 354 00:16:49,070 --> 00:16:51,710 Speaker 2: Rental prices for H100s, by the way, went up yesterday. 355 00:16:51,770 --> 00:16:52,830 Speaker 1: Yeah, they're still going up. 356 00:16:52,870 --> 00:16:56,470 Speaker 3: Yeah, there's definitely, depending on where you sit in the 357 00:16:56,570 --> 00:17:00,820 Speaker 3: value chain, do you want maximal activity? Probably Jensen would 358 00:17:00,860 --> 00:17:02,180 Speaker 3: love maximum activity. 359 00:17:02,200 --> 00:17:03,940 Speaker 1: Yeah, Caterpillar would want maximal activity. 360 00:17:03,960 --> 00:17:06,980 Speaker 3: Yeah, all the picks and shovels, the chip designers and makers, 361 00:17:07,420 --> 00:17:09,490 Speaker 3: and then you have probably someone sitting in between is 362 00:17:09,790 --> 00:17:12,470 Speaker 3: like Anthropic and OpenAI are, they need to be at 363 00:17:12,490 --> 00:17:14,760 Speaker 3: the frontier, but they also know like ultimately they do 364 00:17:14,800 --> 00:17:18,119 Speaker 3: have to show some prospect of sustainable profitability. And then 365 00:17:18,140 --> 00:17:20,440 Speaker 3: you have the hyperscalers who probably, there's a little bit 366 00:17:20,460 --> 00:17:24,340 Speaker 3: of bootleggers and Baptists type dynamic where it's, we were 367 00:17:24,400 --> 00:17:26,740 Speaker 3: all spending in some level of an arms race here. 368 00:17:27,180 --> 00:17:29,060 Speaker 3: Do we have to keep spending? What was once the 369 00:17:29,100 --> 00:17:31,840 Speaker 3: best business model in the world, ads, is now one 370 00:17:31,880 --> 00:17:34,830 Speaker 3: that looks a lot more like an industrial. So I 371 00:17:34,850 --> 00:17:37,520 Speaker 3: think for them, it's The CapEx is a cost, even 372 00:17:37,560 --> 00:17:40,359 Speaker 3: if it's not showing up on EBITDA. It's showing up 373 00:17:40,480 --> 00:17:41,200 Speaker 3: in the D and the A. 374 00:17:41,500 --> 00:17:43,500 Speaker 2: No, and we definitely saw that shift in the market 375 00:17:43,520 --> 00:17:47,560 Speaker 2: because they've gone from spending cash on CapEx to borrowing 376 00:17:47,580 --> 00:17:50,340 Speaker 2: in the bond market. And now some of them, like Oracle, 377 00:17:50,400 --> 00:17:52,640 Speaker 2: are starting to issue new equities. So you can see 378 00:17:52,680 --> 00:17:55,200 Speaker 2: the pressure kind of filter through the cap stack for sure. 379 00:17:55,980 --> 00:17:58,310 Speaker 2: Let's talk about Fed, Jared. Going back to Senate control. 380 00:17:58,660 --> 00:18:01,070 Speaker 2: You mentioned the Senate and its importance to Fed appointments. 381 00:18:01,109 --> 00:18:02,530 Speaker 2: Can you talk a little bit more about that? 382 00:18:03,170 --> 00:18:07,330 Speaker 3: Yeah, so... In the case of before this election, or 383 00:18:07,390 --> 00:18:10,030 Speaker 3: I guess even now, it's a lot easier to get 384 00:18:10,070 --> 00:18:13,200 Speaker 3: your nominees through. Generally speaking, your own party is going 385 00:18:13,220 --> 00:18:18,740 Speaker 3: to scrutinize your nominees to a much lesser degree than 386 00:18:18,820 --> 00:18:24,570 Speaker 3: the opposition party. We saw several, even under Republican Senate 387 00:18:24,810 --> 00:18:28,460 Speaker 3: control in, what was it, 2018, 19, 20? There were 388 00:18:28,480 --> 00:18:31,330 Speaker 3: a number of Fed nominees Trump chose that did not 389 00:18:31,369 --> 00:18:31,700 Speaker 3: make it. 390 00:18:32,470 --> 00:18:32,889 Speaker 1: Oh, yeah. 391 00:18:33,350 --> 00:18:35,790 Speaker 3: I forgot about all of those. So there was Judy Shelton, 392 00:18:35,830 --> 00:18:39,910 Speaker 3: Steve Moore, Marvin Goodfriend. Now the challenge with it is 393 00:18:40,210 --> 00:18:41,790 Speaker 3: I suspect there's going to be even more scrutiny. 394 00:18:41,810 --> 00:18:46,150 Speaker 1: Yeah, of course there will be more scrutiny. But who's 395 00:18:46,170 --> 00:18:47,190 Speaker 1: coming up? 396 00:18:47,430 --> 00:18:48,750 Speaker 3: Well, there's one Jay Powell. 397 00:18:48,790 --> 00:18:49,609 Speaker 1: So when does Jay Powell? 398 00:18:49,850 --> 00:18:53,090 Speaker 3: His term ends at the beginning of 2028. He has 399 00:18:53,130 --> 00:18:54,030 Speaker 3: stayed on longer. 400 00:18:54,050 --> 00:18:56,730 Speaker 2: Yeah, now he can retire in peace, right? 401 00:18:57,140 --> 00:19:00,310 Speaker 3: I think the question for him is there's been this on-again, 402 00:19:00,380 --> 00:19:03,690 Speaker 3: off-again issue of Fed investigations. I suspect he would like 403 00:19:03,730 --> 00:19:05,810 Speaker 3: to roll off if he felt confident that it wasn't 404 00:19:05,830 --> 00:19:08,730 Speaker 3: going to do anything to the institution. That's sort of 405 00:19:08,970 --> 00:19:12,090 Speaker 3: his comfort zone, I suspect, with respect to how the 406 00:19:12,109 --> 00:19:15,100 Speaker 3: president can influence policy, what exactly is going on now 407 00:19:15,140 --> 00:19:18,720 Speaker 3: within the building. But I think even if there's a 408 00:19:18,740 --> 00:19:23,020 Speaker 3: vacancy for that seat, how quickly can that be filled? 