Latest / Balance of Power / Republican Blame Game Starts; S&P 500 Tumbles Most Since April 2025 on AI Fears

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Republican Blame Game Starts; S&P 500 Tumbles Most Since April 2025 on AI Fears · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts. Radio.
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  Speaker 5: We've tracked this sell-off, which again is a bruising one
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  Speaker 5: and potentially the worst one we've seen for semiconductors going
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  Speaker 5: back to the COVID era, the very beginning of it
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  Speaker 5: in March 2020. For the rest of the major equity benchmarks,
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  Speaker 5: this is the worst performance we have seen on any
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  Speaker 5: day going back to Liberation Day in April of last year. which,
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  Speaker 5: of course, was the start of tariffs on a number
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  Speaker 5: of trading partners. Tariffs, of course, being one potential contributing
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  Speaker 5: factor to the losses Republicans experienced on Tuesday. And it
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  Speaker 5: is those losses, not just in federal races. but in
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  Speaker 5: state and local races as well that have this market
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  Speaker 5: worried about what the implications could be for AI and
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  Speaker 5: data centers specifically. So let's get more into this now
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  Speaker 5: as we turn to Bloomberg TV and radio markets correspondent,
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  Speaker 5: Nora Melinda, who is also here with me at world
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  Speaker 5: headquarters in New York. Nora, I don't even really know
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  Speaker 5: where to begin. There is nowhere to hide in tech
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  Speaker 5: and the chip space today. What changed today compared to yesterday?
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  Speaker 6: Well, yesterday was interesting because the logic there was the
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  Speaker 6: fact that if fewer data centers are actually built, that
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  Speaker 6: means that hyperscalers may actually be able to spend less. And,
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  Speaker 6: you know, the conversation has been so much focused when
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  Speaker 6: it comes to CapEx and all the spending that these
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  Speaker 6: hyperscalers are doing. So the idea that they could potentially
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  Speaker 6: be spending less could mean more free cash flow. I mean,
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  Speaker 6: Goldman even pointed to that, saying that there's a clear
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  Speaker 6: rotation into hyperscalers with both long-only and hedge fund buyers participating.
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  Speaker 6: But today we're seeing a bit of a different story.
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  Speaker 6: And so- This is really a distinction, the distinction they
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  Speaker 6: are really breaking down, if you will. Microsoft and Meta
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  Speaker 6: have also been caught up in the selling today. So
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  Speaker 6: maybe yesterday was a bit of a rotation within tech. Today,
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  Speaker 6: it seems to be a bit of a broad spread,
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  Speaker 6: not only chip makers, but the rest of the market
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  Speaker 6: and just any risk off. assets in the market.
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  Speaker 5: OK, so where are people hiding?
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  Speaker 6: That's an interesting question you ask, because if you look
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  Speaker 6: at the S & P 500, all of the 11
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  Speaker 6: sectors in the S & P 500 are in the red. Now,
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  Speaker 6: of course, no surprise led by information technology. But we
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  Speaker 6: can say, I guess, one of the laggards, but one
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  Speaker 6: of the better performing areas where you are getting a
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  Speaker 6: bit of cover is consumer staples still down by about 0.4%.
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  Speaker 6: A name, though, that I am watching within tech that
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  Speaker 6: actually is in the green, interestingly, Applovin. Shares of that company,
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  Speaker 6: they're up about 27% right now. And this comes after
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  Speaker 6: better than expected results, as well as a stronger outlook
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  Speaker 6: for the company. So this ad tech company is seeing momentum,
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  Speaker 6: specifically when it comes to its AI-powered platform. And that's
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  Speaker 6: helping to ease some of the concerns that we've been
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  Speaker 6: seeing from this company that was down about 60% year-to-date
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  Speaker 6: through yesterday. So a bit of a bright spot there. Also,
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  Speaker 6: when you dig into the Mag 7 and you take
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  Speaker 6: a look at some of the names that are still lower,
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  Speaker 6: but not down as badly as their peers, Apple, it's
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  Speaker 6: down about 1.8%. And a lot of folks on Wall
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  Speaker 6: Street have been talking about this as a potential safe haven,
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  Speaker 6: especially when you think about the actual physical AI infrastructure
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  Speaker 6: build and all the spending there. You don't really see
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  Speaker 6: Apple caught up in that space as much as its peers.
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  Speaker 5: All right, Nora Melinda, thank you so much. Of course,
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  Speaker 5: while we're watching this sell-off happen in tech, you're seeing
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  Speaker 5: a bid into the bond market as well. Yields getting
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  Speaker 5: way lower at the short end. Twos through fives falling
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  Speaker 5: about 10 basis points on the day. I guess the thinking, Joe,
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  Speaker 5: might be that if you're seeing financial conditions tighten like
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  Speaker 5: this and the inflationary effects of data centers become more muted,
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  Speaker 5: maybe the Fed's not going to have to hike as much.
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  Speaker 2: And if you just got shaken out of the market
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  Speaker 2: because you bought at the high, hey, 5% sounds pretty
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  Speaker 2: good right about now. I have to admit, Kayleigh, didn't
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  Speaker 2: have Applovin on the bingo card for today, but whatever.
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  Speaker 2: Buy Applovin and Exxon. That's what the market's telling us. Kayleigh,
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  Speaker 2: thank you. We need to continue this conversation here in Washington.
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  Speaker 2: Josh Wingrove joins us now, Bloomberg's Washington and White House correspondent.
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  Speaker 2: I've been watching Truth Social. He's not talking about the
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  Speaker 2: markets today. But I'm guessing this is what the president expected.
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  Speaker 2: And maybe there's a I told you so coming.
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  Speaker 7: I think he seems focused on other things right now, Joe,
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  Speaker 7: but we'll see.
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  Speaker 1: Like a ballroom.
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  Speaker 8: We'll see.
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  Speaker 7: Like a ballroom. We had that tour yesterday. I think
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  Speaker 7: we're running out of things to.
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  Speaker 9: Tour right now.
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  Speaker 1: Did you go to the ballroom tour?
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  Speaker 7: No, I didn't have the pleasure. Did you see he
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  Speaker 7: signed love on it? He loved Donald Trump. Loved Donald Trump.
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  Speaker 7: Very sanguine after this shellacking the Republican Party took.
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  Speaker 2: Well, watch this beam really echo to the watch this drive.
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  Speaker 1: Moment for George W.
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  Speaker 10: Bush.
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  Speaker 1: That was the echo of the midterms.
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  Speaker 7: I think keeping your principal happy is an important work
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  Speaker 7: for political staffers. And whether that means trotting them out
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  Speaker 7: to the reflecting pool or trotting them out to the
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  Speaker 7: ballroom renovation is that. Look, Trump is unusually silent right now, obviously.
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  Speaker 1: I guess that's what I'm trying to explore.
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  Speaker 7: And he's basically the only person in, yeah, both the markets,
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  Speaker 7: but also about Everything else. The proverbial bomb that just
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  Speaker 7: went off in his coalition.
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  Speaker 1: He barely mentioned it yesterday in front of reporters.
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  Speaker 7: Barely mentioned it. Spoke aloud the notion that J.D. Vance
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  Speaker 7: might not run again, which I found was interesting. Continued
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  Speaker 7: to stop well, well, well short of endorsing Vance doing so.
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  Speaker 7: Vance still has to be presumed the heir apparent or
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  Speaker 7: at least front runner poll position. Pick your metaphor. But
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  Speaker 7: his post yesterday certainly raised a lot of eyebrows and
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  Speaker 7: has been getting people... sort of going back and forth.
