Prof G Markets
The TikTok Showdown, UnitedHealth’s First Earnings Post-Shooting, and a Banking Boom
Mon, 20 Jan 2025
Scott and Ed open the show by discussing the latest inflation report, Meta’s next round of layoffs, and the uncertain future of TikTok. Then Scott breaks down United Health’s first earnings call since the killing of executive Brian Thompson, explaining why the company appeared to downplay its successful year. He delves into how profit incentives in sectors tied to social goods can create harmful externalities. Finally, Scott and Ed review fourth-quarter bank earnings, explaining why the results are clear evidence that mergers and acquisitions are back. Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What are the latest trends in inflation?
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Today's number 41,000. That's how many social media posts have the hashtag TikTokRefugee at the time of this recording. Ed, what is a negative thought? What? TikTok. TikTok. That's kind of an existential one. That's like that joke I heard that a Holocaust survivor ends up in heaven and he says to God, hey, I'm thinking about telling a Holocaust joke. And he's like, no, no, no Holocaust jokes.
It's just not funny. And then the Holocaust survivor says, well, I guess you had to be there. It really gets you thinking.
Two bombs in a row.
Well, I wanted to go after the Catholic Church, but I was worried our interns are going to be witnesses in the lawsuit.
Yeah, you've never done that before.
My role model, Sam Harris, I'm totally backfiling right now, says if you're wealthy and you have people who love you unconditionally, you should speak your mind. I'm speaking my mind. That's very good. Have you seen what Sam Harris has been saying about Elon Musk?
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Chapter 2: How is TikTok's future looking?
Yeah, I think the most interesting thing here isn't necessarily the inflation data itself, but the market's reaction to the inflation data. And as you point out, the thing that has, I think, been slightly confusing people, or at least grabbing their attention, is the fact that the stock market has been sliding over the past few months, certainly since the election.
And also, as you say, the 10-year yield is rising, meaning that people are selling off their treasuries. So investors have just been anxious about the economy. And I think the question has been like, what are they specifically anxious about? Are they anxious about Israel? Are they anxious about Ukraine? Is it something to do with Trump?
And I think this reaction, where you had the inflation data come in softer than expected, and then suddenly the market ramps up and you see an increased demand in treasuries, that's basically the confirmation that the number one concerns for investors right now is inflation.
And this is the market trying to tell us, you know, this inflation thing, you might have thought it was over, but we don't think it's over yet. And this is something we cannot forget about.
And I think the hope for investors would be that Trump, as he swears in for his second term, will be thinking about this and perhaps rethinking some of his fiscal policies that are expected to increase inflation. over the next year or so. So I think it'll be interesting to look at the inflation.
And also, as you say, very interesting to look at the 10-year yield, because that's sort of the signal, like, how confident are investors in the economy, really, as you said, the adult in the room, which I think is a good way to put it.
Well, look at the trifecta here of inflation is putting a chill over immigration, both legal and illegal, tariffs, and the expectations of deficits. It's literally like, how could we invent a way to start spooking the market? And I expect the 10-year to go higher. We'll see.
Your reaction to Mark Zuckerberg's announcement, yet another announcement, he's laying off 5% of the employees.
Look, there's only one kind of person that likes Mark Zuckerberg, and that's shareholders. And I find that he just approaches his business as a new pre-capitalist. This is the part of them I respect the most. And I'm a big believer in capitalism. And part of capitalism is that there are winners and losers. And you can't reward the winners without punishing the losers.
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