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0:00:42 >> Thumbtack presents the ins and outs of caring for your home.
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0:00:59 Like why.
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0:01:14 >> It might be enticing to try and sleep through the next four years.
0:01:17 But if you’re wondering how to survive a second Trump term while
0:01:21 staying fully conscious, Pod Save America is here to help you
0:01:24 process what’s happening now and what comes next.
0:01:27 Every Tuesday, Wednesday and Friday, John Lovett, Tommy Veter,
0:01:31 John Favreau, and Dan Pfeiffer weighed hip deep into the week’s
0:01:34 political news and fish out some political analysis you can trust.
0:01:36 Yes, Tommy’s shoes get ruined.
0:01:41 Yes, he’ll do it again tomorrow because the endeavor is worth it.
0:01:43 And so is your sanity.
0:01:48 Tune into Pod Save America wherever you get your podcasts and on YouTube.
0:01:51 >> Today’s number, $49 million.
0:01:54 That’s how much New York City’s congestion pricing tolls brought in
0:01:55 during the program’s first month.
0:01:57 This is an actual true story.
0:02:00 And when I first moved to New York, my first date was with a woman
0:02:04 named Martha who took me to, no joke, a sex club.
0:02:06 And one of us had sex and it wasn’t me, Ed.
0:02:19 >> That’s a true story.
0:02:20 >> That’s not a true story.
0:02:21 >> No, it’s a true story.
0:02:24 The club was called Trapeze.
0:02:25 >> You’re going to have to elaborate.
0:02:27 It’s the final part that I’m really intrigued in.
0:02:30 >> I met this woman, a really interesting woman, nice.
0:02:31 It was a very attractive tour.
0:02:34 And I had this big duck.
0:02:37 I lived at one Greenwich and I had basically this like 700-foot apartment
0:02:41 with a 3,000 square foot duck, see above single and desperate.
0:02:45 And I used to have parties and people and I met this woman super hot,
0:02:47 seemed super cool.
0:02:51 Yeah, passed her out, kept asking her out.
0:02:53 And finally I’m like, I’m getting nothing back here.
0:02:54 And she’s like, I have something I think you’re going to like.
0:02:56 And she showed up and said, I’m going to handle everything.
0:03:01 And we went to this place with the Westfield or so, going to ground.
0:03:04 It’s like 300 bucks for the dude and nothing for the woman.
0:03:06 I’m like, well, that’s going to be interesting.
0:03:09 And they give you a towel and she changed into a towel.
0:03:12 And anyway, she ended up making out and fooling around with a woman.
0:03:13 >> That is crazy.
0:03:16 >> That was my big New York story.
0:03:20 NYU professor, would you let your kid take class with me?
0:03:23 Yeah, you didn’t do anything wrong.
0:03:26 I mean, you shouldn’t have pursued this woman specifically, clearly.
0:03:27 >> Oh, I was so excited.
0:03:36 I think I still probably text her, saying she’s going to be another shot of trapeze.
0:03:40 >> What happened in the basement, water under the bridge, let’s start over.
0:03:46 >> Actually, also my other New York joke, New York is just full of rats.
0:03:51 I made actually friends with this rat, and this ridiculously hot woman walked by.
0:03:52 I’m like, did you see the ass on that woman?
0:03:57 He said, well, actually, I’m a tit rat myself.
0:03:59 >> I prefer the real stories.
0:04:01 >> That’s why you come here.
0:04:03 This isn’t CNBC.
0:04:03 >> Agreed.
0:04:06 >> Let’s start with our weekly review of market vitals.
0:04:12 [MUSIC]
0:04:17 >> The S&P 500 declined, the dollar rose, Bitcoin fell, and the yield on 10-year
0:04:20 treasuries hit its lowest level since December.
0:04:21 Shifting to the headlines.
0:04:25 Tessa’s market cap has fallen below $1 trillion,
0:04:28 erasing nearly all of the stock’s post-election gains.
0:04:31 Shares are down more than 25% so far this year,
0:04:36 as investor concerns mount to overgrown competition and Elon Musk controversies.
0:04:41 Warren Buffett announced that Berkshire Hathaway paid nearly $27 billion in taxes
0:04:46 in 2024, that is the largest tax bill ever paid by a U.S. company,
0:04:51 accounting for roughly 5% of all corporate income taxes collected in the country that year.
0:04:56 And finally, BP announced it is shifting back to fossil fuels and
0:04:59 scaling down investments in green energy.
0:05:03 The company plans to spend around $10 billion a year on oil and gas to win
0:05:07 back investors after its fourth quarter profit hit a four-year low.
0:05:12 Despite that move, BP shares closed down about one and a half percent.
0:05:17 Scott, we’ll start with Tesla and I’m bracing myself for your victory lap here.
0:05:20 You predicted on February 13th.
0:05:23 I can’t help it.
0:05:25 I’m a broken clock here.
0:05:26 Tesla’s imploding.
0:05:29 I think the stock is below $200 in the next six months.
0:05:32 It was trading at $356 a share then.
0:05:37 We’re not below $200, but we’re now at $286.
0:05:41 So it’s down 20% since your prediction.
0:05:41 Take it away.
0:05:43 I hate this motherfucker.
0:05:45 I really, I don’t know if you’ve sensed that.
0:05:46 Really? Yeah.
0:05:49 I have no emotional distance here.
0:05:50 I’m changing my prediction.
0:05:52 I think this thing goes below 150.
0:05:53 Oh, keep it.
0:05:54 Keep the original.
0:05:55 I can’t help it.
0:06:01 It’s at a P of 180 and its sales are off 75% in Germany.
0:06:03 And across Europe, they’re off dramatically.
0:06:06 I think the car line is really stale.
0:06:08 To be fair, the stock is still up 50%
0:06:10 over the last 12 months, right?
0:06:12 It had a huge run up.
0:06:15 And the market, you could say, you could also make this,
0:06:17 you could also steel man and be a weak steel man
0:06:20 and be more like an Ironman or a Heyman.
0:06:22 It’s clear his activities have really hurt him
0:06:24 in Europe and in California,
0:06:28 but probably the market was looking for an excuse
0:06:29 to take this stock down.
0:06:32 I think what will be the real interesting test here
0:06:35 in terms of the association or affiliation
0:06:39 of an individual’s brand and their company
0:06:43 is if Starlink starts to have contracts canceled.
0:06:44 What do you make of this ad?
0:06:47 Yeah, I mean, I think the question that we’ve been trying
0:06:51 to ask is like, what started this slide with Tesla stock?
0:06:54 I mean, it’s pretty dramatic what happened.
0:06:58 It’s down around 20% in five straight days
0:07:00 falling below a trillion dollars.
0:07:02 It’s now down 34% since its peak in December.
0:07:04 I think the thing that really triggered this
0:07:07 is this data that came out from Europe.
0:07:12 Teslas vehicle sales are down almost 50% across Europe.
0:07:15 Meanwhile, overall EV sales across Europe
0:07:17 are up almost 40%.
0:07:19 So clearly people just hate Teslas
0:07:22 and it’s not very surprising why.
0:07:25 I mean, you just look at the UK, for example,
0:07:28 where, you know, Elon is talking about how he wants
0:07:31 to put the British Prime Minister Kierstahmer in jail.
