SKEPTIC’S GUIDE TO INVESTING
Straight Talk for All, Nonsense for None
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Your Hosts - Meet Steve Davenport, CFA and Clem Miller, CFA as they discus the latest in news, markets and investments. They each bring over 25 years in the investment industry to their discussions. Steve brings a domestic stock and quantitative emphasis, Clem has a more fundamental and international perspective. They hope to bring experience, honesty and humility to these podcasts. There are a lot of acronyms and financial terms which confuse more than they help. There are many entertainers versus analysts promoting get rich quick ideas. Let’s cut through the nonsense with straight talk!
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SKEPTIC’S GUIDE TO INVESTING
Debate Dynamics: Harris, Trump, and the Economy
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Can Kamala Harris’s debate performance really sway undecided voters? On this episode of Skeptic's Guide to Investing, Frazer Rice, author of Wealth Actually, joins us to break down the high-stakes debate between Kamala Harris and Donald Trump. Alongside Clem Miller and Steve Davenport, Frazer dissects Harris's strategies, her ability to maintain composure, and the overall entertainment value of the debate. Our conversation moves beyond the theatrics to examine the limited impact these debates have on entrenched voter opinions and the fleeting nature of debate-driven news cycles, including how celebrity endorsements, like Taylor Swift’s for Harris, might play a role.
Shifting gears, we delve into the economic factors shaping voting behavior, with a keen eye on inflation and the Federal Reserve’s controversial actions. This segment isn’t just a critique of economic policy but an exploration of how these issues are framed by the candidates to appeal to voters' concerns. Fraser, Clem, and Steve critique the debate's format and ABC’s handling of the event—especially the control of microphones—and discuss which key issues, such as the economy and foreign policy, Trump should emphasize to strengthen his campaign. We also touch on the broader political discourse and the need for more substantive conversations about economic growth, tax policies, and regulation.
In a forward-looking discussion, we scrutinize the regulatory landscape in the U.S. and Europe, particularly focusing on the tech sector. With Clem’s expertise, we explore the impact of significant regulations like the EU's GDPR and China's data localization policies on innovation and stock price volatility. Additionally, Fraser discuss the potential consequences of the Supreme Court’s Loper-Bright decision on the administrative state and how regulations could affect AI advancements and cybersecurity. Wrapping up, we share our optimism about advancements in healthcare, such as telehealth and obesity treatments, which hold the promise of revolutionizing public health outcomes. This episode is packed with critical insights and a blend of cautionary and optimistic perspectives on the intersection of politics, economics, and innovation.
Straight Talk for All - Nonsense for None
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Welcome everyone to Skeptic's Guide to Investing. And here Clem Miller and I, Steve Davenport, have a special guest today Frazer Rice. Frazer is a former colleague of ours from Wilmington Trust. He's a published author with the book Wealth Actually, and he has a dynamic podcast which we recommend to all our listeners Wealth Actually.
Steve Davenport:So we're happy to have Frazer here today, because we think there's a lot of issues that are going to be involved in how we plan and think about our investments and what the tax regime might be under a Harris or a Trump administration, and I don't think there's a lot of clarity. As we listened to the debate last night, I think it probably raised more questions than it answered. It was a battle of personalities versus policies. So in my mind, it was, you know, probably a win for Harris. It was, you know, probably a win for Harris, but I think that she also left a little light on the facts and information about her administration and how she'd be different than Biden. I'm going to go to the other two now and ask them what their opinions are. So, Frazer, what do you think of the debate and the general environment. Now, how do you feel? A 1%, 2% or 3% lead by Harris.
Frazer Rice:I think she needs more. I think the debate essentially was in a sense trying to target 100,000 people who are quote unquote undecided. I think if you went in pro Trump or pro Harris, the debate did nothing to change your mind on that. If you went in there to we lost him there he is, hey you're back, I'm back. Uh, you want me to start over again?
Steve Davenport:with an opinion on one way or the other. You probably didn't change your opinion, but you were talking about the undecideds.
Frazer Rice:Yeah. So essentially I think that if you went in you didn't have your mind changed. I think that from Trump's perspective, if he thought he was going to chip away at any of the undecideds, I don't had a lot to gain on that front. As far as trying to build credibility as to what the leadership of the country would look like under her, did she provide any real clarity as far as policy is concerned? Not really, but I think she performed better from an entertainment slash, stability, credibility factor than Trump did, and so that's worth something. And I think ultimately, again, we're looking at 100,000 people in a few states, in a few counties within those states, that are going to change things.
