Something's Going to Break, We Don't Know What

The market gains for banks make sense because the Trump administration will provide less regulation and support a steeper yield curve, both beneficial for bank profitability; a flat yield curve and heavy-handed regulation are 'terrible for banks' while steeper yield curves and lighter regulation are positive.

“I mean there's no question that this is great news for banks right I mean this is I the the two things that are terrible for banks are an Administration that is dead set on regulating them at every step and a flat yield curve so now a steeper yield curve a little less regulation you know and and that's good for banks”

The Fed should make decisions independent of progressive/regressive consequences on cash balances and focus solely on its dual mandate of full employment and low inflation, regardless of political consequences, as demonstrated by Paul Volcker raising rates to 18-19% in early 1980s despite political opposition.

“I would argue that that the FED is supposed to be making decisions independent of of its consequence for progressivity and regressivity on cash balances there're they have a dual mandate F you know full employment low inflation everything else is just noise”

A non-independent Federal Reserve makes things worse, as demonstrated by Arthur Burns in the early 1970s when Nixon and Roger Stone applied pressure (threatening to stack the FOMC board, disclosing Burns' compensation in the press) which caused Burns to cave and support wage-and-price controls, contributing significantly to the Great Inflation of the 1970s.

“I'll tell you that a non-independent Federal Reserve tends to make things worse right and that's what happened to Arthur Burns during the early 70s when Nixon and Roger Stone who unfortunately is still alive um was doing some of the dirty tricks on uh back in his early 70s he cave to them eventually and he did he did he he overruled other members of his staff he supported the wage and price controls and if you look back at the fuse of the great inflation in the 1970s a lot of it emanated from poor Arthur Burns because the Republicans were threatening to stack the court essentially and put more people on the fomc board they were disclosing his compensation in the Press”

The federal government employs about 2% of the total US workforce, the lowest level in 85 years; non-defense discretionary spending has been cut to the bone to its lowest level since the early 1960s, meaning DOGE and Elon Musk will struggle to find meaningful spending cuts outside of entitlements (Social Security, Medicare, Medicaid).

“there's 300,000 employees in the federal government as a share of the total Workforce it's 2% that's the lowest number it's been in 85 years”

The Harris campaign had exceptionally strong economic data to campaign on—close to all-time high labor force participation rate, surgeon reshoring of US manufacturing jobs, 75% of energy bill spending going to GOP districts in swing states, largest surge in manufacturing-related construction on record, highest year-to-date equity gains in an election year since 1936, 10 states with highest import-to-GDP share were 8 GOP states, wages now rising faster than rents, and the Fed raising rates without recession for first time in 60 years—but failed to effectively communicate this to voters.

“here are your data points um close to an all-time high in the labor force participation rate which is a proxy for can you get a job okay you can a surgeon reshoring activity of us manufacturing jobs after reshoring progress decline under Trump industrial policy that overwhelmingly benefited GOP districts you cited 75% of the spending from the energy bill actually went to GOP districts which are in swing States nobody knows that um largest surge in manufacturing related construction on record ever uh including the chips bill which they were building facilities in Arizona Ohio New Mexico state that we thought were meaningful almost done highest year-to-date Equity gains in an election year since 1936 uh of 10 states with the highest share of imports to State GDP eight are GOP States”

New York City is underestimating asylum-related costs by $10-15 billion annually according to Brad Lander, the city comptroller, with these funds diverted from critical infrastructure needs like converting underutilized office space (with 20% occupancy on 23rd and 9th Avenue) into residential or industrial housing.

“Brad Lander who's at the control of the currency who tells the truth about what's really happening and he published a report last year that said the city is underestimating by something like 10 to 15 billion doar oh my God the cost of the annual that money comes from where everyone right police firemen um Subway fairs you know business taxes uh taxes on the sale of property you name it and and all and the problem is that money is desperately needed right now for New York to do something about the stock of underutilized office space on 23rd and 9th that is going to eventually have to get convert it's got It's got a 20% occupancy rate going to zero”

The Federal Reserve became politically vulnerable and at risk of losing independence because Federal Reserve System staff made campaign donations totaling more than $600,000 in 2024 with 92% going to Democrats, making the Fed appear to be a Democratic institution rather than a non-partisan Federal institution.

“axios actually wrote today uh one of the strange quirks of the 2024 election cycle political donations by Federal Reserve System staff totaled more than $600,000 with 92% going to Democrats I didn't fact check this let's assume it's directionally right 92% rounds up to 100% people are now going to look at the FED like it's a not Democratic institution but a Democrat institution”

Federal government has 300,000 employees representing 2% of total workforce, the lowest share in 85 years, so claims about cutting the federal government face the constraint that there isn't much discretionary spending to cut.

“there's 300,000 employees in the federal government as a share of the total Workforce it's 2% that's the lowest number it's been in 85 years so go ahead what are you cutting”

A steeper yield curve and less regulation is good for banks, and this is now in place; Trump administration's approach to energy will be different than Biden's despite the massive clean energy bill spending ($1-2 trillion over 10 years not captured in original CBO scoring).

“the two things that are terrible for banks are an Administration that is dead set on regulating them at every step and a flat yield curve so now a steeper yield curve a little less regulation you know and and that's good for banks um energy um you know sometimes The Bu Administration gets a an unfair wrap on energy oil gas and natural gas liquid production went up substantially under Biden but they passed an energy bill that's going to for Renewables that's going to cost somewhere between one and two trillion dollar over the next 10year budget window”

Brad Lander, NYC Comptroller, published a report showing the city is underestimating asylum costs by 10-15 billion dollars annually, whereas the mayor's Office of Management and Budget underestimated the problem.

“the same thing happens with New York City's mayor he's got his own version of the OM an Office of Management and budget but then there's Brad Lander who's at the control of the currency who tells the truth about what's really happening and he published a report last year that said the city is underestimating by something like 10 to 15 billion doar”

Close to an all-time high in labor force participation rate exists, which is a proxy for job availability; manufacturing jobs have reshored after decline under Trump; industrial policy overwhelmingly benefited GOP districts, with 75% of energy bill spending going to GOP districts in swing states; largest surge in manufacturing-related construction on record; highest year-to-date equity gains in an election year since 1936; eight of ten states with highest import share to GDP are GOP states; wages are now rising faster than rents.

“close to an all-time high in the labor force participation rate which is a proxy for can you get a job okay you can a surgeon reshoring activity of us manufacturing jobs after reshoring progress decline under Trump industrial policy that overwhelmingly benefited GOP districts you cited 75% of the spending from the energy bill actually went to GOP districts”

Federal Reserve System staff made political donations totaling more than $600,000 in the 2024 cycle with 92% going to Democrats, creating perception that the Fed is a Democrat institution rather than an independent one.

“axios actually wrote today uh one of the strange quirks of the 2024 election cycle political donations by Federal Reserve System staff totaled more than $600,000 with 92% going to Democrats I didn't fact check this let's assume it's directionally right 92% rounds up to 100%”

New York City was hit with a 10-15 billion dollar asylum cost surge for housing and medical services, paid for from police, fire, subway fares, business taxes, and property sales taxes—all of which the city desperately needs to convert 20% occupancy office space on 23rd and 9th to industrial or residential housing.