0:07:33 Like it’s not very surprising
0:07:34 that the British public is now saying,
0:07:36 hey, we’re down with electric vehicles,
0:07:38 but we’re not gonna buy Teslas anymore.
0:07:42 And so it’s finally being reflected in Tesla’s financials.
0:07:45 I think the thing that I’ve been thinking about a lot
0:07:48 when it comes to Elon and when it comes to Tesla,
0:07:53 I’ve been waiting for what I would call his Wellington moment
0:07:55 and I’ll explain what I mean by that.
0:07:57 As I’ve said to you before,
0:07:59 I think the similarities between Elon Musk
0:08:01 and Napoleon Bonaparte,
0:08:03 and you’re gonna call me a history nerd, but I don’t care.
0:08:04 Just a nerd.
0:08:07 I think the similarities are very striking
0:08:08 in that you have Napoleon,
0:08:12 who was this like miraculously successful guy
0:08:16 who took over all of Europe and tried to take over the world.
0:08:20 And at the same time was also pretty universally disliked.
0:08:21 But people never really did anything about it
0:08:24 because they thought, you know, this guy is so talented.
0:08:25 He’s so powerful.
0:08:28 He conquered the Russians and the Prussians and the Spanish.
0:08:30 He installed himself into office.
0:08:32 He crowned himself emperor.
0:08:35 Like, how could we ever bet against Napoleon?
0:08:37 You never bet against Napoleon.
0:08:39 And that’s basically why people went along with this guy
0:08:44 who was acting, honestly, very irrationally and kind of insane.
0:08:47 But it was only when he suffered this crushing defeat
0:08:50 at Waterloo against the Duke of Wellington
0:08:51 that people realized, actually,
0:08:54 maybe this guy isn’t untouchable.
0:08:56 Actually, maybe he isn’t a god.
0:09:00 And the whole world turned on him at the exact same time,
0:09:02 including the French, by the way,
0:09:05 and he was banished to this remote island
0:09:07 where he died sad and alone.
0:09:11 And I believe that that moment is coming for Elon.
0:09:15 I believe it’s going to take some big loss.
0:09:18 And suddenly all of this mystique and this intrigue
0:09:23 and all of our glorification of his leadership abilities
0:09:25 and his character and his genius,
0:09:28 it’s all just going to disintegrate in a second.
0:09:33 And at that moment, I think the citizens start to turn on him.
0:09:35 We’ve seen that happening already.
0:09:37 But more importantly,
0:09:39 I think the markets will turn on him too.
0:09:41 – I think that moment happened 48 hours ago.
0:09:43 I think it was Bill Burr.
0:09:44 He’s probably my favorite comedian.
0:09:46 I think the guy’s just a genius and he’s fearless.
0:09:47 And he’s been known for being
0:09:49 just incredibly politically incorrect.
0:09:52 And he’s a favorite of what I’ll call
0:09:54 sort of the intelligent manosphere.
0:09:56 And that is he just mocks the shit
0:09:59 out of Democrats and political correctness.
0:10:02 And basically every viewer of MSNBC
0:10:04 was grabbing their pearls every time they watched
0:10:06 a Bill Burr clip.
0:10:07 And he was just totally unafraid
0:10:09 to be totally politically incorrect.
0:10:11 And he went on a rant and we should play that.
0:10:12 We’ll find the clip now.
0:10:13 – I’ll tell you it was funny.
0:10:16 I made fun of the fucking Twitter guy
0:10:18 for fucking Seag Highling, not once but twice.
0:10:20 And I never look at my emails.
0:10:21 I was scrolling through my emails
0:10:24 and it said my Twitter account had been flagged
0:10:26 for InterPro, I don’t even tweet anymore.
0:10:29 It had been flagged for what?
0:10:30 What a fucking baby.
0:10:33 Just like Hitler, a fucking baby.
0:10:33 ‘Cause that’s another thing.
0:10:35 All of these people that are into fucking Hitler,
0:10:36 you know what I mean?
0:10:39 And like, look at this guy,
0:10:40 like he was some sort of fucking hero.
0:10:43 The guy was one of the biggest fucking cowards ever.
0:10:46 All the pain and all the suffering that that guy’s caused
0:10:49 and the war crimes the allies had to commit
0:10:53 firebombing fucking cities to get that motherfucker.
0:10:57 When it came time for him to pay the price
0:10:59 for all the suffering he caused,
0:11:02 millions and millions and millions of people.
0:11:05 Did he face the music?
0:11:09 Nope, he gave himself a nice, quick, painless fucking death.
0:11:13 That’s your fucking hero?
0:11:15 – I think the worm has turned against this guy.
0:11:17 I think that moment you were describing
0:11:19 happened 48 hours ago.
0:11:22 – I still think people think he’s invincible.
0:11:22 – There’s no such thing.
0:11:25 – Agreed, but this is what people believe
0:11:27 and this is what the markets believe.
0:11:28 And so this is what I mean.
0:11:30 I think you need a moment.
0:11:32 You need to see that the God fall from grace.
0:11:34 You realize he’s mortal.
0:11:37 You realize that actually he’s not all he was chalked up to be.
0:11:40 And suddenly that’s when the world collapses in on itself.
0:11:42 But we’ve been talking about Elon
0:11:44 for way longer than we should have.
0:11:45 So let’s just move on to our second headline here,
0:11:50 which is Berkshire Hathaway paying $27 billion in taxes
0:11:52 in the last year.
0:11:54 I think the thing that’s interesting
0:11:57 is what Warren Buffett said about this tax bill.
0:12:00 Specifically, he was talking in his shareholder letter
0:12:03 in his annual letter to Berkshire Hathaway shareholders.
0:12:08 He was explaining how proud he was of paying this tax bill
0:12:12 and contributing this revenue to the US government.
0:12:16 And I’ll just quote one part of this
0:12:18 because I’m supportive of what he said,
0:12:20 but I also take some issue with it.
0:12:24 So in the letter, he’s describing the beginnings
0:12:25 of Berkshire Hathaway
0:12:27 and how they were struggling at the beginning.
0:12:29 And then he says, quote, fast forward 60 years
0:12:31 and imagine the surprise at the treasury
0:12:32 when that same company,
0:12:35 still operating under the name of Berkshire Hathaway,
0:12:37 paid far more in corporate income tax
0:12:41 than the US government had ever received from any company,
0:12:43 even the American tech titans
0:12:46 that commanded market values in the trillions.
0:12:50 So he’s basically saying, look how far we’ve come.
0:12:53 Look what we’re contributing to the government.
0:12:57 But at the same time, he’s kind of taking a shot at big tech
0:12:59 and accusing them of not paying taxes,
0:13:04 which is true and fair and I agree with it.
0:13:06 But I do find it a little bit rich
0:13:08 coming from Warren Buffett,
0:13:10 who has done a very good job of avoiding taxes himself.
0:13:14 I mean, if you look at the history of Berkshire Hathaway,
0:13:17 they have a long list of tax avoidance strategies
0:13:20 and they’ve had no problem taking full advantage of them.
0:13:23 We could go through some of those examples,
0:13:25 but what I would summarize this as,
0:13:28 I respect the point,
0:13:31 but I don’t love this holier than thou attitude
0:13:32 from Warren Buffett,
0:13:36 who’s kind of presenting himself as like the Jesus of taxes,
0:13:39 which isn’t necessarily true,
0:13:42 but let’s hear what you think of this.