Frazer Rice:I think, almost as seismic as the debate itself might be Taylor Swift's endorsement of Kamala I think that could be worth 10,000 votes right there and taken all together, I think that may move Harris from a 1% or 2% advantage somewhere on that front. When we sort of look at it, it's all electoral college based. Whether you get another million votes in New York or Los Angeles or anything like that, I don't think that makes any difference. Angeles or anything like that, I don't think that makes any difference. I'm not sure it really does much on that front. I think also the news cycle is so short that the debate will be forgotten within a week. We've already gone past one of the candidates going away and then an assassination attempt, and that's way in the rearview mirror, and you know, I think we're at the point where the debate will be old news within a week. So I think it gives Harris a slight bump, but not enough to really propel her to anything she can rely on.
Steve Davenport:How do you feel about it, Clem?
Clem Miller:Well, I think you know we see we're seeing a continued deterioration of Trump's position in the election. I think in a prior podcast episode we talked about or I mentioned that I thought that Trump's peak and everybody talks about peak oil, talks about peak oil. I think peak Trump was on the first day of the Republican convention, right after he was shot and and on the day that he was he had his Florida trial, at least temporarily, thrown out. I think that was peak Trump and since then I think the momentum has shifted dramatically towards Kamala Harris. I think in the debate itself last night, I think that you know that only will accelerate the trend.
Clem Miller:I think that it was very light on policy. I don't think you know. If you wanted to learn a lot about policy, you certainly didn't learn it last night. I think these debates are pretty much all about entertainment rather than policy and you know, in prior debates the entertainment premium or factor always would go to Trump. I think last night it was. It was Kamala, through her precision attacks, her smart bombs, so to speak, dropped on Trump. I think she was the entertainment dropped on Trump. I think she was the entertainment and I think you know anybody, anybody, except maybe some Trump people would realize that you know she had the edge on the entertainment factor.
Steve Davenport:Yeah, I thought it was interesting after the two VP candidates came on. After the two VP candidates came on, I mean I didn't know Walt's face could get that red. He looked like a strawberry when you get on there and he's got so much animation. I was just a little bit. And then JD Vance had what he wanted to say. He wasn't going to listen to anybody or anything, he's just going to say it to say. And he wasn't going to listen to anybody or anything, he's just going to say it, you know do you think the VP discussions and debate will move the needle one way or the other?
Frazer Rice:Fraser, basically no. I think that I think they confirm everybody's priors as far as the presidential candidates go, and so I don't really view them as adding much in terms of changing anybody's decision-making process. If you were hardened against Trump, jd Vance does nothing to swing you away from that, and if you were hardened against Kamala Harris, then Waltz doesn't do anything on that front either.
Steve Davenport:What do you think?
Clem Miller:Totally. I agree with Fraser. It's the vice presidential aspect of this. You know, all it tells you is a little bit about the decision making capabilitymaking capability of the presidential contenders. That's all it tells you and I think that you know. I think it does tell us something about that.
Steve Davenport:What do we think about at the end of the debate, kamala coming back and saying she wants another debate? Do you think the other debate will happen? Do you think it helps, hurts, or I mean, I would think after her performance it was pretty good. Why would you set yourself up for a situation where you could expose yourself to you know? Not as good a performance, I guess.
Clem Miller:Or is her confidence so high that yeah, her confidence is so high coming out of that thing that she expects that she would win a second debate.
Steve Davenport:What do you think Fraser? Another debate needed, Another debate wanted? Do we need that entertainment value?
Frazer Rice:Does America need it? Probably not, I think Reality show.
Steve Davenport:We'll replace it Probably not, I think, reality show we do replace it with reality?
Steve Davenport:I don't know. I thought that when we look at these people and we see them on TV, I think it's interesting how different they are every time we do this. It's like the debate in June felt nothing like the debate last night and I think if we had another one in a month, I think it would feel even more different, because I think that people are getting out there and learning about the candidates and as they learn, they have questions, and I think it would be a good thing to have more one-on-one discussion, because I have this idealistic belief that an actual discussion of policy will break out accidentally if we give it enough opportunities.
Clem Miller:I don't think there's any fear of that.
Steve Davenport:Will policy break out?
Clem Miller:I don't think so, Fraser. I don't think so, Fraser.
Frazer Rice:I don't think so either. To get back to, I think Kamala would like another debate. I think having one space would help her.
Steve Davenport:Yeah, I thought it was interesting To do a debate wise.
Frazer Rice:Yeah, I thought it was interesting it's such a key statement.
Clem Miller:I mean, they have enough.
Frazer Rice:They have so much trouble agreeing on the rules that by the time you get done with that, it just doesn't work. But yeah, no, I think that the does America need another debate on that front? I doubt it. Tactically, it'd probably be good for Kamala. From Trump's perspective, I think he has to try to win, quote unquote, undecideds, one at a time at this point, and he's better off doing that barnstorming.
Steve Davenport:Yeah, I think that the fact that they know the districts and people's, you know, they can see where money is coming in from, they can see, you know, the tracking online of information. For these people, technology helped in 2016 and 2020. I mean, today I got to imagine it's even more detailed and even more granular in terms of who they need to affect and who they need to influence that maybe they got people knocking door to door, making the calls you know. So it's scary to think about how much, if you can be targeted so easily on Facebook or any social platform, these people who are unsure I mean they must be either completely detached in the mountains or they just don't log in because otherwise people would be knocking on their door and going after them.