“New York is now settled with a 10 to 15 billion Asylum hit for mostly housing but also medical stuff... that money comes from where everyone right police firemen um Subway fairs you know business taxes uh taxes on the sale of property you name it and and all and the problem is that money is desperately needed right now for New York to do something about the stock of underutilized office space on 23rd and 9th that is going to eventually have to get convert it's got It's got a 20% occupancy rate”

EV subsidies can only be eliminated through reconciliation bills that pass Congress, not through executive action, and the House currently has its tightest governing margin since 1900.

“so the department of energy they have the horses to to do I mean they got a they got a four seat what is it a four to six seat Marg it's the tightest governing margin in the house in since 1900 okay so uh we'll see right um McCarthy had trouble with the caucus and you know we'll see how Johnson does”

In the 10 states with the highest share of imports to state GDP, 8 are GOP states; voters would reasonably be expected to be more wary about tariffs in those states, but they were not.

“of 10 states with the highest share of imports to State GDP eight are GOP States you would think people would be a little bit more wary about tariffs in those States they weren't”

The Biden administration's removal policy (lower left chart) represents the biggest indictment of the administration's immigration approach, and it was purely ideological rather than economically motivated.

“the lower left chart is the biggest indictment of the Biden administration's approach to immigration that I've seen yeah and it was purely ideological it was not a it was not a uh it was not an economic consideration let's have open borders because it's great for the economy it was it was purely let's reverse everything Trump did”

The root cause of the housing problem is a massive increase in zoning regulations and land-use reform lawsuits; reversing this would require an administration that is willing to deregulate rather than increase regulations.

“if you look at the root of the housing problem the root cause is a massive increase in zoning regulations and land use reform lawsuits...the reason the chart on the right is there is who would you trust to break the Log Jam of a housing crisis whose who one of whose root causes is too much regulation an Administration that that set a new gold record in new regulations by presidency or one that didn't”

Legal immigration structured around merit-based and needs-based criteria (following Canada, Australia, UK model) would allow the US to select for labor market requirements like truck drivers, which is more rational than the progressive wing's resistance to this approach

“a legal process would then allow the United States to do what Canada Australia and the UK are now doing which is um needs-based immigration and merit-based immigration in other words we need more truck drivers yeah let's prioritize that they're selecting for what's good for the country”

Voters are smart enough to understand that housing affordability and cost of living have become worse over time, and one Wharton analysis shows a perfect correlation between housing affordability in 25 different metropolitan areas and their level of zoning regulations.

“I think the voters are smart enough to draw that con I think they know that to put it this way the the inner life in an inner city is getting worse rather than better and one of the issues there and there's a Wharton there's a Orton analysis that shows this like perfect correlation between housing affordability in in 25 different msas you know the Metropolitan Cal areas and their level of zoning regulations”

Semolist's parents' generation came through legal immigration processes and assimilated; he is sympathetic to the need for legal immigration processes, and other Anglo-Saxon countries like Canada, Australia, and the UK now do needs-based and merit-based immigration selection.

“I come from a generation when the vast majority until about 15 years ago the vast majority of immigrants into this country came here legally... it's funny cu liberal there are other yeah but there's other Anglo-Saxon countries that are doing this and I think when you look at the progressive wing of the democratic party they are violently against this right”

During Trump's first term, Apple received an iPhone exclusion from tariffs, and more recently he was 'willing to play ball' with exclusions, suggesting he is not as extreme in practice as his rhetoric suggests; this indicates tariff policy will have carve-outs for politically important sectors.

“he did it with apple what's that he did it with apple we Apple we got an iPhone exclusion the the phones are being made in China like that's that's it right um so we know that he's willing to play ball he's not he's not like a he's not as extreme indeed as maybe he is in word”

RFK Jr.'s appointments and statements about vaccines are concerning because he lacks medical background or scientific degrees; he studies issues but is 'very opinionated' and conflates vaccines with mercury and autism, a claim 'very easily debunked' (Europe doesn't use mercury in vaccines but has the same autism incidence), and 'he's not great for the scientific method.'

“no medical background uh no scientific uh degrees of any kind he's a very opinionated person who studies these issues but then he also does things like conflate vaccines with Mercury with autism in Europe they don't have mercury in the vaccines and they have the same incidence of autism so very easily debunked pet theor he's not great for the scientific method let's just say that”

Social Security was originally structured so that life expectancy was approximately the age at which payments began, meaning the median recipient would never receive benefits; now median life expectancy is in the late 80s and early 90s depending on demographics, making Social Security function as a full retirement program rather than a temporary insurance program.

“the bigger issue with Social Security is you remember this when it was originally structured the life expectancy of was was was basically that you die and wouldn't get it so the median person would never get the money yeah now you know like you know the median ages are you know late 80s early 90s depending upon what demographic you're looking at”

The United States has a low organic birth rate and needs immigrants for prosperity, but needs a legal immigration process similar to Canada and Australia that enables needs-based and merit-based selection rather than open borders.

“the United States has a low organic birth rate and needs immigrants um you know whether you look at Heritage Institute KO they all agree the United States needs some kind of immigration to prosper”

The blue line on federal spending charts shows entitlement spending (Medicare, Medicaid, and Social Security enhancements) which by 2034 is expected to be approximately 5x the level of non-defense discretionary spending; entitlements have no guardrails or breakwaters like other countries have, causing the ratio to grow continuously.

“the blue line of this chart is entitlement spending which by 2034 is expected to is that 5x versus what it was in 1965 no it's it's 5x the level of non-defense discretionary spending”

Immigration bill proposal by Biden administration did not incorporate merit-based or needs-based selection like Canada, Australia, and UK, which would allow US to prioritize immigrants in specific needed occupations like truck drivers.

“a legal process would then allow the United States to do what Canada Australia and the UK are now doing which is um needs-based immigration and merit-based immigration in other words we need more truck drivers yeah let's prioritize that”

Microsoft's initial Copilot earnings numbers disappointed the market and the entire NASDAQ was hammered, suggesting that current AI adoption metrics and productivity claims are not yet translating to stock price support.

“the day that Microsoft put out its initial co-pilot numbers the stock the stock got hammered the whole NASDAQ got hammered”

Early signs of AI adoption are not encouraging; Microsoft's announcement of initial Copilot numbers caused its stock to be hammered and the whole NASDAQ declined, suggesting market skepticism about near-term AI productivity gains.

“the day that Microsoft put out its initial co-pilot numbers the stock the stock got hammered the whole NASDAQ got hammered um do you have an iPhone 16 yet no you don't need one I have it yeah I have I updated the software Siri is dumber than she's ever been honestly”

Self-driving vehicles must work reliably in multiple conditions beyond just Phoenix and San Francisco, which have sunny weather; the evidence is not yet in on true all-weather autonomous capability.

“we're waiting to see evidence that self-driving vehicles are good enough to actually work in places other than Phoenix and San Antonio where they're sunny every day”

The Biden administration went 'absolutely Hog Wild' with paperwork-burdening regulations according to Doug Holtz-Eakin at the American Action Forum, with many being jammed through during the lame-duck period; this created an opening for the Trump administration to claim a deregulatory mandate.

“there's a guy Doug holtzin who is at the American action forum and he public I was reading some of his stuff over the weekend the Biden Administration went absolutely Hog Wild with uh paperwork burdening regulations a lot of which they're trying to jam through during these last couple months”

The Biden administration passed an Inflation Reduction Act that increased inflationary pressures; it is the most Orwellian named bill in Congressional history. Producer price reports show Transformers and Power Regulators for transmission systems and power prices rising not just in California but in Texas, Pennsylvania, and New York—very inflationary.

