Transcript of Elon Musk & Republicans are Freaking Out.
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0:00Elon Musk is throwing $158 million at0:03the man he's suing in Texas. But this is0:08more than just what's going on in Texas.0:12Elon Musk is fighting for his point of0:15view of control of the entire United0:18States. Let's break down what's going on0:21here and try to make sense of all of the0:24pieces of the puzzle. So, first of all,0:27this story just came out that most of0:30the money that Ken Paxton has raised in0:33his bid to get the Texas Senate seat has0:38come from Elon Musk. $158 million came0:43from Elon Musk to Ken Paxton in the span0:47of just 14 days. $75 million on0:51September 9th, then another $83 million0:55on September 23rd. Now, they were0:57funneled through the Senate pack and1:00then directly sent over to Pakistan. So,1:02there's some deniability that it wasn't1:04directly Elon's money going directly to1:07Paxton, but the numbers just happen to1:09perfectly match. And so, a lot of people1:11are wondering, what's the point? Why1:13just a Senate seat? What does a Senate1:15seat do for Elon in Texas? Especially1:18since it seems like Greg Abbott is going1:21to smoke the Democratic governor in1:25Texas. So why bother? Why would Elon be1:27going for this? In my opinion, Elon is1:31pushing for Ken Paxton to win a1:33Republican seat because I think he sees1:36that one seat as potentially critical1:39for avoiding and preventing a Democratic1:42sweep in the Senate and therefore also,1:45you know, the House across the entire1:47country. that that one seat in the1:50Senate uh uh uh Senate or in the Texas1:54Senate race could potentially stop a1:56full set of Democratic control because1:58it's not the governor's race that2:00matters right now given that Greg2:01Abbott's got this 75 to25 lead $2.52:04million of volume over here on Cali.2:07What matters a lot more is that Abbott2:10is falling behind Telerico2:13uh in the Senate race for Texas. Look at2:16this.2:18Around September 10th, September 11th,2:21we started getting a lot of fear about2:23artificial intelligence. We had insiders2:26from big AI companies quit saying it's2:30going to take over. It's going to kill2:31us all. People started freaking out2:33about agents going rogue. All of this2:36really happened late August and it2:39boiled over into politics in2:41midepptember. And right at that moment,2:45sentiment has swung against artificial2:48intelligence. The Wall Street Journal is2:50calling it the tech lash against, well,2:54frankly, the artificial intelligence2:56buildouts. And so now even Republicans2:59are trying to come out saying, "Oh,3:01well, you know, we're also anti-data3:04centers raising your electricity costs3:07and, you know, water use costs or3:10whatever." Like these are the arguments.3:11Of course, both sides argue different,3:16how should I put it, impacts on the same3:19topic. You've got Republicans arguing,3:21oh, you know, uh, energy costs actually3:23go down because if we generate our own3:26electricity at these data centers, we3:28could export extra electricity and3:30that's going to lower energy costs and3:32water gets recycled within the plants.3:34But then, of course, the other side3:35argues, yeah, but what about all the3:36water that it costs to actually build3:38the facilities, build the concrete? And3:40so you've got concerns that oh angles3:42and then some people start talking about3:43shrimp. Things get a little wild. But3:47let's consider this. It's not just3:49Texas. I mean look at even Ohio which is3:52another important place for data3:53centers. The Vaker Ramwami who is neck3:56andneck with Amy Actton for the governor3:59race is now getting smoked and it's4:03getting worse by the day. And this race4:06has $2.7 million of volume. The reason I4:09bring up the volume is if you have a4:11small race with like $100,000 or4:14whatever, usually one little bet can4:16swing the the the odds very rapidly.4:19Like for example, will Democrats win a4:22super majority in the midterms? This is4:23$17,000 of volume. If I put $500 on yes4:27on this right now, it probably skyrocket4:29to like 15%. I'm not I'm not going to do4:32it. I'm just saying when you have those4:33larger volume numbers, the prediction4:35numbers are a little bit more reliable.4:38And that's why, you know, I think it4:40seems reliable to say that right now4:41Abbott seems like he's got a pretty4:43secured lead. And even Abbott has taken4:46this approach of, hey, we need to make4:48sure y'all are complying. We need we4:50need more reports on how these data4:53centers are going to affect water, how4:55these