0:13:43 I assume you’re a supporter of this.
0:13:44 – Yeah, but you got to write.
0:13:47 Like, fine, they paid a lot of taxes.
0:13:49 If she wants to take a victory lap for it
0:13:50 and make a point, good for him.
0:13:51 And he has said for a long time,
0:13:53 there’s no reason I should pay a lower tax rate
0:13:55 than my assistant,
0:13:57 but his obligation to a Swiss shareholder
0:13:59 is no one’s going to disarm unilaterally.
0:14:01 I believe tax rates should go up,
0:14:02 but I engage in tax avoidance.
0:14:04 So I’m constantly thinking about strategies
0:14:06 to minimize my tax bill.
0:14:08 And there’s a ton of ways you can do it legally
0:14:10 when you’re rich.
0:14:12 And what we’ve seen as a tax code go from
0:14:15 something like 400 pages to 7,000,
0:14:17 and those incremental 6,600 pages
0:14:19 are there basically to fuck people of your generation
0:14:21 and transfer more wealth to my generation
0:14:22 and to corporations.
0:14:26 And cruise lines have weaponized various loopholes.
0:14:29 They pay less than 2% for old tax rates.
0:14:33 General Motors in 2023 paid a tax rate of 5%.
0:14:36 T-Mobile, which I would think was a very profitable company,
0:14:40 pays an effective tax rate of 0.4%.
0:14:41 Every company’s going to do the best they can
0:14:42 to pay as little as they can.
0:14:43 That’s their job.
0:14:44 We’re not doing our job.
0:14:46 And that is there have been so many loopholes
0:14:49 stuffed into the tax code.
0:14:50 And what the misdirect is,
0:14:51 people think it’s about tax rates.
0:14:54 It’s not, it’s about the tax code.
0:14:57 And I believe that as a percentage of GDP taxes
0:15:02 or corporations are paying the lowest taxes since like 1938.
0:15:04 And at some point you got to fund the government.
0:15:05 And there’s two things to do.
0:15:08 There’s either deficits, right?
0:15:10 Or you got to charge more
0:15:13 in different types of consumption taxes.
0:15:14 And I’ve said this for a long time.
0:15:16 There’s some mythology in the tax code.
0:15:18 The bottom half pays almost no federal income tax.
0:15:20 They pay a lot of consumption and sales tax,
0:15:22 but almost no federal income tax.
0:15:24 The people who get most screwed in our tax system
0:15:29 are actually most of the people who work at property media.
0:15:31 And that is, you guys make very good livings,
0:15:32 but it’s all current income.
0:15:35 And you live in a high tax domain, New York City.
0:15:36 So even as young as you are,
0:15:38 you make exceptionally good livings for people your age,
0:15:40 even though you may not feel that way.
0:15:44 You’re probably paying 30 to 40% tax rates at this point.
0:15:46 That’s a lot of money for a young person.
0:15:48 And, but once you make the jump to light speed
0:15:49 and get really rich,
0:15:51 you can leverage all these different loopholes,
0:15:55 whether it’s 1031 exchanges
0:15:56 where you can take real estate
0:15:59 and roll it into a new investment,
0:16:00 a new real estate investment
0:16:01 without incurring a capital gain,
0:16:04 triggering a capital gain.
0:16:06 Even thinking of yourself as a stock,
0:16:09 you produce, I have stocks that produce,
0:16:12 say a hundred grand a year in dividends or growth.
0:16:14 That gets to grow on the dividends,
0:16:16 but the growth, gross tax deferred.
0:16:18 Whereas if you’re an individual making $100,000,
0:16:21 you lose 20% of it every year at least.
0:16:24 So the tax code has basically said,
0:16:26 all right, the bottom 99,
0:16:28 we’re gonna basically fund the government
0:16:32 with the kind of 50 to 99th percentile.
0:16:34 And then once you get above the 99th,
0:16:36 your tax rates plummet.
0:16:37 And the reason why America puts up with it
0:16:39 is that we’re so optimistic
0:16:41 that people believe at some point
0:16:43 they’re gonna be in the 0.1%.
0:16:47 But corporations, I mean, we just have two choices here.
0:16:49 We either need to cut spending and raise taxes
0:16:52 or have massive deficits, which are,
0:16:54 and it’s important that we communicate this to people,
0:16:56 nothing but taxes on you and Claire
0:16:57 and the rest of the young people of this organization
0:17:00 just kind of laying in wait.
0:17:02 So I find the whole,
0:17:05 I think taxes are a really important conversation.
0:17:07 I would like to see the best solution
0:17:09 would be an AMT and alternative minimum tax
0:17:12 on corporations and the rich.
0:17:14 And that is if you make over say $10 million,
0:17:18 we want you to pay a 50% AMT.
0:17:20 Whatever loopholes you can come up with, great,
0:17:21 but you’re paying at least 50%, you know,
0:17:23 well, that’s a lot, Scott.
0:17:27 It’s not because every psychiatrist and psychologist
0:17:28 and Daniel Kahneman specifically
0:17:30 has shown that above a certain amount of money,
0:17:31 you lose no happiness.
0:17:35 Any more money doesn’t make you any happier,
0:17:37 so having a higher tax rate doesn’t make you any less happy.
0:17:40 And also these tax rates are lower than they were
0:17:43 in the 50s, 60s, 70s and even in the 80s
0:17:44 at those income levels.
0:17:48 So I think tax rates could actually come down
0:17:52 if you forced everyone to pay those tax rates.
0:17:55 And that is you could lower the top tax rates on people
0:17:57 if everyone paid them.
0:17:59 You could lower corporate tax rates
0:18:02 if everyone paid that rate.
0:18:04 – I also think that there is something to be learned
0:18:08 from Warren Buffett just being happy to pay his taxes.
0:18:10 Like that’s just on a personal emotional level.
0:18:11 I think if we can, you know,
0:18:13 we clearly need to raise more tax revenue.
0:18:18 If there is any way for Americans or people anywhere
0:18:22 really to feel a little bit less resentful
0:18:24 when they make their tax payments
0:18:28 and to feel that feeling of actually having pride
0:18:29 and it being a bragging point,
0:18:32 how much you contributed to the US government,
0:18:33 which it seems like that’s, you know,
0:18:35 everyone who pays their taxes is like, fuck this,
0:18:37 I don’t want to pay my taxes.
0:18:39 But I do like that Warren Buffett
0:18:41 is kind of changing the sentiment there.
0:18:43 And I will also shout out Andrew Yang,
0:18:45 who one of his great policy proposals
0:18:46 when he was running for president
0:18:50 was that we should basically have the government send out
0:18:55 videos, including local governments to taxpayers,
0:18:57 telling them, here’s everything we did
0:19:00 with your money this week or this month or this year.
0:19:04 And I think if you could sort of just change the mentality
0:19:06 when it comes to paying taxes,
0:19:08 I mean, it’s a little bit of a soft point,
0:19:11 but I do appreciate that Warren Buffett
0:19:14 is leading that movement of, okay,
0:19:17 paying a lot in taxes is not necessarily a bad thing.