“they actually passed something that they called the inflation reduction act which is the most orwellian named Bill in the history of Congress it's almost perfect and yeah and it has done nothing except increase inflationary pressures if if there are 49 categories in the PPI report over the last few years the number one thing that's increasing in the producer price report uh Transformers and Power Regulators for transmission um Power prices are going up not just in California but in Texas and Pennsylvania and New York this is a very very inflationary bill”

The hyperscalers' argument that 'the biggest risk is underinvestment' is not credible; even Google, which pioneered search and has 95%+ browser market share, cannot afford to say investment is insufficiently risky because it's a defensive strategy against AI search threats.

“they've already got 95 plus% search browser market share so that's so that's not going to increase their margins or pay for that that's a defensive strategy the same way that they're paying $30 billion do a year to Apple for Google to be the they won't be allowed to do anymore either dep depending upon how the justice department lawsuits kind of work out of settlement yeah and Google is not monetizing the AI summary to the extent that they monetize search and they're probably years away from being able to do that so if anybody can say the risk is under investment it's not Zuckerberg it's not Tim Cook it's literally Google”

Democrats blew the inflation narrative according to Nick Somas, with Biden proposing a $1.9 trillion stimulus bill in January 2021 on top of a $900 billion COVID relief bill, representing massive fiscal overload at a time when stimulus was no longer necessary and would inevitably create inflation.

“President Biden hadn't even been inaugurated when he and his senior advisers made a Monumental gamble in January 2021 that would reverberate through his presidency fresh on the heels of a $900 billion covid relief bill that Congress had approved weeks earlier Biden proposed a $1.9 trillion stimulus bill so a big critique in the Obama years was that there wasn't enough fiscal stimulus”

The Biden Administration went 'absolutely hog wild' with paperwork-burdening regulations, as documented by Doug Holtz-Eakin at the American Action Forum, with many regulations being jammed through during the last months of the administration.

“the Biden Administration went absolutely Hog Wild with uh paperwork burdening regulations a lot of which they're trying to jam through during these last couple months and uh so I'm I'm I buy into the notion that in broad effective deregulatory agenda aimed at small and medium-sized businesses can have a huge payoff”

Matt Gaetz's appointment as Attorney General is concerning because he lacks relevant prosecutorial experience: he has not served in the Department of Justice, a US Attorney's office, a State Attorney General's office, nor does he have executive experience at a major US or state agency; he only worked at a small 9-lawyer Florida law firm and in the Florida State Legislature.

“okay so like a like a strip mall basically law firm and then he was in the Florida State Legislature and that's it so forget about all the personal stuff with him who knows what's true what's not just on that basis alone it seems weird that he want Trump wants to die on this hill”

Wages are now rising faster than rents, which is a meaningful shift in real purchasing power for consumers dealing with inflation.

“the inflation surge um was painful but wages are now Rising faster than rents”

The home price-to-income ratio in the United States reached approximately 10 times median income by 2024, up from 7.5 times in 1995 when Semolist was 22 years old, representing a near-doubling of housing affordability burden.

“the median home price is 10 times the median income the United States after having been 1995 when I was uh 22 about 7 and a half okay so that's meaningful that's it it's very meaningful”

Prices rose in aggregate by 20% during Biden's term compared to 8% during Trump's first term—more than a double the rate of price increases; this aggregate measure includes specific line items like auto insurance where increases were 'hysterically funny' (extremely high).

“during Biden's term Prices rose in the aggregate by 20% during Trump's term prior 8% it's more than a double in the aggregate rise in prices for everything and if we go in line items and we start looking at auto insurance it's h sterically funny um this is really look there's social issues that got people out to vote or got people really vocal but I I agree with you it's like you had to come out and Tackle this inflation story headon”

Chris Wright as Energy Secretary has positioned himself as deregulation-focused and wrote a 180-page piece on energy policy whose first chart came from Semolist's annual energy report, indicating alignment with pro-business energy policy.

“the appointment of of Chris Wright as um as Energy Secretary right from Liberty Energy I heard he likes your charts he does he he uh he wrote 180 P 180 page piece last year on his view of and the first chart in there came from our annual energy piece um all right it's good that it's good that this podcast has a voice for the new Administration”

The Affordable Care Act could not be repealed despite Trump having unified control of Congress in 2016, suggesting bills that are passed are very hard to unwind, which applies to the Inflation Reduction Act renewable provisions Trump wants to cut

“Trump ran in 2016 on getting rid of the Affordable Care Act and controlled both chambers of of Congress and wasn't able to do it um as I mentioned 75% of the energy bill Capital spending has been taking place in Republican districts yeah and you're starting to see quiet back channels to the administration of what they don't want them to cut”

The Biden administration's $1.9 trillion stimulus in January 2021 was unnecessary and inflation-increasing, coming on top of the $900 billion COVID relief bill from December 2020; the administration had learned from perceived under-stimulus in the Obama years and overcorrected dramatically, and many people said at the time that this stimulus was 'nor is it inflation reducing.'

“a big critique in the Obama years was that there wasn't enough fiscal stimulus and the Fed was left to push on a string and try to do by themselves right the Biden folks many of them were around including Biden for the Obama years and they seemed like they really wanted to go hard the other way let's do more fiscal stimulus than anyone has ever done unfortunately it was coming on top of all of the stuff that Trump had done and minuchin and uh and the Federal Reserve and we said at the time a lot of people did that this is not necessary but he promised it nor is it inflation reducing”

The market is currently pricing in a 'metaverse risk of zero' for AI, but if market sentiment shifts to price in a '30% metaverse outcome' (i.e., 30% probability that AI doesn't deliver expected value), uncertainty and fear would creep in, causing market repricing and potential decline even if AI spending continues.

“the biggest risk to the market over the next let's call it 12 to 18 months yes is it is it big Tech pullback because that will drag the market down with it it's so big yeah or is it something macro no I I think the bigger risk is this recognition that like right now let's use like the metaverse scale right the metaverse was a complete loser in almost every regard the markets are pricing the metaverse risk of AI at zero if the markets price a 30% metaverse outcome for AI right like so it's not it doesn't work it's like how much fear and uncertainty has to creep in because right now everybody buys in 100%”

Harris's housing solution of giving more people housing subsidies would push housing prices up more, worsening the affordability crisis rather than solving it; this is trying to fix inflation with more inflation.

“the notion that you were going to solve the housing Problem by giving more people more housing subsidies to go and push housing prices up more fix inflation with more inflation right it made absolutely no sense”

The fiber optic cable buildout in 1999-2000 is a relevant precedent for AI infrastructure: Corning made enormous profits laying fiber in those years, but it took them 20 years to make back the equivalent amount of profit, suggesting a similar timeline risk for current AI infrastructure overinvestment.

“looked at the amount of money that Corning made in 1999 and 2000 laying fiber optic cable and after that dream Unwound it took them 20 years to make the amount of money that they made in 1999 yeah to because there were so and so that's my concern eventually all this GPU infrastructure is going to be utilized how long will it take and who's going to go bankrupt on the way there”

Cost centers within large organizations (like AI departments in banks) are typically evaluated based on headcount and budget size rather than profit, creating perverse incentives for empire building and continued spending regardless of actual ROI; Semolist questions whether the last person in defense (presumably a CFO evaluating AI spending) would approve continued high AI investment if forced to justify it.