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  Speaker 7: Fox News this morning, which the president watches faithfully, not
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  Speaker 7: taking a liking to Vance's framing of that, interestingly. So
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  Speaker 7: we have a lot of tension swirling in the MAGA
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  Speaker 7: movement right now. You sure woke up Ted Cruz. Pardon me?
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  Speaker 2: You sure woke up Ted Cruz with a 30-paragraph response
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  Speaker 2: on Twitter.
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  Speaker 7: Did it ever.
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  Speaker 1: I thought Twitter was the short-form... platform not.
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  Speaker 10: For my fellow Ted Cruz mission statements on there uh
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  Speaker 10: yeah Ted also put out a long we're seeing teasers
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  Speaker 10: of what might be the 2028 uh message yeah uh
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  Speaker 10: Vance a poster at heart you know bless him uh
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  Speaker 10: put out a long Twitter thread as well uh and
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  Speaker 10: Ted Cruz put out a big podcast of his own
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  Speaker 10: I think you know for Cruz the both of them
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  Speaker 10: had rough nights Tuesday right Cruz kind of actively running
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  Speaker 10: for president, or at least that's what J.D.
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  Speaker 7: Vance has accused him of already. Of course, now the
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  Speaker 7: last standing statewide Republican in Texas after this shock election
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  Speaker 7: on Tuesday really complicates his path if he wants to
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  Speaker 7: run for something. Vance, of course, trying to distance himself
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  Speaker 7: from the president. What Trump thinks about that and whether
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  Speaker 7: Vance can continue to do it and get away with it,
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  Speaker 7: I think is very much an open question. And so
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  Speaker 7: we're going to see. Everyone's just kind of trying to
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  Speaker 7: figure out where they're going to go right now. But
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  Speaker 7: we've seen a lot of Republicans who have stayed silent,
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  Speaker 7: kind of emerging for their I told you so moment,
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  Speaker 7: whether it's Ron DeSantis in Florida or others. Former Senator
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  Speaker 7: Pat Toomey, for example, hitting Vance on the notion of tariffs,
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  Speaker 7: saying Republicans got to wake up and realize that tariffs
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  Speaker 7: are increasing costs.
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  Speaker 2: Just quickly, we're going to be speaking with Congresswoman Debbie
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  Speaker 2: Wasserman Schultz in just a second here.
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  Speaker 1: Does he have travel plans?
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  Speaker 2: Is he hunkered down now that this is over to
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  Speaker 2: deal with the lame duck session?
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  Speaker 7: We have not heard about travel plans. We'll see. We'll
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  Speaker 7: see in the coming days. I think what we will see,
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  Speaker 7: there are immediate questions including on like a government funding bill,
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  Speaker 7: as well as the potential for permitting still to be
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  Speaker 7: done in the lame duck. There's been ongoing talk about
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  Speaker 7: Chinese cars and whether that could be its own standalone
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  Speaker 7: bill rolled into the NDAA to deal with the lame duck.
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  Speaker 7: So there are things happening now that he might have
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  Speaker 7: to deal with. But right now, we just don't know.
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  Speaker 7: Let's just know that Trump has treated so far, Joe,
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  Speaker 7: as you know, the 2018 and 2026 results quite differently
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  Speaker 7: from the 2020 results, right? 2020 was full bunker mentality
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  Speaker 7: for weeks. Yes, yes. We don't really know whether he's
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  Speaker 7: going to land there yet. He seems to be more
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  Speaker 7: kind of chalking it up to everyone else that lost
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  Speaker 7: and not himself. But, you know, we might have, for instance,
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  Speaker 7: a Mississippi call that seems to be going to the Democrats,
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  Speaker 7: which is just as much of a jaw-dropper as Texas governor.
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  Speaker 1: We'll be standing by for it. Josh, thank you so much.
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  Speaker 1: Glad to see you recovered.
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  Speaker 2: Midterm election night as well. Bloomberg senior White House reporter
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  Speaker 2: and Washington correspondent Josh Wingrove. Find him on the terminal
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  Speaker 2: and online. As we prepare for the congresswoman, we're preparing
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  Speaker 2: for the lawmakers. They'll be coming, of course, for the
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  Speaker 2: lame duck next week, but also The incoming class will
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  Speaker 2: be here for orientation, to start setting up staff offices,
• 8:22
  Speaker 2: find places to live. Already talking about it is Abdul El-Sayed.
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  Speaker 2: Out on the morning shows today, talked on CNN about
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  Speaker 2: the obligation to not only be elected, but to govern.
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  Speaker 11: We've proven what we can get. Now the question is,
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  Speaker 11: can we govern like we deserve it? That's the choice
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  Speaker 11: that we are going to face. And I'm hoping that
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  Speaker 11: as Democrats, we rise to the challenge. And I've been clear,
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  Speaker 11: the big challenge that's kept us from being able to
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  Speaker 11: do this is people don't trust our party because too
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  Speaker 11: often we're funded by the very same people who fund Republicans.
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  Speaker 11: Too often, we're just doing a lighter version of that.
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  Speaker 11: Can we actually cut the cord that we've had to
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  Speaker 11: corporate money and start governing like we give a damn
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  Speaker 11: about working people and start passing the policies that are
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  Speaker 11: actually gonna make people's lives better?
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  Speaker 2: That's where we start our conversation with Congresswoman Debbie Wasserman Schultz.
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  Speaker 2: As aforementioned, the Democrat representing Florida's 25th District senior member,
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  Speaker 2: House Appropriations, and was at one time chair of the DNC. Congresswoman,
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  Speaker 2: congratulations on your reelection. It's great to see you back
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  Speaker 2: on Bloomberg TV and radio. Thank you for joining us.
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  Speaker 2: So was this just a big night? Ted Cruz calls
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  Speaker 2: it a Watergate-level repudiation. Was it just a big night
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  Speaker 2: for Democrats, or did you see your party entirely remade
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  Speaker 2: in this midterm cycle?
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  Speaker 12: What we saw was a cataclysmic response to Republican MAGA
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  Speaker 12: indifference to the plight of everyday folks across this country,
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  Speaker 12: no matter what their party affiliation was, because I know
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  Speaker 12: I heard across my district when I was campaigning and, frankly,
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  Speaker 12: during the last few years of representation of my current
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  Speaker 12: congressional district, people's costs have skyrocketed out of control and
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  Speaker 12: went into overdrive when Donald Trump implemented this illegal tariff
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  Speaker 12: tax policy.
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  Speaker 1: I think we may have just lost our connection.
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  Speaker 12: Nope, I'm still here.
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  Speaker 1: Sorry, Congresswoman.
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  Speaker 2: I think you're getting a little choppy on the Wi-Fi. Yeah,
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  Speaker 2: maybe we can just check quickly to make sure the
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  Speaker 2: Congresswoman is good because I want to be able to
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  Speaker 2: finish her answer there.
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  Speaker 1: Kayleigh's in New York. I'm in Washington.
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  Speaker 2: And Kayleigh, as we reconnect with the Congresswoman, this is
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  Speaker 2: the question right now. And while I'm not sure anyone's
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  Speaker 2: going to know until tomorrow, All the lawmakers are back
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  Speaker 2: in Washington and we actually have a family conversation inside
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  Speaker 2: one room.
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  Speaker 13: Yeah.
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  Speaker 5: And as she's talking about hearing so much about affordability
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  Speaker 5: questions and costs in her district and beyond, the real
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  Speaker 5: question is, is what legislation immediately. can be enacted by
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  Speaker 5: a Democratic-controlled Congress that can address that, assuming that it's
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  Speaker 5: not one of those that President Trump has suggested he
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  Speaker 5: might veto, because he said he might be Mr. Veto
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  Speaker 5: and be doing that a lot. Congresswoman, I believe we've
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  Speaker 5: reestablished our connection. Apologies for the technical difficulties here. Legislatively,
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  Speaker 5: as you talk about addressing costs, what's the first bill
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  Speaker 5: that's going to pass that does that for the American people?