data centers are going to affect4:56what's going on with the quality of our4:58air that we're breathing. Right? So the5:00Republicans realize this is an important5:02issue for5:05uh voters,5:07but their approach is expected to be way5:10less intensive than the Democratic5:13approach. Take a look at this potential5:15policy scenarios and market in5:18implications put together by BNY. We're5:21going to cover exactly what their point5:23of view is on this. I do want to quickly5:25mention since I did talk about Koshi, I5:27want to be clear. Koshi is a sponsor of5:29the channel. Uh you can get a free $255:32when you sign up for Koshi and make your5:33first trade. koshi.com/mec.5:36Scan the QR code or just use code meet5:38Kevin when you sign up. They are a paid5:40sponsor of my startup reinvest. So I5:43just want to be clear about that. But5:44think about this for a moment. The idea5:46is would you rather have some regulation5:50on AI with Republicans or would you5:53rather have a lot of regulation with uh5:57against artificial intelligence with5:58Democrats. So I think what Elon is6:01seeing given that you know Texas is Elon6:03Musk's corporate home right Tesla's6:06headquarters Austin Texas SpaceX6:09Starbase is near Brownsville in Texas.6:11Elon did just conduct the Louisiana6:13purchase over in Louisiana. Uh and and6:15that you know we're gonna have five6:17different launch pads for rocket ships.6:19You're gonna with with two launch pads6:21each. So it's actually 10 five launch6:23sites, 10 pads. So you're potentially6:26shooting off 10 rockets at a time. That6:28is going to make for one heck of a video6:30when that happens at some point in the6:31future. But Louisiana has a pretty6:33secure Republican uh governor campaign6:37going on. What's the concern here isn't6:39even just one Senate seat because what's6:41Ken Paxton for Senate going to do for6:43Elon in Texas. It's not that Senate seat6:48in Texas. It's how that one seat in6:50Texas can affect the entire6:54United States ability to prevent6:56Democrats from getting a sweep and6:59control. And that, in my opinion, is why7:02Elon Musk has plowed $1587:05into essentially one man's race. This is7:08Elon quietly telling you this one race7:12matters for the entire United States and7:14for Donald Trump's policies and also7:17what affects Elon Musk. Now, Elon's7:19pretty quiet on X about politics. I7:21think after Doge, he's a little gunshy.7:24And obviously, let's go look at the7:25sheet here on market implications to7:27kind of see, you know, what some7:28expectations are here. But keep in mind,7:31you've got uh uh you know, other uh that7:36other politicians that Donald Trump says7:38are sort of like distracting from7:40Paxton. And so the GOP's come out with7:43estimates that they would need $150 to7:46$200 million for Paxton to be able to7:48hold his seat. And so Elon is basically7:51coming in and saying, "Okay, that's the7:53check you guys need. I'll fund all of7:56it."7:57So without Elon Musk, the expectation is8:00Paxton would basically have almost no8:02ability to run ads. Whereas right now,8:06we expect over $500 million are going to8:08be spent in total ads in just the Texas8:11Senate race. That's half a billion8:13dollar in TV ads for one damn race. And8:18based on GOP's estimates, just for8:21Paxton alone, Elon is basically footing8:24all of the bills for Paxton, cuz in Q3,8:29Paxton only raised $18 million. That's8:32not good. Telerico's got $64 million as8:35of Q3. So, Tel Rico, the Democrat, had8:38three and a half times as much money as8:40Paxton did. And so all of a sudden, you8:42know, six weeks before the election,8:44basically Elon goes, "Hey, man, how8:46don't how about we just like nearly 9x8:49how much money you've brought in, which,8:52you know, obviously then a lot of people8:53go, okay, well, Telerico is getting and8:56and and these numbers, you always have8:57to be careful about how they do this."8:59Like, and then let's talk about market9:01implications, but they do this all the9:03time. uh in terms of branding, what9:06they'll do is they'll say something9:07like, "Oh, well, you know, 97%9:10of donations are small checks." Okay,9:14that's fine. That's what Telerico is9:16pitching. And and that's fine. It's9:18probably true. But that can mask the9:20fact that you could get a big $259:22million check and then, you know, that's9:25like represents 0.01% of donations,9:30right? because they're not actually9:31saying of donated money. They usually9:34say it's of donations. Well, yeah, but9:37one big check is a tiny percentage of9:40the actual donated checks. So, you have9:42to be careful about the