'Ugly' Midterms, Increasing Your Nest Egg, Everywhere Millionaires

Sarah Fryer · Bloomberg News

Big Tech's close ties to Trump help on AI infrastructure but are risky if Congress flips.

Big Tech executives have built a close relationship with Trump through trips, dinners, summits, and by joining him when he met Xi Jinping. This has helped them because AI needs government support on energy and infrastructure. The relationship is risky, though, because if congressional leadership changes, those companies could be drawn into investigations.

“This has been beneficial for them as AI requires the government to be on board with the companies. They need energy. They need infrastructure... But it's also risky because if the leadership changes in congress, then they could be tied in.”at 10:43

David Gura · Bloomberg

Trump created the affordability problem, leaving Republicans without a response; Democrats are disciplined on it before midterms.

Gura argues that many Republican candidates acknowledge affordability is a real issue, but the president has little he can talk about on it before election day, which is why he has cancelled and reinstated rallies. He says the president has created, galvanized and catalysed much of the affordability problem, and Republicans do not know how to respond. He credits Democrats with message discipline on cost of living, which he calls front of mind for many voters. The evidence is his observation of campaign behaviour and candidate statements, not polling data.

“I think that there is a sense here that he has created a lot of this, galvanized a lot of it, catalyzed a lot of it, and republicans don't really know what to do with that.”at 47:46

Tyler Kendall · Bloomberg Television

Opposition to data centers is bipartisan, with about 300 construction moratoriums and new tax bills.

Legislation from both parties targets data centers, not the technology itself. About 300 construction moratoriums are in place, several states will have localized measures on the ballot, and lawmakers have introduced bills for new taxes and to remove tax breaks that support data center development. He says he has not seen another issue bridge the partisan divide as much as opposition to data centers.

“...curbing data centers that serve as the backbone... I don't know if we've seen another issue bridge the partisan divide quite as much as opposition to data centers. 300 construction moratoriums currently in place.”at 11:39

Henrietta Treyz · Veda Partners

Predictive markets are unreliable for election forecasting because they are correlated and sample too narrowly.

She is skeptical of predictive markets and of blanket numbers-based forecasting. Polls have been wrong often, as in Brazil, and the markets are closely correlated with polls, so they draw on no deep independent sample. She argues you have to go into the country and hear what voters say.

“I have a hard time with predictive markets and with just a blanket numbers game. Because they're so closely correlated, it's not a deep sample set.”at 16:26

Scarlet Fu · Bloomberg

US growth depends heavily on AI investment; without it the economy might be in recession.

AI investment was a big driver of third-quarter growth, so US growth depends on continued AI spending. AI has also boosted the stock market, and she argues the economy could have been in recession without it. Her point is that the growth is concentrated in AI capex, even as voters are against AI and data centers.

“AI investment was a big driver of growth in the third quarter. So our growth is very much dependent on continued investment in AI... It's all about AI that's boosted the stock market. You could argue there'd be a recession without it.”at 17:49

Henrietta Treyz · Veda Partners

Democrats taking the House forces a Q4 reconciliation bill; only about 30% odds it passes.

With the House lost, Trump must negotiate with Democrats next year to fund the Iran war, which is in month eight without an emergency supplemental, and to raise the debt ceiling. Republicans must act on a Q4 reconciliation bill covering about $100 billion for defense, a farm bailout and a roughly $5 trillion debt-ceiling hike, but members don't want to vote for it. The debt-ceiling fight could come next August, with rating agencies possibly downgrading the US if tariffs are not repealed. She puts the odds of passing that must-pass bill at 30%.

“But that's not a fun bill to write... My odds are 30% that we get that must pass reconciliation bill.”at 20:15

Henrietta Treyz · Veda Partners

Does not assume Social Security will be there; politicians lack votes for needed fixes.

She has watched repeated deficit-reduction efforts, including Simpson-Bowles, fail to pass painful fixes such as raising the retirement age or taxing high earners more. Lawmakers know these changes are needed but lack the votes and the will to make them. With AI emerging, she expects the 2028 campaign to promise that growth will fix Social Security and Medicare, rather than to campaign on saving them.

“I do not assume that Social Security will be there. I see how many deficit reduction commissions we've done, Simpson Bowles, trying to pass legislation that is painful, like raising the retirement age, raising the tax rates on the wealthy.”at 24:35

Michael Conrath · J.P. Morgan Asset Management

Planning should use about 7% long-term returns for balanced portfolios, not recent bull-market gains.

JPMorgan's modelling is based on long-term capital market assumptions rather than the last two years of returns. A balanced portfolio gets about 7%, with perhaps 50 basis points more from alternatives. Investors anchor on recent performance, so the firm sets expectations on a 10-to-15-year view.

“So you're looking at your balanced portfolio of, call it 7%, maybe get another 50 basis points if you have some allocation alternatives in there.”at 35:35

Owen Zidar · Princeton University

Private equity has grown strongly and is hungry for founder-owned businesses as owners retire.

Zidar says private equity has grown a lot and is very hungry for privately owned businesses. He ties this to the aging of the everywhere millionaires, many of whom are reaching retirement and want to sell, often to private equity rather than to their children. He also describes young MBA graduates increasingly buying businesses through search funds instead of joining Goldman Sachs or McKinsey, with seller financing that lets buyers pay out of future profits. The case rests on the demographic supply of owner-operated businesses meeting strong private equity demand.

“private equity has really grown since [Orissa] and it's they're just very hungry for these types of companies and the typical everywhere millionaire in this country... now they're seeing retirement”at 42:23