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  Speaker 5: What do you want it to be?
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  Speaker 12: Well, our legislative agenda is going to be driven by
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  Speaker 12: the message we heard loud and clear and that these
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  Speaker 12: election results produced, which is that people want us to
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  Speaker 12: reduce their costs, whether it's groceries and gas, housing and
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  Speaker 12: health care or utilities, housing being the largest portion of
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  Speaker 12: a household budget. We've got to create more affordable options.
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  Speaker 12: We had the Road to Housing Act that became law
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  Speaker 12: without Trump's signature. That was bipartisan legislation. even in a
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  Speaker 12: very challenging partisan political environment. And I am confident that
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  Speaker 12: we're going to be able to build off of that model.
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  Speaker 12: We have dozens of bills that have been filed focused
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  Speaker 12: on bringing the cost of housing down, health care as well.
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  Speaker 12: We need to reenact the enhanced premium tax credits because, folks,
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  Speaker 12: health insurance premiums have doubled, tripled, and quadrupled.
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  Speaker 7: We have to make.
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  Speaker 12: Sure that whether it's groceries or gas. You bring this
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  Speaker 12: war to an end. It's illegal to begin with. People
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  Speaker 12: were very, very vocal when I was hearing from them
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  Speaker 12: that they're tired of this war. They're angry that Trump
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  Speaker 12: is waging it. And it's increased the cost of fertilizer
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  Speaker 12: as well as a barrel of oil, which has put
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  Speaker 12: gas prices and the cost of food on top of
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  Speaker 12: his price increase resulting from tariffs. really out of people's,
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  Speaker 12: too many people's reach. So those are the focuses that
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  Speaker 12: we're going to have when it comes to legislation.
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  Speaker 2: And you need to get around a president who, while
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  Speaker 2: he has pledged to work with Democrats, has also fancied
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  Speaker 2: calling himself Mr.
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  Speaker 1: Veto.
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  Speaker 2: I wonder, with so many new members coming in, so
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  Speaker 2: many of them were running against data centers, corporate interests, APEC,
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  Speaker 2: many pledging to end weapons shipments to Israel. When will
• 13:15
  Speaker 2: the family conversation happen? When does Hakeem Jeffries get everyone
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  Speaker 2: in a room and hammer out an agenda?
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  Speaker 12: Well, we've been working on that agenda for months now,
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  Speaker 12: and the voters have spoken. We will, after you have
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  Speaker 12: all the votes counted and the numbers are in, we
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  Speaker 12: will have the largest majority in the House of Representatives
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  Speaker 12: since 1990. And that majority is made up of moderate
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  Speaker 12: Democrats who flipped Republican districts, and they got so many
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  Speaker 12: votes from Republican constituents. And so Making sure that we
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  Speaker 12: focus on life being more affordable, that's going to be critical.
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  Speaker 12: That is issue one, two, and three, while also really
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  Speaker 12: going after the Trump crime family's corruption. Because I heard,
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  Speaker 12: and it doesn't matter whether you're in a liberal district
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  Speaker 12: or a moderate or conservative district, People were tired of
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  Speaker 12: Trump's obvious corruption, taking money out of families' pockets, stuffing
• 14:18
  Speaker 12: it into the pockets of billionaires, and also just the
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  Speaker 12: dismantling of our democracy, ignoring the Constitution.
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  Speaker 9: So we're going to.
• 14:26
  Speaker 12: Be united in combating and proposing and pushing forward those efforts.
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  Speaker 12: I've served in majorities and minority, Joe, back and forth
• 14:37
  Speaker 12: in my time in Congress with Republican presidents, with Democratic presidents.
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  Speaker 12: I mean, unless Trump decides he's going to be the
• 14:44
  Speaker 12: exception to the rule, most presidents want to actually have
• 14:47
  Speaker 12: a legislative agenda and not just veto bills.
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  Speaker 14: All right.
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  Speaker 5: Democratic Congresswoman Debbie Wasserman Schultz of Florida's 25th District. Thanks
• 14:55
  Speaker 5: so much for joining us on Balance of Power. We'll
• 14:58
  Speaker 5: have more on the show coming up. The implications of
• 15:00
  Speaker 5: the midterms and what it means for markets, which, of course,
• 15:02
  Speaker 5: are tanking today, at least equity wise. The stocks index
• 15:05
  Speaker 5: on its worst day since 2020.
• 15:07
  Speaker 1: Stay with us on Balance of Power. We'll have much
• 15:09
  Speaker 1: more coming up after this.
• 15:13
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• 15:33
  Speaker 5: Just absolutely incredible numbers we are seeing. Charlie Pellett, thank
• 15:35
  Speaker 5: you so much. Charlie will continue to run us through
• 15:38
  Speaker 5: the sell-off periodically here, but we can't talk about it
• 15:41
  Speaker 5: enough today as we consider how much of this might
• 15:43
  Speaker 5: be driven by the new political reality in the U.S.
• 15:46
  Speaker 5: that not just federal offices, congressional offices are going to
• 15:50
  Speaker 5: belong more so to Democrats in the new Congress, but
• 15:53
  Speaker 5: in state governments as well, in governors' mansions in places
• 15:56
  Speaker 5: like Texas and and Georgia. And perhaps that is what
• 15:59
  Speaker 5: the reality of this market is dealing with now as
• 16:01
  Speaker 5: they consider the future of the build-out of data centers
• 16:04
  Speaker 5: that power artificial intelligence. We want to get more into
• 16:06
  Speaker 5: this now with Romain Bostic, host of The Close here
• 16:09
  Speaker 5: on Bloomberg, who, of course, spent the first half of
• 16:11
  Speaker 5: this week in Michigan covering the midterm elections that have
• 16:15
  Speaker 5: resulted in all of this. Romain, obviously here on The
• 16:17
  Speaker 5: Politics Show, we like to think that politics has an impact,
• 16:20
  Speaker 5: that policy matters for markets. Is that exclusively what's happening
• 16:24
  Speaker 5: here today, or is there more at work?
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  Speaker 15: No, that's pretty much the underlying narrative going on right now.
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  Speaker 15: And you have to look at it this way. We
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  Speaker 15: talk at the high level about all of these races,
• 16:32
  Speaker 15: the Senate races, gubernatorial races. Don't forget, there were 47
• 16:36
  Speaker 15: ballot measures across the country directly related to the data
• 16:39
  Speaker 15: center build-out, basically reining it in. 46 of those measures passed.
• 16:44
  Speaker 15: That doesn't even include various other propositions that were sort
• 16:46
  Speaker 15: of a little sort of on the periphery. I'll bring
• 16:50
  Speaker 15: up one. There was a proposition in Michigan that was
• 16:53
  Speaker 15: ostensibly about campaign finance reform, but it was specifically targeted—
• 16:57
  Speaker 15: at the local utilities there and the idea of reining
• 16:59
  Speaker 15: in the amount of political influence they have. Again, this
• 17:03
  Speaker 15: was a direct response by a lot of the residents
• 17:06
  Speaker 15: there to what they saw as sort of this unfettered
• 17:10
  Speaker 15: runaway build out of data centers and everything related to
• 17:14
  Speaker 15: that without community input. And I think what we heard
• 17:17
  Speaker 15: across this country is that the communities are now gonna
• 17:20
  Speaker 15: have a lot more input, whether it's at the local level,
• 17:22
  Speaker 15: the state level, or at the federal level. And that
• 17:25
  Speaker 15: means that if you're an investor, In these AI names,
• 17:28
  Speaker 15: over the last two years, where you've had effectively unfettered
• 17:31
  Speaker 15: and almost unregulated access to be able to do what
• 17:35
  Speaker 15: you wanted to do, I think the message is very
• 17:38
  Speaker 15: clear that that's going to change.