409 00:19:24,080 --> 00:19:25,800 Speaker 3: I suspect it's going to be very hard if Jay 410 00:19:25,820 --> 00:19:27,220 Speaker 3: Powell is out of the state until the beginning of 2028. 411 00:19:27,220 --> 00:19:29,040 Speaker 3: I think it's going to be really hard to fulfill 412 00:19:29,080 --> 00:19:31,240 Speaker 3: that by the end of the term because you're going 413 00:19:31,260 --> 00:19:33,620 Speaker 3: to have to get through a lot of Democratic sort 414 00:19:33,640 --> 00:19:35,760 Speaker 3: of veto gates of sorts. So you have just like 415 00:19:36,000 --> 00:19:39,030 Speaker 3: that math gets very difficult and so probably won't get filled. 416 00:19:40,130 --> 00:19:42,310 Speaker 3: That'd be my best guess unless they're able to find 417 00:19:42,369 --> 00:19:45,430 Speaker 3: a way to really pick a nominee who can win 418 00:19:45,470 --> 00:19:49,109 Speaker 3: over the trust of Democrats relatively quickly, coordinate that to 419 00:19:49,150 --> 00:19:51,830 Speaker 3: some degree. I don't know with, there's not going to 420 00:19:51,869 --> 00:19:53,649 Speaker 3: be any coordination with J-PAL. So I think that's good. 421 00:19:53,690 --> 00:19:55,590 Speaker 3: That's itself going to be a challenge for how to 422 00:19:55,630 --> 00:19:58,190 Speaker 3: kind of manage, navigate that. So you're going to be 423 00:19:58,230 --> 00:20:00,689 Speaker 3: left with the Fed board composition. But the thing is, 424 00:20:00,950 --> 00:20:03,109 Speaker 3: with the Senate, it's like, these are six-year terms, right? 425 00:20:03,170 --> 00:20:06,450 Speaker 3: So it's going to matter, the fact that like, it 426 00:20:06,470 --> 00:20:08,750 Speaker 3: may be a one-off that Democrats win in South Carolina. 427 00:20:08,770 --> 00:20:11,960 Speaker 3: It may be a one-off that if it's Mississippi or Kansas. 428 00:20:13,040 --> 00:20:15,520 Speaker 3: But they're going to be there for a while, and 429 00:20:15,560 --> 00:20:18,840 Speaker 3: that itself just tilts things for at least, yeah, another 430 00:20:18,880 --> 00:20:21,280 Speaker 3: four or six years, even as there are other Senate 431 00:20:21,320 --> 00:20:25,060 Speaker 3: cycles that'll happen. And so if you're thinking about who 432 00:20:25,100 --> 00:20:28,000 Speaker 3: are going to fill the subsequent seats, that tilt looks 433 00:20:28,040 --> 00:20:30,619 Speaker 3: a little less favorable if you're trying to tilt it 434 00:20:30,640 --> 00:20:33,540 Speaker 3: in a partisan direction. Now, look, it really wouldn't be 435 00:20:33,560 --> 00:20:35,700 Speaker 3: for the best if the Fed board did not take 436 00:20:35,740 --> 00:20:37,370 Speaker 3: on a partisan character. And I think the Fed board 437 00:20:37,400 --> 00:20:40,169 Speaker 3: is less partisan than, say, the Supreme Court. The Supreme Court, 438 00:20:40,190 --> 00:20:43,150 Speaker 3: we all kind of see that's, like, got some very 439 00:20:43,580 --> 00:20:47,600 Speaker 3: convenient splits of votes on key decisions that do take 440 00:20:47,640 --> 00:20:50,260 Speaker 3: on a partisan character. That hasn't been the case, even under, 441 00:20:50,280 --> 00:20:52,800 Speaker 3: I don't know, Chris Waller will still vote in the 442 00:20:52,840 --> 00:20:55,680 Speaker 3: same direction as Philip Jefferson. It's not, that hasn't changed 443 00:20:55,740 --> 00:20:59,020 Speaker 3: so drastically. But even so, you have a president right 444 00:20:59,060 --> 00:21:01,659 Speaker 3: now who clearly would like to move policy in a 445 00:21:01,700 --> 00:21:04,540 Speaker 3: specific direction, has been very vocal about that. And I 446 00:21:04,580 --> 00:21:07,160 Speaker 3: think that's what, there's more sand in the gears here. 447 00:21:07,180 --> 00:21:09,620 Speaker 3: There's more More of a challenge, actually, to influence that. 448 00:21:25,780 --> 00:21:28,680 Speaker 1: Just real quickly, like on the cure macro. So like, 449 00:21:28,840 --> 00:21:31,000 Speaker 1: I feel like if we were having a conversation about 450 00:21:31,040 --> 00:21:35,240 Speaker 1: the state of the economy, wow, Tesla shares declined 10%. 451 00:21:35,240 --> 00:21:38,580 Speaker 1: SpaceX shares fall another 7%, 7.5%. And they got hammered 452 00:21:38,600 --> 00:21:41,060 Speaker 1: yesterday pretty hard. So these are like, man. 453 00:21:41,980 --> 00:21:42,180 Speaker 2: Yeah. 454 00:21:42,260 --> 00:21:43,480 Speaker 3: I mean, you have the unwind. 455 00:21:43,510 --> 00:21:44,639 Speaker 1: Elon Cosmos. 456 00:21:45,750 --> 00:21:48,850 Speaker 3: Yeah. It's funny where you have like this unwinding of 457 00:21:48,910 --> 00:21:51,969 Speaker 3: the effects from the 2024 election response where you had 458 00:21:52,010 --> 00:21:55,760 Speaker 3: a lot of. Stocks that really ripped after Trump won. 459 00:21:55,900 --> 00:21:58,780 Speaker 3: Clearly put a lot of money behind Trump's election. 