Frazer Rice:right, the one thing I would say is that if you're a fan of Kamala and you don't know exactly what she stands for on things like taxes or whether she supports nuclear which I don't know what she does or doesn't on that front, she had to address the fracking issue with Pennsylvania. There are certain issues there that I think there are still a lot of uncertainties with Kamala, even if you follow this stuff, which I do. That she didn't address with the debate and I don't think she's really addressed with her campaign rollout at the moment and didn't have to address by not being part of the primary component either, and so that's why I think any chance she can get out in a in a controlled setting and deal with those issues, maybe in contrast to Trump or sort of in a way that antagonizes him, I think that augurs well for her if she were to chip away and try to get more undecideds as they find different issues that are important to them.
Steve Davenport:Right. I believe that it's the economy stupid, and so I believe that there's a lot of people that will be asking the question do you feel better than you were four years ago? And I think that answer is probably no for a lot of those people in the middle who are trying to decide and make up their minds. So I feel like she has to come with some fresh ideas on the economic front in order to separate herself from the Biden inflation. And was this Biden inflation caused by the Fed being slow to act and raise rates? Absolutely? Was it any fault of the president and vice president? Probably not a lot, but that's the role If you're the president, you get to take all the blame or all the credit, right? And I think that ultimately, the economics of the country are going to drive some of these voting.
Steve Davenport:I think some of these ancillary issues.
Steve Davenport:They're nice if everything else is going great, but I'm not sure that everything is going great for a lot of people in this country right now, that everything is going great for a lot of people in this country right now.
Steve Davenport:So I'm a little bit concerned that, in sliding by some of these issues, I think she missed a chance to kind of be more of this person who she talks about, who cares about people and is kind to people, and we try to operate in a better and different way. I mean, do you two see this election changing in terms of being less bitter and less you know insults and daggers throwing, or do you see it just coming down to whoever is going to shout the largest and interrupt the questioner? I thought that Trump did an unbelievable job at every question. He had to have the last point, even though there was no order, there was no mics on or off. It felt to me like these rules that they spent weeks arguing about didn't get followed anyway. So what did it matter how we set up the rules? How did you find the environment?
Clem Miller:You threw out a lot just now, so I would say that you know when you. Well, let me ask you what? When you say environment, what are you referring to exactly? The debate itself or just the environment, the debate?
Clem Miller:the debate itself and how they listen to the instructions and they listen to the Well, ABC made it clear abc made it clear that they would reserve the right to turn off the mics and even though it was part of the rules that the mics would be turned off, right. So they said they'd reserve the right and indeed they they did turn off the mics. And I think for anybody who was so pro Kamala, there was this kind of impression that that ABC was maybe being too lenient towards Trump in terms of allowing him to, you know, to talk and to talk and to talk right, uh and uh. Indeed, during the apparently the first, I saw some of the, the, the calculations as to who spoke and who didn't speak. First half of the debate, uh, trump spoke a lot more than kamala did, uh, and in the second half, it was the. It was actually the opposite, which I thought was interesting because when I listened to it, it sounded like Trump was talking, you know, was saying a lot more than Kamala, and all the different questions. But I think ABC actually did the right. I think they did the right thing. I think ABC did the right thing in allowing Trump to talk because, you know, it gave him the opportunity to to either, you know, say something good or say something that people would think was crazy, and so they gave him that opportunity to do that.
Clem Miller:I think that ABC also did the right thing in allowing Trump, you know, letting him him lie but at the same time fact checking him, uh, when he did lie, at least on some of the lies, so I thought that was good. So, you know, on those things, all you know, all harris had to do was sort of sit back and, uh, you strike a pose, which she did on some of those questions, you know, putting her, her, her chin in her hand and sort of laughing a little bit, smiling, like you know what am I hearing here? You know, she, she. Those were the things that, in my mind, were entertaining. The way she reacted to a lot of what Trump was saying was entertaining, and I think a lot of people in this split screen approach realized that she was just, you know, enjoying herself at Trump's expense. That's the way. That's the way I saw the debate itself going down, even though I didn't think there was a lot of substance to it.
Steve Davenport:What did you think President?
Frazer Rice:You know, as a general matter. You know I got tired of watching it, so the entertainment factor didn't really work and I sort of put myself in the shoes of amateur political consultant and said OK, what would I be doing telling these candidates on the front what should they focus on? If I'm Trump, I focus on three things. Number one, the economy. As you said, are you better off now than you were four years ago? And I think people will look at higher prices and the struggle that it is to exist in America versus what it was before. Number two, I think the migrant crisis.