“some this kind of the risk is under investing be careful for these these Empire Builders even within Banks like JP Morgan all the big firms now have these independent AI departments full of Engineers they're not profit centers they're cost centers and cost centers typically get evaluated in terms of their importance based on how many people they have what their budgets are in that's the last guy in defense that I'm going to go to to say how is how is this working out what are the cost benefit issues associated with AI adoption do you think we should spend more money”

The share of Americans who assess their own finances positively has remained relatively stable around 75% throughout recent years, but the share who assess the national economy positively has fluctuated much more; the spread between personal financial perception and national economic perception 'has blown out like credit spreads in the GFC'—this gap is 'at the heart of this election.'

“if you look at this chart it's the it's the it's from uh the share of Americans who assess their own finances and the national economy positively and the line that shows when people say how are your own finances it's that's steady that that's around 75% give or take and it doesn't really fluctuate that much people feel okay about how they're doing but if you look at if you ask them how is the national economy doing and you were to chart the spread between those two responses it has blown out uh like credit spreads in the GFC just an absolute explosion in the difference between how people think they're doing and how everyone is doing and that is at the heart of this election”

Old media is effectively dead, and the role that Rogan and other podcasters played in the election, combined with Harris refusing to appear on Rogan's show, cost her the election.

“one of the key themes for me for this election was old media just dead uh the the role that Rogan and other podcasters played and the fact that she said no or what I don't know what happened there but she didn't go on for whatever reason that mattered a lot”

Harris avoiding the Al Smith dinner and not getting battle-tested through a traditional presidential campaign hurt her candidacy, as Americans are looking for people who have been battle-tested.

“she also didn't go to the Al Smith dinner and um and some people were kind of like wow that was that's the first time that's the that's the big like Catholic uh event in New York the first time that a candidate opted not to appear and you know obviously her campaign made the decision what's the benefit for her going just to get kind of made fun of by Trump... but you know Americans are kind of looking I think yeah for people that have been battle tested and the whole point of Harris's candidacy is it avoid it avoided all the battle testing associated with presidential campaigns and that was just another exclamation point on it”

The hyperscalers have publicly committed to their customers and stakeholders that their data center power will be green/renewable, but actually delivering green power at scale while maintaining the necessary infrastructure buildout is 'not so fast'—there are limited options (only 3 decommissioned nuclear plants that might be recommissioned, small modular reactors are unproven), leaving them likely to 'quietly push all the green stuff under the rug and rely on natural gas.'

“all of these hyperscalers have committed to their customers and their stakeholders that the power is going to be green okay not so fast um you can't recommission a nuclear plant that's already in the process of being decommissioned there are three plants in the United States Palisades in Michigan Dwayne arold and Iowa and Three Mile Island reactor number one that were decommissioned within the last few years and haven't been dismantled yet where the spent fuel is moved offside etc etc and they start dismantling the equipment so yeah there are three instances of decommissioned nuclear plants that that may be able to go on the grid but there's not 12 of them there are tons of companies competing to build small modular reactors not a single one of them has ever been delivered on time under budget or is currently operational so that's a lottery ticket maybe it pays off maybe it doesn't”

According to Semolist's analysis in his piece, Biden and Harris should have been 'a lot more frantic' about inflation risk, and the subsequent inflation surge was the worst since the late 1970s, accompanied by the worst housing affordability data on record.

“to which you said actually Biden and Harris should have been a lot more frantic the subsequent inflation surge was the worst since the late 70s and accompanied by the worst housing affordability data on record”

The correlation between land-use regulation cases and declining starter home construction is nearly perfect: starter homes comprised 30-40% of new home construction in 1980 and declined to 8% by 2024, directly coinciding with the increase in federal and local zoning restriction lawsuits shown on the Gold Line of the chart.

“it used to be that something like 30 or 40% of all new homes were 1400 square feet or less starter homes starter homes they're gone they're 8% now and that's to that has directly that that percentage from 33 to8 has directly coincided with the increase of zoning regulations”

The Treasury yield curve and Treasury control is what will ultimately constrain or control Trump's policy options, not the Fed; the wrong kind of tariffs combined with too much deportation that tightens labor markets in the lowest quintile will force the Fed to start hiking rates again, meaning you need a productivity shock and massive deregulation to avoid this outcome.

“the one thing Trump can't bully or control is the tenure Treasury and that's going to be the the ultimate barometer uh and control mechanism for the next Administration okay because the wrong kind of tariffs I I'm not saying there's no room for tariffs but the wrong kind of tariffs and too much deportation which tightens the labor markets particularly low is quintile and the fed's going to have no choice but to start the hike rates again he can't get us to start buying the tenure push yield Stone”

Corning made enormous amounts of money in 1999-2000 laying fiber optic cable, but it took them 20 years to replicate those earnings after the telecom dream unwound, offering a cautionary precedent for AI infrastructure investment.

“looked at the amount of money that Corning made in 1999 and 2000 laying fiber optic cable and after that dream Unwound it took them 20 years to make the amount of money that they made in 1999”

All hyperscalers have committed to customers and stakeholders that their power supply will be green, but meeting this commitment faces serious constraints: nuclear plants cannot be recommissioned fast (three plants in Palisades MI, Duane Arnold IA, Three Mile Island are being decommissioned but can't quickly restart).

“all of these hyperscalers have committed to their customers and their stakeholders that the power is going to be green okay not so fast um you can't recommission a nuclear plant that's already in the process of being decommissioned there are three plants in the United States Palisades in Michigan Dwayne arold and Iowa and Three Mile Island reactor number one that were decommissioned within the last few years”

Trump can't bully or control the ten-year Treasury, which is going to be the ultimate barometer and control mechanism for the next Administration; if the wrong kind of tariffs and too much deportation tighten labor markets, the Fed will have no choice but to hike rates again and face impossible tenure Treasury dynamics.

“the one thing Trump can't bully or control is the tenure Treasury and that's going to be the the ultimate barometer uh and control mechanism for the next Administration okay because the wrong kind of tariffs I I'm not saying there's no room for tariffs but the wrong kind of tariffs and too much deportation which tightens the labor markets particularly low is quintile and the fed's going to have no choice but to start the hike rates again”

Semolist's daughter had a deadly peanut allergy and there have been changes in the food supply related to things RFK Jr. has raised; there are legitimate FDA failures like the recalled Vioxx drug that caused heart attacks, suggesting fair questions can be asked about drug development establishment without embracing RFK Jr. theories.

“I have a I have a kid with a deadly peanut allergy yeah and it's all it's there are no but no there there are things that have changed about the food supply and there are things that are really unhealthy about about you know aspects of the American food ecosystem... remember Sarah brecks yeah right so and there's it was giving people heart it was giving people heart attacks”

Old media is dead—the role that Rogan and other podcasters played in the 2024 election was significant, and Harris said no or didn't go on for whatever reason, which mattered a lot.

“one of the key themes for me for this election was old media just dead uh the the role that Rogan and other podcasters played and the fact that she said no or what I don't know what happened there but she didn't go on for whatever reason that mattered a lot”

The economic outcome will be shaped by a horse race between the administration's deregulatory agenda (which is deflationary) and the inflationary pressures from tariffs and deportations, with the resolution determining market and economic stability.

“so it's the tariffs and the deregulation inflationary pressures against the deflationary pressures of the deregulatory agenda and a pro business agenda and you know we'll have to see how that turns out”

If office buildings are converted into apartments, NYC can certainly handle more people; the city hasn't grown in years and could accommodate additional population, but currently faces the opposite problem of miniature tenderloin districts forming when office buildings sit empty with vacant street-level retail.