0:19:20 You’re doing a service to your country.
0:19:23 I guess you have to start off believing in your country
0:19:24 and liking your country to begin with,
0:19:27 which is becoming rarer and rarer in America.
0:19:30 Now, let’s talk about BP.
0:19:33 They’re deciding to shift away from renewables,
0:19:35 investing more in oil and gas.
0:19:37 I guess the first question I had reading this headline
0:19:40 is how much did Elliott management,
0:19:41 the activist investment firm,
0:19:43 how much did Elliott have to do with this?
0:19:47 Because two weeks ago it was leaked
0:19:51 that they had this stake in BP, roughly 5%.
0:19:54 They wanted to clearly address BP’s underperformance.
0:19:56 It’s down 8% in the past year.
0:19:58 Meanwhile, Shell is up 7%
0:20:00 and all the other energy companies are doing a lot better.
0:20:02 And then suddenly two weeks later,
0:20:04 we see this turnaround in strategy.
0:20:07 So I guess my first question for you, Scott,
0:20:10 to what extent do you think this was Elliott’s doing?
0:20:11 – Oh, Elliott, they’re smart people.
0:20:14 And Jessica, when he runs our activist group,
0:20:15 is a really smart guy.
0:20:16 And marketing is important,
0:20:18 but be clear, this is all marketing.
0:20:20 I’m not sure, I think BP was actually,
0:20:23 so I ran a brand strategy firm called Profit.
0:20:25 And I think BP was a client.
0:20:29 And the running joke around the office was beyond petroleum.
0:20:32 And they’d like, the ad team would hire an Asian dude,
0:20:34 put him in a jacket and run a commercial talking
0:20:37 about how algae is gonna fuel the future automobile.
0:20:40 – Can 100,000 people in 100 countries come together
0:20:43 to build a new brand of progress for the world?
0:20:45 We think so.
0:20:48 And now BP, Amaco, Arco and Castrol have come together
0:20:51 to try beyond petroleum.
0:20:53 – They never spent a lot of money.
0:20:56 I think right now, what is the research you guys did
0:21:00 that basically BP is allocating somewhere
0:21:03 between 3% and 5% of their total cap extra renewables.
0:21:05 That’s just not a lot.
0:21:08 They were never not in oil and gas.
0:21:11 And this is basically saying, okay, get rid of all of it,
0:21:14 stop pretending, stop running the ads beyond petroleum.
0:21:16 Just say petroleum, it’s here.
0:21:17 – Sorry, you think that,
0:21:20 you basically think that they believe
0:21:22 that the world wanted them to be a renewable company.
0:21:24 So they said, oh, we’re a renewable company.
0:21:26 And now the world wants them to be an oil and gas company.
0:21:28 So they’re saying we’re an oil and gas company.
0:21:29 – Yeah, there’s no substance here.
0:21:33 This is them pretending for two decades,
0:21:37 deciding that the big sunflower beyond petroleum
0:21:38 would make them see warm and cuddly
0:21:41 as they were belching more carbon into the air
0:21:44 than anyone but maybe Exxon and Chevron.
0:21:46 Because there is nothing,
0:21:49 there is nothing like the arbitrage you get
0:21:52 from fossil fuels in terms of the ability to do work,
0:21:56 move earth, create different substances
0:21:59 based on this incredibly cheap supply
0:22:03 where you get a barrel, an absolute barrel of this shit
0:22:05 that can be made into almost anything
0:22:07 or providing energy to make almost anything
0:22:09 and the barrel costs 70 bucks.
0:22:11 I mean, it’s just so cheap.
0:22:16 And these guys, these companies are just cash juggernauts.
0:22:19 And basically Elliot said, stop the bullshit,
0:22:22 stop the virtue signaling, stop the posturing.
0:22:25 You’re a petroleum company, you always have been.
0:22:27 – They are putting $10 billion a year
0:22:29 additionally into oil and gas.
0:22:33 So I think, I mean, I think I’m sort of half with you
0:22:35 and that this is probably what they thought
0:22:38 the market wanted because the way that the pendulum
0:22:41 is sort of swinging back away from ESG.
0:22:43 But I would also put forward the possibility
0:22:47 that a lot of this has to do with AI
0:22:48 and just the fact that they couldn’t really predict
0:22:51 what was gonna happen in terms of how AI
0:22:54 was gonna explode over the next few years.
0:22:55 And you’ve got billions of dollars
0:22:57 being plowed into these data centers,
0:23:00 which are already one of the biggest strains
0:23:02 on power in our economy.
0:23:04 And it’s expected to double in just a couple of years,
0:23:07 quintuple in maybe the next 10.
0:23:08 So I do think at the same time,
0:23:10 I’m sure there’s probably a marketing element to it.
0:23:11 I think at the same time,
0:23:15 these energy companies are realizing like shit,
0:23:17 we’ve been investing in these renewables,
0:23:21 which are probably pretty exciting over the long term,
0:23:23 but the short-term demands of AI
0:23:25 are way higher than we thought.
0:23:27 And the reality is these renewables
0:23:29 that we’ve been investing in, they won’t cut it.
0:23:31 And if we wanna meet demand,
0:23:33 we do need more oil and we do need more gas,
0:23:36 especially gas, liquid natural gas
0:23:38 is like ideal for data centers.
0:23:41 So I think I’m like sort of half with you there,
0:23:43 but I do think there is some substance here
0:23:46 in the fact that power demand is just going up.
0:23:48 And we’re not gonna power these data centers
0:23:50 with windmills and solar panels.
0:23:52 We’re gonna do it with oil and gas.
0:23:53 And so if you’re not investing in that,
0:23:55 or at least maybe to your point,
0:23:58 showing Wall Street that you’re trying to invest in that
0:23:59 and that you’re being realistic
0:24:02 about the demands of AI in the next few years,
0:24:03 then you’re gonna get punished.
0:24:06 And that’s why we’ve seen BP down
0:24:10 or at least kind of flat over the past year or so.
0:24:12 It’s up 37% in the past five years,
0:24:14 Chevron’s up 109%.
0:24:16 Exxon is up 183%.
0:24:19 So they have been getting crushed.
0:24:24 And I don’t like to be the big energy guy,
0:24:25 but I do support this move.
0:24:29 – We saw a lot of those energy stocks crash with deep seek
0:24:30 when all of a sudden people thought,
0:24:32 oh, we might not need as much energy.
0:24:34 And what you’re saying is that was a bit of a headache.
0:24:37 We’re still gonna need a massive amount of energy.
0:24:41 And I met with a guy who’s an energy guy
0:24:43 and he said, you got nuclear wrong.
0:24:46 He said, and Mia kind of confirmed this in her notes
0:24:51 that the lag to bring energy capacity nuclear online
0:24:54 is five, 10 years out at a minimum.
0:24:58 And that the real play is liquid natural gas, LNG.
0:25:00 And that you wanna be looking at that space.
0:25:03 And it’ll be very interesting to see the other,
0:25:05 there’s the side note that really fascinated me.
0:25:06 I don’t know if you’ve saw,
0:25:10 the number one producer of wind power now is Texas.