Frazer Rice:I think painting Kamala in a box on that front is another big part of it. And then, I guess, the third level. Not that it really matters that much, but do you feel safer now in this environment than from a foreign policy perspective as it relates to? You know? Was the exit from Afghanistan orderly? Are we doing the right things in the Middle East? Are we doing the right things in the Ukraine? Is that the right hand you want on the steering wheel going forward? If I'm Kamala, I kind of do what I kept doing.
Frazer Rice:I think her appeal to women can only have a higher ceiling as she talks about her stance on abortion and really bringing logic into that framework. I think she's got a good story to tell on that. I think she has a story, a much better job at reestablishing the narrative around a pro-growth economic set of ideas. I think right now she is painted in the box of Biden's tax policies and people are going back and she's not really portraying sort of a an optimistic future beyond sort of I guess probably simplistically calling it sort of a giveaway culture. I would lean into the fact that Silicon Valley is a big part of California and a big driver of what's going on in this country as far as economic growth, and she's not been comfortable doing that.
Steve Davenport:Yeah, I think it's amazing what didn't get talked about, right, I really don't think we talked about China at all. Given the amount of influence it has, you know, on the Taiwan Straits and just in general worldwide and their influence in their roads policy. It kind of left me a little bit like this this is really a discussion about a few issues. Bit like this this is really a discussion about a few issues. And then, when they waste time, I, like you, get very frustrated listening because I'm like this is just nonsense we're talking about. You know the size of your rally. I've never heard that.
Steve Davenport:As you know, the way that you measure success is how many people you get at the rally. I mean, if you bring enough food and you bring enough things, you will have enough people. I don't think it really is this statement that you have 35 and I have 32. You're bigger and better than I am. So I find the way that we do things in our politics is as frustrating as the ultimate result. If we don't do a good job of holding people accountable, telling them to stop turning their mic off and saying answer the question yes or no, I think we don't really get to the heart of what are the differences between these two people? I thought one of the people might say yeah, all of our economic policies involve giving people money. Giving people a tax break for a startup. Giving people money if they have a child. Giving people money if they buy a house.
Steve Davenport:It seemed like you know how do we have more policies of giving money away? Is it going to be easier next year than it was this year? Why couldn't we give people $25,000? My daughter just bought a house. It would have been great. I would have really appreciated that. Why are we waiting until next year?
Steve Davenport:And I think that the degree of detail that we discuss things is still at such a high level. I find that sometimes we get away with a person, gives us any insight. We take that as policy when in reality, like when they press Trump, for what is your policy on improving health care? Well, it's a concept right now. I mean all these things are concepts. I mean there's no bills waiting to be filed when Harris becomes president. So I think that we're just, our expectations are so low for these politicians and it just leads to a lower level dialogue, and I'm maybe unrealistic and you can tell me that, but I just like the dialogue to be just a little more. You know less eighth grade and more 12th grade. Just just move up a few years. You know what do you think?
Clem Miller:Well, I mean I would. I think it would be great if we could up the level of policy discussion. I think that you know we don't really get much from the entertainment value of the whole thing. I think, it could be the nature of the questions. The questions were sort of phrased in a way that they were aimed at. The questions themselves were eighth grade. When you do eighth grade questions, you're going to get eighth grade answers.
Steve Davenport:If the questions were 12th grade?
Clem Miller:questions. ABC could have done a better job. Yeah, If the questions had been 12th grade questions, then I think there would have been. Well, there could have been more sophisticated.
Steve Davenport:Accidents happen, you know.
Frazer Rice:Neither candidate is going to go out in any great level of detail on policy. I think we may be waiting for Godot on that one.
Steve Davenport:All right, what do we think about? Let's just take a little tact change here. I think that if we look at the two candidates, trump is probably going to be less regulation and Harris would probably be a little more regulation, just in general to characterize the two positions. But what do we think is happening with going on with Google and some of the magnificent seven in terms of how we as a country are treating them versus how Europe and China and the rest of the world is from a regulatory standpoint? Is America still the home of the free and the brave, or are we becoming Europeanized? What do you think, clem?
Clem Miller:Well. So I think Europe has gone quite far down the road of regulating the Apple, Google, Meta, Tesla I mean not Tesla, but X and some other companies in terms of their monopoly presence in digital markets. The US is quite far behind that. I think the US is ultimately going to be forced to move in the direction that Europe has been moving. They first came out with their general data protection regulations, GDPR, which was aimed at not just that data privacy, but a data localization that is, keeping data generated in Europe on servers in Europe.
Clem Miller:China does the same thing, where basically it's an antitrust act that was crafted just for the US and some Chinese mega cap companies. And then the last one was the so-called Digital Services Act, which actually requires a certain degree of content moderation, and actually X has just gotten in trouble for violating provisions of the Digital Services Act. So we're going down this road of greater regulation of the mega cap tech companies I think that's responsible for some of the volatility we've seen in their stock prices. It's not just valuation, it's these uncertainties about their regulatory future is necessarily going to have to find a way to manage its own regulation so that it doesn't diverge too far from European regulations. Basically, that means that the large tech companies in the United States are going to be increasingly regulated along a number of different fronts.