“if we convert these uh into Apartments how many more people can the city handle um they can certainly handle as much as we were handling you know I mean there's there's there's the city hasn't grown in terms in in years and so we could the city could certainly handle more people and we're having the opposite problem we're having little miniature versions of the tenderloin District in San Francisco where three or four Office Buildings in a row become empty the underlying street level retail then become empty”

The S&P 500 is up 3% since the election with financials up 8%, discretionary up 7.5% (mostly Tesla), energy up 6%, reflecting market repricing to full valuation of 'Trump trade' expectations that were only 60-70% priced in before the election became certain.

“even up until even up until a few days before the election the highest Trump shares I saw in some of the betting markets were 60 70% so it makes sense that after the reality of his election becomes clear that you have those things kind of Gap up to the full level that they were pricing in”

The highest year-to-date equity gains in an election year since 1936 occurred in 2024 at 10%, yet this was not communicated by the Harris campaign.

“highest year-to-date Equity gains in an election year since 1936 uh of 10 states with the highest share of imports to State GDP eight are GOP States”

Federal Reserve made decisions during the pandemic influenced by mission creep concerns about inequality, including Jackson Hole speeches suggesting people of color are more susceptible to rising rates and that the Fed should consider this in rate-hiking policy, which distracted from the primary mandate of controlling inflation.

“there was a Jackson Hole speech about how uh people of color are more susceptible to the effect of rising rates and maybe we ought to think about the inequality that comes from um hiking weights too soon into an expansion there there was mission creep in a lot of areas”

Trump has a four-to-six seat margin in the House (the tightest governing margin since 1900) which constrains his legislative ability to pass bills; McCarthy had trouble with his caucus and Johnson will face similar constraints.

“it's the tightest governing margin in the house in since 1900 okay so uh we'll see right um McCarthy had trouble with the caucus and you know we'll see how Johnson does”

Wage growth now exceeds rent growth for the first time in this cycle, representing a genuine improvement in affordability that would have been powerful messaging if communicated to voters

“the inflation surge um was painful but wages are now Rising faster than rents”

During Biden's term, prices rose in the aggregate by 20%, compared to 8% during Trump's prior term, representing more than a double in the aggregate rise in prices for everything.

“during Biden's term Prices rose in the aggregate by 20% during Trump's term prior 8% it's more than a double in the aggregate rise in prices for everything”

AI adoption rates are increasing across companies and industries, but adoption rates alone don't indicate value generation; companies may simply be 'checking the box' (letting employees use ChatGPT freely) without systematically deploying AI to reduce workforce costs or enhance productivity.

“there's no question about that but AI adoption rates could be as simple as a company's just checking the Box yeah we we have we have our employees use GPT when they want we don't have any answers yet on how much people are actually going to be willing to Shell out and real hard dollars for this stuff when it comes time to for them paying for it or how are these hyperscalers going to make all this money back”

The progressive wing of the Democratic party is 'violently against' merit-based and needs-based immigration selection, representing an ideological constraint that prevents rational immigration policy design.

“and it's funny cu liberal there are other yeah but there's other Anglo-Saxon countries that are doing this and I think when you look at the progressive wing of the democratic party they are violently against this right”

Hyperscalers continue to claim the biggest risk is underinvestment in AI, but this claim is self-serving since they're the ones who benefit from continued spending and have strong incentive to keep narrative alive.

“the hyperscalers they continue to say the ones that are spending $500 billion do on this they continue to say the biggest risk is underinvestigated”

Trump will likely implement tariffs, and the market will initially react negatively, but he won't unwind them if markets react badly because he is a 'markets guy' who uses the market as a scoreboard; however, a universal tariff of 5-10% on all imports (which hasn't been done since the 1930s) would be 'a big deal' and markets would 'shoot first and ask questions'—the key question is whether he's serious about universal tariffs.

“he's a markets guy that's a scoreboard and it's true uh and therefore if the market react you making fun of me adversely that's what I say no it's not just you if the markets react adversely uh he'll back off he's not gonna blow up the Dow he's not gonna blow up the Dow Jones over tariffs”

Mass deportations of approximately 1 million people (in a country of 11 million undocumented immigrants) would have significant disruptive effects, particularly on consumer discretionary sector, staples companies, and industries that depend on low-wage labor, though the most profitable S&P 500 companies have low labor-to-capital ratios and would not be significantly impacted.

“the most most profitable companies in the S&P right now incredibly low labor to Capital ratios and the labor they do hire are not at that level so now but now you're talking about you know the entire consumer discretionary sector some of the staple companies and then you know other other industries that feed off of that so I think we we'll have to see the we may end up in some kind of middle where there are some highly”

Hyperscalers (major cloud/AI companies) are spending approximately $500 billion per year on GPU infrastructure buildout, scheduled to make $100 billion per year in revenue from that infrastructure, creating a $400 billion hole between spending and revenue that must be filled by 'killer apps' that reduce workforce costs or enhance productivity by 20% within 12-18 months.

“what's fascinating about what's going on is you have these hyperscalers right that are spending let's call it rough numbers about $500 billion doll a year building out GPU infrastructure and they're scheduled over the next couple years to to make let's say 100 billion a year so there's a $400 billion hole in between the money that people are spending and giving to Nvidia and other data centers and stuff like that and the amount of money that they're making and so that's the biggest question I think for the markets putting all this election stuff aside is within the next 12 to 18 months are we going to start seeing the killer apps”

The best spokesman for Bidenomics over the last 18 months was the Secretary of Transportation, and there is no precedent in the modern era for an administration relying on the Secretary of Transportation at that depth of bench to tell the story, indicating fundamental failures in cabinet staffing and campaign strategy.

“the best by far the best spokesman for bionomics over the last 18 months has been the Secretary of Transportation and there simply is no precedent in the modern era for an Administration and a and a presidential campaign run by the Vice President relying on the Secretary of Transportation going that deep in the depth chart”

DOGE is expected to produce 'lots of fanfare and cork popping' but ultimately minimal dollar cuts because most federal spending is either untouchable (defense contracts, entitlements) or already minimized (non-defense discretionary).

“what I'm expecting from VC and and the Doge Department with Elon is lots of fanfare and cork popping and a very small amount of dollars are going to cut”

Steve Mnuchin had significantly higher Google Trends search visibility than Fed Chair Janet Yellen in Trump's first term, and most JP Morgan clients and listeners could not identify Mnuchin in a police lineup, indicating that the Biden-Harris administration's choice of an academic former Fed chair as the public face of 'Bidenomics' was a messaging miscalculation compared to Clinton's choice of Bob Rubin to sell the Clinton economy.

“I had a chart in the eye on the market after the election I did a Google Trends search for manukan yeah in h in Trump's term against Yellen we have we have this um most of our clients and most of your listeners couldn't identify Steve manukan in a police lineup they don't know who he is yeah Yellen had a fraction of his recognizability and visibility she disappeared”

Elon Musk was the single biggest beneficiary of Biden administration policies despite not receiving recognition; the administration excluded him from EV events at the White House, which he never recovered from, contributing to his subsequent support for Trump, though this was strategically damaging since Musk's support enables Trump to eliminate the EV tax credit which Musk himself relies on.

