The Compound and Friends
00:49:43 · Michael Batnick, Josh Brown, Daniel Clifton
[00:49:43] S0: It's cute. It's... [00:49:44] S2: Doesn't... Understand it's Clinton. It's the nineties. Fine. [00:49:47] S0: It's '50 to 70 to '78. [00:49:49] S2: No. No. No. 16.5% Democrat, 10.2% for Republican. Am I misreading this? [00:49:56] S0: No. I'm saying, but all those blue bars happened prior to 1990. So it's sort of not super relevant. [00:50:01] S1: So we we we communicate a little bit differently. We do it with the president, and we do it bipartisan control. And what we found is that under every single partisan breakdown that we've had over the last hundred years, stocks are higher. Okay? Stocks are higher. It really doesn't matter. Okay? I love [00:50:18] S2: I love that. [00:50:19] S1: Alright? It really doesn't matter. [00:50:20] S0: What if the president's under five foot eleven? [00:50:23] S1: But if you think if you think about, like, you know, these combinations, they're all political animals. It is really cool to be a member of congress. I'm not gonna destroy the world and ruin my relationship. [00:50:36] S2: They do... Especially in the senate, they think they're in the think they're in the they house of lords. They wanna they wanna sit there for the rest of their lives. Can I? Can we do oil? Yeah. Alright. Chart four, John. By the way, round of applause for John. Crushing it. So this is Brent Crude Oil Futures. Is This is Wading. Yeah. Pretty notable. What's the message to your firm's clients on what we're seeing [00:51:01] S1: with oil prices? So the straight [00:51:03] S2: of
00:51:03 · Josh Brown, Daniel Clifton
[00:51:03] S2: of [00:51:03] S1: removes dictates every other financial asset in the world right now. I've never seen anything like [00:51:08] S2: it. Like interest rates. [00:51:09] S1: Interest rates. Dollars. All that. [00:51:11] S2: Yes. Okay. [00:51:14] S1: And by the way, it's not oil. It's the Strait Of Hormuz. And so if the Strait Of Hormuz is going to start to normalize, oil is going to come down. We're getting 18,000,000 barrels out every day, and oil still hasn't come down. The market started to say, well, wait a minute here. The Democrats have leverage because they control the budget. They can limit Trump's spending on the Iran war. JD Vance is blaming the Iran war for Trump's [00:51:36] S2: Explicitly. Jews and the Iran war. Yes. [00:51:40] S1: Right? Yes. And so, you know, you could trade, you know, the Israel stock market, but oil is a much more important one. Yeah. And so the market is saying directionally this can improve. I just urge a little bit of caution with that view. It takes two to agree to end a war. [00:51:53] S2: Yeah. I was gonna ask you, what what is the interpretation of the IRGC? Yeah. So they they all they all meet for coffee the next morning. Yeah. And what what is the what is the view from Tehran of what just happened [00:52:06] S1: to you? Ready for this? Their view is that there's [00:52:08] S2: Now they could wait this guy out.