wording. So,9:44when you hear that sort of branding from9:46either Democrats or Republicans, oh, 97%9:49of our donations are under $25. like9:52Bernie Sanders famously does that. It's9:54like, "Yeah, okay, but what percentage9:57of your total raise came from small10:00checks?" And and you'll usually find10:02they won't answer that question. But10:04let's be clear, Elon's basically buying10:06out the Republican one. So, you know,10:10it's it's clearly happening on the10:11Republican side. But anyway, what you10:13have over here, potential policy10:15scenarios. So, on a Democratic sweep,10:16and this is, I think, what Elon is10:18trying to avoid.10:20uh Democratic sweep, the expectation is10:24not necessarily that they're going to10:25get any kind of policy through because,10:28you know, Donald Trump is basically10:30going to sign nothing. So, if Democrats10:32sweep, they could pass whatever bills10:34they want. Uh they'll still have to deal10:36with the filibuster. I I mean, the odds10:38of them getting a super majority are10:40next to zero. Uh the odds of them10:42getting even over 60 seats to get past a10:44filibuster are also next to zero. So10:47really what you're going to find is like10:48the House will pass legislation and the10:50Senate will eventually pass it, but10:51it'll be quote unquote, as BNY says10:53here, symbolic because it's really, hey,10:56like Trump's not going to sign any of10:58your crap and you don't have the votes11:00to force Trump to sign anything. So it's11:02just not going to go anywhere. So what's11:05more likely is you get investigations11:09that just slow things down. And so11:11that's actually the problem here is you11:14can get a lot of congressional11:15committees that force companies and CEOs11:19and executives into uh investigations or11:24into reporting that ends up being11:26ownorous for the companies that slows11:29the process down. And that's the whole11:31goal is to kind of slow down the data11:33center expansion plans. I mean here's a11:36quote from Telerico here. Um, Telerico11:39says that Ken Paxton is selling off11:41Texas, our land, our water, our11:43communities, anything to make a buck. He11:45gave them special tax breaks. So, the11:48special tax breaks11:50are exempting data centers from having11:52to pay sales taxes. Since then, because11:55Terico's been bashing Paxton for this,11:58Paxton's actually come back and said,12:00"Yeah, we should get rid of that and we12:01should sales tax the data centers." So,12:03they're both wanting to sales tax the12:05data centers. But the Democrats have12:06sort of led in that charge and you know12:09tax is like all right yeah I guess we're12:10going to have to agree to do that as12:12well.12:13I kind of think about it like uh oh what12:16was it uh you know Donald Trump was like12:18no tax on tips and then Kla Harris like12:213 weeks later is like yeah we're going12:24to do no tax on tips. It's like all12:26right well the other person had the idea12:29first. Uh but um but anyway, you know,12:32that's when you know something's really12:34popular and an issue for voters. Paxton12:37has recently also adopted quote tough12:39rhetoric against data centers. That's12:41the Republican that Elon is funding12:43promising to crack down on the12:45facilities. But the problem is the12:47letters that he's sending for, oh, you12:49need to comply with our water rules. If12:51they don't, the companies end up getting12:53a maximum fine of just $500. So, like12:56the Republicans are wielding a sword on12:59data centers, but it's like it's a a13:01really dull blade and the Democrats have13:04a sword on data centers, and it's a13:06really sharp blade. And so, both of them13:09are flailing the sword. Oh, we're going13:10to limit data centers, but the the13:12Democrats have a substantially sharper13:14sword here. Now, what about this lawsuit13:16thing I talked about earlier? And let's13:17keep going on scenarios here. Well,13:19SpaceX sued Paxton, but this is really13:21suing the county. it's not really suing13:24the person because he's the attorney13:25general. So when he leaves office and13:28let's say he gets his Senate seat or he13:30just leaves office in general, the13:32lawsuit stays with the county, it13:34doesn't follow Ken Paxton. And so the13:37idea here is that, you know, Elon, even13:40though it seems like he's naming the13:43attorney general Ken Paxton and it's a13:44lawsuit against him, it's really the13:46seat that he's suing. And SpaceX doesn't13:48want uh13:51these new disclosure requirements over13:55where they're potentially acquiring land13:57or who some of their supply chain uh uh13:59providers