00:17:41 · Tracy Alloway, Skanda Amarnath, Joe Weisenthal
[00:17:41] S1: No, and we definitely saw that shift in the market because they've gone from spending cash on CapEx to borrowing in the bond market. And now some of them, like Oracle, are starting to issue new equities. So you can see the pressure kind of filter through the cap stack for sure. Let's talk about Fed, Jared. Going back to Senate control. You mentioned the Senate and its importance to Fed appointments. Can you talk a little bit more about that? [00:18:03] S2: Yeah, so... In the case of before this election, or I guess even now, it's a lot easier to get your nominees through. Generally speaking, your own party is going to scrutinize your nominees to a much lesser degree than the opposition party. We saw several, even under Republican Senate control in, what was it, 2018, 19, 20? There were a number of Fed nominees Trump chose that did not make it. [00:18:32] S0: Oh, yeah. [00:18:33] S2: I forgot about all of those. So there was Judy Shelton, Steve Moore, Marvin Goodfriend. Now the challenge with it is I suspect there's going to be even more scrutiny. [00:18:41] S0: Yeah, of course there will be more scrutiny. But who's coming up? [00:18:47] S2: Well, there's one Jay Powell. [00:18:48] S0: So when does Jay Powell? [00:18:49] S2: His term ends at the beginning of 2028. He has stayed on longer. [00:18:54] S1: Yeah, now he can retire in peace, right?
00:18:57 · Skanda Amarnath
[00:18:57] S2: I think the question for him is there's been this on-again, off-again issue of Fed investigations. I suspect he would like to roll off if he felt confident that it wasn't going to do anything to the institution. That's sort of his comfort zone, I suspect, with respect to how the president can influence policy, what exactly is going on now within the building. But I think even if there's a vacancy for that seat, how quickly can that be filled? I suspect it's going to be very hard if Jay Powell is out of the state until the beginning of 2028. I think it's going to be really hard to fulfill that by the end of the term because you're going to have to get through a lot of Democratic sort of veto gates of sorts. So you have just like that math gets very difficult and so probably won't get filled. That'd be my best guess unless they're able to find a way to really pick a nominee who can win over the trust of Democrats relatively quickly, coordinate that to some degree. I don't know with, there's not going to be any coordination with J-PAL. So I think that's good. That's itself going to be a challenge for how to kind of manage, navigate that. So you're going to be left with the Fed board composition. But the thing is, with the Senate, it's like, these are six-year terms, right? So it's going to matter, the fact that like, it may be a one-off that Democrats win in South Carolina. It may be a one-off that if it's Mississippi or Kansas. But they're going to be there for a while, and that itself just tilts things for at least, yeah, another four or six years, even as there are other Senate cycles that'll happen. And so if you're thinking about who are going to fill the subsequent seats, that tilt looks a little less favorable if you're trying to tilt it in a partisan direction. Now, look, it really wouldn't be for the best if the Fed board did not take on a partisan character. And I think the Fed board is less partisan than, say, the Supreme Court. The Supreme Court, we all kind of see that's, like, got some very convenient splits of votes on key decisions that do take on a partisan character. That hasn't been the case, even under, I don't know, Chris Waller will still vote in the same direction as Philip Jefferson. It's not, that hasn't changed so drastically.