460 00:21:58,820 --> 00:22:00,159 Speaker 2: He could have just paid taxes. 461 00:22:00,180 --> 00:22:04,680 Speaker 1: He could have just paid taxes. Or just build cars 462 00:22:04,740 --> 00:22:08,379 Speaker 1: and spaceships. It's really incredible how in addition to being 463 00:22:08,540 --> 00:22:12,199 Speaker 1: a great car industrialist and a great spaceship industrialist, he 464 00:22:12,380 --> 00:22:16,270 Speaker 1: really decided to get into politics. And he really may 465 00:22:16,330 --> 00:22:20,889 Speaker 1: have just... for nothing at the end like when we 466 00:22:20,930 --> 00:22:24,290 Speaker 1: really look at like yeah maybe 2028 and like what 467 00:22:24,350 --> 00:22:27,810 Speaker 1: if he got anything out of like if he had 468 00:22:27,890 --> 00:22:31,570 Speaker 1: just avoided the germ of like caring about politics like 469 00:22:31,609 --> 00:22:32,950 Speaker 1: i just doesn't seem like it's not. 470 00:22:32,869 --> 00:22:35,520 Speaker 2: Even that it doesn't seem like it's the male urge 471 00:22:35,580 --> 00:22:37,760 Speaker 2: to tweet yeah that's all it is. 472 00:22:37,680 --> 00:22:39,840 Speaker 1: It really feels like it male. 473 00:22:39,760 --> 00:22:42,300 Speaker 2: Politics is useful to like have something to talk about 474 00:22:42,359 --> 00:22:43,160 Speaker 2: on twitter. 475 00:22:42,859 --> 00:22:44,859 Speaker 1: Yeah i mean there's it just seems like when you 476 00:22:44,980 --> 00:22:46,600 Speaker 1: add when we tell you it up in the end 477 00:22:46,680 --> 00:22:49,909 Speaker 1: the cost of like The cost of caring about posting, 478 00:22:49,970 --> 00:22:51,630 Speaker 1: the cost of caring about what people are talking about 479 00:22:51,690 --> 00:22:54,689 Speaker 1: on X, the cost of wanting to then influence the 480 00:22:54,730 --> 00:22:57,970 Speaker 1: world through X just seems like may end up being 481 00:22:58,050 --> 00:23:02,250 Speaker 1: one of the most colossal wastes of money we ever imagined, right? 482 00:23:02,430 --> 00:23:04,410 Speaker 1: I mean, what has he got? Has he gotten one 483 00:23:04,520 --> 00:23:08,500 Speaker 1: thing from caring about politics and caring about posting at 484 00:23:08,520 --> 00:23:09,900 Speaker 1: all in his life? 485 00:23:10,540 --> 00:23:12,760 Speaker 3: So I guess it'll be to be determined about what 486 00:23:12,820 --> 00:23:14,740 Speaker 3: he was able to get out of the experience of 487 00:23:15,320 --> 00:23:18,510 Speaker 3: Doge in terms of his knowledge of government. But I 488 00:23:18,530 --> 00:23:24,730 Speaker 3: think it's a, but there's a John Arnold tweet I 489 00:23:25,090 --> 00:23:27,360 Speaker 3: think is quite apt here. It's like what, political giving 490 00:23:27,420 --> 00:23:28,480 Speaker 3: is the original wealth tax. 491 00:23:29,700 --> 00:23:33,920 Speaker 1: So there's- This is another conversation and like, they really 492 00:23:33,960 --> 00:23:37,859 Speaker 1: seem to be bad at it. And especially like tech money. 493 00:23:38,220 --> 00:23:42,950 Speaker 1: Like just no intuitions and neither at any point, either 494 00:23:42,990 --> 00:23:45,449 Speaker 1: what the important races are or the things or like 495 00:23:45,470 --> 00:23:49,260 Speaker 1: how to do it effectively. It just seems like zero intuition. 496 00:23:49,280 --> 00:23:52,930 Speaker 1: These are people who love talking about their... I'm updating 497 00:23:52,970 --> 00:23:54,210 Speaker 1: my epistemic priors. 498 00:23:54,530 --> 00:23:57,169 Speaker 3: Those people love... These are people who. 499 00:23:57,050 --> 00:24:00,190 Speaker 1: Love updating priors. They're like, oh, let me improve my 500 00:24:00,250 --> 00:24:04,470 Speaker 1: epistemics here. Update my priors. And then they just get 501 00:24:04,490 --> 00:24:07,280 Speaker 1: hit with the biggest blind spot. And it just seems 502 00:24:07,300 --> 00:24:09,280 Speaker 1: like it happens over and over again with these guys. 503 00:24:09,340 --> 00:24:11,960 Speaker 1: It's like, first, I'm going to update some priors and 504 00:24:12,000 --> 00:24:13,640 Speaker 1: then just completely step on a rate. 505 00:24:14,000 --> 00:24:16,290 Speaker 3: Yeah, there's a lot of Dunning-Kruger to this stuff, right? 506 00:24:16,310 --> 00:24:17,910 Speaker 3: Where it's just like you think you know a lot 507 00:24:17,950 --> 00:24:20,889 Speaker 3: and you actually... You're really at the beginning of the 508 00:24:20,910 --> 00:24:21,290 Speaker 3: learning curve. 