• 17:39
  Speaker 5: Well, and talk about the distinction within so-called AI names,
• 17:42
  Speaker 5: because yesterday the kind of narrative was that this might
• 17:45
  Speaker 5: actually be good for hyperscalers because there's not going to
• 17:47
  Speaker 5: be the temptation to throw boatloads of CapEx. at this,
• 17:50
  Speaker 5: but maybe it's really not good for chip stocks, which
• 17:52
  Speaker 5: of course is where a lot of that money was
• 17:54
  Speaker 5: being funneled. Is that distinction being made today, Romain, or
• 17:57
  Speaker 5: is this kind of a take no prisoners kind.
• 17:59
  Speaker 8: Of sell off?
• 18:00
  Speaker 1: Today, no.
• 18:01
  Speaker 15: Yesterday, you saw that distinction a little bit more and
• 18:03
  Speaker 15: you saw some of the big hyperscalers actually rally while
• 18:06
  Speaker 15: the chip stocks fell. Today, everyone's pretty much throwing the
• 18:08
  Speaker 15: baby out with the bathwater. Someone kind of described it
• 18:11
  Speaker 15: to me as best as this, is that leading up
• 18:13
  Speaker 15: to this election, you had started to see a big
• 18:15
  Speaker 15: repricing in the AI space because of concerns about the
• 18:18
  Speaker 15: cost it was taking to finance. some of the political
• 18:20
  Speaker 15: risk as well, and the idea that change is the return.
• 18:23
  Speaker 15: What you're seeing today is actual de-risking, and that is
• 18:26
  Speaker 15: basically people cashing in their chips and moving to the
• 18:28
  Speaker 15: sidelines until they get better clarity as to what comes next.
• 18:33
  Speaker 2: Hey, Romain, you know what else we heard yesterday was
• 18:34
  Speaker 2: the power of incumbency, and it didn't have to do
• 18:37
  Speaker 2: with politicians. The idea that the MAG-7 and some of
• 18:42
  Speaker 2: the major hyperscalers already had data centers in the ground
• 18:45
  Speaker 2: and might have a moat if no new competitors... neocloud
• 18:50
  Speaker 2: companies could creep in on that. Mag7 did great yesterday,
• 18:54
  Speaker 2: if we still call them that. Now they've joined the
• 18:56
  Speaker 2: rest of the sell-off here. Was that just a failed theory?
• 19:00
  Speaker 15: No, I don't think it was a failed theory, Joe.
• 19:02
  Speaker 15: I think it was valid yesterday, and I think it's
• 19:04
  Speaker 15: still valid today. But as you often see when you
• 19:07
  Speaker 15: have big sell-offs like this, particularly when a lot of
• 19:10
  Speaker 15: it is driven by a lot of the algorithms and
• 19:12
  Speaker 15: what we call the CTAs, commodity trading advisors, which is
• 19:16
  Speaker 15: just kind of a fancy way of saying the computers.
• 19:18
  Speaker 15: But it gets to this idea that when you start
• 19:20
  Speaker 15: to have these sell-offs and you start to hit key
• 19:21
  Speaker 15: technical levels, it just sort of exacerbates everything. And we've
• 19:24
  Speaker 15: seen that today with all of the major indices testing
• 19:27
  Speaker 15: to the downside some of those key moving averages. And
• 19:30
  Speaker 15: of course, a lot of superlatives with regards to hitting
• 19:32
  Speaker 15: sort of key metrics that actually requires certain parts of
• 19:36
  Speaker 15: this market to actually sell. Now, to your point, as
• 19:39
  Speaker 15: far as whether the MAG7 or whatever we're calling them
• 19:42
  Speaker 15: these days are sort of insulated. That's certainly a valid theory.
• 19:45
  Speaker 15: And someone actually sent me a list of what he
• 19:47
  Speaker 15: would consider buys in this environment. It wasn't a lot
• 19:50
  Speaker 15: of the Mag7 names, but there were actually a lot
• 19:52
  Speaker 15: of power and utility companies. And the argument that he
• 19:55
  Speaker 15: was making was that a lot of these companies already
• 19:57
  Speaker 15: had the permitting for what they wanted to do. Basically,
• 20:00
  Speaker 15: the idea that this was going to be more of
• 20:01
  Speaker 15: a build out of what they already had approved and
• 20:04
  Speaker 15: they had a little bit less risk for going back
• 20:06
  Speaker 15: to the table and getting new approvals for new projects.
• 20:10
  Speaker 1: Fascinating. What a treat to have Romaine with us throughout
• 20:12
  Speaker 1: the week.
• 20:13
  Speaker 2: He's back in New York and will be holding forth
• 20:15
  Speaker 2: later the host of The Close on Bloomberg TV. I'm
• 20:18
  Speaker 2: Joe Matthew in Washington. Kaylee Lyons is still in New York.
• 20:22
  Speaker 2: She'll be on The Close later on as well. And
• 20:24
  Speaker 2: we want to assemble our political panel. We've got eyes
• 20:27
  Speaker 2: on the Senate race in Mississippi, Bloomberg politics contributors Adam
• 20:30
  Speaker 2: Hodge and Rick Davis join us right now. Adam is
• 20:32
  Speaker 2: our Democratic analyst, managing director, bully pulpit international. Rick is
• 20:36
  Speaker 2: a Republican strategist and partner at Stonecourt Capital. We're going
• 20:40
  Speaker 2: to get to that race, but Adam, I promised you
• 20:42
  Speaker 2: in our radio hour a chance to weigh in on
• 20:44
  Speaker 2: this because Wall Street is giving a huge thumbs down
• 20:46
  Speaker 2: to the idea of Democratic governors rolling into states like
• 20:49
  Speaker 2: Texas and rolling up the mat when it comes to
• 20:52
  Speaker 2: data centers. Is that the aim for Democrats who got elected?
• 20:56
  Speaker 2: Is this sell-off justified?
• 20:58
  Speaker 16: I think after a big election swings, some market volatility
• 21:02
  Speaker 16: is pretty normal. I remember when I was at Treasury
• 21:04
  Speaker 16: in the Obama administration years ago, post-Brexit, there was this
• 21:07
  Speaker 16: huge market correction and the market stabilized a little bit
• 21:10
  Speaker 16: and look where we are today. So I think that's
• 21:13
  Speaker 16: some of what's going on. I think we cannot lose
• 21:15
  Speaker 16: sight of the political backlash to this was not just
• 21:18
  Speaker 16: focused on one party. As Rick was saying last hour,
• 21:22
  Speaker 16: these referendums passed universally in states red and blue. And so-
• 21:28
  Speaker 16: I think what you may see from the companies that
• 21:30
  Speaker 16: are involved in here, and it's something we're talking to
• 21:33
  Speaker 16: some of our clients, is think about your engagement strategy.
• 21:35
  Speaker 16: How are you actually reaching out to people, to local communities, to.
• 21:38
  Speaker 1: Prove the value?
• 21:40
  Speaker 16: And the terms may end up being a little bit different,
• 21:42
  Speaker 16: but that engagement strategy and how you get people on
• 21:45
  Speaker 16: board is going to matter, and that's going to matter
• 21:47
  Speaker 16: not just at the governor's office, but across the communities.