00:20:55 · Skanda Amarnath, Joe Weisenthal, Tracy Alloway
But even so, you have a president right now who clearly would like to move policy in a specific direction, has been very vocal about that. And I think that's what, there's more sand in the gears here. There's more More of a challenge, actually, to influence that. [00:21:25] S0: Just real quickly, like on the cure macro. So like, I feel like if we were having a conversation about the state of the economy, wow, Tesla shares declined 10%. SpaceX shares fall another 7%, 7.5%. And they got hammered yesterday pretty hard. So these are like, man. [00:21:41] S1: Yeah. [00:21:42] S2: I mean, you have the unwind. [00:21:43] S0: Elon Cosmos. [00:21:45] S2: Yeah. It's funny where you have like this unwinding of the effects from the 2024 election response where you had a lot of. Stocks that really ripped after Trump won. Clearly put a lot of money behind Trump's election. [00:21:58] S1: He could have just paid taxes. [00:22:00] S0: He could have just paid taxes. Or just build cars and spaceships. It's really incredible how in addition to being a great car industrialist and a great spaceship industrialist, he really decided to get into politics. And he really may have just... for nothing at the end like when we really look at like yeah maybe 2028 and like what if he got anything out of like if he had just avoided the germ of like caring about politics like i just doesn't seem like it's not. [00:22:32] S1: Even that it doesn't seem like it's the male urge to tweet yeah that's all it is. [00:22:37] S0: It really feels like it male.
00:22:37 · Joe Weisenthal, Tracy Alloway, Skanda Amarnath
[00:22:37] S0: It really feels like it male. [00:22:39] S1: Politics is useful to like have something to talk about on twitter. [00:22:42] S0: Yeah i mean there's it just seems like when you add when we tell you it up in the end the cost of like The cost of caring about posting, the cost of caring about what people are talking about on X, the cost of wanting to then influence the world through X just seems like may end up being one of the most colossal wastes of money we ever imagined, right? I mean, what has he got? Has he gotten one thing from caring about politics and caring about posting at all in his life? [00:23:10] S2: So I guess it'll be to be determined about what he was able to get out of the experience of Doge in terms of his knowledge of government. But I think it's a, but there's a John Arnold tweet I think is quite apt here. It's like what, political giving is the original wealth tax. [00:23:29] S0: So there's- This is another conversation and like, they really seem to be bad at it. And especially like tech money. Like just no intuitions and neither at any point, either what the important races are or the things or like how to do it effectively. It just seems like zero intuition. These are people who love talking about their... I'm updating my epistemic priors. [00:23:54] S2: Those people love... These are people who.
00:23:54 · Skanda Amarnath, Joe Weisenthal, Tracy Alloway
[00:23:54] S2: Those people love... These are people who. [00:23:57] S0: Love updating priors. They're like, oh, let me improve my epistemics here. Update my priors. And then they just get hit with the biggest blind spot. And it just seems like it happens over and over again with these guys. It's like, first, I'm going to update some priors and then just completely step on a rate. [00:24:14] S2: Yeah, there's a lot of Dunning-Kruger to this stuff, right? Where it's just like you think you know a lot and you actually... You're really at the beginning of the learning curve. [00:24:21] S0: And we all have to be humble, right? We're all Dunning-Kruger all the time. Yeah, we are. These are people who pride themselves on the fact that they don't have this thing because... They're so rigorous and there's our first principles thinking and systems thinking and all the, like, this is, we are all done in Kruger. [00:24:35] S1: Yeah. [00:24:35] S0: Like that's a given. What I'm, what remarks, what's remarkable about me is like, there's a whole group of people pride themselves on their rational, like I look at the data, all this stuff and they seem to be, get it the worst. Yeah.
00:24:35 · Joe Weisenthal, Skanda Amarnath
[00:24:35] S0: Like that's a given. What I'm, what remarks, what's remarkable about me is like, there's a whole group of people pride themselves on their rational, like I look at the data, all this stuff and they seem to be, get it the worst. Yeah. [00:24:49] S2: I think it's also funny because I spent 2024, if you were sort of in tech and you were like, we're leaning or you had just decided I'm going to go to the right year. And so you throw a lot of money at it and. success so that's like clearly the success is because i also contributed i did the smart thing it's like well you did the same thing again and didn't quite work i feel like cause and effect are different from each other in some ways and so you might get sort of these like you know elon was he the cause of why trump won i don't think he was but there were a lot of a lot of democrats and liberals who i know were like oh he's the key factor behind this and it's like okay elon's still giving a lot of money but it didn't quite work out the same way this time so i though who actually has.