509 00:24:21,310 --> 00:24:23,120 Speaker 1: And we all have to be humble, right? We're all 510 00:24:23,180 --> 00:24:25,800 Speaker 1: Dunning-Kruger all the time. Yeah, we are. These are people 511 00:24:25,840 --> 00:24:28,000 Speaker 1: who pride themselves on the fact that they don't have 512 00:24:28,060 --> 00:24:30,550 Speaker 1: this thing because... They're so rigorous and there's our first 513 00:24:30,609 --> 00:24:34,010 Speaker 1: principles thinking and systems thinking and all the, like, this is, 514 00:24:34,510 --> 00:24:35,510 Speaker 1: we are all done in Kruger. 515 00:24:35,590 --> 00:24:35,790 Speaker 2: Yeah. 516 00:24:35,850 --> 00:24:39,010 Speaker 1: Like that's a given. What I'm, what remarks, what's remarkable 517 00:24:39,050 --> 00:24:41,670 Speaker 1: about me is like, there's a whole group of people 518 00:24:41,750 --> 00:24:45,850 Speaker 1: pride themselves on their rational, like I look at the data, 519 00:24:45,950 --> 00:24:47,909 Speaker 1: all this stuff and they seem to be, get it 520 00:24:47,950 --> 00:24:49,090 Speaker 1: the worst. Yeah. 521 00:24:49,230 --> 00:24:51,609 Speaker 3: I think it's also funny because I spent 2024, if 522 00:24:51,630 --> 00:24:53,330 Speaker 3: you were sort of in tech and you were like, 523 00:24:53,350 --> 00:24:55,409 Speaker 3: we're leaning or you had just decided I'm going to 524 00:24:55,450 --> 00:24:57,470 Speaker 3: go to the right year. And so you throw a 525 00:24:57,490 --> 00:25:00,050 Speaker 3: lot of money at it and. success so that's like 526 00:25:00,170 --> 00:25:02,909 Speaker 3: clearly the success is because i also contributed i did 527 00:25:02,930 --> 00:25:04,850 Speaker 3: the smart thing it's like well you did the same 528 00:25:04,890 --> 00:25:07,250 Speaker 3: thing again and didn't quite work i feel like cause 529 00:25:07,270 --> 00:25:09,510 Speaker 3: and effect are different from each other in some ways 530 00:25:09,550 --> 00:25:11,710 Speaker 3: and so you might get sort of these like you 531 00:25:11,730 --> 00:25:13,710 Speaker 3: know elon was he the cause of why trump won 532 00:25:13,730 --> 00:25:15,840 Speaker 3: i don't think he was but there were a lot 533 00:25:15,859 --> 00:25:17,230 Speaker 3: of a lot of democrats and liberals who i know 534 00:25:17,280 --> 00:25:19,720 Speaker 3: were like oh he's the key factor behind this and 535 00:25:19,740 --> 00:25:21,940 Speaker 3: it's like okay elon's still giving a lot of money 536 00:25:22,020 --> 00:25:23,719 Speaker 3: but it didn't quite work out the same way this 537 00:25:23,740 --> 00:25:25,820 Speaker 3: time so i though who actually has. 538 00:25:26,680 --> 00:25:28,820 Speaker 1: Just on the macro stuff, a couple of months ago, 539 00:25:28,859 --> 00:25:31,179 Speaker 1: we might have, if we were just catching up with 540 00:25:31,200 --> 00:25:33,800 Speaker 1: you talking about the macro, we might have said, well, 541 00:25:33,940 --> 00:25:37,170 Speaker 1: the non-AI economy is soft. Maybe it's like getting stressed 542 00:25:37,270 --> 00:25:41,649 Speaker 1: by higher rates. The AI economy is still absolutely booming. 543 00:25:41,670 --> 00:25:46,209 Speaker 1: On net, we have a lot of inflationary pressure, et cetera. 544 00:25:47,010 --> 00:25:51,209 Speaker 1: Where's your read on right now, the sort of the 545 00:25:51,280 --> 00:25:55,100 Speaker 1: core impulses and, you know, do we have a path 546 00:25:55,320 --> 00:25:58,640 Speaker 1: not like, especially maybe if some of this AI spending 547 00:25:58,720 --> 00:26:01,420 Speaker 1: cools off or like how much work does the Fed 548 00:26:01,440 --> 00:26:04,659 Speaker 1: have to do to get back to 2% inflation or whatever? 549 00:26:04,859 --> 00:26:05,580 Speaker 1: What are the trends there? 550 00:26:06,020 --> 00:26:10,830 Speaker 3: Yeah. So I think even by the sort of call 551 00:26:10,869 --> 00:26:13,110 Speaker 3: it early part of this year, we had already seen 552 00:26:13,150 --> 00:26:15,730 Speaker 3: sort of a basing of that, that dynamic where it was, Oh, 553 00:26:15,790 --> 00:26:19,350 Speaker 3: the non AI economy soft and like we're headed. The 554 00:26:19,369 --> 00:26:22,960 Speaker 3: Fed was, flagging rate cuts as late as, what, the 555 00:26:23,000 --> 00:26:25,900 Speaker 3: May meeting? And that was just too late relative to 556 00:26:25,960 --> 00:26:28,750 Speaker 3: where the economy was. The economy was solidifying after the 557 00:26:28,770 --> 00:26:31,390 Speaker 3: government shutdown had ended. And so the risks were already 558 00:26:31,430 --> 00:26:33,510 Speaker 3: tilted in the direction of, hey, the economy is like, 559 00:26:33,550 --> 00:26:36,230 Speaker 3: it's not, I wouldn't say the non-AI economy is gangbusters, 560 00:26:36,330 --> 00:26:37,130 Speaker 3: but it's fine. 561 00:26:37,410 --> 00:26:38,350 Speaker 1: Like, it's fine. 562 00:26:38,410 --> 00:26:38,970 Speaker 3: It's been fine. 563 00:26:39,030 --> 00:26:39,370 Speaker 1: It's nothing. 564 00:26:39,770 --> 00:26:41,869 Speaker 3: I would say is amazing, but all booms tend to 565 00:26:41,890 --> 00:26:42,710 Speaker 3: be imbalanced. 