Steve Davenport:What do you think, Parajit?
Frazer Rice:Nothing I can really disagree with there. I do think that either candidate, whether Trump or Harris, is going to sort of look at what the tech companies are bringing as far as job creation and wealth creation et cetera and, you know, I think there will be some common sense applied to the regulatory scheme so that we're not sort of leapfrogging over the Europeans or, you know, dealing with China or anything like that. Ultimately, our wealth creation is an export, and to kill the golden goose, I think is something that you're not going to score political points. Doing that Now. Does that mean that they're going to take a sort of not cause breaking up Google or something like that Uncertain? But I think that once we get past the election and once you sort of look at, you know the framework of what the economy does and doesn't do in the context of what's out there in the rest of the world, I think a combination of the lobbyists, of the firms, I think the business groups, of the firms, of the tech groups, I think they're going to get smarter as far as educating the political component of this country about what is special about the wealth creation in the tech space and to start firing arrows at it for political gain. We'll see what happens Now. Does that mean that they should not have content controls over going after younger kids or sort of immoral situations, or if there's market power issues or something? No, but I think the balance.
Frazer Rice:I'm not as worried about it being a huge overreach, and that's not to say that there aren't going to be measures taken. There isn't going to be a lot of noise around it, be a lot of noise around it, but antitrust law in particular is a long, winding road that usually ends in some sort of settlement, and I kind of think that's what's going to happen on these fronts, not least of which these firms could get competed away very quickly. I mean, the next Bitcoin may be around the corner. Light-based micropro Bitcoin may be around the corner. Light-based microprocessors may be around the corner and all of a sudden, nvidia is not as amazing as it was before. Who knows? And so if you take a snapshot in time around competitive advantage and regulation and things like that, it's tough to extrapolate from that, because the innovation oftentimes comes from places we don't even see it.
Steve Davenport:I thought it was interesting. Today I looked at the while and the video was doing well and I announced that they approved for some chips to be sent to Saudi Arabia, and we think about everything that's competing here in the US. But if you start to think about how you could impact the US, but if you start to think about how you could impact their position in technology within the Middle East, there's all of these sub-universes that these people are operating in that, I think, make it. How we distribute technology, how we allow the distribution of technology, how we help people to move their societies and economies along, is as important as how we operate here back in the US. I'm not sure we understand how much of a benefit like you mentioned once about Silicon Valley being where the golden goose is I don't think we realize how being in the front of most of these technologies, especially AI, is a huge, huge influencer of the US economy. And if we start thinking more about regulatory and stop thinking more about innovation, I think we do have a risk of being surpassed by some of the Chinese and other competitors in these spaces. So how do we make sure that the next four years are going to be us continuing to lead.
Steve Davenport:Just as an example, as I got done with the debate, I was talking to my wife and I said what do you think of it? She says I don't know, but there's a really good ai out there from melania where she's saying these things and it's just so funny and and I think about like four years ago we weren't talking about memes from you know, ai that that looked perfect and sounded perfect and were, you know, artificially created with all of the tools that have existed now, four years ago, I have no idea how we're. It's amazing to me. We have more and more technology, but we still have paper ballots in most states. How does this all come together? If we have this great technology? We have this ability to understand AI. Are we using it on the right things or are we using it on the wrong things? What do you think, clint?
Clem Miller:Well, you know, I happen to think and I think a lot of people think this that paper ballots are a paper trail. Let's call it. It's not necessarily a paper ballot, but a paper trail is actually a good thing in our elections. So I would put that in the category of something where electronics is good and the combination of electronics and paper is even better. Right, paper record.
Clem Miller:I think AI has a lot of dangers in it and I think that it's going to be subject to regulation, that it's going to be subject to regulation and I do think that there will be a lot, you know, to Fraser's point, you know a lot of innovation that will take us. You know, two, three, four, five miles down the road from where we are now. It's not going to look five years from now. Ai and tech in general is not going to look. You know the way it does now. Just's not going to look five years from now. Ai and tech in general is not going to look. You know the way it does now, just like today. You know what we're seeing with the integration of AI into a lot of the search engines, a lot of the social media. You know we couldn't have envisioned that just three or four years ago, before open AI came out, and now we're seeing that. So AI is.
Clem Miller:I think I've mentioned this before on this podcast AI is a real. I believe AI is a real thing. There was some doubt about that at one point. Right, is AI a real thing? I think most people realize now that AI is a real thing, that AI is, in some respects, a game changer, that AI has a strong future to it. It doesn't necessarily mean that the stocks that are involved in AI are all going to be great stocks not suggesting that we invest top down in AI, but AI is certainly something that is a theme, that theme that we really need to stay on top of, but it is subject to regulation. It's real. It's unlike Bitcoin. Bitcoin, in my mind at least, is not real. Bitcoin, in my mind at least, is not real. And while it's an investment theme, it's not something that I go chasing around. Ai is something that's very real and has to be on our radar screens, just like the weight loss drugs, for example.