0:25:12 And we should do a deeper dive at some point
0:25:16 on the economics of wind power
0:25:18 because it’s politically, quote unquote, incorrect
0:25:21 or politically sober, whatever the term you wanna use this,
0:25:25 Texas is, the economics of wind have made it such that
0:25:28 it is now in many ways a better bet
0:25:30 than these dirty fossil fuels.
0:25:32 – We’ll be right back after the break
0:25:33 with a look at Nvidia.
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0:29:13 – We’re back with ProfG Markets.
0:29:15 NVIDIA reported fourth quarter earnings
0:29:18 that beat expectations with revenue up 78%
0:29:19 from a year earlier.
0:29:20 The company also forecasted
0:29:23 higher than expected first quarter revenue
0:29:26 with the CFO confident in a quote significant ramp
0:29:28 in sales of Blackwell,
0:29:30 which is its next generation AI chip.
0:29:33 However, NVIDIA also warned that profit margins
0:29:34 would be tighter than expected
0:29:37 as it accelerates the rollout of the Blackwell chip.
0:29:40 After fluctuating between gains and losses,
0:29:44 the stock actually fell slightly in extended trading.
0:29:47 Scott, just your headline initial reactions
0:29:48 to NVIDIA’s fourth quarter earnings
0:29:51 and perhaps the market’s reaction to those earnings.
0:29:53 – You had it, you summarized it perfectly, Ed.
0:29:56 And that is the market is so used to
0:29:59 these companies blowing away expectations
0:30:00 that when they don’t beat expectations,
0:30:03 they don’t meet expectations.
0:30:07 And NVIDIA beat expectations on the top and bottom line.
0:30:08 And I think the stock’s off today.
0:30:10 I mean, it’s not off hugely,
0:30:12 but you summarized it perfect.
0:30:15 Expectations have become such that you’re expected
0:30:18 to massively blow away expectations,
0:30:21 but I didn’t take a ton away from this.
0:30:22 Do you have any thoughts?
0:30:26 – I think what the market wants from NVIDIA now
0:30:30 is they need a home run to be fine.
0:30:33 They need to consistently hit a home run.
0:30:36 And only if they knock the ball literally out of the park
0:30:38 will they get a bump in the stock.
0:30:40 But we can just look at the numbers here.
0:30:44 So sales up 80% to 39.3 billion,
0:30:48 net income up 80% to 22.1 billion,
0:30:49 beat on revenue by 3%,
0:30:52 beat on guidance by 5%.
0:30:54 I think the most important stat here
0:30:56 is their data center revenue beat.
0:31:00 They beat data center revenue expectations by 6.3%.
0:31:01 And that’s, as we know,
0:31:03 the most important thing for Wall Street right now.
0:31:08 I think they did $115 billion in data center revenue in 2024.
0:31:10 It’s just unbelievable.
0:31:12 So it was a great quarter.
0:31:15 But as you say, great isn’t good enough.
0:31:17 And so they kind of flatlined.
0:31:22 But in my book, that’s kind of a win for NVIDIA.
0:31:24 I think a lot of people are expecting at this point
0:31:28 that NVIDIA, they’re looking for anything
0:31:29 to bring the stock down.
0:31:32 And so the fact that they were able to maintain themselves
0:31:33 is kind of impressive.
0:31:36 We should probably talk about Deepseek
0:31:38 and what Jensen Huang said about Deepseek.
0:31:41 He mentioned it pretty much first thing on the call.
0:31:43 He said, I’ll just quote what he said.
0:31:47 He said, “Models like OpenAI, Grock 3 and Deepseek R1,
0:31:49 are reasoning models that apply inference time-scaling
0:31:53 and reasoning models can consume 100 times more compute.”
0:31:56 So he kind of sounded bullish on Deepseek in a way.
0:31:59 He then went on to say that Deepseek is quote,
0:32:02 “An excellent innovation, but even more importantly,
0:32:05 it has open sourced a world-class reasoning model.
0:32:09 Nearly every AI developer is applying R1 or techniques
0:32:12 like R1 to scale their models performance.”
0:32:16 So if I were to translate what he’s saying about Deepseek,
0:32:20 it’s that Deepseek can only be good for Nvidia.
0:32:23 He says, you know, it can consume more computing power.
0:32:26 And I’m not totally sure about that.
0:32:29 And I don’t really believe him given what we saw
0:32:30 in the research paper where Deepseek said,
0:32:32 “No, we consume less compute.”
0:32:36 But he also said that it’s democratizing AI,
0:32:39 which will ultimately lead to even more demand
0:32:40 for computing power.
0:32:43 And on that point, I do agree with him.
0:32:46 I think that, you know, if Deepseek can make this stuff
0:32:50 more accessible, then we’re gonna see more people
0:32:53 accessing it and more people using this stuff,
0:32:56 which is only gonna lead to more demand for compute,
0:32:58 which can only benefit Nvidia.
0:33:00 This is, we’ve talked about this before.
0:33:02 I think this is Jevyn’s paradox.
0:33:03 A lot of tech bros talk about this.
0:33:06 This paradox that the cheaper and more efficient
0:33:10 a product gets, the more it is consumed in the real economy.
0:33:12 And so Jensen’s comments at the start of the call were,
0:33:14 “This is what’s gonna happen.
0:33:15 It’s more accessible.
0:33:17 It can only benefit us.”
0:33:18 I’m sort of with him.
0:33:20 I think the 100 times more compute power comment
0:33:22 was probably a little bit misleading.
0:33:25 But, you know, I look at this and I think,
0:33:28 okay, Nvidia’s crushing it, keep going.
0:33:30 – It’s great IR, it’s great investor relations
0:33:33 to turn a bug into a feature, right?
0:33:36 That A, confronting it head on,
0:33:38 let’s talk about Deepseek.
0:33:41 And this is why Deepseek is good for us.
0:33:42 – It’s a very well-run company.
0:33:44 He’s an outstanding CEO.
0:33:47 I think Josh Brown said that it’s up a hundred acts.
0:33:49 And Josh, I guess Josh has owned it for 10 years.
0:33:52 – Yeah, I couldn’t believe when he said that.
0:33:53 By the way, we were wondering,
0:33:54 how much do you think he put in?
0:33:57 – I have no idea, but I know I met Josh
0:33:59 through his partner, Barry Ritholtz,
0:34:00 who’s also a very smart guy.
0:34:03 And they’re trying to be sort of a hybrid
0:34:07 between a hedge fund and their business model and Vanguard.
0:34:09 And that is every time their AUM goes up,
0:34:11 they charge us money, but they’re very,
0:34:13 they’re not stock pickers.
0:34:14 Well, I guess they’re stock pickers to a certain extent,
0:34:15 but they’re very much–
0:34:16 – They’re sober about it.
0:34:18 – Yeah, they’re one of the few funds
0:34:20 I’ve ever thought investing in an even bank fees
0:34:23 because they’re just very sober kind of level-headed guys
0:34:26 and they give it kind of, give it to you straight.
0:34:27 And oh yeah, those guys are like fun to go out
0:34:29 and eat beef and drink bourbon with.
0:34:32 They’re such like long island guys.
0:34:34 Like I don’t even like basketball.
0:34:35 – Which is the most important thing
0:34:37 in the wealth management business.
0:34:37 You need to be–
0:34:40 – 100%, but if I was gonna go to a next game with anybody
0:34:43 and then go have a big steak, it’d be those guys.
