Prof G Markets
00:25:48 · Deirdre Bosa
[00:25:48] S8: It is not doomer here in San Francisco. I mean, it remains sort of as bullish as ever, and what Jensen Huang focused on, what Gavin Baker focused on in that interview is demand, and that is undeniably still, you know, just at the earliest stages. What I would say though is, I mean, that is a very... That is a bit of a disconnect, right, from Wall Street. And I think that some will be able to withstand that better. NVIDIA's gonna be okay. Right? They're at the center of the entire trade, and you... We can talk about as well, you know, GPU futures, wave insurance, and the lifetime of these GPUs is lasting a long time. So there's a cohort of companies that are gonna be okay. We talked about a lot of them. The Mag seven, you know, SpaceX as well is able to tap markets and raise more money. Companies will be able to do that. I think the fear maybe are some of the neo clouds. Right? And is that the thing that sort of breaks the AI trade? So that may be something to look at a lot more closely because, Ed, I love that you look at the fundamentals. Me too. When you look at the big tech fundamentals, which I think these are the numbers that people here in tech focus on, like these cloud numbers were insane. AWS up nearly 40%, Azure nearly 50%, Google Cloud over a 100%. That is sort of indication that the demand is there, and it's paying off. But Wall Street is really focused on some of those other core businesses that have paid for the build out.
00:27:09 · Ed Elson, Deirdre Bosa
[00:27:09] S4: Deirdre Bosa is founder and host of Deirdre Bosa Live, which I understand is officially launching next week. Could you tell us a little bit about it, Deirdre? What's the launch gonna look like? What's the timing? [00:27:21] S8: Yeah. So we actually launch our daily show on Monday, November 9. We're gonna be live at 1PM Pacific, 4PM Eastern, right after the market's closed. Every day, I'm sitting actually in the office space, not the studio. It's still under construction. Final touches are putting, are being put on just across from me. So really excited, and Ed, hope to have you on to chat with me there as well. [00:27:43] S4: I would love to, and I'll be tuning in. Thank you so much, Deirdre. [00:27:46] S8: Thanks for having me.
00:27:46 · Deirdre Bosa, Ed Elson, Mark Zandi
[00:27:46] S8: Thanks for having me. [00:27:55] S4: It is election day in America, and voters are casting their votes in what could be a blockbuster election for the Democrats. But before we are able to break down the results of the midterms, let's take a moment to check-in on what will probably be the most important topic on many voters' minds, and that topic is the economy. How is it doing? Joining us to discuss this, where the American economy stands ahead of the midterms, we're speaking with Mark Zandi, chief economist at Moody's Analytics. Mark, thanks for joining us on Prof G Markets. So half of registered voters tell Gallup, they did a poll, that the economy is extremely important to their vote. I'm not surprised by this. This seems to me, to be the most important thing heading into these midterms. So I just wanted to get your update. How is the economy doing halfway through Trump two point o? [00:28:50] S3: Well, Ed, I have to tell you, I'm surprised. Only half? I would have thought it must be much more than that. [00:28:54] S4: Me too.
00:28:54 · Ed Elson, Mark Zandi
[00:28:54] S4: Me too. [00:28:55] S3: Because I think that's top of mind for sure for many people when they go... Going to the polls. Well, the economy is... It depends on which economy you're talking about. I mean, if you're talking about the AI economy and you're in that ecosystem, you know, benefiting from all the investment that's going on or more likely if you own stocks and AI companies, you know, the economy feels pretty good. You're you're a lot wealthier than you were not too long ago. In fact, the the total value of publicly traded stocks in The US has doubled in just the past four years since ChatGPT was put on the planet. So the wealthy, the folks that own the stocks, they've... They're doing fine. No problem. Life is good, and they're outspending. For the rest of Americans, not so much. You know, many Americans don't own stock. Most Americans don't own any stock of any consequence. And, of course, many Americans, about a third, don't even own their own home. They're struggling. Their after inflation inflation income is at best holding its own, maybe even declining, and their purchasing power is evaporating. And this goes to the higher inflation. This goes to higher interest rates as a result of things like the Iran war. So their economy is not so good. When you add it all up, you know, it looks okay. The economy is growing, but, you know, it's a very fragile growth. And, it depends on whose economy you're talking about.
00:30:18 · Ed Elson
[00:30:18] S4: Yeah. I mean, we've seen income, inflation adjusted falling over the past six months, prices obviously continuing to rise. You said in May, said, quote, in my thirty six years as a professional economist, the stock market has never been more disjointed from the economy, which gets at what you've just explained there, this difference between the AI economy, the stock market economy, and I guess we could call it the real economy, the workers' economy. To what extent do you think that disconnect is going to play a role? Like, do you think that any Americans say, okay. Well, my wages are down. My grocery prices are up. Gas prices are up, but I have, you know, a more valuable stock portfolio, and I'm happy about that. Is that something that you think that that voters are actually gonna think heading into these elections?
00:31:14 · Mark Zandi
[00:31:14] S3: Well, I think, you know, three fourths of Americans don't own stocks of any consequence, and many don't own their own homes. So what's going on with regard to AI stocks means nothing. So the stock market can go up. It can go down. It can go around. It doesn't matter. What matters for them is what they're feeling, and that is, are my wages, you know, what I'm getting paid, keeping pace with the higher prices for the things that I'm buying? And that's real income, real... So called real wages after inflation wages. And there, you know, the picture is pretty bleak. I mean, real wages are going down. Inflation is faster than the rate of growth in wages. So people's purchasing power, their ability to buy things is declining, and they feel that. They know that. They sense it. They can... And that's what makes them upset. And that's why consumer sentiment surveys are as weak as they are. That's why, you know, the polling numbers are the way they are. That's why the Republicans are getting blamed for, you know, what's going on. For that... For for that three quarters of Americans, you know, the financial situation is pretty tenuous. And then you throw into the mix, more recently, the hot run up in interest rates. I mean, interest rates had been pretty low until the war. And now the fixed mortgage rate, which is kind of the benchmark rate that most people think about when they think about rate... Rates, the... You know, what they have to pay to get a mortgage, it was below 6% before the war started. It's now well above 7%. And, of course, that's just makes housing, home... Homeownership, you know, completely unaffordable. And that... That's just, you know, part of it. It's higher credit card interest rates, higher interest rates on home equity lines of credit, consumer finance loans. So for, again, for most Americans who don't own AI stocks, it's a pretty vexed time. They got a job, you know, okay, but, you know, their wages are just not keeping up with the pace of inflation. Their real standard of living is on the decline.