It looks like the market is saying the hose has been cauterized here, that these data centers literally have nowhere to go. Even Republican governors are going to be somewhat remiss. If I were to try and pick one point of light that the markets woke up to and said, "Oh, uh-oh." And then also, it's validated by the thesis that the ones that are the least diversified to the choke of supply of data centers are the ones that got hit the hardest. That would be the point of light I would be looking at.
That's it. I think that's the most important thing for the markets coming out of this election was that the people were asked how they feel about data centers, and it was basically just a giant flat resounding no.
Today's number: $13,000. That's how much courtside seats at the Knicks home opener are selling for. Ed, knock it was a democracy.
Ed, how are you feeling as a young man? Are you hopeful?
Totally hopeful. Fired up. It's been a great week. I haven't been getting a lot of sleep because I've just been, you know, doing that midterms election live stream. I was reacting to that. Um, but you know, this is a big week.
That came up in my feed. It's like bad public access television talking about the elections and you're off like doing a gang bang with, you know, you're not only cheating on me, you're doing an orgy.
It's a collaboration. It's not an orgy, it's a crossover is what we call it in podcasting.
I love that. My favorite is the camera work that you'll say something and then they'll pan to Anthony going.
It's called television. Old people. Old people are growing with the young man.
Where are you right now? What? I don't get this background.
I'm in London. I'm heading home to New York tomorrow.
What are you doing in London? You don't even tell me you're leaving anymore.
I thought I did. I was in London for the live stream. Remember, Rest is Politics is a UK company. So we very weirdly traveled to London to react to what was happening in the US. So we woke up at 2:30 in the morning London time, headed over to the studio, and then reacted to one of the greatest congressional defeats in American history. So it was a great night or a great morning here in London.
You went to London to do a podcast on American elections, correct?
I'm pretty sure your employment agreement prohibits that, but I'll get back to you this afternoon with our lawyers. Pretty sure that means you forfeit all your equity.
I'm pretty sure that's advertising for our show.
That's marketing. We're going to see a big bump. Enough of this. Let's, Ed, how fantastic are we feeling today? How fantastic.
How are you feeling? So you're on tour. Is that correct?
Yeah. Look, I woke up yesterday. It looked good when I went to bed on, when was it, Tuesday night, and I woke up Wednesday morning. And I just sat on the edge of my bed watching CNN and then thinking, "Is this real? I'll go to Fox and see if it's real." I'd go to Fox and I'd see a bunch of like, "Oh god, those reactions were incredible." Just utter dejection. I'm like, "Wow, it is real. These people don't even know how to like wallpaper over this." That's right. And then they flip that. Suddenly they realize what's happened. And then finally after years of just total and utter delusion and sycophancy they realize, oh actually maybe we made a mistake. Especially when you consider the fact that their ratings have fallen 30% in the past year. So they clearly made an error and it clearly didn't work out. So now they have to figure out what to do next. But boy was that Fox News. That was fun to watch.
Yeah. You're going to essentially see all the Mag7 tech guys and all the podcasters that fellate them. They woke up yesterday morning and decided they're Democrats again. You're about to see all of these tech bros start to, you know, make more noises. I mean, these guys will like, you know, they'll go to any glory hole that looks hard with power at the moment. You're going to see all of a sudden a very significant pivot to the left in terms of the rhetoric from the tech CEOs. But anyways, I spent so much time yesterday just processing it and I realized I was finally starting to like my emotions were starting to bubble up when I was watching Goodfellas and began to sob.
Is that bubbling up or is that fully reaching a boil?
I think I'm just at a simmer at this point. I have literally more to go.
I have been dancing which is not good for anybody.
I saw your dance moves actually. I thought they were very good. I was actually quite impressed.
I appreciate that. Um, but let's stay on Goodfellas. Why? What got you?
I think I was just ready to emote and then I watched Shawshank Redemption. I couldn't stop. I could not stop crying. I'm like, he found him in Mexico. I wonder if they're friends now.
Well, that'll, I just, I've been very, and then like I can't even watch Modern Family. But the.
It really is. I really do think like I was trying to grasp my emotions yesterday. I'm just so happy for, I mean, you know, there's always stuff you don't like, but every minute it just kept getting better. I'm like, "Oh, wait. First openly gay senator. Oh, wait. First Native American governor. Oh, wait. We've only had three black governors in history. Now there are five. And by the way, good for the Republicans. They nominated or they elected a black governor in Florida. There's doctors, people who actually understand science, a ton of veterans who have served their country. I mean, there's just so many wonderful candidates that overcame stuff that shouldn't have been running for Senate, but they were the sister of some former senator and the president liked them or a guy who'd been impeached by his own party and had taken money to protect a pedophile. I mean, it just feels like America woke up and said, "Jesus Christ, I am back." This was an emotional week.