• 21:52
  Speaker 5: Well, so Rick, before we move on to some other
• 21:55
  Speaker 5: races that aren't decided yet, in places like Texas or
• 21:59
  Speaker 5: in Georgia where Gina Hinojosa and Keisha Lance Bottoms have
• 22:02
  Speaker 5: talked about moratorium at the very least until new rules
• 22:05
  Speaker 5: around community protection can be put into place. Is what
• 22:09
  Speaker 5: we're realistically talking about here an outright stoppage to investment
• 22:14
  Speaker 5: in things like data centers, or is it simply a
• 22:16
  Speaker 5: slow rolling of the process? And if that is what
• 22:19
  Speaker 5: it is, how is it any different than the usual
• 22:22
  Speaker 5: kind of infrastructure permitting molasses that companies have historically had.
• 22:28
  Speaker 8: To work through?
• 22:29
  Speaker 17: Yeah, I think that it's the latter, right? It's a
• 22:32
  Speaker 17: kind of normal process of matching community standards and government
• 22:37
  Speaker 17: regulation to, you know, the development and growth of a
• 22:40
  Speaker 17: new industry. And There's going to be probably 20 states
• 22:44
  Speaker 17: that say, welcome aboard, business as usual. You bring your power,
• 22:47
  Speaker 17: you can dig a basement anywhere you want and put
• 22:50
  Speaker 17: a data center in. And then there are going to
• 22:53
  Speaker 17: be 30 states that are going to say, look, we're
• 22:56
  Speaker 17: not saying no, but what we would like to do
• 22:58
  Speaker 17: is do it under a new set of regulations that
• 23:00
  Speaker 17: the new elected officials at both the state legislative level
• 23:05
  Speaker 17: and the governor's mansion are able to come to agreement on.
• 23:08
  Speaker 17: And then- Come on in under those new.
• 23:10
  Speaker 9: Rules and.
• 23:13
  Speaker 17: Build jobs, especially in the trade unions, and create tax
• 23:17
  Speaker 17: revenue for the betterment of the people of those states.
• 23:20
  Speaker 9: So I really see.
• 23:21
  Speaker 17: No scenario at all. that two years from now, we're
• 23:25
  Speaker 17: looking back and there had been like absolute stoppage of
• 23:29
  Speaker 17: the development of data centers in states that previously had them.
• 23:34
  Speaker 17: So at the end of the day, I think what
• 23:36
  Speaker 17: you're going to see is a layer of regulation applied.
• 23:41
  Speaker 17: And it may be also at the federal level. We
• 23:43
  Speaker 17: know Donald Trump has basically said, hey, the spigot is
• 23:47
  Speaker 17: wide open. Let's just develop anywhere under any circumstances that
• 23:51
  Speaker 17: you can cut a deal on. And I think the
• 23:53
  Speaker 17: Congress is going to work with him to try and
• 23:55
  Speaker 17: find a better way to do it, both on the
• 23:56
  Speaker 17: AI side, what kind of guardrails you need for AI development,
• 24:01
  Speaker 17: and then anything else that happens along the lines of
• 24:05
  Speaker 17: power generation, because these are strategic federal issues.
• 24:10
  Speaker 2: Well, this is awfully important to our audience, so we're
• 24:12
  Speaker 2: going to talk more about it coming up a little
• 24:13
  Speaker 2: bit later this hour with Mike Shepard, who's actually tracking
• 24:16
  Speaker 2: the geography on these AI initiatives today. many of which,
• 24:21
  Speaker 2: most of which passed on Tuesday night. Guys, we still
• 24:25
  Speaker 2: haven't figured out Mississippi, and this is remarkable. The Democrat
• 24:28
  Speaker 2: in this case, Scott Cologne, is pulling further ahead of
• 24:31
  Speaker 2: Republican Senator Cindy Hyde-Smith in a state that we weren't
• 24:34
  Speaker 2: even supposed to be talking about a couple of weeks ago.
• 24:36
  Speaker 2: He's up by about 1,700 points, votes I should say now.
• 24:39
  Speaker 2: Chuck Schumer is surging legal and staff support to Mississippi
• 24:43
  Speaker 2: for what might be about to happen. Cologne talked about
• 24:46
  Speaker 2: this yesterday.
• 24:47
  Speaker 10: Listen.
• 24:48
  Speaker 8: Unlike all the people across the country that might be surprised,
• 24:51
  Speaker 8: our campaign, our volunteers, the people of Mississippi are not surprised.
• 24:56
  Speaker 8: We're prepared for this moment. We have been planning for
• 24:59
  Speaker 8: this scenario for weeks. We have hundreds of volunteers. We've
• 25:05
  Speaker 8: got local lawyers that are going to be at the
• 25:07
  Speaker 8: county meetings in each county. We will protect the process
• 25:12
  Speaker 8: of this election. We will protect the integrity of this election.
• 25:15
  Speaker 8: We are going to win this. We have already showed
• 25:18
  Speaker 8: the country that Mississippi matters, y'all.
• 25:21
  Speaker 1: All right, now here's where it gets interesting.
• 25:24
  Speaker 2: As we may have told you by now, there are
• 25:26
  Speaker 2: no automatic recounts on the books here. There's no system
• 25:29
  Speaker 2: in Mississippi to do that. And the state has until
• 25:31
  Speaker 2: the 10th of November to count several thousand provisional and
• 25:35
  Speaker 2: mail-in ballots that have, what, I think they've got five
• 25:38
  Speaker 2: days after election to count those. Adam, is Scott Colon
• 25:42
  Speaker 2: the next senator from Mississippi? And do we find out
• 25:45
  Speaker 2: next week?
• 25:46
  Speaker 15: Yes.
• 25:47
  Speaker 16: Scott Colombe will be the next senator for Mississippi, which
• 25:51
  Speaker 16: takes your breath away in many ways. He ran a
• 25:54
  Speaker 16: very effective campaign, but I think was also built on many,
• 25:59
  Speaker 16: many years of investment at the local level. Just to
• 26:02
  Speaker 16: take a step back at the governor's race in Mississippi
• 26:04
  Speaker 16: a couple of years ago, this has not been on
• 26:05
  Speaker 16: the national media landscape, but Democrats almost won the governor's
• 26:09
  Speaker 16: race a couple of years ago. And so this is
• 26:12
  Speaker 16: part of a groundswell across the South political momentum towards Democrats.
• 26:17
  Speaker 16: I mean, just next door in Louisiana, the Democrat lost
• 26:20
  Speaker 16: that Senate race by 45,000 votes and nobody was talking
• 26:24
  Speaker 16: about the Senate race in Louisiana. So it is clearly
• 26:28
  Speaker 16: a movement. And I think that you've seen the marshal
• 26:31
  Speaker 16: of resources to make sure that Scott Colombe very much
• 26:34
  Speaker 16: is sworn in as the next senator from Mississippi come January.
• 26:38
  Speaker 5: Rick, we just have 30 seconds left, but if it
• 26:40
  Speaker 5: remains this tight and Colombo's ultimately declared the victor, what
• 26:44
  Speaker 5: recourse does Senator Hyde-Smith have?
• 26:48
  Speaker 17: Run again the next time around. There is no recourse.
• 26:53
  Speaker 17: There's no recount for a federal office in Mississippi. So
• 26:57
  Speaker 17: once it's certified, it's one vote.
• 26:59
  Speaker 1: It's all it takes.
• 27:01
  Speaker 17: And after that, you got a new governor.
• 27:03
  Speaker 5: Incredible.
• 27:04
  Speaker 15: Wow.
• 27:04
  Speaker 12: Well, we'll see.