are so that way they can14:01maintain their competitive edge and14:03their Terraab buildout in Texas or14:05Louisiana. Other other people obviously14:08respond and say, "Bro, you have enough14:09of a competitive edge. You don't need14:10this. you should be transparent about14:12where you're building and what you're14:13doing and and you know what the14:15environmental impacts of this are and14:17that's the whole point like this is14:19turning into an election about you know14:21how much insight and transparency do we14:24want on the data centers now my belief14:26is that if we don't get a deal with Iran14:29between the 20th and the 27th mind you14:33my belief is Donald Trump is like ready14:35to sign a deal is just trying to eek out14:36a little bit more but I'm willing to be14:38wrong and I'm okay with that it was just14:40sort of When I called the top on the14:4210-year Treasury at about 5.27, I'm14:45like, look, plus or minus five basis14:47points. I think this is the top. I also14:49said I'm willing to be wrong, but I I'm14:52confident that this is the top on the14:5410-year. And it was uh which is great.14:57And I hope it stays that way. Even after14:58hot CPI, hot PPI, we're down at like15:005.08 right now, which is great. I hope I15:03have I have the same amount of15:05confidence that I did on the 10-year top15:08call as I do for an Iran deal happening15:10between the 20th and 27th. And again,15:12I'm willing to be wrong. I just want you15:13to know that that's my opinion. So, you15:15know where my head is on this. If I'm15:17wrong and this doesn't happen, then15:19Democrats are almost certainly going to15:21sweep. then you're going to have to deal15:24with more of this um you know15:26investigation pressure into Trump, his15:29allies, into data centers, into Elon15:33Musk that'll end up hey we'll drop these15:36investigations if you compromise with us15:38and give us what we want which15:40potentially you know Democrats which15:42could be beneficial to renewable energy15:44and healthcare. So, if we don't get a15:46deal right here in this range on Iran,15:50you know, it starts sounding like, you15:51know, it's it's time to buy some solar15:52plays again. I actually call solar my15:55socialism play. Who was it? I was just15:57we were just reading about this on15:59solar.16:01I think it was was it a It was a Leban16:04It was Lebanon. Yeah, that's what it16:05was. Lebanon Solar. It was on Alazer.16:09And this was Yeah, look at this.16:11Qatar has announced a major agreement16:13with a French company, Total Energies,16:15to jointly develop a solar power plant16:17in Lebanon. Like, man. Uh, so like I16:22think we're going to go more in that16:23direction, especially with the AI data16:25center buildout. I'm I'm very16:28highly anticipating we are going to get16:30data centers. They're just going to get16:31delayed, right? And usually what happens16:33when you get people like uh Telerico in16:37is they end up saying things like, "Oh,16:39we want to make sure the community has16:41the right to be involved in these data16:43center buildouts." What that basically16:46means is it's very much like California16:48where they just open the door to16:50lawsuit, lawsuit, lawsuit, and any16:52jerkoff who files a lawsuit against the16:54data center basically just delays the16:56whole data center uh build out for two16:58years. And the whole name of the game17:01isn't actually winning that the data17:03center won't eventually be built. The17:05whole name of the game is delay and then17:08try to get those companies to go f it.17:10We'll just go build somewhere else.17:12That's the idea. Uh you know, Abbott,17:15keep this in mind, he's trying to imply17:17that he's doing that, too. And he's the17:19Republican, right? Uh so, you know, oh,17:22we're going to do a clean air review.17:24We're not going to issue any new17:25permits. We talked about this back even17:27on uh September 29th in a video. This is17:30very normal and you know their their17:32goal is to try to come across as oh17:34we're going to restrain them, but voters17:36are going to come out and say, "Yeah,17:38but but do we believe that Republicans17:40actually are going to restrain the data17:42centers?" And I would make the argument17:45that Republicans probably are kind of17:47going to, you know, go ahead data17:49centers, do what you got to do. And I I17:51think we could all reasonably argue that17:53that that's likely. Now, David Sax then17:56takes this alternative weird like17:58approach where he's like, "Oh, yeah,17:59Democrats delaying data centers is18:01actually a good thing because it it18:02restrains the bubble."18:05I