“you know who the biggest beneficiary was of biomics ironically it's Elon Musk there's literally there's literally nobody has benefited more in the last four years the problem is they lost him they they dissed him for the EV event at the White House and quite frankly he didn't get over it maybe he shouldn't have they acted like he doesn't exist he is the singular person to serve as the Catalyst for the EV Revolution whether you like Tesla cars or you don't or you like him on Twitter or you don't you can't say that he shouldn't have been there”

The risk to markets over 12-18 months is whether uncertainty creeps in about AI's timetable; markets are currently pricing AI at zero risk ('100% buy-in'), so the risk isn't full failure but 30% metaverse-type outcome probability becoming apparent.

“the bigger risk is this recognition that like right now let's use like the metaverse scale right the metaverse was a complete loser in almost every regard the markets are pricing the metaverse risk of AI at zero if the markets price a 30% metaverse outcome for AI right like so it's not it doesn't work it's like how much fear and uncertainty has to creep in because right now everybody buys in 100% And so all that has to happen is for some uncertainty to creep in about the timetable”

Hyperscalers may 'quietly push all the green stuff under the rug' and rely on natural gas instead, which would represent a practical solution but undermines environmental narratives.

“the the other big thing staring these data center investments in the face is the the power expenditures are going to be high unless they just kind of quietly push all the green stuff under the rug and rely on natural gas of which there do that this might be the time this might be when you get away with it”

Tech company margins are still going higher despite massive AI spending, which means the productivity benefit is showing up as margin expansion rather than revenue/earnings decline—but if AI doesn't deliver, multiples will contract immediately while margins stay high.

“it's amazing that these companies have spent so much money and their margins are still going higher at the same like their their margins are not being impacted by the spend however the benefit that they're getting is the multiple expansion because if this does not come to fruition the margins might stay high but the multiples will contract immediately absolutely”

Steve Mnuchin had far greater visibility and recognizability than Janet Yellen according to Google Trends search comparing his name during Trump's term versus Yellen during Biden administration, yet most clients and listeners couldn't identify Mnuchin in a police lineup.

“I had a chart in the eye on the market after the election I did a Google Trends search for manukan yeah in h in Trump's term against Yellen we have we have this um most of our clients and most of your listeners couldn't identify Steve manukan in a police lineup they don't know who he is yeah Yellen had a fraction of his recognizability and visibility”

For the first time in 100 years, incumbents lost voter share in every election, yet in five of the swing states contested, Democrats won four Senate seats, indicating there was a messaging issue at the national level and within the Harris campaign that needs to be examined.

“I saw that chart from F and I looked at their methodology and I think it's fine um there was some fudging going on in there but essentially They concluded that for the first time in a 100 years voters share for incumbents uh lost uh incumbents lost voter share in every election okay yet in five of the Swing states that were contested Democrats won four Senate seats”

EV subsidy elimination is the most likely energy bill reversal; the $7,500 tax credit for EV purchase, which Semolist received for a plug-in hybrid Jeep Wrangler that gets 19 miles on electric charge and has had multiple recalls including one for spontaneous explosion hazard, exemplifies subsidy design problems.

“the Trump people have been suggesting that all they really want to do is eliminate the EV subsidies like I got how much money is that I got $7,500 yeah to buy a hybrid Jeep Wrangler which is an awful car we spoke about this piece of [ __ ] I can't wait to get rid of it it's horrible it gets it gets 19 miles on a full charge and I've had five recalls one of the recalls said even if it's not plugged in it could explode”

AI adoption rates are going up but this could be as simple as companies checking boxes ('we have employees use GPT') without real integration or hard dollar investment; there are no answers yet on how much companies will pay for AI services when actual accounting costs apply.

“AI adoption rates are going up there's no question about that but AI adoption rates could be as simple as a company's just checking the Box yeah we we have we have our employees use GPT when they want we don't have any answers yet on how much people are actually going to be willing to Shell out and real hard dollars for this stuff”

Trump spoke with NYC Mayor Eric Adams after the election and they appear to want to use New York as a test case for how fast they can reverse asylum flows; cutting inflow rates in half or to a third is more feasible than removing people already here.

“Trump's first day after the election he spoke on the phone with Eric Adams I think they want to use New York as a as a test case for how much how fast they can reverse that you have people who are already here I don't think you have new people who are going to arrive yeah I mean the it's PR it will be easier for them to cut the inflow rates in half or to a third”

Semolist could be set up as the scapegoat: Trump could dispose of DOGE in seconds since it's not a real government department, claiming 'they failed, they failed you' and externalizing blame for not cutting spending.

“he's setting them up as the scapegoat for when something goes wrong he can he can get rid of this Doge thing in two seconds it's not a actual government Department no it's not so he could say they failed they failed you they failed me they're out I want them out of the White House like it almost seems like hey heads I win cuzz they cut a lot of waste and it gives me things to say on on uh from the podium Tails they failed to do anything meaningful I just get rid of them”

Janet Yellen appeared to be someone who had just retired from a full career at the Fed, her accent is distinctly Brooklyn (giving Woody Allen vibes), and this persona wasn't resonating in the states that the campaign needed to win.

“she um looks like somebody who had just retired from a full career at the FED which she did a very successful career it's more than it's more than that it's the accent it's distinctly Brooklyn if you close your eyes it's giving Woody Allen that's not resonating in the states that you need”

The Secretary of Transportation was the best spokesman for Bidenomics over the last 18 months, and there is no precedent in the modern era for an administration relying on the Secretary of Transportation at that depth to tell the economic story.

“the best by far the best spokesman for bionomics over the last 18 months has been the Secretary of Transportation and there simply is no precedent in the modern era for an Administration and a and a presidential campaign run by the Vice President relying on the Secretary of Transportation going that deep in the depth chart”

Biden administration gave away $4 trillion but had no money to make starter home construction fully tax deductible or to offer first-time homebuyers 0% interest rate mortgages for the first five years.

“we had so we gave away $4 trillion do to keep Broadway shows running okay fine I get it there was no money well there was no money to make um starter home construction uh fully tax deductible there was like no no nobody thought oh what if uh firsttime home buyer single family non-attached home is a a 0% interest rate mortgage for the first five years”

The administration could live with 60% tariffs on additional Chinese imports (much of which end up in US through third-party countries) but a universal 5-10% tariff on all imports—which hasn't happened since the 1930s—would be a big deal and markets would 'shoot first and ask questions according to news reports' about it.

“I think we could live with uh the 60% tariff on an on an additional set of Chinese Imports a lot of which would end up making their way to the United States through third party countries but once if you if he's serious and I don't know if he's serious if he's serious about a universal Tariff of 5 to 10% on All Imports that's a big deal we haven't had one of those since the 1930s and I think it would I think the markets would shoot first and ask”

Nobody has any idea what Trump will or won't do on policy—predictions that he won't 'blow up' on some issue are unfounded given his appointment of Matt Gaetz as attorney general and Stephen Miller for mass deportations with no equivocation.

“the only thing I don't think you can say on this show is what you just said which is that he won't do X because none of us have any idea what he will or won't do you probably would have said the same thing about appointing Matt gats as attorney general”

Semolist predicted in 2024 surprises list that Biden would drop out of the race for health reasons (correct), based on an August 2023 interview where Biden answered a question about defending Taiwan directly and his demeanor suggesting terminal decline.

“the first was an interview he did in August 2023 where somebody asked him what would you do if China invaded Taiwan and he answered the question which no president has ever done because you're not supposed to that's part of official US policy One China is the stated US policy and he said we'd bomb Mexico no he said that we would in that we would defend Taiwan”

RFK Jr. and Matt Gaetz appointments raise questions about whether they are for shock value, payback (Musk swung 500,000 people to Trump), or other motives; they could be 'stunts' that get headlines and crush biotech/healthcare stocks, particularly those with vaccine exposure like Moderna.