• 27:05
  Speaker 5: We might have to be waiting a couple more days
• 27:06
  Speaker 5: for this one. We might have to wait a couple
• 27:08
  Speaker 5: more weeks for Alaska to come in as well. Rick
• 27:10
  Speaker 5: Davis and Adam Hodge, both of them Bloomberg Politics contributors
• 27:13
  Speaker 5: in our political panel on this Thursday after the election.
• 27:17
  Speaker 5: Thank you so much. Of course, it took until Thursday,
• 27:19
  Speaker 5: not the Wednesday after, for the markets to really react.
• 27:21
  Speaker 5: We'll get more into the sell-off in tech and AI names.
• 27:24
  Speaker 4: Up next on Bloomberg.
• 27:25
  Speaker 1: Stay with us on Balance of Power. We'll have much
• 27:27
  Speaker 1: more coming up after this.
• 27:33
  Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
• 27:36
  Speaker 4: us live weekdays at noon and 5 p.m. Eastern on
• 27:40
  Speaker 4: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 27:43
  Speaker 4: Listen on demand wherever you get your podcasts or watch
• 27:46
  Speaker 4: us live on YouTube.
• 27:49
  Speaker 2: Walking us through the carnage here today, and it's pretty
• 27:51
  Speaker 2: tough to find a silver lining on a day like this,
• 27:54
  Speaker 2: unless you're into treasuries, I guess. But of course, that's
• 27:57
  Speaker 2: pulling interest rates lower and maybe at some point. we'll
• 28:00
  Speaker 2: find some equilibrium. But we're drawn, Kaylee, to this post
• 28:03
  Speaker 2: by Dan Ives a while ago, who was, my gosh,
• 28:06
  Speaker 2: there couldn't have been a bigger bull when it came
• 28:08
  Speaker 2: to AI. Putting all the pieces together, we believe big
• 28:11
  Speaker 2: tech CapEx growth.
• 28:12
  Speaker 1: Rate now peaks in 2027.
• 28:14
  Speaker 2: I don't really need to read beyond that because this
• 28:16
  Speaker 2: was supposed to go on for many more years than
• 28:18
  Speaker 2: next year, right? He goes on to write, the growth
• 28:21
  Speaker 2: rate into 28 will clearly moderate significantly as the data
• 28:24
  Speaker 2: center build-out comes at a much slower pace. given the
• 28:28
  Speaker 2: political map, especially in the state of Texas. Blue wave emoji,
• 28:34
  Speaker 2: bullseye emoji. And Kaylee, I'm here with Mike Shepard in
• 28:38
  Speaker 2: our DC Bureau, Bloomberg Senior Editor for Technology and Strategic Industries.
• 28:42
  Speaker 2: We talk about the AI build-out and the potential for
• 28:45
  Speaker 2: regulation on a regular basis, Shep. That regulation will come
• 28:48
  Speaker 2: on the state level. Is that what Wall Street woke
• 28:50
  Speaker 2: up to here?
• 28:51
  Speaker 13: That is what they're getting a sense of now. It
• 28:54
  Speaker 13: wasn't just the governor's races, Joe. It's a whole bunch
• 28:56
  Speaker 13: of ballot measures across the country. Thirteen states had more
• 29:01
  Speaker 13: than 40 proposals for voters to consider, and these were
• 29:05
  Speaker 13: measures aimed at slowing the role of tech development in
• 29:09
  Speaker 13: their backyards. They were really concerned. About nondisclosure agreements, they
• 29:13
  Speaker 13: were concerned that these things would be driving up, the
• 29:16
  Speaker 13: data centers would be driving up electricity costs, being noisy,
• 29:20
  Speaker 13: and just not being good neighbors. And people have been
• 29:23
  Speaker 13: complaining increasingly, and it showed up in the polling before
• 29:26
  Speaker 13: the elections. And out of all those jurisdictions, roughly 45
• 29:31
  Speaker 13: to 1 approved measures that would, if enacted fully, slow
• 29:38
  Speaker 13: the development of these projects.
• 29:40
  Speaker 1: Okay, so people are looking at Texas. They're worried. They're
• 29:44
  Speaker 1: looking at Ohio.
• 29:44
  Speaker 7: They're worried.
• 29:46
  Speaker 1: New York's already got a moratorium. Arizona, what are we
• 29:49
  Speaker 1: going to do?
• 29:50
  Speaker 2: But does this create a world in which or a
• 29:53
  Speaker 2: country in which we have a number of states embracing
• 29:56
  Speaker 2: data centers? Do they cross the border into Mexico? Do
• 30:00
  Speaker 2: they show up in the Middle East? They're going to
• 30:01
  Speaker 2: go somewhere.
• 30:02
  Speaker 13: They are going to go somewhere because this pushback against
• 30:06
  Speaker 13: AI doesn't mean that the AI trade and the desire
• 30:10
  Speaker 13: nationally and internationally to develop this technology just goes away
• 30:14
  Speaker 13: because voters objected to data centers. It's still there, and
• 30:17
  Speaker 13: there's still a strong motivation across the economy to adopt
• 30:22
  Speaker 13: and embrace this technology. Voters are really just saying, look,
• 30:24
  Speaker 13: we would like to have it done a little bit
• 30:26
  Speaker 13: more on our terms. But what that means, as you said, Joe,
• 30:29
  Speaker 13: is perhaps some of these facilities get located elsewhere. And
• 30:33
  Speaker 13: in fact, on election night, I won't forget this interview
• 30:36
  Speaker 13: that you did with David Kelly of JPMorgan Chase Asset Management.
• 30:40
  Speaker 13: He talked about this phenomenon that, look, there may be
• 30:44
  Speaker 13: jurisdictions that say, no, we are no longer interested in
• 30:47
  Speaker 13: having these kinds of projects. But there will be others
• 30:50
  Speaker 13: that do do the opposite, that say we would welcome
• 30:53
  Speaker 13: this because it will be good for our cash strapped
• 30:56
  Speaker 13: local budgets. We could use the tax revenue. And so
• 30:59
  Speaker 13: you may see a little bit of a rebalancing. And interestingly, today,
• 31:03
  Speaker 13: Google announced a 17 billion dollar data center project in
• 31:07
  Speaker 13: the state of Wyoming. So, you know, we could see
• 31:10
  Speaker 13: different facilities popping up in unexpected places like space.
• 31:15
  Speaker 1: That's going to be the next thing Elon reminds us of.
• 31:17
  Speaker 13: Well, he reminded us on election night with a joking tweet.
• 31:21
  Speaker 1: Well, the space laser. How about the space data?
• 31:24
  Speaker 13: Well, he also tweeted about that, too. He said he
• 31:26
  Speaker 13: said data centers in space look more appealing now. And
• 31:31
  Speaker 13: when we think about it, he has that big TerraFab project, Joe,
• 31:34
  Speaker 13: in Texas that he has been pushing. And it's not
• 31:37
  Speaker 13: only a massive chip making project. It is also one.
• 31:41
  Speaker 13: that would be a data center in itself too.
• 31:43
  Speaker 1: Shep, we've only got a minute before we talk to
• 31:45
  Speaker 1: Mick Mulvaney.
• 31:46
  Speaker 2: I'm curious that the power of incumbency, we talked about
• 31:49
  Speaker 2: this a little bit earlier in the program, that was
• 31:52
  Speaker 2: part of the trade yesterday. MAG7 was lifted because they
• 31:55
  Speaker 2: either have data center, they've got the permits to build
• 31:58
  Speaker 2: more as opposed to a new candidate coming into the business.
• 32:02
  Speaker 2: Is there something to be said for that? Because they're
• 32:04
  Speaker 2: being washed out with everyone else today.