don't know about that. Overall, delays18:08just end up increasing costs. I'm a big18:10fan of the free market, but in fairness,18:12I also don't want a data center right18:14next to where my house is or, you know,18:16where property is that we own. But18:18there's plenty of damn land you could go18:20build at in areas where people aren't18:22living. I think there's plenty of land18:24out there and we should be accelerating18:26permits for that. Uh and letting the18:28free market do its thing away from where18:30people live. Uh I I don't know. That's18:32that's my point of view. Maybe maybe18:34that's a bad point of view. I don't18:35know. Uh you know, this whole argument18:37that oh the data centers are going to be18:39able to export extra electricity. I18:41don't know about that. I I feel like a18:43lot of the data centers are going to use18:45all the power that they can generate.18:46And there's such a delay right now to18:48even get gas turbines like whether18:50they're um you know bloom energy fuel18:53cells which use natural gas but not18:56through a combustion process instead18:58through some other chemical reaction or19:00a turbine like a Genova uh you know19:03turbine or you know whatever else. A lot19:06of these are booked out two to three19:08years just to even get your power plant19:10set up. So in the near term I know19:13there's a lot of a desire to burn more19:15natural gas. I just I just don't think19:17there's capacity to actually pull it off19:19right now. So either way, I don't think19:22you're exporting energy to the grid19:23anytime soon. I think that's a cute19:25argument by people like Sachs. Oh yeah,19:27it's going to lower your electricity.19:29Nah, not anytime soon. Not with19:31inflation at these levels. So that's the19:34other issue is as interest rates go up19:36for uh on on the yield curve. So the19:3910-year for example, utility companies19:42end up having to pay more uh to fund19:44raise. And because they're regulated19:46monopolies, there's a limit to how much19:48they can actually raise utility rates.19:51Uh which is, you know, somewhat a good19:53lid for consumers, but it's bad for the19:55utility companies because they can't19:57actually fund raise what they need19:58because they can't afford it. And then20:00they can't build out enough capacity.20:02And if they can't build out enough20:03capacity, then they can't long-term keep20:05rates lower. Then there's also the20:07problem of like there's this whole like20:09data center shadow or shadow data center20:11application issue where people are like20:13trying to double and triple permit20:14everywhere. And so utility companies are20:16like, "Okay, you got to prove you're20:17actually legit." It's a whole giant mess20:20right now that's going on with data20:21centers. It's a real real issue. And so20:25I maintain no deal on Iran. Democrats20:27almost certainly sweep. And I maintain20:29it's going to be good for renewable20:30energy. I don't think people want to be20:32relying on natural gas20:35for the long term. Are we going to use20:37natural gas for the next 50 years? Hell20:39yeah. We are going to burn burn burn for20:42the next 50 years. But you know at some20:45point are we going to go all like20:47nuclear? God, I hope so. Anyway, split20:50Congress. Uh this is what really I think20:53Elon is going for. I don't think he has20:56grand delusions that Republicans are20:58going to sweep. I think the odds of that21:00are really really low. Um, we should21:03honestly look at Kowi to see if there's21:04a there's a Republican sweep category21:06here, but I think that's a little21:08delusional is sort of my impression21:10here. So, Khi Republican sweep. Uh, I21:13think gridlock is more likely. But21:16gridlock being more likely is actually21:18beneficial for a lot of the uh21:21Republican initiatives because what you21:23do is you eliminate or maybe I shouldn't21:25say eliminate, you reduce the odds that21:30you get bogged down in all these21:31investigations.21:33So if I go to midterms, balance of21:36power. Yeah. Okay. Republican sweep21:39right now has a 10% chance. So, if you21:42want to make a bet or predict that uh21:46Republicans are going to sweep, you have21:50an option here. Right now, it's there's21:53only a 10% chance that Republicans21:55sweep. I think that's probably closer to21:571%. If, however, here's how you could21:59actually play this. If you think we're22:01going to get a deal with Iran, the odds22:04of a Republican sweep will probably22:05triple. That could be an interesting one22:09to trade. You don't even necessarily22:11have to hold it, but it could be an22:12interesting