Steve Davenport:That's a real thing too, and needs to be on investors' radar screens. Yeah, fraser, when you look at this regulation and the pursuit of these companies, I feel a little bit like we're chasing the horse that is already out of the stable, that these companies have already taken over these markets and taken over their presence there, and that their lawyers and their situation they're way ahead of the regulators. So I'm looking at this saying we're trying to figure out how Google might be managed or controlled or regulated and in reality, we've got this next thing AI. That is going to be 10 times as complicated and much more difficult, and we haven't figured out how to control people getting ads, information and location information for individuals. It's like, in my mind, we're pretty far behind in the social aspect of these technologies and we're going to get further behind. Do you feel like there's some rhyme and reason to what the government's going to do with these?
Frazer Rice:I think it's a huge topic, but I would say there's a couple shreds of optimism. I think the first one is that with these tools, as they become more and more democratized and get in the hands of more and more people, I think that creates more and more offshoots there. That also creates the potential for more market power and control. But I am more optimistic on that front and I think that a steady hand at the federal level in terms of regulating on that front and I think that you know, a steady hand at the federal level in terms of regulating on that is possible. An interesting case from the Supreme Court is one called Loper Bright, which essentially said that courts can take over and render decisions on ambiguous laws and so, in a sense, the administrative state could be a little bit more democratized as well. For those people who feel like that the, if they feel like that there's been regulatory capture by large groups, et cetera, they can go and sue in one of a bunch of different venues in order to sort of attack a rule that may not, that may be have been put in place at the behest of somebody larger, more centralized, and so I look at that. You know the case just came out, basically three weeks ago. So the who knows what the impact of that is. But essentially, you know, the decentralization of the administrative state, I think, opens up possibilities to attack sort of the death star of you know the monoliths that are out there on a piecemeal basis. Now you could go and say, well, those people aren't necessarily resourced well enough to be able to, you know, fight in federal court with you know loose litigation dollars, whereas Google and Meta and all that, just these huge war chests, that's the bounce to be struck. I think that the shift in arena where these fights are going to take place is something that, as an investment theme, I think that's something that the analysts out there are going to have to really understand well, because I think it's new. I think it's going to have a big impact on a lot of different areas. I mean any area where an industry touches the federal government, it's going to touch that. The Loper-Bright case is probably going to be a big part of where the fights are at the forefront of legislation and how it's implemented.
Frazer Rice:So long-winded way of saying that, look, ai is a big thing. Ai is not perfect. It's going to. There's going to be a lot of eggs broken. There's going to be a lot of different challenges related to it, but I also think that it's so imperfect, and it's going to continue to be so imperfect, that the economy and the thoughtful people around it are going to incorporate it and use it as a tool, and the people that are.
Frazer Rice:I don't think it's something that's easily controlled. I think that if you even look at the entertainment industry and you start seeing, well, you know what happens if all the actors get thrown away and you just use likenesses or use computer generated likenesses. That creates issues and you end up, you know, if all of Los Angeles becomes unemployed because of AI, you will have political ramifications to that. So I try to take a 20-year look at that and say you know, we are in such the early innings here and there are so many different things going on that I'm not doom and gloom on it and it's something that I monitor from afar doom and gloom on it and it's something that I, you know, monitor from afar.
Steve Davenport:Yeah, I remember when my kids started playing with sims and they created their own little you know gardens and their own things and it was like the game um was very much like life, and you looked at it and you said, well, this keeps going. We're going to have these virtual lives and these virtual games, and that's where we've gotten, and I feel like there's a opportunity here to how we think about these technologies and how we think about the regulation of it. That should give us not a scary feeling but a feeling of you know, this is really a future that we're going to see over and over repeated. Whether it's the human genome, whether it's you know, the peptides that is going on with the obesity drugs, we're going to see signals and understand things about life in a more microscopic manner. That's going to, I think, be very exciting. It's just in my mind. Sometimes we have to.
Steve Davenport:When the internet started, there was a lot of people that said you don't want to be on it. It's crazy, it's uncontrolled. Everyone there is. You know, it's a free range and, sure enough, as people started to get on it and people started to use it, they realized there was real advantage from sharing. So I think that sharing AI and sharing some of these things will help us. I guess I'm trying to figure out is which candidate in the next in this election is going to put an environment in place that's going to be better for us as investors and better for us as citizens. Do we think that one? You know, I think we probably have an inclination, but I'm not sure if the regulatory world being more active is going to create an environment that will allow our innovation to continue to grow and prosper. Do you ever worry about that, Clem?