• 32:06
  Speaker 13: Well, the neoclads are really getting hurt far worse when
• 32:09
  Speaker 13: you compare the numbers. CoreWeave is one example.
• 32:12
  Speaker 1: They're down 12%. Another neighborhood.
• 32:14
  Speaker 13: Applied Digital, a data center developer, they're down roughly 16%.
• 32:18
  Speaker 13: So the market is delineating. So the market is delineating some.
• 32:22
  Speaker 13: And the market is also looking at the balance sheets
• 32:24
  Speaker 13: of some of these hyperscalers. And they are seeing that, wait,
• 32:27
  Speaker 13: maybe if the roll is slowed a little bit on
• 32:29
  Speaker 13: data center build-out, maybe that will flip the picture on
• 32:33
  Speaker 13: free cash flow. Because a lot of those big companies
• 32:35
  Speaker 13: had gone free cash flow negative before. And that was
• 32:38
  Speaker 13: a concern for investors, especially over the past month.
• 32:41
  Speaker 1: Well, it gave them a lift at least yesterday. Today's
• 32:42
  Speaker 1: a whole different world, Shep. Thank you so much.
• 32:44
  Speaker 2: Bloomberg's Mike Shepard with us here in Washington. Kayleigh, this
• 32:49
  Speaker 2: is something that's not going to be going away. And,
• 32:50
  Speaker 2: of course, we'll be looking at the results of this
• 32:53
  Speaker 2: brutal session in the late edition of Balance of Power.
• 32:55
  Speaker 2: You'll get to it even earlier on the close.
• 32:58
  Speaker 5: Yeah, lots of time to dissect these markets today and
• 33:00
  Speaker 5: the political reality they may be reflecting. But let's talk
• 33:03
  Speaker 5: more about that political reality with someone who has a
• 33:06
  Speaker 5: long string of political titles behind his name. Mick Mulvaney
• 33:09
  Speaker 5: is back with us, of course, former acting White House
• 33:11
  Speaker 5: chief of staff in the first Trump administration, co-founder of
• 33:14
  Speaker 5: the Freedom Caucus, former congressman from South Carolina for OMB director.
• 33:17
  Speaker 5: I could go on. Mick, welcome back to Bloomberg TV
• 33:20
  Speaker 5: and radio. You're joining us two days after a midterm election,
• 33:23
  Speaker 5: but really on the first day that the markets seem
• 33:25
  Speaker 5: to be reflecting. the concern around a serious slowdown to
• 33:30
  Speaker 5: the build-out of infrastructure-powering artificial intelligence. But we hear so
• 33:34
  Speaker 5: often that there is a big difference between campaigning and governing.
• 33:38
  Speaker 5: Does the market have good reason to fear what governing
• 33:41
  Speaker 5: could look like from some of these elected officials who
• 33:47
  Speaker 5: are going to be taking office at the state and
• 33:49
  Speaker 5: federal level?
• 33:51
  Speaker 3: Yeah, you know, I don't try to sort of dip
• 33:53
  Speaker 3: into the market discussions very often because it's not what I.
• 33:55
  Speaker 9: Know more than most people.
• 33:57
  Speaker 3: But I do think they're probably starting to figure out
• 33:59
  Speaker 3: that it was the state elections, the national election that
• 34:01
  Speaker 3: got all the attention on Tuesday night. But really, whether
• 34:05
  Speaker 3: or not a data center gets built in your town
• 34:07
  Speaker 3: doesn't really have anything to do with Washington, D.C. It
• 34:09
  Speaker 3: has to do with your local county council, your local
• 34:11
  Speaker 3: town council. city manager, whatever. So I think the markets
• 34:14
  Speaker 3: have finally figured that out here today. Whether or not
• 34:17
  Speaker 3: the feds, Kayleigh, can trump that, whether or not they
• 34:19
  Speaker 3: can come in at some level and say, look, we're
• 34:21
  Speaker 3: going to make the local governments, state and local governments
• 34:23
  Speaker 3: do something.
• 34:24
  Speaker 1: It's hard.
• 34:25
  Speaker 3: They've done it before. Trump wants these things built. Of course,
• 34:29
  Speaker 3: his political capital is probably as low as it's ever been.
• 34:32
  Speaker 3: But yeah, I think the markets are simply digesting a
• 34:35
  Speaker 3: ton of information that got sort of developed on Tuesday night.
• 34:43
  Speaker 1: Mick, it's great to have you back. And I think
• 34:46
  Speaker 1: you put your finger on it here.
• 34:47
  Speaker 2: I just wonder why we weren't talking about this yesterday
• 34:49
  Speaker 2: when we had the Nasdaq up over a thousand points.
• 34:53
  Speaker 2: But things tend to overshoot and come back in some
• 34:57
  Speaker 2: corrective form here. Are you of the mind that data
• 35:01
  Speaker 2: centers will find a home in the United States or
• 35:04
  Speaker 2: is there going to be an offshoring of this industry?
• 35:07
  Speaker 1: Well, a bit of both, right?
• 35:08
  Speaker 9: I mean, look, again, it's a state-by-state sort of.
• 35:10
  Speaker 3: It doesn't surprise me that your previous guest talked about
• 35:13
  Speaker 3: a $ 17 billion development in, was.
• 35:16
  Speaker 9: It Wyoming or Montana?
• 35:17
  Speaker 3: There's a lot of states out there with a lot
• 35:19
  Speaker 3: of open space. And a lot of cheap electricity. That's
• 35:22
  Speaker 3: what we have in this country, generally, compared to the
• 35:24
  Speaker 3: rest of the world. Are you going to be able
• 35:26
  Speaker 3: to build one in downtown Philadelphia?
• 35:29
  Speaker 9: Probably not. Are the developments.
• 35:31
  Speaker 3: Here in Washington, D.C., out in the suburbs near Dulles Airport,
• 35:34
  Speaker 3: have we probably seen peak development out there?
• 35:36
  Speaker 9: Yeah, probably. But if you're the state of Nevada, why
• 35:40
  Speaker 9: not approve a bunch of these things?
• 35:41
  Speaker 3: So, look, the market is going to find a home
• 35:44
  Speaker 3: because there's a demand for these places. It might be
• 35:46
  Speaker 3: more expensive, might be a little less efficient, but they're
• 35:49
  Speaker 3: going to get built someplace because we need them.
• 35:52
  Speaker 5: Mick, I want to go back to what you just
• 35:53
  Speaker 5: said a moment ago about the idea that President Trump's
• 35:55
  Speaker 5: political capital is as low as it's ever been. That's
• 35:59
  Speaker 5: interesting to hear, especially considering that this is the president who,
• 36:03
  Speaker 5: of course, was in the office when the January 6th
• 36:05
  Speaker 5: attack on the Capitol happened. If his political capital is
• 36:10
  Speaker 5: this low, how is he able— to claw it back?
• 36:13
  Speaker 5: Or can he? Could he, for example, switch up those
• 36:16
  Speaker 5: close to him? What his administration and White House staffing
• 36:20
  Speaker 5: looks like? Does he have options here?
• 36:23
  Speaker 3: People who underestimate Donald Trump's ability to recreate himself, to
• 36:27
  Speaker 3: rehabilitate himself, do so at their own peril. I mean,
• 36:30
  Speaker 3: he's got almost superhuman abilities to take victory from the
• 36:33
  Speaker 3: jaws of defeat, as we learned on January 6th. I
• 36:35
  Speaker 3: never thought the man had a chance to get elected
• 36:37
  Speaker 3: president again after January 6th.