0:34:44 – 100%.
0:34:46 – Look, it’s an incredible company.
0:34:48 I’m pissed off, I never owned it.
0:34:50 I have a difficult time seeing where it goes from here
0:34:55 based on how just expensive it has become, but–
0:34:55 – It was interesting.
0:35:00 I mean, I was watching CNBC the night before the earnings
0:35:05 and CNBC had probably every single analyst on their roster
0:35:09 come on to talk about this topic
0:35:13 and specifically to make a big, bold prediction about it.
0:35:15 And it was really interesting
0:35:17 seeing all of these analysts getting so fired up.
0:35:19 – Investors are awaiting the most anticipated report
0:35:22 of the whole earnings season just a couple hours from now.
0:35:24 – The bottom line is if they can beat $38 billion
0:35:26 in sales for the quarter, it’s gonna be a great quarter.
0:35:27 – What they’re gonna report,
0:35:29 this quarter is gonna be fantastic.
0:35:31 – You know, this does remind me of the bubble,
0:35:32 but it’s on steroids.
0:35:35 I mean, there is a data point, a podcast, a rumor
0:35:36 every five minutes.
0:35:39 By the way, they had Aswath demotorin on
0:35:42 and his prediction was Nvidia’s going to beat,
0:35:44 but the stock’s gonna come down a little bit.
0:35:48 Aswath absolutely nailed it as he often does.
0:35:51 But I guess the big takeaway for me from watching that
0:35:53 and from seeing all of the memes online
0:35:55 on Twitter, on Instagram, on threads,
0:36:00 this is basically like the Super Bowl for nerds now,
0:36:01 for business nerds.
0:36:02 – That’s a new sport, 100%.
0:36:05 – And there was this great data from the team.
0:36:08 Google search volume four Nvidia beat out
0:36:10 at 4 p.m. the day of the earnings.
0:36:12 It beat out searches for the New York Times,
0:36:17 for Wikipedia, for Instagram, and for chat GBT.
0:36:20 So this really is like, yeah, it’s the business Super Bowl.
0:36:23 It’s one of those moments where the entire business community
0:36:25 is coming together and they’re making predictions
0:36:27 and it’s a ton of fun.
0:36:29 It’s a ton of fun for CNBC too.
0:36:32 And as someone who’s trying to make business news
0:36:34 more interesting, I kind of love it.
0:36:36 – You know what would be a total gangster move
0:36:39 is if Elliot convinced Nvidia to become a petroleum company.
0:36:42 (laughing)
0:36:43 That’d be a test.
0:36:44 – I think you should become an activist
0:36:46 and maybe you can pitch that next time.
0:36:47 – There you go.
0:36:50 – We’ll be right back after the break
0:36:52 with a look at the new American Gold Card.
0:36:55 If you’re enjoying the show so far, hit follow
0:36:57 and leave us a review on Proficy Markets.
0:36:59 (upbeat music)
0:37:10 – We’re taking Vox Media Podcast on the road
0:37:11 and heading back to Austin
0:37:13 for the South by Southwest Festival,
0:37:14 March 8th through the 10th.
0:37:19 What a thrill, chicken fajitas, queso, strawberry margarita,
0:37:20 extra shot of tequila.
0:37:22 There you’ll be able to see special live episodes
0:37:25 of hit shows, including our show Pivot.
0:37:27 Where should we begin with Esther Perrell?
0:37:29 A touch more with Sue Bird and Megan Rapinoe.
0:37:31 Not just football with Cam Hayward
0:37:35 and more presented by Smartsheet.
0:37:38 The Vox Media Podcast stage at South by Southwest
0:37:41 is open to all South by Southwest badge holders.
0:37:43 We hope to see you at the Austin Convention Center soon.
0:37:44 I’m not joking.
0:37:46 I love South by Southwest.
0:37:47 The people are a ton of fun.
0:37:49 It’s a great time.
0:37:51 If you do come up and say hi,
0:37:55 visit voxmedia.com/sxsw to learn more.
0:37:59 That’s voxmedia.com/sxsw.
0:38:05 We’re taking Vox Media Podcast on the road
0:38:06 and heading back to Austin
0:38:10 for the South by Southwest Festival, March 8th through the 10th.
0:38:11 What a thrill.
0:38:14 We’ll be doing special live episodes of hit shows,
0:38:15 including Pivot.
0:38:16 That’s right.
0:38:18 That dog’s going to the great state of Texas.
0:38:21 Where should we begin with Esther Perrell?
0:38:24 A touch more with Sue Bird and Megan Rapinoe.
0:38:27 Not just football with Cam Hayward and more,
0:38:29 presented by Smartsheet.
0:38:32 The Vox Media Podcast stage at South by Southwest
0:38:35 is open to all South by Southwest badge holders.
0:38:37 We hope to see you at the Austin Convention Center soon.
0:38:42 Visit voxmedia.com/sxsw to learn more.
0:38:46 That’s voxmedia.com/sxsw.
0:38:52 This week on ProfG Markets,
0:38:53 we speak with Mike Moffitt,
0:38:55 Founding Director of the University of Ottawa’s
0:38:57 Missing Middle Initiative
0:39:00 and a former economic advisor to Justin Trudeau.
0:39:02 We dive into the state of Canadian politics
0:39:04 and we get his take on the biggest challenges
0:39:06 facing Canada’s economy.
0:39:10 Canada’s economy is like three oligopolies in a trench coat.
0:39:12 We have a lot of inequality that way.
0:39:16 We have high levels of market concentration
0:39:19 because we have this tension in Canada
0:39:21 where we want things to be Canadian.
0:39:23 We want Canadian ownership.
0:39:25 But when you do that, you create a moat.
0:39:28 And whenever you create barriers to entry,
0:39:31 you’re going to naturally create oligopolies.
0:39:33 You can find that conversation
0:39:36 exclusively on the ProfG Markets podcast.
0:39:45 We’re back with ProfG Markets.
0:39:48 Trump is launching a new gold card program,
0:39:50 offering residency and a path to citizenship
0:39:51 for wealthy investors.
0:39:54 But it comes with a steep price.
0:39:56 Participants will need to pay $5 million
0:39:58 directly to the US government
0:40:01 with the funds going toward paying down the federal deficit.
0:40:04 The program set to launch in just two weeks
0:40:07 will replace the existing EB-5 visa program
0:40:09 which grants visas to foreign investors
0:40:11 who finance US projects.
0:40:13 However, immigration experts argue
0:40:16 that Congress must approve this change first.
0:40:19 Scott, I’d like to just quickly start off
0:40:22 by clearing something up on this EB-5 thing.
0:40:24 The Trump administration is saying
0:40:27 that this is no different from the EB-5 program,
0:40:30 which was set up in around 1990, I believe.
0:40:32 And this is a program where you pay a million dollars
0:40:33 to get a green card.
0:40:35 They’re saying, well, this is the same.
0:40:38 It’s just five million, not quite.
0:40:40 The EB-5 visa is actually quite different
0:40:42 because it’s a conditional visa
0:40:45 that is dependent on your ability to prove
0:40:48 after two years that you have created
0:40:51 an invested in a legitimate American business
0:40:53 and you have to prove that you have created
0:40:57 at least 10 full-time jobs for Americans.
