The Compound and Friends
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?
00:21:15 · Josh Brown, Daniel Clifton
[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? [00:21:34] S1: Well, I agree, and I think the interest rate story is a big one. If you get a directionally improved situation in Iran, you're going to get lower rates. If you get lower oil prices, you're going to get fewer Fed rate increases and the data center portion of it. Let me give you one more. The deficit's probably going to get better here. This is a widely out of consensus view. Even if there's a budget deal, the deficit's probably to get better next year because we just did almost $1,000,000,000,000 of stimulus this year. Tariff refunds. There have been no tariffs in effect on the IEEPA tariffs because the Supreme Court threw them out. The OBB, the big distribution on the OBB, that was already that's already been banked now. You're not going to get that next year. Right? So you go through it mathematically, you're running off $607,100,000,000,000 dollars But this is why the data center issue is important. You need private sector growth to offset that fiscal tightening that's going to be happening.
00:21:34 · Daniel Clifton, Josh Brown
[00:21:34] S1: Well, I agree, and I think the interest rate story is a big one. If you get a directionally improved situation in Iran, you're going to get lower rates. If you get lower oil prices, you're going to get fewer Fed rate increases and the data center portion of it. Let me give you one more. The deficit's probably going to get better here. This is a widely out of consensus view. Even if there's a budget deal, the deficit's probably to get better next year because we just did almost $1,000,000,000,000 of stimulus this year. Tariff refunds. There have been no tariffs in effect on the IEEPA tariffs because the Supreme Court threw them out. The OBB, the big distribution on the OBB, that was already that's already been banked now. You're not going to get that next year. Right? So you go through it mathematically, you're running off $607,100,000,000,000 dollars But this is why the data center issue is important. You need private sector growth to offset that fiscal tightening that's going to be happening. [00:22:29] S2: Do you think do you think the leadership in the Democratic Party... So they're not gonna say, alright. The data centers are fine. The rhetoric will continue. There's probably gonna be hearings. Yep. Like... But do you think deep down they understand, like, it would not be a great idea to halt all of these projects in their tracks? So Or or or is the the part of the party that's so insane, like, they don't get it or they don't even care about it? Like, what do... What's your read?