Steve Davenport:Yeah Well, first of all, there is a benefit to having regulation, because without regulation, businesses're not going from zero to 100 or 100 to zero, right?
Clem Miller:I think the point that fraser raised about the recent supreme court ruling is a very interesting one, because now, uh, you know, the shots are not no longer going to be fully called by the administrative courts, which which basically my understanding is, are pretty much captured by the individual agencies that are doing the regulations, but now can be sorted out in federal courts that I don't know how the federal courts are going to do that, because it could be overwhelming in terms of the volume of decisions that they have to make, but it is. You know, it does create variety and, as Fraser pointed out, in who could be looking at these things, geographic variety, variety of political viewpoints. You know, it sort of opens up the discussion, the regulatory discussion. So I thought that was a very interesting point up the discussion, the regulatory discussion. So I thought that was a very interesting point, fraser, that you made on that issue. But I think that regulation isn't all bad. Regulation is good. I think that it can go too far.
Clem Miller:It really, really depends on the the type of regulation, certainly not regulation for regulation's sake, uh, but you know that's not how you know in in the in the us regulation, when you put when the government puts out regulations, there have to be waiting periods, there have to be comment periods, uh, you've got got the Congress that can weigh in on regulations. Some of them don't take effect until Congress has had a chance to review. This isn't just government agencies or the White House going crazy. Right, there are legitimate processes by which these regulations get reviewed before they get implemented.
Steve Davenport:Well, we have been having a government by presidential edict, haven't we? I mean, the presidency has stopped going to Congress for ideas that they don't think they can get through. Well, you've got With immigration and other ideas that are yeah, not to some degree, right?
Clem Miller:I mean, you have executive orders. They all have to have some basis in law, right? Or else they'll be over overturned, right? Uh, although I don't know, under the new supreme court immunity ruling. I don't know if if an executive order can be overturned. So that's something that will have to be hammered out, I think, in the courts. But executive orders are, you know, historically have had to be grounded in some kind of law that Congress has passed have had to be grounded in some kind of law that Congress has passed.
Frazer Rice:Yeah, I mean, if an executive is promulgating executive orders that aren't rooted in constitutional authority or legislative action, I think, by extension, that's an exercise of power that goes beyond the authority of the presidency. Now, that's a complicated question depending on. You know the world that they're in or that the domain that they're opining on, but I, you know our political system has been pretty good for a really long time, in the sense that it it did its best to try to set out checks and balances around all of these different things. And when people start sort of mulling that there's too much power here, there's too much power there, what do we do? Oh, my gosh, do we pat? You know the courts don't reflect this or that.
Frazer Rice:You know the founding fathers returned to think in 50 to 100 to 250 year cycles and that's where we are right now. And I think you know there are a lot of different scenarios. We've gotten through a civil war, two world wars, the Depression, vietnam 9-11. The January 6th, to some degree, I think, was a test of the government that I think it passed. And as we continue going forward, I think that everything that we're doing on that front. Going forward leads to sort of a good steady direction as it relates to policy, no matter who you have in office, and so, um, you know, is it to sort of tie it back to regulation? Um, you know, are we in a we? I?
Frazer Rice:I still think that we, we live in a country that that values hard work and innovation, and I think the political process reflects that.
Frazer Rice:The people and the ideas of the, of the parties that are around it now can be frustrating at times, but I think this is just in many ways, an exercise in patience and, you know, and in locating people that hopefully, you know, project kind of that combination of temperance and optimism and envision. That sort of gets this country back to being exceptional again, and you know, we'll see what happens. I mean, the two people that are vying for it right now aren't communicating that Trump is too negative and has a lot of different issues around it. Kamala, I think, tries to project positivity but at the same time, she doesn't have the detail associated with it and her track record creates questions as to what is the way she would get there, and that's what the voter has to kind of figure out. Going forward is which of the two is going to be is going to be the right track, if not for the long term, at least for the short term.
Steve Davenport:Yeah, sometimes I think that elections are rebounds and you go in one direction and the pendulum swings, and then we rebound and we go in another direction and we're not necessarily going in one's the right direction and one's the wrong direction, they're just different directions. So I was going to try to wrap up today's podcast by asking each of you two questions. One, what do you think will be a positive surprise between here and the end of the year to make these markets and the future of American excellence which is a great phrase I'm going to use that exceptionalism? And what thing do we expect might happen or worried about or concerned about that could happen between now and the end of the year? That could definitely throw things up in the air or throw things in a more uncertain area. So it could be geographic, it could be military, it could be technology, it could be. You know Pfizer is looking to come out with a new drug that will be a pill versus this you know for the obesity issue. So I just think there's.