• 36:39
  Speaker 9: And I got news for you.
• 36:40
  Speaker 3: I wasn't alone in thinking that But we all know
• 36:43
  Speaker 3: what happened after that.
• 36:44
  Speaker 9: Do I expect a turnover? Yeah, the turnover would be
• 36:46
  Speaker 9: natural anyway.
• 36:48
  Speaker 3: Marco Rubio is going to leave anyway, regardless of Tuesday,
• 36:51
  Speaker 3: because he wants to run for president in 2028. And
• 36:53
  Speaker 3: you can't do that as the sitting secretary of state.
• 36:56
  Speaker 3: Will there be more turnover than there would be because
• 36:58
  Speaker 3: we got our asses kicked on Tuesday night?
• 37:00
  Speaker 1: Yeah.
• 37:01
  Speaker 3: The Dems want some heads. They want some heads on platters.
• 37:04
  Speaker 3: They want Hegseth. They want Lutnick. They want Kennedy. By
• 37:08
  Speaker 3: the way, moving out of government and into the private sector,
• 37:11
  Speaker 3: they want Elon Musk's head on a platter, and they
• 37:14
  Speaker 3: mean to have it. My guess is Elon spends more
• 37:17
  Speaker 3: time in a congressional hearing room in the next two
• 37:19
  Speaker 3: years than he does at SpaceX headquarters.
• 37:22
  Speaker 2: Yeah, that sounds about right based on all the signs
• 37:25
  Speaker 2: that we're seeing here, Mick. You mentioned Hegseth. Does he
• 37:28
  Speaker 2: get impeached next week? Is he the first to go?
• 37:33
  Speaker 3: Keep in mind, yes, he's likely to get impeached for
• 37:35
  Speaker 3: a variety of reasons, one of which is there's actually
• 37:38
  Speaker 3: already pending articles for him that they.
• 37:40
  Speaker 9: Could vote on, and it's led by a Republican, Thomas Massey.
• 37:44
  Speaker 3: And you have to think that maybe there's some other
• 37:45
  Speaker 3: Republicans after Tuesday night who are sort of saying, you
• 37:48
  Speaker 3: know what?
• 37:48
  Speaker 9: Hey, I'd vote for that. Why not?
• 37:50
  Speaker 3: Now, whether or not they'd have time to actually prosecute it,
• 37:52
  Speaker 3: even on impeachment, it's a two-step process. It's a bill
• 37:55
  Speaker 3: of indictment of sorts in the House and then a
• 37:58
  Speaker 3: trial in the Senate. And there's no way the Senate
• 38:00
  Speaker 3: is going to take up any of its precious lame
• 38:02
  Speaker 3: duck time to conduct an impeachment trial of Pete Hegseth.
• 38:06
  Speaker 3: They've got judges to confirm. They've got presidential appointees to confirm.
• 38:10
  Speaker 3: They've got a couple pieces of legislation they might take up, permitting, clarity, etc.
• 38:14
  Speaker 9: So there's no way that he actually physically gets removed
• 38:17
  Speaker 9: from office. But that narrative is going to start as
• 38:20
  Speaker 9: soon as they're back next week, if not before.
• 38:23
  Speaker 5: Well, yeah, certainly. It's a reminder that the lame duck
• 38:26
  Speaker 5: session is just around the corner, and the new Congress
• 38:28
  Speaker 5: will be here certainly very quickly, I would imagine, after that.
• 38:34
  Speaker 5: Time does have a tendency to fly in politics, and
• 38:36
  Speaker 5: we're going to see this new entrance of senators and
• 38:40
  Speaker 5: congressional members who, of course, just a few weeks ago,
• 38:44
  Speaker 5: months ago, we didn't necessarily think stood a chance of
• 38:46
  Speaker 5: one day calling themselves congressman-elect or senator-elect. I think that
• 38:50
  Speaker 5: would go to show you in South Carolina, where Annie
• 38:53
  Speaker 5: Andrews is now senator-elect. This is obviously the state you
• 38:57
  Speaker 5: come from, Mick, and I would love your reaction to
• 38:59
  Speaker 5: her victory. Just let's remind ourselves of what her victory
• 39:01
  Speaker 5: speech sounded like on Tuesday night.
• 39:04
  Speaker 14: You have shown the nation that in this era of
• 39:07
  Speaker 14: partisan divides, of vitriol and name-calling— in a politics dominated
• 39:15
  Speaker 14: by billionaires and special interest groups and insiders in Washington, D.C.,
• 39:19
  Speaker 14: that we will not bow down. That we will not
• 39:26
  Speaker 14: back down, and we will chart our own course.
• 39:30
  Speaker 5: Mick, as Annie Andrews looks to chart her own course here,
• 39:34
  Speaker 5: was this race decided so much by her, a decision
• 39:38
  Speaker 5: making around her or around Darlene Graham?
• 39:42
  Speaker 3: No, this race is about Graham. And by the way,
• 39:43
  Speaker 3: it's one of the dynamics that will be interesting to watch.
• 39:46
  Speaker 3: Certain Democrats won on Tuesday night, but most of them
• 39:49
  Speaker 3: were the beneficiaries of Republicans who lost. And if I
• 39:52
  Speaker 3: sound like I'm splitting hairs, I'm not really. A very
• 39:54
  Speaker 3: different political capital is someone votes for you versus someone
• 39:58
  Speaker 3: voting against somebody else. So Annie Andrews is going to
• 40:01
  Speaker 3: have to sort of try and figure that out for herself.
• 40:03
  Speaker 9: But no, she didn't win. Darlene Graham lost. Darlene Graham lost.
• 40:06
  Speaker 3: Look, and I've said this before, the election was probably
• 40:08
  Speaker 3: the single least qualified person ever to run for Senate
• 40:12
  Speaker 3: in the state of South Carolina's history.
• 40:14
  Speaker 9: She was horrible. And, you know, Donald Trump handpicked her.
• 40:18
  Speaker 3: Look, Republican voters, I spent a lot of time in
• 40:21
  Speaker 3: South Carolina, as you folks know. What were they saying?
• 40:23
  Speaker 3: They're saying, look, we don't like the war. We don't
• 40:26
  Speaker 3: like inflation. We don't like the price of gas. And
• 40:27
  Speaker 3: we certainly don't like an unpopular president telling us who
• 40:31
  Speaker 3: we get to put on the ballot for senator. this
• 40:36
  Speaker 3: was a thumb in the eye to Donald Trump in
• 40:39
  Speaker 3: South Carolina, more so than probably in any other state.
• 40:41
  Speaker 3: Darlene Graham was more of a Trump proxy than Herschel
• 40:45
  Speaker 3: Walker or Ken Paxton. So yeah, when I talk about
• 40:48
  Speaker 3: his political capital being.
• 40:49
  Speaker 9: Down, that's why. But again, folks who count him out
• 40:52
  Speaker 9: do so at their peril.
• 40:55
  Speaker 2: Mick, thank you so much. Mick Mulvaney, live on Bloomberg
• 40:57
  Speaker 2: TV and radio. We've got a breaker here that might
• 41:00
  Speaker 2: explain the sell-off In a bit more detail, mystery sellers
• 41:04
  Speaker 2: seeking to dump a half billion dollars of data center loans.
• 41:10
  Speaker 2: Thanks for listening to the Balance of Power podcast. Make
• 41:13
  Speaker 2: sure to subscribe if you haven't already at Apple, Spotify,
• 41:16
  Speaker 2: or wherever you get your podcasts. And you can find
• 41:19
  Speaker 2: us live every weekday from Washington, D.C.
• 41:21
  Speaker 1: At noontime Eastern at Bloomberg.com.