Because it basically, I mean, obviously it was a blowout win for Democrats, but it also feels like a blowout win for democracy, which I think a lot of people were genuinely losing faith in. And it seems as though, I mean, what was so, I agree with you, disturbing about the depravity, the cruelty, the brazen corruption. I mean the fact that our government was literally being run by mob bosses who are criminals. I mean literal criminals, proven convicted felon of sexual assault. So we already knew that. Plus the corruption that was very apparent and I hope we'll now start to see some justice taken. And of course he then went and removed all of the agents at the agencies who tried to investigate him for his corruption. But it seemed the fact that we had voted this guy in twice was America saying that we endorsed this and this is, we're okay with this and this is who we are. And the reality is that, you know, the elections were pretty close and I think honestly the Democrats shot the bed, especially the previous election cycle because of what happened with Biden. And so we weren't getting a very pure signal, I don't think, in 2024 of who the nation really is. But this time, it feels like all of the facts were on the table. We all understood what was going on. And this was America saying, "Yeah, actually we're not cruel and depraved. Actually we believe in decency. We actually believe in kindness. We believe that there is a way to be strong and kind and generous at the same time which is what so many of these candidates have exemplified like Torico's speech at the end. Maybe we should pull it up. I don't have it handy but it was all about love and generosity. And that was what he said about Paxton as well. I mean he went on Diary of a CEO and he was asked about Paxton at the end. He said, "I love this person because he's a child of God." I mean, that is, there's a level of strength and generosity that seems to be bubbling up in the party right now that really resonates with people. Like this is actually for the most part, as we have tried to argue multiple times, for the most part, people are good. They're good and they're kind and they're generous and this was America saying that's who we are. I think that's really well said. But I've been watching, you know, closely watching politics and elections since I was, you know, for a while now. And this really is, this is not since Nixon was about to leave office has there been this type of rout. Of the, I think there's 435 congressional districts. Not a single one flipped to Republicans. Not a single Democrat lost to a Republican yesterday in the entire House of Representatives.
Just unbelievable. And by the way, victory lap because we predicted exactly this. My June prediction was landslide.
You predicted it. You were much more bold and looking at the numbers. I, as someone who's, you know, I'm like a beaten dog that's just sort of scared to come out of the corner regardless of how nice everyone seems. And I was much more cautious. I'm like, I don't know. Anyways, I'm very happy and I've decided to wear these blue Democratic sunglasses or glasses which make me look like an aging porn producer in honor of the election.
I'm not going to agree with you, but I'm not going to disagree with you either. With that, shall we get into our intro and discuss next steps?
Democrats swept both the House and Senate in a historic victory last week. The day after the election, markets rallied with the Dow posting its best day since April 2025. Five big tech companies added roughly $1 trillion in value. But by Thursday, that momentum reversed. The Dow dropped more than 1,000 points and the Nasdaq sank 5%, hitting correction territory as tech stocks erased more than a trillion dollars within 30 minutes. The sharp swing suggests investors are still trying to make sense of what the election results could mean for the country with Democrats set to take control of Congress in January. The big question is what changes this shift in power could bring. So Scott, we're going to look at the potential impact of the elections in this episode. We're going to look at the impact on the economy and then we'll look into the impact on the markets. And it appears that investors, they really don't know what to think. Clearly a ton of anxiety, confusion, initially a lot of optimism coming off of this and then suddenly the sentiment just completely reversed. I also think it says something about the amount of leverage in the system, the fact that the markets can whipsaw this quickly. But I think one of the central questions going into the end of the year and next year is what will the Democrats actually do? Because there are these huge, massive decisions that Trump has made, specifically tariffs and Iran, and we could talk about Medicaid cuts and reductions to SNAP benefits, etc., but I think tariffs and Iran are the two big ones. And it seemed initially based on the market's response where the price of oil tanked and by the way continued to go down, it seems as though that is the market saying that the war is going to end soon. But I'm not sure if that's necessarily correct. So what do you think changes from here?
It's very hard to find themes in a one-day movement in the market. So if you look at the economic policies, one of the things the Republicans have been great at is branding themselves as the pro-growth, pro-economic growth party. I would argue that over the last 10 years, the GOP has moved from being the pro-business party to the pro-billionaire party. And that if you actually look at the policies of massive deficits, not reinvesting in the middle class, that over the last 12 presidential administrations, what you've seen is lower growth in Republican administrations, lower job growth with greater deficits. That's just a fact. And that I would have liked to have thought that the market said that this was an endorsement of democratic policies as it relates to the economy. But I think probably what it was, given the check back today, was a bit of a relief rally that the markets don't like uncertainty. That once the markets have sort of a feel for what the next few years will be like and the election is over, the markets like knowing who they're waking up next to, even if you don't agree with their politics, or they just want a certain level of certainty. And once the election was over, there was a bit of like, I call it an uncertainty relief or certainty relief rally today. I think especially with the wipeout we've seen in tech stocks, I wonder if people are interpreting this populist movement against data centers. I mean the elections sent a resounding face plant or not so fast girlfriend to data centers and thinking, okay, is the capital formation, if you have a wobbliness in big tech around it being out over its skis because of these incredible capex wars and then you have a potentially hostile Congress, you know, what might that mean for the companies that have basically become sort of synonymous with the market as they represent so much of the market. And I think it sort of woke up and said, "Okay, great. Now what?" Is this potentially at exactly the wrong moment when the sector itself, which is basically as goes AI, as goes the market right now, I would argue, are we about to see additional headwinds? If the Democrats come in and start just passing all sorts of anti-AI legislation, anti-growth legislation, I don't think that's going to happen. I think that regulation is actually key to a market's growth. One of the things that's been constraining AI companies is a lack of guardrails and clarity around how they operate, what they can and can't do, and some certainty from citizens that these models are going through some sort of blue ribbon panel or check. The piece of data I did see yesterday that just blew my mind and I think I might have seen it from you or from your show was Tom Lee and it's all over the internet now showing that when the Senate in a midterm election flips to blue, and that's happened I think 20 times since World War II, every time over the next 12 months or 6 months maybe, the markets rip up and it's 100%. It's 20 for 20. So I'm trying to digest why the market is seesawing back and forth. It is very hard to draw consistent themes and CNBC, I'm sure, has already interpreted this 45 different ways, but I think it is difficult to draw any conclusions either way, as I tried to do yesterday based on what we've seen in the last 48 hours in the markets. What are your thoughts?
It's very hard to understand exactly what investors are thinking. I mean just to start off with the initial rally because what you had was a very, very big rally. The Dow especially up 3%, best day of the year. S&P up one and a half percent, NASDAQ up one and a half percent.
