Prof G Markets
00:19:28 · Ed Elson
[00:19:28] S8: We're back with Prof G Markets. I will grant you that many of us were surprised that he wasn't simply denying the results of election. But I think the other thing that was unique about this one is that it wasn't about him. And that was part of his statement. That was what he felt actual seemingly pride about. He said, well, this wasn't about me. This is about the other candidates. And then when asked, I think someone asked him, I wanna say it was Doctor. Burns, asked him about Iran. He said, no, that was still the right decision. I still stand by that. I'm making the right move. And so it seems to me that he's almost deluding himself into saying, no. This... Because it's the midterms, it's not about me. It's because these candidates are crappy candidates. And if I had been on the ballot, then everyone would say I'm doing a great job. And I wonder if that's what he's going to demand from his cabinet as well, that anyone who goes out and says, hey. We should probably take this seriously. We should probably switch things up. He'll say, no. You don't get it. It's because those candidates were bad candidates. They didn't have the risk. And I think about one of his core tenets, which is never admit defeat. I mean, this is what he's all about. He never ever admits defeat. And so to me, I mean, I'd be curious to hear your reactions to that because I still see a world in which he says, no. I'm still great. I made all the all of the right decisions. And it would be too painful, too embarrassing, and feel too pathetic to say that his his two signature policy decisions, Iran, tariffs, to say that was that was a bad idea.
00:21:04 · Anthony Scaramucci
[00:21:04] S6: Well, I mean, he did that last night. We both saw that, and we were both laughing about it, and he was getting schooled by Brett Baier about the polls. But Trump did say something that the results would have been different if his name was on the ballot. And I actually do agree with him. The margin of the losses would have been way bigger. And that's the irony of the whole thing. Okay. And he sort of knows that. Okay. He's also got a vice president that's trying to reposition himself now. And Vance is saying, well, this happened because of the war. And Vance did something very clever. He got Don Jr. To say the same thing, right? They both came out today and said it was the war that turned people off and dissuaded people from MAGA. And I wanna go to DeSantis for a second because he did say that we have close to an extinction level event. You know, again, six years, very unlikely they'll lose power. But you know, listen, to me it's what do the Democrats do with this victory? What do they do with it? Because if they run it up the middle and they put more moderates in place and they try to build a coalition with some level of compromise to common sense pragmatists in the Republican Party look out, they could really control the card table. If they decide that no, no, no, there was one conservative pundit that kept playing the replay on a liberal cable news channel of a woman saying, Hey, everybody, woke is back. Woke is back. I don't know. You think woke is back? I mean, Fox News is gonna play that tune all day tonight and tomorrow, but the truth of the matter is if woke is back, that's gonna be very bad for the Democrats, And this is gonna be a very short lived victory. And I would suggest to my democratic friends, even if you like woke, go see your sister AOC and ask AOC what she thinks about the culture war right now, because she took her pronoun usage and her designation off her Twitter feed. She's telling people that woke one was crazy. And she's trying to indicate to you guys, Hey man, I don't want to fight that. I want to deliver on affordability. I wanna deliver on getting us out of this war. Ed, you're a markets guy. So I just wanna say this to people. The war is a $500,000,000,000 venture because it's $50,000,000,000 in climbing to leave the Navy where it is, the Marine Expeditionary Forces, all of that stuff.
00:23:45 · Anthony Scaramucci
It is 150, possibly 200, it's $2,400 a family in the increase in energy costs in the country, which isn't just gasoline and diesel, it's also fuel and jet fuel. You saw the prices coming over the pond, how expensive it's become. The other thing that's happened is we raised interest rates. You know, on your show, because I listened to your show, we were talking, or you were talking with your guests about lowering interest rates in calendar year 2026. So last November, you, me, others were saying, okay, the consensus is two, possibly three rate cuts this coming year. He declares war, the tenures at three ninety six going into the war. It's over four ninety now. It peaked in the 530s. So, I mean, look at what he did. So it's not just the 50 bill here, the 200 bill for the energy, but now you have increased borrowing costs all over the society. And as a result of interest rate rises, you have certain stocks that are down. So you've killed people in their four zero one ks and in their savings, and you didn't get the outcome. There's no outcome here other than this will probably go on forever.
00:25:01 · Ed Elson
[00:25:01] S8: Well, this has been one of the more interesting things coming out of the election is because when we were analyzing the results in real time and we were looking at the after hours trading and then the pre trading, it seemed as though Wall Street was gonna be very worried about this. And one of the big themes coming out of this election was the the data center theme. This idea that we had all of these local data center ballot measures And on... I'm pretty sure all counts but one, local communities said, no. We don't want a data center in our town. And that's... And and in addition, you had a lot of this this blue blue nami, this blue wave Mhmm. Where there was a lot of these Democrats who were more amenable to a data center moratorium or to a data center pause. And it seemed like you were gonna see, like, havoc in the markets and people saying, oh my gosh. AI is over. But that's not what happened actually because suddenly markets open, Dow immediately jumps more than 2%, best day since April. The S and P jumps more than 1%. NASDAQ jumps more than 1% as well. A few very specific AI names get hurt, namely the Neo Cloud names, those those companies that are fully leveraged to the to to the data center trade. But overall, investors were pretty happy here. And so from your seat, what are investors feeling constructive about? Because I see it. I see why this can be a good thing, but I I wasn't necessarily expecting it from Wall Street. I was expecting more of a cynical perspective. What do you think they're optimistic about?
00:26:38 · Anthony Scaramucci, Ed Elson
[00:26:38] S6: Well, I mean, for thirty years, I... Yale Hirsch and now his son, Jay Hirsch, are the authors of The Stock Trader Almanac. Have you ever seen it? [00:26:48] S8: No. I haven't. [00:26:48] S6: Okay. I'm gonna send you a copy for Christmas because I get them delivered to me, and I like giving them out to my friends. And in the almanac, it talks about the seasonality, like the Farmer's Almanac. It talks about the seasonality of stocks, and it talks about different issues that happen in stocks, but it also talks about four year presidential election cycles. And they go all the way back to 1896. And it turns out that when you have a mixed cycle, when you have the Congress turn to the Democrats and the Republicans still keep the presidency, people actually get bullish. And the main reason they get bullish is there's almost complete gridlock in Washington and nothing gets done. And this happened during the Clinton era. They eventually shut down the government, but then they reached a compromise. And some of that compromise was reform based that led to some budgetary surplus in the year 2000, as I write about in the book, All the Wrong Moves. And let me tell you something, Ed, that mixed government helped the country. So if you go back to 1896, anytime you get in a situation like this, it's been better for the stock and bond market.
00:27:57 · Ed Elson, Anthony Scaramucci
[00:27:57] S8: Yeah. Just here's a quote from Deutsche Bank's head of FX research. Quote, the combination of a large Democratic majority in congress and president Trump's statement that he is willing to work with the opposition should act as a break on extreme policy outcomes and bring down risk premia. And it does seem like, you know, one of the big stories in in the second half of the year in markets has been what we've seen on on bond yields and on treasuries, this just explosion in yields. [00:28:27] S6: I think there's one missing piece to this, because again, this is a markets commentary show in addition to politics, but I think the missing piece is the data center piece. And so the data centers are very unpopular. Sherrod Brown went after Houston or Houston on the data center issue as did others. And I think the AI boom was supposed to be the GOP's economic story, but it ended up on the ballot as somebody's utility bill. And I think it's important for people to understand that, that they felt holy shit, the data center is here in my neighborhood. It's not environmental. It's drawing too much power. And because of the demand supply mix for power, my prices are going way up, and people weren't happy about that.