566 00:26:42,750 --> 00:26:44,270 Speaker 1: Housing is terrible still, right? 567 00:26:44,530 --> 00:26:45,710 Speaker 3: Housing is soggy and soggy. 568 00:26:45,730 --> 00:26:48,250 Speaker 2: Home builders started going up yesterday by quite a bit. 569 00:26:48,369 --> 00:26:50,320 Speaker 3: Yeah, part of that is a rates move. And so 570 00:26:50,340 --> 00:26:53,639 Speaker 3: you have just a, there's clearly some effect of if 571 00:26:53,680 --> 00:26:56,639 Speaker 3: you have less AI CapEx, you will have maybe a 572 00:26:56,660 --> 00:26:59,780 Speaker 3: softer economy, lower interest rates. There's more room for other 573 00:26:59,820 --> 00:27:03,200 Speaker 3: things to thrive. I'm quite skeptical that if you did 574 00:27:03,260 --> 00:27:06,240 Speaker 3: see AI CapEx really cool off, these things tend to 575 00:27:06,290 --> 00:27:08,470 Speaker 3: not be very linear. It tends to be more binary. 576 00:27:08,510 --> 00:27:11,350 Speaker 3: It's on or off. And once it's off, is there 577 00:27:11,369 --> 00:27:13,189 Speaker 3: something that's going to pick up that slack very quickly? 578 00:27:13,930 --> 00:27:19,070 Speaker 3: That's obviously the Goldilocks outcome. Yeah, I'd say history suggests 579 00:27:19,109 --> 00:27:22,190 Speaker 3: that's hard to pull off. So we are obviously in 580 00:27:22,250 --> 00:27:24,630 Speaker 3: a world where I'd still characterize it as an AI boom. 581 00:27:24,950 --> 00:27:26,830 Speaker 3: I'd still say there's obviously a lot of activity going on. 582 00:27:26,840 --> 00:27:29,600 Speaker 3: There's a lot of activity still booked to happen. But 583 00:27:29,740 --> 00:27:33,000 Speaker 3: if the tide comes out, I'm not as convinced that 584 00:27:33,040 --> 00:27:35,800 Speaker 3: there is going to be some big housing boom that 585 00:27:35,840 --> 00:27:39,750 Speaker 3: offsets it. So another set of... Those things take time 586 00:27:39,790 --> 00:27:42,050 Speaker 3: to really get going as well. So you don't have 587 00:27:42,070 --> 00:27:45,830 Speaker 3: this super nice sort of counter-cyclicality here in terms of 588 00:27:45,890 --> 00:27:49,470 Speaker 3: how the economy works. And so you have the share 589 00:27:49,609 --> 00:27:52,870 Speaker 3: of what I call the AI-sensitive segments of spending in 590 00:27:53,050 --> 00:27:55,390 Speaker 3: the kind of GDP mix have grown at such an 591 00:27:55,530 --> 00:27:58,670 Speaker 3: enormous pace. It's something getting close to 8% of GDP 592 00:27:58,710 --> 00:28:01,330 Speaker 3: if I think about just your tech hardware, tech software, 593 00:28:01,830 --> 00:28:05,629 Speaker 3: and industrial equipment. Those categories itself make up such a 594 00:28:05,910 --> 00:28:09,430 Speaker 3: large share of the U.S. economy. From the demand side, 595 00:28:09,510 --> 00:28:12,100 Speaker 3: obviously a lot of it is imported, but it still matters. 596 00:28:12,130 --> 00:28:16,600 Speaker 3: This is still like spending. Spending is a risk. Someone 597 00:28:16,680 --> 00:28:18,420 Speaker 3: who is spending is putting that on their income statement, 598 00:28:18,440 --> 00:28:22,500 Speaker 3: their balance sheet in the U.S. And so these dynamics 599 00:28:22,600 --> 00:28:25,080 Speaker 3: are probably going to dictate the cycle. I think that's 600 00:28:25,119 --> 00:28:27,800 Speaker 3: not actually at this point very original to say, but 601 00:28:27,859 --> 00:28:29,919 Speaker 3: we have coming into this year, there's a sense of, oh, 602 00:28:29,940 --> 00:28:32,050 Speaker 3: the non-AI economy is soft. It's like, I'm not sure 603 00:28:32,070 --> 00:28:34,429 Speaker 3: that's quite true. It's like not amazing. The other side 604 00:28:34,450 --> 00:28:37,830 Speaker 3: is inflation, right, where we have three themes, maybe four 605 00:28:37,869 --> 00:28:40,400 Speaker 3: at this point, that are going to matter. Look, the 606 00:28:40,420 --> 00:28:44,320 Speaker 3: Strait of Hormuz closure and to some degree, obviously, some 607 00:28:44,340 --> 00:28:46,760 Speaker 3: of the refining capacity issues that are maybe tied also 608 00:28:46,780 --> 00:28:50,220 Speaker 3: to the Russia-Ukraine conflict have clearly blown out sort of 609 00:28:50,240 --> 00:28:53,630 Speaker 3: set of prices for jet fuel. And that has pushed 610 00:28:53,650 --> 00:28:56,750 Speaker 3: up airfares quite considerably. So when people are saying, ah, well, 611 00:28:56,790 --> 00:28:59,530 Speaker 3: services inflation is running hot, it's like because airfares are 612 00:28:59,750 --> 00:29:02,630 Speaker 3: sensitive to energy. It's not necessarily because of the labor market. 