00:02:56 · John Coogan
[00:02:56] S1: Yeah. Yeah. Ron Al Bahari is in the Wall Street Journal. He's the Chief Investment Officer at Multifamily Office L and W. Let's give it up for Multifamily Offices. He said, I also think equity investors are breathing some kind of relief that the president is gonna accept the results. And so I'm sure everyone's seen, but the stock market is booming today. The Dow Jones is up 3%. The Nasdaq's up 1.88%. Russell two thousand is up as well. There's a bunch of positive news in the market. But the AI trade is still shifting around. Not everything is up. It's not all green. The deck is reshuffling. And Ben Thompson had a really great breakdown. 10 hot takes that we can go through in just a minute. But Tyler Cowen, in his roundup, he says, Rising in status. Matt Yglesias, socially moderate. Democrats did very well. Normie, social science results on campaign finance. And Nate Silver predictions all did very well. Falling in status, tariffs are on the way out, corruption's on the way out, war with Iran, wealth taxes lost in California, gerrymandering came back to hurt Republicans given the blue wave. There's actually another name for gerrymandering that hurts you. It's a different phrase. I heard it from Nate Silver on some podcast but I can't remember it. And he says, and there you go. So fun fun reflections. The prediction markets also held up well. We... I I felt like we were gonna get into a debate. Have you changed your position? Are you impressed or unsatisfied with the quality of prediction markets this time around?
00:04:35 · Jordi Hays, John Coogan
[00:04:35] S0: Overall, they called almost everything right. Yeah. I thought that obviously Texas was was a bit of a surprise. Prediction market's not that helpful if it looks, you know, one way, you know, for months and months and months, and then in the two hours before results are in, it flips completely. [00:04:53] S1: This is always the trick. [00:04:54] S0: But but, I mean, again, and it's hard to process that, you know, if if something has a 30% chance of happening... [00:05:01] S1: That's one three. I'll take those odds any day. Anyways, so [00:05:08] S0: yeah, some some surprises but but but overall, like they seem to be pretty effective. Yeah. It was interesting. There were there was a number of people both in tech and tech adjacent [00:05:21] S1: Yeah. [00:05:21] S0: That were basically taking the stance of the polls are wrong and the prediction markets are wrong. Like, just every indicator that we have Yeah. Is And then it turns out they were actually... Those individuals were wrong like way way... They were way more wrong than I think anybody even thought they were maybe wrong. Right?
00:05:21 · Jordi Hays, John Coogan, Derek Blasberg, Apoorva Mehta
[00:05:21] S0: That were basically taking the stance of the polls are wrong and the prediction markets are wrong. Like, just every indicator that we have Yeah. Is And then it turns out they were actually... Those individuals were wrong like way way... They were way more wrong than I think anybody even thought they were maybe wrong. Right? [00:05:43] S1: So, wrongs don't make right in this scenario. Yeah. So sheet Fascinating. Kalshi came in at 95% accuracy when the polls opened. So you can always look at a prediction market and it's like, oh, right before the mainstream media calls the election. The prediction markets usually have it pretty dialed right before then. But the question is like, what's the predictive power a month, two months before? But even three months before Kalshi was at 81 accuracy whereas Vote Hub average was 77%. [00:06:15] S4: Which which that's... [00:06:16] S1: 75%. Know, like they... [00:06:17] S0: Just just my napkin math that feels pretty impressive given that a lot of those markets at the time were not like eighty twenty. Right? Oh, yeah. They were more like sixty forty. [00:06:27] S3: Yeah. Yeah. [00:06:28] S0: Yeah. And so it would appear that there... You you can maybe put a little bit more weight on average Yeah. On markets Yeah. Where there's like a definitive leader.
00:06:28 · Jordi Hays, John Coogan
[00:06:28] S0: Yeah. And so it would appear that there... You you can maybe put a little bit more weight on average Yeah. On markets Yeah. Where there's like a definitive leader. [00:06:37] S1: Yeah. So from my perspective, the, people felt this way with... I think it was the Emmys or the Oscars where the prediction markets were on the were on the screen. And so, you know, the announcer comes out and says, oh, the the best picture nominees are. And then you can just see like 99% chance that this person's gonna win. And I think Polymarket called every single one correctly. So it sort of like ruined the Oh, yeah. Thrill of watching it because you're just like, oh, okay. The... Again, the one that they put on screen won. Yeah. And that's sort of how I felt where I felt like the prediction markets were calling this blue wave for months. [00:07:12] S0: Yeah. And... It worked. You can put odds on the screen during a football game because the result is not decided when somebody just walks out on the field and the result. Right? Whereas in some of these award shows, it literally is just like totally decided. Somebody comes out, reads the result. It's over. Yeah. And so...
00:07:12 · Jordi Hays, John Coogan
[00:07:12] S0: Yeah. And... It worked. You can put odds on the screen during a football game because the result is not decided when somebody just walks out on the field and the result. Right? Whereas in some of these award shows, it literally is just like totally decided. Somebody comes out, reads the result. It's over. Yeah. And so... [00:07:30] S1: And so, going into yesterday, I I was very much like I like I'm not following it today. I I I just I'm... I've I've processed all of the... All of this and all the downstream effects. And I think the market had as well. I think I think a lot of the selling off in the AI stocks in some of the data center builders, I think that was because everyone was clocking that this was gonna be the outcome. And so you don't think so? [00:07:57] S0: I don't... I I... The thing the thing is, I don't recall seeing a single person making the claim that the Texas governor was gonna be a Democrat. [00:08:08] S1: That's true. Yeah. [00:08:09] S0: At any point.... [00:08:11] S1: Guess that is sort of a like like a surprise. [00:08:13] S0: Right when the prediction markets flipped last night. [00:08:14] S1: But I I I would say that although the the Texas Texas race is important, the 40 odd data center bills are probably more important in aggregate. For sure. And so those have been in process that it would... That permitting would become more... [00:08:31] S0: And the other thing is it's not like Greg it's not like Greg Abbott was like Yeah. Doing rallies being like, we're gonna build them all here. [00:08:37] S1: Yeah. No doubt.
00:08:37 · John Coogan, Jordi Hays
[00:08:37] S1: Yeah. No doubt. [00:08:38] S0: He was also he was Yeah. Also [00:08:40] S1: enacted a moratorium of one month. So, yeah. It it was it was going back and forth. The other interesting story is, yeah, I mean, compute campuses, big loser, except for in North Dakota. North Dakota voted in favor. But Ben Thompson has 10 takeaways that we can kind of run through. He says, the AI trade got it right. The most obvious reason why the stock market has been rocky over the last few weeks is the tightening of credit markets. We are needless to say full on into the equity funding era. At the same time, it seems that this outcome is very bad for the AI trade in the short term, but much of the pain may have already been endured because we've seen that selling off even though spot markets like the value of GPU hour is increasing, The models are getting better. But maybe there's been a process over the last few months, mostly speculative, that, you know, that people have been digesting the fact that there might be a pullback in new compute coming online. And so more data centers, more GPUs warehouses as opposed to... [00:09:45] S0: The craziest thing to me is how little attention it's getting that prop 40 didn't pass. Like prop 40, as it was written, was going to destroy the model for building technology companies in California. Like, I... A bunch of people on our show... That have come on our show are like paper billionaires. [00:10:05] S1: Sure. Right? Oh,