Steve Davenport:You know, personally, I'm worried about something going on with China and Taiwan. I still believe that is my biggest concern, as we keep getting more and more engaged in the Middle East with Hezbollah and Iran. I feel like that distraction and our moving carrier over there is not a good situation, because I still believe, if we look at the forces in the world, the force of China against some of its or towards its territories is something that we are not really prepared for and could definitely upset this election and could upset this end of the year. In the markets, I think the markets are fully priced and I think that they're looking for a reason to become more reasonably priced and I think that something like that with China could do that In terms of optimism.
Steve Davenport:I really think what's going on in the obesity space and what's going on with the human genome is really the future of our medicine. We know we have, medically, a problem with obesity in America. We have a problem with obesity worldwide and I think that if we can figure out how to economically produce these drugs, that will help people get from the shape they're in to a better shape and ultimately, you know, we can start to have people you know with greater medical care. I think that you know my vision is that I think there will be some kind of telehealth that will be available to all and that we'll look at that and say the benefits of this are so great to our Medicare and other systems that it makes sense for the government to pay for this and get people healthy, and I believe that you know this step by Pfizer with this drug is one first step in that direction and it could have a huge impact. What would be your two things to celebrate and to be concerned about, fraser?
Frazer Rice:So I will start with. There are many things to be concerned about and, as you said, you know it could be geopolitical. It could be China, it could be something blowing up with, you know, in the Mideast it could be you know something negative happening in the Ukraine, in the Mideast it could be something negative happening in the Ukraine or it could be any number of things on that front that whipsaw the attitude of this country toward sort of a retrenchment to safety.
Frazer Rice:Yeah, and that type of thing I don't think is super productive. I think America works well when it is involved in the world and we're safer when that happens. So that's something that concerns me between now and the end of the year. Positive things, as you said, there's lots of stuff going on there. I'm trying to manifest this into reality. It's sort of like when you hit a drive into the rough, you kind of look for it where you want to find it and hope it turns out well from there.
Frazer Rice:But I desperately want to see this country have a developed nuclear policy, a power in this world and, frankly, an environmentalist and someone who believes in driving economic growth and not really think that nuclear can't be a big part of that, I think energy is accomplished with a symphony of measures. I think it's everything from fossil fuels, hopefully going down over time, but then using solar and wind and hydro. But I think I mean nuclear is just waiting to happen and you know the sun is in many ways the biggest fusion reactor. I would love to see some sort of advance in fusion energy all of a sudden really ignite figuratively, not literally, the imagination of this country. And in fact if it were me running for president, I would my big platform, I would have a Marshall Plan for nuclear energy, because then I think if we are fully an exporter of energy going forward, that changes the geopolitical dynamics of everything and uh, and then we're able to play our strengths like us a little bit, wouldn't they?
Frazer Rice:sorry, our allies would like us a little bit more I guess I don't know, but uh, I, I to me, to me, if we're, if we, if we are fully energy independent, slash exporting, I think the world looks to us again.
Steve Davenport:That's great, Clem. How about you? You want to take us home? What's going?
Clem Miller:to happen. Let me just say, on the positive front, I think that if you look not at the day-to-day volatility, if you bring yourselves above the day-to-day volatility, month-to-month volatility of the markets, I think we are seeing continued corporate earning strength. We're not in a recession, we're not on the cusp of a recession. We're not in a recession, we're not on the cusp of a recession. I think that underlying I know you're shaking your head, I don't think we are I think that we're powering through, at least in terms of markets. We're powering through because we have innovation and innovation society and I think we're doing well on that, and so that would be my. I don't think there's anything more that's needed on the positive front. That's going to keep us forward.
Clem Miller:Now the big negative right, you guys have mentioned some foreign policy potential scenarios. I agree with every single scenario you've mentioned. I would just add one thing and I'm going to spin out a a pot, a possible negative scenario as a sort of science fiction aficionado and that would be one where, on election day this year, there's a giant cyber attack directed by Russia. I think that I think that would be, I think, if you had a giant cyber attack directed by russia, I think that. I think that would be. I think if you had a giant cyber attack, uh affecting uh the us elections, uh, I think that would create so much internal chaos there would be political conflict in the united states. It would trigger just an absolute mess. That would be my one scenario for chaos at the end of 2024.
Frazer Rice:Like I've said publicly elsewhere, we've not had the 9-11 of a cyber attack yet, and if something like that were to come to pass, that's the enormity and the wide breadth of impact that that would cause.
Steve Davenport:I don't think anybody's really tried to hem in what that would look like. Yeah, I mean that earlier attack this year was the CrowdStrike was, I think, an example of how even something that's not dangerous can turn dangerous if something's mishandled. So I really appreciate what you guys have added today. I think it's been great and I think we discussed some issues and some opportunities and help people think about their investment portfolios. So thank you very much, everybody, please, where you can share and like Wealth, actually, or Skeptic's Guide, and we hope to have more to give you as the year ends and we'll hopefully be more on the optimist side and less on the dark side. So thank you everyone and have a great day.