0:40:58 So it’s different in the fact
0:41:01 that it requires actual real investment,
0:41:04 not just your money, but your time
0:41:06 and your effort and real commitment.
0:41:08 And I think to me, that is the crucial difference here.
0:41:11 This gold card is very simply pay-to-play.
0:41:15 You hand over the cash, you get the visa, one and done.
0:41:17 And I think when it comes to citizenship,
0:41:20 that is an important thing to recognize
0:41:23 is you’re actually investing your time
0:41:24 and your effort and your commitment
0:41:25 versus just your money.
0:41:27 – Well, this isn’t anything new.
0:41:29 Europe has a bunch of these programs.
0:41:32 They get, I think they garner
0:41:34 or different countries in Europe garner
0:41:36 about three billion in euros each year
0:41:38 from selling different visas.
0:41:42 I’m on a tech talent visa here in the UK
0:41:44 where I convinced them that I would bring unique skills
0:41:46 and they gave me a five-year visa.
0:41:48 But there was a similar program,
0:41:50 I think in the first Trump administration
0:41:52 where if you purchased a certain amount of real estate,
0:41:53 maybe it was for people out of China,
0:41:55 and the Canada has these programs.
0:41:56 I mean, this isn’t anything new.
0:42:00 What’s different about this is the price point.
0:42:03 And at $5 million, that’s just exceptional.
0:42:06 And someone did some analysis and said that
0:42:10 if you’re gonna pay $5 million for a visa,
0:42:14 it means you’re worth at least $25 million.
0:42:16 They’re just not that many people
0:42:17 that could afford this thing.
0:42:22 So this bullshit that we might raise $5 to $50 trillion.
0:42:24 I don’t have a problem with it.
0:42:27 The only thing is at this price point,
0:42:30 if you can’t figure out a way to get into America
0:42:33 or another Western country for a lot less than this,
0:42:37 it means you’re on the run from the tax authorities
0:42:39 or you’re pretty shady.
0:42:41 I mean, there’s some analogies here.
0:42:44 So one of my, when people asked me,
0:42:46 by the way, I spoke at the Royal Academy of Arts last night.
0:42:47 Ed, I don’t know if you heard
0:42:48 if you heard about it in the press.
0:42:52 – I did hear, a friend of mine said he met you, this guy.
0:42:55 – Oh, the former Golden guy came up to me and he was like,
0:42:57 I know Ed Elson, I’m like, well, I’m good for you.
0:43:00 You’re a nice man.
0:43:01 – Very cool that Royal Academy is very cool.
0:43:03 – Yeah, it was like a London highlight for me.
0:43:06 Anyway, it’s been, people always asking Q and A,
0:43:10 how would you distinguish the US from America?
0:43:14 And I say, look, my sense is unfortunately in the UK,
0:43:16 most of the people I know, including the people in this room
0:43:18 was room of very successful people.
0:43:22 Their servicing wealth built or made somewhere else.
0:43:26 And effectively some form of this was a huge,
0:43:29 a hugely successful program for Britain.
0:43:30 And that is, I think it was in the 90s,
0:43:33 Tony Blair or the odds put in place
0:43:35 really strict private property laws.
0:43:36 And that, as he said,
0:43:38 I don’t care if you’re an African warlord
0:43:40 or a Russian oligarch,
0:43:41 if you bring $100 million in the UK
0:43:45 and you buy a $30 million house in Mayfair,
0:43:48 they can’t come for it.
0:43:50 I mean, they meaning any other government
0:43:52 can’t come and take your shit away.
0:43:53 Once you have private property here in the UK
0:43:57 or you have money in our banks, no one can come for it.
0:43:59 And people would argue it attracted
0:44:01 some unsavory characters.
0:44:02 At the same time, the majority of the capital
0:44:04 and the majority of people attracted
0:44:06 were just very successful people.
0:44:08 And over the last 30 or 40 years,
0:44:09 and I know this firsthand,
0:44:11 having come to the UK once or twice a year
0:44:13 for the last 40 years,
0:44:15 London just got a dramatic facelift
0:44:18 because it attracted so much capital.
0:44:21 The US attracts people who want to make money.
0:44:24 The UK and a lot of these places attract people
0:44:27 who want to spend their money or shelter it.
0:44:31 And I wonder what kind of person are we gonna attract
0:44:35 if they have to spend $5 million to get into the US?
0:44:38 One, it’s gonna be someone very rich
0:44:42 who quite frankly is a little bit in a hurry.
0:44:45 And why are they, okay, they’re rich
0:44:47 and they’re in a hurry
0:44:50 and willing to give $5 million to get into the US.
0:44:53 That says to me like, okay,
0:44:58 the local tax authorities or the local law enforcement
0:45:00 is circling, right?
0:45:02 And they’re closing in on me
0:45:05 and I need to get out and get to America.
0:45:08 And so it’ll be really interesting.
0:45:10 First off, this just isn’t gonna raise that much money
0:45:12 ’cause I just don’t think there’s that many people.
0:45:15 The total adjustable market here is not that big.
0:45:17 The most interesting thing about this
0:45:19 will be some great investigative journalist
0:45:21 will get a source on the inside
0:45:24 and he or she will get the names of the 100 people
0:45:26 that do this, the first 100.
0:45:28 And it’s gonna be really interesting
0:45:30 to profile those people.
0:45:32 And in one way or another,
0:45:35 what this is is people on the run would be my guess.
0:45:40 People who wanna get out of the reach of tax authorities
0:45:43 or law enforcement in their host nation
0:45:47 because there are cheaper ways to get to America
0:45:49 than a $5 million.
0:45:53 This is sort of like giving the Trump administration
0:45:55 or in the Clinton and Clinton did this too,
0:45:58 a huge donation hoping for a pardon.
0:46:01 To me, this is like effectively a $5 million.
0:46:04 You’re buying a pardon, if you will, from another nation.
0:46:08 ‘Cause I wonder if, especially with the Trump administration,
0:46:09 if part of the wink-wink around this
0:46:13 is you can’t be extradited by another country.
0:46:16 – I just wanna emphasize the numbers here.
0:46:18 I mean, you mentioned how the total adjustable market
0:46:19 is not that big.
0:46:22 I just wanna get concrete here.
0:46:25 So Trump said, he had this press conference
0:46:27 with the cabinet.
0:46:30 He said, “If a million people buy the Golden Visa,
0:46:33 “that’s $5 trillion to pay down our debts.”
0:46:35 Then he said, “If 10 million people buy, quote,
0:46:38 “which is possible, that’s $50 trillion.”
0:46:40 Let’s just be very clear here.
0:46:42 Credit Suisse did this analysis
0:46:45 of ultra-high net worth individuals across the world.
0:46:47 So that’s people worth $50 million or more.
0:46:52 There are only 264,000 ultra-wealthy people in the world.
0:46:56 And by the way, 150,000 of those people are American.
0:47:00 So that only leaves you with 114,000 people left over
0:47:02 and only those people would even consider
0:47:04 getting this Golden Visa.
0:47:06 I think at most this generates maybe a couple hundred
0:47:09 billion dollars, more likely, I think,
0:47:11 would be just a few billion dollars.
0:47:15 So I just wanna be clear about the numbers here.