“what what's your take on are these for shock value or is it like payback like I owe RFK because he swung his 500,000 people my way when I needed it like what what is the thinking behind doing this kind of stuff I don't know I mean it's hard I mean I don't know it's stunting though it does get headlines that biotech Healthcare stocks are Terri crushed anything with vacines uh ferna”

The theory that Gaetz is a 'head fake'—put forward so Democrats say no to at least one controversial nominee, allowing Trump to claim victory—is plausible; this structure would allow everyone to feel they got something (GOP claims victory in forcing demurrals, Democrats get to reject one nominee).

“so like a like a strip mall basically law firm and then he was in the Florida State Legislature and that's it so forget about all the personal stuff with him who knows what's true what's not just on that basis alone it seems weird that he want Trump wants to die on this hill or maybe this is the guy that you throw out there so that the Democrats get to say no to one which is my theory well no that the Republicans get to say no to one well everyone gets to say no to one yeah yeah everyone feels better”

Semolist expects DOGE and Elon to find 'lots of fanfare and cork popping' with very small amounts of actual dollars cut, not the kind of meaningful spending reduction needed to address structural budget problems.

“I don't know what they're going to find that's meaningful and what I'm expecting from VC and and the Doge Department with Elon is lots of fanfare and cork popping and a very small amount of dollars are going to cut”

Hyperscalers are spending roughly $500 billion/year on GPU infrastructure with $100 billion/year scheduled revenue generation, creating a $400 billion hole between spending and returns; the biggest market question is whether 'killer apps' will emerge within 12-18 months to justify the investment.

“these hyperscalers right that are spending let's call it rough numbers about $500 billion doll a year building out GPU infrastructure and they're scheduled over the next couple years to to make let's say 100 billion a year so there's a $400 billion hole in between the money that people are spending and giving to Nvidia and other data centers and stuff like that and the amount of money that they're making and so that's the biggest question I think for the markets putting all this election stuff aside is within the next 12 to 18 months are we going to start seeing the killer apps”

Democratic messaging failure on housing affordability stemmed from the party's tendency to solve supply-demand imbalance problems by giving people more money (demand-side subsidies) rather than addressing the root cause of supply constraint—excessive zoning regulations and land-use restrictions—which Democrats are ideologically uncomfortable proposing because it requires private-sector led deregulation.

“Democrats have this inclination that anytime there's a problem give people more money to solve the problem and when the problem is a supply demand problem Democrats tend not to think about a positive Supply shock right because Supply shocks that everybody learns in Ecom 101 are the way that you do with excess demand you you do something to increase on a shock basis Supply so that there's a a supply demand equilibrium and bring prices down so the notion that you were going to solve the housing Problem by giving more people more housing subsidies to go and push housing prices up more fix inflation with more inflation right it made absolutely no sense”

Non-defense discretionary spending is already cut to the bone at its lowest level since the early 1960s, so 'the real money' that Elon Musk and DOGE would need to find savings is in entitlements, but tackling Medicaid would cause a crisis within the Trump administration because it is politically vulnerable.

“non-defense discretionary spending is already been cut to the Bone to its lowest level since the early 1960s the real money right to quote the guy like you know I rob banks because that's where the money is it's entitlements yeah and so what's gonna happen when with VC and and comes back and would they dare and say well you're gonna have to make some changes to Medicaid that's where the money is would they I I think it would cause a crisis within the Trump people”

Every incumbent around the globe lost their seat in 2024 because voters voted for change, and it doesn't matter that inflation was subsiding—the rate of change was subsiding if you tried to sell that message it would have been counterproductive because people would say 'my burrito is $14 and I don't want to pay that much anymore.'

“every incumbent around the globe lost their seat and it's very simple why people voted for Change and it doesn't matter that inflation was subsiding the rate of change was subsiding if you tried to sell that message it would have been counterproductive because people would have said mying burrito is $14 I don't care that it's not up month over month or year over year”

Elon Musk was the biggest beneficiary of Bidenomics ironically, but the Biden administration dissed him for an EV event at the White House and he didn't get over it; Musk is the singular person to serve as the catalyst for the EV revolution whether you like Tesla cars or not.

“who the biggest beneficiary was of biomics ironically it's Elon Musk there's literally there's literally nobody has benefited more in the last four years the problem is they lost him they they dissed him for the EV event at the White House and quite frankly he didn't get over it”

Immigration should be discussed dispassionately: the United States has a low organic birth rate and needs immigrants; both Heritage Institute and CATO agree the US needs immigration to prosper, but the Biden Administration handled it like someone washing a dirty car by parking it outside before rain with all windows and doors open.

“the United States has a low organic birth rate and needs immigrants um you know whether you look at Heritage Institute KO they all agree the United States needs some kind of immigration to prosper but the way the Biden Administration handled it was like someone who said my car is dirty I need to wash my car drive it into it's about to rain I'm going to park it on the street and leave all the windows and doors and the hood and the trunk open”

Trump can use DOGE as a scapegoat if it fails to achieve meaningful cuts: he could dissolve DOGE ('in two seconds') and blame them for failure, claiming 'they failed me' without paying the political consequence, since DOGE is not a formal government department and exists at his pleasure.

“here's another theory he's setting them up as the scapegoat for when something goes wrong he can he can get rid of this Doge thing in two seconds it's not a actual government Department no it's not so he could say they failed they failed you they failed me they're out I want them out of the White House like it almost seems like hey heads I win cuzz they cut a lot of waste and it gives me things to say on on uh from the podium Tails they failed to do anything meaningful I just get rid of them and I don't really pay the consequence for that”

One possible interpretation of Trump's cabinet appointments (including Gaetz) is that they are meant to be 'sacrificial' positions that allow the Republicans to say 'no' to one controversial appointee and claim they defeated that nominee, when in fact Trump may use them as negotiating chips or intentional distractions from other appointments.

“well no that the Republicans get to say no to one well everyone gets to say no to one yeah yeah everyone feels better all right we didn't let him do Gates he got this he got this he got this we got rid of that guy is that possible it's it's possible”

Post-election, S&P 500 is up 3%, financials up 8%, discretionary up 7.5% (mostly Tesla), energy up 6%, with Bitcoin and US dollar also appreciating and interest rates rising, which makes sense given that betting markets had Trump at 60-70% odds before the election.

“since since the election the S&P is up 3% uh financials are up 8% discretionary is up 7 and half% that's mostly Tesa so we'll throw that out Energy's up 6% those are the big Winners uh obviously Bitcoin US dollar interest rates”

Trump has appointed people for cabinet positions who are 'true believers' in the policies he's campaigned on rather than moderates who might walk them back; examples include Stephen Miller (who is serious about mass deportations with no equivocation) and others, indicating the administration intends to follow through on campaign promises.

“he's tending to pick people for cabinet positions who are true believers in the things that he says he wants right I mean by the time you know like Stephen Miller he believes it there's no equivocation Mass deportations yeah yeah like there's no equivocations with him or hom so Trump may or may not want whatever he's putting people in positions that really believe in those things”

Many states including Illinois, New York, California, and Florida are going to 'vigorously resist' mass deportations; project sites in Florida are already months behind schedule due to labor shortages, and agricultural fields are already partially empty, indicating significant resistance from business interests and states.