613 00:29:03,130 --> 00:29:05,770 Speaker 3: diesel prices are very high. Caught a lot of political attention, 614 00:29:06,230 --> 00:29:08,820 Speaker 3: but the effects actually on the consumer have yet to 615 00:29:08,860 --> 00:29:11,160 Speaker 3: be seen really, which is to say like there's a 616 00:29:11,200 --> 00:29:12,700 Speaker 3: lot of, I'm curious for a lot of the food 617 00:29:12,740 --> 00:29:15,780 Speaker 3: retailers who have had to take on additional energy costs 618 00:29:15,840 --> 00:29:18,400 Speaker 3: and transport costs. Are they going to have to pass 619 00:29:18,440 --> 00:29:22,400 Speaker 3: through higher prices than the food, food services inflation, which 620 00:29:22,440 --> 00:29:26,220 Speaker 3: actually does matter for core. That energy dynamic is clearly 621 00:29:26,320 --> 00:29:29,540 Speaker 3: one big thing that I think, I suspect we're still 622 00:29:29,740 --> 00:29:32,860 Speaker 3: kind of processing. It may not, be more aggressive in 623 00:29:32,880 --> 00:29:35,650 Speaker 3: the next several months, but it may be called just 624 00:29:35,710 --> 00:29:38,090 Speaker 3: as aggressive or pretty close to what we've seen in 625 00:29:38,110 --> 00:29:40,910 Speaker 3: the last several months. Then you have the AI boom itself, 626 00:29:40,950 --> 00:29:43,490 Speaker 3: where it's still places where this is showing up. Again, 627 00:29:43,630 --> 00:29:46,290 Speaker 3: maybe we're past the peak impulse, but it may be 628 00:29:46,370 --> 00:29:49,410 Speaker 3: more durable than people realize in terms of we had 629 00:29:49,430 --> 00:29:53,150 Speaker 3: a lot of prices that spiked for your laptops, for 630 00:29:53,230 --> 00:29:55,450 Speaker 3: various sort of things tied to memory, but there's still 631 00:29:55,490 --> 00:29:57,340 Speaker 3: more things that could rise. So that might just mean 632 00:29:57,360 --> 00:29:59,460 Speaker 3: that we had to deal with more durable inflation there. 633 00:30:00,140 --> 00:30:03,440 Speaker 3: And the third piece of this is obviously tariffs itself. Look, 634 00:30:03,460 --> 00:30:05,560 Speaker 3: there are a lot of categories that have already moved. 635 00:30:06,440 --> 00:30:10,200 Speaker 3: There are some categories, notable categories that have not moved yet. Cars, right? 636 00:30:10,260 --> 00:30:11,720 Speaker 3: Like you have not seen anything that's happened in the 637 00:30:11,770 --> 00:30:13,930 Speaker 3: auto space. And some of that is because it's a 638 00:30:13,970 --> 00:30:16,770 Speaker 3: different tariff regime there. But even so, there were a 639 00:30:16,790 --> 00:30:19,010 Speaker 3: lot of the Canadian tariffs that were put on and 640 00:30:19,530 --> 00:30:22,710 Speaker 3: on off that still cost that's not yet passed through 641 00:30:22,770 --> 00:30:25,770 Speaker 3: to the consumer. And so I think those three themes 642 00:30:25,810 --> 00:30:27,450 Speaker 3: are still with us. It may not mean that we're 643 00:30:27,470 --> 00:30:29,390 Speaker 3: going to go to 4% inflation, but we might be 644 00:30:29,430 --> 00:30:32,250 Speaker 3: stuck around three a lot longer than is currently suspected. 645 00:30:33,070 --> 00:30:36,130 Speaker 2: Last question. Are we going to see a democratic socialist 646 00:30:36,450 --> 00:30:38,490 Speaker 2: on the ticket in 2028? 647 00:30:38,490 --> 00:30:41,560 Speaker 3: My prognosticates, probably not. I think that this is. 648 00:30:41,740 --> 00:30:44,580 Speaker 1: If you had to pick, you don't have to say 649 00:30:44,620 --> 00:30:48,460 Speaker 1: it on air. If you had to pick, nominate. Just 650 00:30:48,500 --> 00:30:49,560 Speaker 1: a guess, not a preference. 651 00:30:50,150 --> 00:30:53,290 Speaker 3: I think the prediction markets here is a... Ossoff is, 652 00:30:53,310 --> 00:30:56,090 Speaker 3: I think, moving into frontrunner now. And I believe in 653 00:30:56,210 --> 00:30:57,230 Speaker 3: efficient markets like Joe. 654 00:30:57,250 --> 00:30:59,230 Speaker 1: Don't lean on prediction markets. 655 00:30:59,280 --> 00:31:02,340 Speaker 3: What I suspect that's important for that primary at this 656 00:31:02,380 --> 00:31:05,120 Speaker 3: point is, like, the Senate map looks different. And Democrats 657 00:31:05,140 --> 00:31:09,700 Speaker 3: have not been competitive in the Senate for a long time. Yes, 658 00:31:09,720 --> 00:31:12,540 Speaker 3: there's one faction that's very progressive and has their political 659 00:31:12,580 --> 00:31:17,160 Speaker 3: leanings that are ideologically based. That will matter. How do 660 00:31:17,200 --> 00:31:20,780 Speaker 3: you excite them? There's another segment that obviously likes to 661 00:31:20,820 --> 00:31:23,660 Speaker 3: be competitive and win. Winning is also itself very kind 662 00:31:23,680 --> 00:31:27,450 Speaker 3: of addicting and attracting. And so I imagine for those 663 00:31:27,470 --> 00:31:29,310 Speaker 3: who are governors in a lot of states, they probably 664 00:31:29,330 --> 00:31:32,170 Speaker 3: will want to push it, whether it's Andy Beshear or 665 00:31:32,330 --> 00:31:36,120 Speaker 3: Josh Shapiro. I think John Ossoff, the margins he won 666 00:31:36,130 --> 00:31:38,260 Speaker 3: by are going to be very compelling. So I think 667 00:31:38,300 --> 00:31:40,940 Speaker 3: Ossoff is a pretty reasonable favorite right now, but it's 668 00:31:41,000 --> 00:31:44,920 Speaker 3: really early. This will ping-pong. back and forth. The field 669 00:31:45,000 --> 00:31:48,760 Speaker 3: is pretty large. There's no obvious front runner. Large and flat, basically. 