The Compound and Friends
00:15:28 · Daniel Clifton, Michael Batnick
[00:15:28] S1: know what the happened. But think about this. This is this is what I think the best stat of this election. In thirty five years, there were five senate candidates who won a state the other president won two years before by more than 10 points. K? We had six of those happen Tuesday night. Wow. So it... Like, five in thirty five years. We had six happen. And it could be seven. And it could be... In one shot, one election, it could be seven. That to me is amazing. And that tells you that Trump's base did not come out. These are royal voters. It told you that the Democratic base are totally energized, and it tells you that the independent voters said, We gave you your shot. We're going the other way. Okay. Now, this can hold for a couple of cycles. I mean, those senators are going be there for six years, but we have to remember politics are cycles. Everybody was saying, look at the vibe shift after 'twenty four, and now your vibe shifts in again in two thousand and six... 'twenty six. Let me make this very clear. We've had 11 federal elections since the financial crisis, and the voters of this country have removed the party in power in 10 of those 11 elections. Depressing. That sounds extreme. It's extreme. It has not happened since the Reconstruction period of the civil war. We actually are now beating the Reconstruction period of the civil war. And so every two years, we're changing. Why? Because Facebook. Yep. It could be Facebook. Right? It could be No. I really... [00:16:52] S0: I I think that's right. Right. It's social media, but go ahead.
00:16:52 · Michael Batnick, Daniel Clifton, Josh Brown
[00:16:52] S0: I I think that's right. Right. It's social media, but go ahead. [00:16:54] S1: There's definitely more information, but the economy used to grow at 3%. There was enough real income to go around for everybody. When the financial crisis came, we went from three to two, and we have stayed there for, what is it, eighteen years now. Okay? American households would be $5,600,000,000,000 richer if we had been growing at 3% rather than 2%. And we think voters just know that their standard of living isn't rising. And as we don't get that growth, and this is a global phenomenon, [00:17:23] S0: Oh, that's so just the nice. All We'll try this. [00:17:25] S2: Forget it. Let's try Try that. I agree with that. [00:17:27] S1: But here's the kicker. Now you're not getting it from your establishment. So now you're going to the populist, and I would argue we have four political parties in The United States, two in the Republican and two in the Democrat, and a generational shift as the older voters die or pass away, these newer, younger voters are coming in, and they're demanding a much different policy. [00:17:47] S2: Well, it's Democrats and DSA. Correct. And then you have MAGA and Exactly. Are there any actual Republicans left? Think about this. Duncan. [00:17:55] S1: There there are some there are some Republicans left. But they Mitt Romney? Like I wouldn't say that. Like, at that point... And, like, Mitch McConnell's no longer in the senate. Right? You see that old Republican going away. [00:18:04] S0: Wait. Why is Mitt Romney? Why no? He's not a Republican? Well, is.
00:18:04 · Michael Batnick, Daniel Clifton, Josh Brown
[00:18:04] S0: Wait. Why is Mitt Romney? Why no? He's not a Republican? Well, is. [00:18:07] S1: He said he was a Republican. [00:18:08] S2: He's not he's not politically relevant. [00:18:09] S1: He's not he's not part of the the mix anymore. And what I would argue is that in 'twenty eight, you have a real chance for the first time to have a true populist election in one hundred years in The United States, right? Like J. D. Vance versus AOC. I'm just using those names as a proxy, not as actual names, but that is a generational shift. Now you're going into the 40 group, 40 old group, and you're going on a much more populist wing. The views of J. D. [00:18:36] S2: Vance In both parties. [00:18:37] S1: In both parties, Okay. Right? That is a massive change in the political framework, and it's because we're not generating enough income for the entire population. [00:18:46] S0: Well, is the thing. I saw somebody put it this way, that it was less about left versus right Correct. And more about top versus bottom. Yep. Sure.
00:18:46 · Michael Batnick, Daniel Clifton, Josh Brown
[00:18:46] S0: Well, is the thing. I saw somebody put it this way, that it was less about left versus right Correct. And more about top versus bottom. Yep. Sure. [00:18:55] S1: And I would just argue, before anybody gets all crazy about, like, left versus right and populism, the people who won on the Senate side for the Democrats in Kansas and Iowa, right, South Carolina, they are not Bernie Sanders Democrats. And that is a very important point because now they're going to come to Washington. They're going to want to make deals with Republicans. And those Republicans that are up in 28 in those states, they're going to want to make deals with those Democrats. So this was actually a vote for moderation, and I don't think that that's getting enough play right now. [00:19:26] S2: You should tell the people on Bluesky that this was a vote for moderation because I don't think that that's the way they're reading it. [00:19:32] S1: I understand. But you would see it in health care stocks. In 2018, after Trump's first midterm election, as soon as he won, the market began to price in that Elizabeth Warren or Bernie Sanders was going to be the nominee, and it crushed health care and financial stocks. For two years, the multiple was restrained. That's the Medicare for all trade. You're not getting that this time. You're getting something on data centers, which is a totally different issue. But you're not getting it on health care. In fact, health care stocks have been ripping through all this.
00:19:32 · Daniel Clifton, Josh Brown
[00:19:32] S1: I understand. But you would see it in health care stocks. In 2018, after Trump's first midterm election, as soon as he won, the market began to price in that Elizabeth Warren or Bernie Sanders was going to be the nominee, and it crushed health care and financial stocks. For two years, the multiple was restrained. That's the Medicare for all trade. You're not getting that this time. You're getting something on data centers, which is a totally different issue. But you're not getting it on health care. In fact, health care stocks have been ripping through all this. [00:19:59] S2: I was trying to think of all of the positive things. Even if you like... So let's say you're a conservative. This is your nightmare scenario. Fine. But let's think about some of the positives that come out of this potentially. Not definitely. Oil prices should be lower as the, whatever we're called, the excursion in Iran winds down. [00:20:19] S1: Yep.
00:20:19 · Daniel Clifton, Josh Brown
[00:20:19] S1: Yep. [00:20:19] S2: That's a good thing for almost everybody. Yep. That's not ExxonMobil. Okay. Great. Interest rates should come down Absolutely. Because if the data center Yep. Build out is gonna slow Yep. That's less debt that needs to be sold. Yep. That's competing with treasuries. 100%. Everybody likes lower interest rates, Especially if they're market driven and not Fed Okay. So two. Three, to your point, in some of these states where the Republicans were never really running against anyone, they could kinda do whatever they want. Yep. We know from history, it's never great when one political party or the other thinks that there's no there's no challenge. Correct. I would argue it's not great for inner cities. Yep. I don't think it's great for rural states either. I feel like, alright, I look at that as a positive externality. Absolutely. Some... Tariff bullshit. Like, regardless of whether you think they quote unquote worked, I don't, but fine. It's a tax. [00:21:15] S1: Yeah. It [00:21:15] S2: does. As those things... Let's... Like, maybe the cold war with Canada Yep. Thaws. Like, a lot of these things, even if you hate what happened politically, ideologically, you have to admit some of these things were an albatross for your investment portfolio or for your business or whatever. What do think about that idea?