00:52:08 · Josh Brown, Daniel Clifton
[00:52:08] S2: Now they could wait this guy out. [00:52:09] S1: There was regime change in Texas before there was regime change in Tehran. Alright. Well Okay. Right? Like, think about that. Right? And so their point is... The IRGC's point is It's true. I mean, sad but true. We can't be attacked. If we are attacked and don't respond, it's existential for them. So they're willing to get totally suffocated economically and not do a deal. The civilian leadership of Iran need to do a deal because the blockade is working, all but since sanctions on them are working, they're caught... And to me, that's where we're we're gonna be in the status quo. We could play the games of doing these deals back and forth, but literally, they just need to straight open for five days. We need it open every day. Yeah. And that's a that's a very asymmetrical [00:52:50] S2: We also don't know what the what the DNC presidential candidates are gonna be saying about how to resolve whatever we started. Like, we... It's way it's way too soon. Yeah. But does that keep oil somewhat elevated then, that uncertainty? [00:53:06] S1: I've been higher... I've been in the higher for longer camp. Okay. And and by the way, if I get lower oil, I'm all for it. I just need to see a plan to get us there. Is Trump going to completely capitulate and give them tolls on the Strait Of Hormuz? The market will love that, but I'm not sure that Trump's ready to do that position
00:53:06 · Daniel Clifton, Michael Batnick, Josh Brown
[00:53:06] S1: I've been higher... I've been in the higher for longer camp. Okay. And and by the way, if I get lower oil, I'm all for it. I just need to see a plan to get us there. Is Trump going to completely capitulate and give them tolls on the Strait Of Hormuz? The market will love that, but I'm not sure that Trump's ready to do that position [00:53:21] S0: right So, Dan, are the questions that clients are asking you more longer term in nature, like what does this mean for data center earnings, or are they like when will this sort of when will the market come down? [00:53:31] S1: So all the above. So my email box today is, what do you think the governor of Texas is really going to do? [00:53:37] S2: Should I buy Micron? Right? But that's That's what they're asking. [00:53:40] S1: That's what [00:53:40] S0: they're asking. Yeah. [00:53:41] S1: Yeah, exactly right. And so it's very short term, but it's, Hey, can you bring your economist in? We have a great economist, Don Ritholtz. We need to know how this is going to impact his capex forecast and his GDP forecast. [00:53:53] S2: Is she that powerful? So here's Is that seat, whoever sits in it, that powerful?
00:53:53 · Josh Brown, Daniel Clifton
[00:53:53] S2: Is she that powerful? So here's Is that seat, whoever sits in it, that powerful? [00:53:58] S1: I wasn't going go into the governor of Texas isn't as powerful as most governors, but the dynamics here are very important. There's a moratorium on Texas data centers right now that Abbott put in place. There's an audit that's coming out on December 10 about the energy in Texas. And then there's a public hearing on December 17. So the idea was he pushed this out to the election. We were going to do this audit. He lifts the moratorium. Maybe we make some modest changes, it's off to the races again. She's now got that audit, Okay? And her point is, I'm keeping the moratorium in place until the legislator actually comes up with taxes and regulations for the data centers. [00:54:39] S2: Okay. [00:54:39] S1: Okay? And this is very important. In Texas, they're only in session for six months of a two year session. So, it goes from January to June. You want to see a circus, Austin, Texas, from April to June, when they're just trying to jam all these bills through. I'm probably gonna be live from there doing, like, a podcast like you guys with all the stakeholders for my clients. [00:55:01] S2: Somebody... Somebody's gotta be whispering to her, look at all the jobs. I know Oracle built big shit there. They're running TikTok out of a Texas Like, data somebody's gotta be whispering to her, hey, this is not as black and white as maybe you made it sound on the campaign trail. [00:55:17] S1: Absolutely. And by the way, that always
00:55:17 · Daniel Clifton, Josh Brown
[00:55:17] S1: Absolutely. And by the way, that always [00:55:19] S2: And she seems like smart. She seems smart. She's very smart. Okay. [00:55:22] S1: So, she's going to come in. And if she didn't win the legislature, it wouldn't be a big deal, but now she's got the legislature. So, she's going to say, I want to put a tax on there. I'm just asking that... They're flowing with money. I'm just asking them for a tax. [00:55:38] S2: I'll just a trillion dollars. They pay a higher tax. [00:55:40] S1: And there's a new type of negotiation happening between some of the leading environmental groups and some of the leading business groups, which are basically funded by all the hyperscalers. And the idea is to come up with a set of environmental standards that the data centers are going to abide by. So, that [00:55:58] S2: sounds productive, if people believe in it. [00:56:02] S1: It's going to take some time for all this stuff to work itself out. But my sense here is that you're getting to a point where you're going to be able to come up with some sort of negotiation. Virginia did it, and it killed Northern Virginia data center construction. We're still doing data centers in Richmond and outside Charlottesville, but we killed off the entire Northern Virginia data center.