670 00:31:48,820 --> 00:31:51,540 Speaker 3: Large and flat. It's not like Hillary Clinton going into 671 00:31:51,560 --> 00:31:55,120 Speaker 3: the 2016 cycle or even the 2008 cycle where she 672 00:31:55,140 --> 00:31:57,350 Speaker 3: was clearly the front runner and over time, instead of 673 00:31:57,370 --> 00:32:00,790 Speaker 3: Obama and obviously John Edwards, the other one, that was 674 00:32:00,870 --> 00:32:05,070 Speaker 3: the race. We don't really know what the head-to-head will be, 675 00:32:05,210 --> 00:32:08,230 Speaker 3: who will be the top three. I suspect Ossoff is 676 00:32:08,350 --> 00:32:10,070 Speaker 3: right now the front runner, but there are a lot 677 00:32:10,090 --> 00:32:12,020 Speaker 3: of people who are the front runner coming right out 678 00:32:12,060 --> 00:32:14,000 Speaker 3: of midterms. That could just change very quickly. 679 00:32:14,840 --> 00:32:18,480 Speaker 1: All right, Skanda Amarnath, thank you so much for breaking 680 00:32:18,540 --> 00:32:20,010 Speaker 1: it all down for us. 681 00:32:20,030 --> 00:32:33,500 Speaker 3: Thanks for coming on all day. That's right. 682 00:32:33,860 --> 00:32:37,459 Speaker 1: Tracy, that was a lot of fun. I think this election... 683 00:32:37,890 --> 00:32:39,890 Speaker 1: was a sort of mini version of what we always 684 00:32:39,910 --> 00:32:41,489 Speaker 1: talk about. It's like, wow, there's a lot of new 685 00:32:41,530 --> 00:32:42,350 Speaker 1: stuff to consider. 686 00:32:42,470 --> 00:32:42,810 Speaker 3: Yeah. 687 00:32:43,210 --> 00:32:46,380 Speaker 1: It's just like, it's just, and no one really knows. 688 00:32:46,740 --> 00:32:48,500 Speaker 1: And it's just a lot of new things. 689 00:32:48,640 --> 00:32:50,600 Speaker 2: And it happened literally overnight. 690 00:32:50,740 --> 00:32:51,520 Speaker 1: It's really weird. 691 00:32:51,620 --> 00:32:51,959 Speaker 2: Yeah. 692 00:32:52,020 --> 00:32:55,620 Speaker 1: But like now, you know, for a long time when 693 00:32:55,680 --> 00:32:58,980 Speaker 1: I sort of thought about the two parties, I thought 694 00:32:59,020 --> 00:33:01,530 Speaker 1: it's like, okay, they're like, you know, roughly even in 695 00:33:01,570 --> 00:33:06,880 Speaker 1: the grand scheme of things, Democrats, Republicans, heavily coastal california 696 00:33:06,900 --> 00:33:10,020 Speaker 1: new york new jersey etc a few big cities and 697 00:33:10,060 --> 00:33:13,280 Speaker 1: then you're just like no like the democrats are a 698 00:33:13,380 --> 00:33:16,420 Speaker 1: national party in a way they haven't been in ages 699 00:33:16,880 --> 00:33:19,430 Speaker 1: and in some places i just do not think the 700 00:33:19,470 --> 00:33:22,830 Speaker 1: republican party exists that they were dominant in that's what 701 00:33:22,870 --> 00:33:24,070 Speaker 1: it feels like in texas to me. 702 00:33:24,270 --> 00:33:27,410 Speaker 2: Yeah well i mean texas so i remember my Dad 703 00:33:27,450 --> 00:33:29,880 Speaker 2: is Texan. He comes from, like, a small town outside 704 00:33:29,900 --> 00:33:32,060 Speaker 2: of Dallas. I remember my aunt used to be a 705 00:33:32,220 --> 00:33:36,480 Speaker 2: closeted Democrat. She wouldn't tell her friends and family because 706 00:33:36,540 --> 00:33:39,240 Speaker 2: it just, like, wasn't socially acceptable, like, way up until 707 00:33:39,260 --> 00:33:42,310 Speaker 2: the early 2000s, which is kind of crazy. But the 708 00:33:42,380 --> 00:33:45,030 Speaker 2: one thing I'm thinking, a lot of this can change 709 00:33:45,110 --> 00:33:47,810 Speaker 2: pretty fast. Like, you know, a lot has happened in 710 00:33:47,850 --> 00:33:50,170 Speaker 2: the past two years. A lot could happen in the 711 00:33:50,230 --> 00:33:52,530 Speaker 2: next two years. I remember after Watergate, there was a 712 00:33:52,570 --> 00:33:56,540 Speaker 2: big Democratic sweep, right? And then what, like, Eight years later, 713 00:33:56,560 --> 00:33:58,380 Speaker 2: Reagan was in office, something like that? 714 00:33:58,900 --> 00:34:02,430 Speaker 1: No, people were comparing this election to the post-Watergate election. 715 00:34:02,850 --> 00:34:05,850 Speaker 1: And it's actually a pretty good, like, it's both because 716 00:34:05,870 --> 00:34:09,770 Speaker 1: of the scale, but because what are, like, the two things? It's, like, 717 00:34:09,989 --> 00:34:15,469 Speaker 1: high inflation and a deeply unpopular president together. 