0:47:19 As you said, your instinct was it doesn’t make sense.
0:47:22 I’m looking at the numbers, it does not make sense.
0:47:25 Now the price we pay for that tiny little bit
0:47:30 of additional revenue to me is very high.
0:47:34 And I hate this and I’m surprised you don’t hate it
0:47:37 as much as I do because what this is basically saying
0:47:39 is that citizenship in America is now for sale.
0:47:42 – Well, it has been for a while, just to be clear.
0:47:43 If you have money, you’ve been able to get into the US
0:47:44 for a while.
0:47:47 – Not with this level of swiftness.
0:47:48 I mean, I don’t like this.
0:47:51 And I look at you, I think London is the great comparison.
0:47:53 I look at what’s happened to London.
0:47:56 When you go to Knightsbridge, yeah, it’s wealthy,
0:47:57 but it’s also a ghost town
0:48:00 because you’ve got hundreds of these ultra-luxury apartments.
0:48:04 With no one in them because it’s just a vehicle
0:48:05 for these Russian billionaires
0:48:07 who want to park their money somewhere safe.
0:48:10 Usually that money was made in very ugly ways.
0:48:14 And so they buy these giant apartments at One Hyde Park.
0:48:16 And so America has decided, oh yeah, we like that.
0:48:17 Let’s do that.
0:48:20 But I need to get your official,
0:48:23 your official where you land on this gold visa thing.
0:48:26 What I’m hearing from you is this is stupid,
0:48:29 but it’s not that problematic
0:48:31 because America has always been for sale.
0:48:33 – Every Western nation at one point or another
0:48:34 has been selling visas.
0:48:37 Has been basically, we live in a capitalist economy.
0:48:38 If you have money, you can figure out a way
0:48:42 to become a citizen of almost any nation with enough money.
0:48:43 And a lot of people would argue
0:48:47 the Trump administration is doing what the government’s
0:48:48 always done and Democrats have always done.
0:48:51 They’re just more transparent and more brazen about it.
0:48:53 I’ve engaged in this arbitrage.
0:48:56 And that is Claude de Jocas,
0:48:58 arguably one of the two or three most talented people
0:48:59 I’ve ever worked with.
0:49:02 Canadian, went to Yale, a gymnast,
0:49:07 just so impressive, great presence, hardworking,
0:49:09 working at L2, brings me, asks,
0:49:09 “What can I speak to you?”
0:49:10 Brings me the comments from,
0:49:13 “I’m really sorry, but I just got a message or a letter
0:49:16 from the INS saying I have to return to Canada.”
0:49:18 And I’m like, “Fuck that.”
0:49:19 I’m like, “Don’t worry about it.”
0:49:22 I’m like, “I can figure this out, I’ve got money.”
0:49:25 And you know, stay put, don’t worry about it.
0:49:26 And we’ll figure this out.
0:49:28 I lawyer it up with immigration attorneys
0:49:31 and Claude has never left the U.S.
0:49:32 – Oh, really?
0:49:34 ‘Cause I have a lot of talented friends
0:49:36 who are having issues with this.
0:49:37 I have a Canadian friend.
0:49:40 – It’s gotten much worse the last couple of years.
0:49:41 The last two or three years,
0:49:43 basically since the first Trump administration,
0:49:45 and this is just shooting ourselves in the foot,
0:49:48 that we’re heavy-handed with the wrong people.
0:49:50 We need to have borders.
0:49:54 We need to be, I’m all for deported criminals.
0:49:57 I’m all for, the whole immigration debate,
0:50:00 and we’re going way past here, but going to the low end,
0:50:03 if you wanted to solve this illegal immigration problem,
0:50:04 all you would do is find employers.
0:50:06 But no one wants to do that.
0:50:09 But at the high end, this is just,
0:50:11 it’s again another distraction.
0:50:12 It’s not gonna raise that much money.
0:50:15 The most interesting thing is that casted characters,
0:50:19 it’s gonna draw, who actually are willing to pay $5 million
0:50:21 so they can camp out.
0:50:22 It almost feels like
0:50:24 the most expensive witness protection program in history.
0:50:26 (laughing)
0:50:27 – That’s good.
0:50:30 All right, let’s take a look at the week ahead.
0:50:32 We’ll see the unemployment rate for February,
0:50:36 as well as earnings from Costco, Broadcom, and CrowdStrike.
0:50:38 Scott, do you have any predictions for us?
0:50:40 – I was reading that, essentially,
0:50:43 if you look at the history of different sectors
0:50:45 or categories of stocks,
0:50:48 and 100 being the most expensive they’ve ever been,
0:50:50 and zero being, or one being the least expensive
0:50:51 they’ve ever been,
0:50:54 US growth stocks are at 98 right now,
0:50:57 meaning that only 2% of the time in history
0:50:59 have they been trading at higher multiples on earnings.
0:51:03 At the same time, European value stocks
0:51:08 are trading at 2%, meaning 98% of the time
0:51:09 they have traded at higher multiples
0:51:13 throughout economic history, or modern economic history.
0:51:15 And so this isn’t a prediction, but this is what I’m doing.
0:51:20 I am starting to sell down some of my US tech stocks,
0:51:22 Apple, Amazon, and some others,
0:51:27 and rotating into these very boring European value ETFs.
0:51:29 – Good luck.
0:51:31 – But that’s what I love about this strategy,
0:51:34 ’cause about the time everybody throws in the towel,
0:51:35 I remember, probably the best investment,
0:51:39 I would say, in terms of a lack of volatility,
0:51:44 is in 2010, I started buying homes,
0:51:45 actually my partner, I can’t take credit,
0:51:48 buying homes out of foreclosure in Florida.
0:51:53 And nobody wanted Florida real estate.
0:51:56 And it didn’t seem like it was ever gonna get fixed.
0:51:58 That’s when you invest.
0:52:01 And I feel like just your reaction,
0:52:05 that means it’s time to invest in European value companies.
0:52:06 And there’s still some great companies,
0:52:11 Nestle, L’Oreal, British Petroleum, Shell, Mercedes.
0:52:16 Anyway, so I think this rotation is about to happen,
0:52:20 or it might be three months, it might be three years.
0:52:23 I think over, if you have a 10 year time horizon,
0:52:26 I think you trim out of US growth
0:52:28 and you trim into Florida real estate,
0:52:30 which right now is European value.
0:52:35 – This episode was produced by Claire Miller
0:52:37 and engineered by Benjamin Spencer.
0:52:39 Our associate producer is Allison Weiss.
0:52:40 Mia Silverio is our research lead.
0:52:43 Isabella Kinsell is our research associate.
0:52:45 Drew Burrows is our technical director.
0:52:47 And Katharine Dillon is our executive producer.
0:52:49 Thank you for listening to ProfG Markets
0:52:51 from the Vox Media Podcast Network.
0:52:54 Join us on Thursday for our conversation
0:52:57 with Jonathan Cantor, only on ProfG Markets.
0:53:03 ♪ Lifetimes ♪
0:53:11 ♪ You help me ♪
0:53:16 ♪ In kind reunion ♪
0:53:23 ♪ As the world turns ♪
0:53:28 ♪ And the dark lights ♪
0:53:31 ♪ And love, love, love ♪
0:53:33 (soft music)