“remember Illinois New York California a lot of states are and even Florida are gonna vigorously resist some of this um you know there is a there's a lot of project sites in Florida that are months behind schedule because they can't get Workers some of the Agricultural fields are already empty so a lot of the small business people are are worried about this”

The Biden administration's handling of immigration was ideologically motivated rather than economically driven, described as equivalent to washing a dirty car by parking it in the rain with all windows and doors open, resulting in $10-15 billion annual asylum-related costs to New York City primarily for housing and medical services.

“the way the Biden Administration handled it was like someone who said my car is dirty I need to wash my car drive it into it's about to rain I'm going to park it on the street and leave all the windows and doors and the hood and the trunk open and that Deluge cleaned the car but also caused all sorts of problems New York is now settled with a 10 to 15 billion Asylum hit for mostly housing but also medical stuff”

Harris also didn't go to the Al Smith dinner, which was the first time a candidate opted not to appear at this important Catholic event in New York, and missing it was another indication that her campaign avoided battle-testing.

“she also didn't go to the Al Smith dinner and um and some people were kind of like wow that was that's the first time that's the that's the big like Catholic uh event in New York the first time that a candidate opted not to appear”

Semolist says Biden and Harris should have been 'a lot more frantic' about inflation risks given the subsequent inflation surge of the worst since the late 1970s and worst housing affordability on record.

“to which you said actually Biden and Harris should have been a lot more frantic the subsequent inflation surge was the worst since the late 70s and accompanied by the worst housing affordability data on record”

Chris Wright, appointed as Energy Secretary from Liberty Energy, wrote a 180-page piece last year on his view of energy, with the first chart coming from Semolist's annual energy piece, indicating alignment between the new administration and deregulatory-oriented energy thinking.

“the appointment of of Chris Wright as um as Energy Secretary right from Liberty Energy I heard he likes your charts he does he he uh he wrote 180 P 180 page piece last year on his view of and the first chart in there came from our annual energy piece”

75% of energy bill capital spending has been in Republican districts, and companies are now using quiet back channels to lobby the administration about which parts of the energy bill they don't want cut.

“75% of the energy bill Capital spending has been taking place in Republican districts yeah and you're starting to see quiet back channels to the administration of what they don't want them to cut”

The Hybrid Jeep Wrangler received a $7,500 EV subsidy despite getting only 19 miles on full electric charge and requiring five recalls, including one where it could explode without being plugged in, illustrating the absurdity of current EV subsidies.

“I got $7,500 subsidy for a vehicle that I might or might not drive on a full charge you know an electric charge so I could drive it as a full internal combustion engine vehicle I got the save $7,500 so that's what Trump wants to get rid of”

Hispanic voters in border counties voted for Trump at higher rates than expected; 8 of 10 border counties shifted to Trump, driven by working-class Hispanic and Spanish-speaking households who are most affected by undocumented immigration (job displacement in the lowest-income segment, school overcrowding)—this was not ideologically motivated but based on economic self-interest and survival.

“an enormous number of Hispanic voters felt that this was mishandled eight of the 10 border counties they went for Trump and these are almost all Hispanic Spanish-speaking households right guess who gets guess who loses their job first when another 500,000 undocumented workers come across the border uh guess whose schools go to [ __ ] when they lose control because there's too many students in in a district they're not not stupid they're not voting to make people on Twitter uh feel self-righteous about racial issues they're literally voting their own Survival”

The central tension in 2025 will be between inflationary pressures (tariffs, deportations, government spending) and deflationary pressures (deregulation agenda, pro-business policies), with structural forces already bringing inflation down from normalization of supply chains.

“it's going to be this horse race between the administration's deregulatory agenda which you can throw energy into right with the appointment of of Chris Wright as um as Energy Secretary right from Liberty Energy and it's the tariffs and the deregulation inflationary pressures against the deflationary pressures”

Semolist expects a 12-15% market correction in 2025 as investors come to understand the potential chaos and disruption from Trump administration policies, even if markets end the year higher.

“in my outlook for 2025 I think while the markets might end up the year higher I'd be surprised if we didn't have a 12 to 15% correction along the way”

The Inflation Reduction Act's renewable energy spending is so large (estimated $1-2 trillion over 10 years) and includes so many Capitol spending commitments already underway (especially in GOP districts like Arizona and Ohio for chip manufacturing facilities) that Trump cannot unwind these provisions without Congressional action and reconciliation bills; bills passed are very hard to unwind.

“you know it's it's once bills get passed they're very hard to unwind Trump ran in 2016 on getting rid of the Affordable Care Act and controlled both chambers of of Congress and wasn't able to do it um as I mentioned 75% of the energy bill Capital spending has been taking place in Republican districts yeah and you're starting to see quiet back channels to the administration of what they don't want them to cut”

The Biden administration did not get credit for immigration bill because it was proposed after cities like New York and Chicago were already experiencing fiscal impacts from border arrivals, and it was done under duress rather than out of conviction, making it a late political response rather than proactive policy.

“the Biden Administration gets in my mind very little if any credit for the immigration bill that they didn't stop talking about over the last few months they didn't propose it until after New York and Chicago and the other cities were feeling the fiscal impacts”

The Biden administration embraced Modern Monetary Theory (MMT) concepts from the Hoey Foundation study in 2020, arguing there is greater headroom for government spending without causing undue inflation; they commissioned this study because they were desperately seeking a justification for massive fiscal stimulus that previous administrations would have been 'terrified' to implement.

“the Democrats were also desperate for an economic alternative to the status quo and the Biden people in particular commissioned a study it was from the huet foundation and it came out in it was remember that mm um mmt yeah mmt stuff I was gonna say MMA but that's different um they did this study where they they finally said okay and this is 2020 right and the Biden Administration can now finally think about all sorts of stimulus without having to worry about inflation any Administration before them would have been terrified to pick up that document the Biden people embraced it wholesale”

News reports indicate Trump has been serious about tariffs and hasn't been able to choose a Treasury secretary yet because he wants someone who will 'full throatedly' declare tariffs are good for America, showing commitment to tariff agenda.

“according to news reports he's so serious he's so serious about the tariffs that he hasn't been able to finally choose his treasury secretary yet because he really wants somebody who will full throated declare this is good for the American”

Semolist's outlook for 2025 expects markets may end higher but anticipates a 12-15% correction along the way when 'potential chaos' becomes apparent and the administration moves to 'break something' as promised, reflecting their rhetoric of disruption and change.

“in my outlook for 2025 I think while the markets might end up the year higher I'd be surprised if we didn't have a 12 to 15% correction along the way and I'm going to be telling our clients to kind of prepare for that when the potential chaos Dawns on people”

One observation about Apple's latest AI products: Siri (the voice assistant) is 'dumber than she's ever been' after the iPhone 16 software update, suggesting that AI integration into consumer-facing products is not yet mature and actual user experience hasn't improved despite AI adoption rhetoric.

“I have it yeah I have I updated the software Siri is dumber than she's ever been honestly at very rote tasks”

Javier Milei is Argentina's stabilization star, but there is risk: he is alone without institutional support, and Peronists are waiting for him to fail; Peronism is ideologically flexible and will adopt whatever political form (populism, fascism) is currently viable.

“it's only him yeah that's the risk for Argentina it's only him and there's still a giant party of peronists that are waiting for him to fail well the thing with the peronists is that they are they are without uh any ideological constraints if populism is hot right now the they'll push you a populist if if fascism is hot they'll push you one of those they have they have every flavor available”