718 00:34:15,510 --> 00:34:15,790 Speaker 2: Yeah. 719 00:34:16,610 --> 00:34:18,540 Speaker 1: And then you just get this. So maybe that is, like, 720 00:34:18,560 --> 00:34:21,850 Speaker 1: the best analogy. But I really do think, like... Like, 721 00:34:21,890 --> 00:34:24,109 Speaker 1: I don't know. I'm not a prediction, but things change 722 00:34:24,170 --> 00:34:27,410 Speaker 1: really fast. And after the 2024 election, you know, there 723 00:34:27,450 --> 00:34:31,700 Speaker 1: was a truly new map, not new map necessarily, but 724 00:34:31,739 --> 00:34:34,080 Speaker 1: it looked like the sort of Trump version of the 725 00:34:34,120 --> 00:34:37,700 Speaker 1: GOP had fully solidified and not only fully solidified, had 726 00:34:37,739 --> 00:34:42,380 Speaker 1: like one done extremely well among various minority groups in 727 00:34:42,420 --> 00:34:44,779 Speaker 1: a way that hadn't been seen before. So it's like, oh, 728 00:34:44,880 --> 00:34:48,640 Speaker 1: that's all reversed. We thought we knew about the Democratic 729 00:34:48,680 --> 00:34:53,230 Speaker 1: Party coalition. So it's like, uncertainty is like, you know, 730 00:34:53,250 --> 00:34:58,049 Speaker 1: let's just, and epistemic humility. Unlike the tech billionaires who 731 00:34:58,090 --> 00:35:00,760 Speaker 1: talk about their epistemic humility, I will actually practice it. 732 00:35:00,770 --> 00:35:04,379 Speaker 1: You've updated your worldview. I'm updating my priors as we speak, 733 00:35:04,469 --> 00:35:06,359 Speaker 1: and I'm going to put it, I'm going to do 734 00:35:06,400 --> 00:35:07,020 Speaker 1: some practice. 735 00:35:07,219 --> 00:35:10,740 Speaker 2: Speaking of things that are changing very fast, the stock charts. 736 00:35:11,239 --> 00:35:14,300 Speaker 2: So in addition to SpaceX and Tesla, have you looked 737 00:35:14,420 --> 00:35:15,859 Speaker 2: at Sterling Infrastructure? 738 00:35:16,060 --> 00:35:16,759 Speaker 1: No, what do they do? 739 00:35:17,540 --> 00:35:22,859 Speaker 2: They build data centers in Texas. And that looks like 740 00:35:22,900 --> 00:35:23,700 Speaker 2: a dot-com chart. 741 00:35:23,840 --> 00:35:25,120 Speaker 3: Wow. Yeah. 742 00:35:25,160 --> 00:35:28,520 Speaker 1: These are some really ugly charts. That's pretty bad. 743 00:35:28,660 --> 00:35:28,940 Speaker 3: Wow. 744 00:35:30,080 --> 00:35:33,460 Speaker 1: That was a $ 1, 000 stock in June. And as of 745 00:35:33,500 --> 00:35:35,460 Speaker 1: right now, it's a $ 255 stock. 746 00:35:35,640 --> 00:35:35,920 Speaker 3: Yeah. 747 00:35:36,760 --> 00:35:37,380 Speaker 2: Isn't that crazy? 748 00:35:37,440 --> 00:35:39,000 Speaker 1: That's a good chart. That's a good one. 749 00:35:39,219 --> 00:35:39,500 Speaker 3: All right. 750 00:35:39,520 --> 00:35:40,219 Speaker 1: We'll put that in the newsletter. 751 00:35:40,540 --> 00:35:41,180 Speaker 2: Shall we leave it there? 752 00:35:41,280 --> 00:35:41,779 Speaker 3: Let's leave it there. 753 00:35:42,310 --> 00:35:44,950 Speaker 2: This has been another episode of the Odd Thoughts Podcast. 754 00:35:45,110 --> 00:35:47,910 Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway. 755 00:35:48,070 --> 00:35:50,810 Speaker 1: And I'm Jill Wiesenthal. You can follow me at The Stalwart. 756 00:35:50,950 --> 00:35:54,930 Speaker 1: Follow our guest, Skanda Amarnath at Irving Swisher. Follow our producers, 757 00:35:54,969 --> 00:35:58,209 Speaker 1: Carmen Rodriguez at Carmen Arman, Dash O'Bennett at Dashbot, Kale 758 00:35:58,230 --> 00:36:01,589 Speaker 1: Brooks at Kale Brooks, and Kevin Lozano at Kevin Lloyd Lozano. 759 00:36:02,120 --> 00:36:03,480 Speaker 1: And of course, you can chat about all of these 760 00:36:03,540 --> 00:36:08,670 Speaker 1: topics 24-7 in our Discord, discord.gg slash oddlots. And for 761 00:36:08,690 --> 00:36:11,410 Speaker 1: more Oddlots content, check out our daily newsletter, which you 762 00:36:11,469 --> 00:36:13,910 Speaker 1: can find at Bloomberg.com slash oddlots. 763 00:36:14,630 --> 00:36:16,830 Speaker 2: And if you enjoyed this conversation, if you like it 764 00:36:16,870 --> 00:36:19,700 Speaker 2: when we talk about seismic shifts in politics and what 765 00:36:19,719 --> 00:36:21,800 Speaker 2: it means for the economy, then please leave us a 766 00:36:21,860 --> 00:36:25,140 Speaker 2: positive review on your favorite podcast platform. And if you're 767 00:36:25,160 --> 00:36:28,260 Speaker 2: watching on video, then please like or leave a comment 768 00:36:28,420 --> 00:36:29,640 Speaker 2: or better yet, subscribe. 769 00:36:30,070 --> 00:36:32,890 Speaker 1: And remember, if you're a Bloomberg subscriber, you can listen 770 00:36:32,930 --> 00:36:36,160 Speaker 1: to all of our episodes absolutely ad-free. All you need 771 00:36:36,180 --> 00:36:38,620 Speaker 1: to do is find the Bloomberg channel on Apple Podcasts 772 00:36:38,680 --> 00:36:39,899 Speaker 1: and follow the instructions there. 773 00:36:40,480 --> 00:36:41,220 Speaker 2: Thanks for joining. 774 00:36:57,989 --> 00:36:58,430 Speaker 1: Thank you.