one to trade. Uh if if you22:14think we get a deal with Iran.22:17Okay. So, then we have uh Republican22:21sweep. Again, I think is extremely22:22unlikely right now. Uh and even with a22:26deal with Iran, I I still think it's22:28like under 30%. I'm going to make those22:31predictions. So, no deal, 1% chance,22:34Republican sweep. Uh deal, 30% chance.22:39IMO, right? That's my take. Split22:42Congress. I think that this is, you22:44know, with a deal,22:46uh, almost certain split and that's22:50going to basically give us22:55shutdown risk,22:57uh,22:59and no big benefit for renewables,23:03uh, but but lower or or I should say23:06fewer investigation23:08blocks potentially. So, this is probably23:12where we end up with an Iran deal. And23:14that's where if Donald Trump wants to23:16limit investigations, he's going to sign23:19that paper on his desk, uh, that offer23:22on his desk. Uh, here are key states23:24that we should be watching for the23:26election. It's going to be Texas for key23:29states on the data center buildout. This23:31has to do with planned or proposed. Uh,23:34this is actually operating plus planned23:36data center capacity. So, it's operating23:38plus planned. planned you could see is23:40most of all of these here. So Texas,23:43Virginia, but the competitive races are23:45Texas, Ohio, Georgia, uh New Mexico, and23:49Nevada. This right here is starting to23:52get uncompetitive because the Democrat23:54is just way ahead of VA right now. VA's23:57just not doing well.23:59And then over here we could see, you24:01know, we'll probably go back to these24:03standoffs again and government shutdowns24:05and all that nonsense uh if we end up24:08getting either a split or a Democratic24:12sweep, although probably honestly less24:15likely to get shutdowns on a sweep24:17because they'll be able to pass funding24:19without Republicans. So, I would argue24:23that uh shutdowns less likely under the24:28sweep right here. And then this is24:31probably worst case for shutdowns. Worst24:34case for shutdown hell right here cuz24:38you know it's just going to be a mess.24:42So, that gives us a bit of an overview24:46on some of the drama here. Let's go see24:48if there's uh I think there was another24:50note here on data centers. The times we24:54went through the New York Times, we went24:55through Telerico's. See if we have any24:57other notes here.24:59Paxton needs rescuing.25:02Cornin, you've got problems. You've got25:04this leaked audio with Paxton blaming25:06the Iran war and gas prices on Trump.25:08Obviously, that doesn't help because it25:10it's giving you this sort of fractured25:14setup for Republicans in Texas. You've25:16got Trump yesterday blaming Cornin and25:19Carl Rove. If Paxton loses, he's already25:21starting to fingerpoint. We just got the25:23filings from Elon Musk. Uh the polls are25:27a little different than the betting25:28markets, by the way. So under 30, and I25:31think the split is interesting. Under25:3330, 69% of voters are going from25:35Telerico.25:37Over 65, you're 55% Paxton. So there's a25:42clear age split here where the younger25:43folks maybe because of the labor market25:45which isn't the greatest are feeling25:48pressure and and sort of see data25:50centers as as you know the the problem.25:53Uh if you look at Fox polling you're25:56split Terrico Paxton. If you look at uh26:00yuggov polling, Telerico's leading by26:02six points. If you look at uh tpo tp,26:08telerico is winning by five points. So,26:12and then obviously in the couch betting26:13markets, Telerico is winning by by quite26:15a little bit as well. Early voting opens26:18in Texas as of October 19th. And so you26:22do get early voting that's going to26:24start taking place, but those usually26:26the early voters are Democrats anyway.26:29So that's why I think, you know, the26:3120th to 27th is really that key time26:34framing there uh for what ends up26:37happening uh for the Iran deal and and26:40and that'll shift midterm odds26:42substantially. And with that,26:45>> oh man, [music] your boy Kevin just lost26:47lots of money.26:49>> If you like that video, check this one26:50out. I think you're going to love it.26:52>> Why not advertise [music] these things26:54that you told us here? I feel like26:55nobody else knows about this.26:56>> We'll we'll try a little advertising and26:58see how it goes.26:58>> Congratulations, [music] man. You have27:00done so much. People love you. People27:01look up to you.27:02>> Kevin Papra there, financial analyst and27:04YouTuber. Meet Kevin. Always great to27:06[music] get your take.
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