Episode summary
The World You Knew Is Never Coming Back | TCAF 247
Ask The Compound
· · 1 hr 3 min · Hosts: Josh Brown, Michael Batnick · Guests: Michael Zezas
Summary
Michael Zezas argues that the market regime has changed in a durable way: globalization’s best benefits are behind us, trade barriers are likely to stay higher, and investors need to think in terms of a multipolar world rather than a return to the old Washington consensus. He says that shift has already shown up in industrial policy, reshoring, and supply-chain realignment, with examples like Intel and the CHIPS Act illustrating how policy continuity matters more than election-day noise.
He also pushes back on the idea that policy calls can be translated directly into trades. Even when a tariff outcome is correctly anticipated, markets still have to absorb earnings, valuation, Fed reactions, and sector-specific effects. Michael Zezas says that is why prediction markets and scenario analysis are useful, but only as inputs into a much messier multivariable process.
On AI, he says the buildout is still early, with huge capital spending still ahead and meaningful productivity gains likely to take time inside large organizations. He expects benefits to broaden beyond the hyperscalers, but says the market is only partly there so far. He is also relatively relaxed about the midterms, expecting more noise than policy shock, and sees AI-related employment disruption as something to watch but not yet a crisis.
Key takeaways
- Michael Zezas says the old free-trade, multilateral policy regime is not coming back, and investors should treat higher friction and geopolitical fragility as structural.
- He thinks policy matters, but direct policy-to-stock translation is unreliable because earnings, valuation, and central-bank responses often dominate.
- He sees the AI capex cycle as still early, with large-scale infrastructure spending likely to continue before productivity gains fully show up.
- He expects the AI trade to broaden beyond the hyperscalers, with more adopters eventually benefiting in earnings.
- He thinks the 2026 midterms are more likely to create short-term noise than a lasting policy shock.
Notable quotes
“our call was and is that there's been a regime change driven by shifting voter preferences”
“things are not going back to normal in fact”
“it's a multivariable problem”
“our economics team has about a quarter of GDP growth this year coming from just like the buildout of the current buildout of AI”
How the episode opens
First of all, how you doing? — We are going to have so much fun. — All right. — I promise. — I like that. — Thank you for coming. — Yeah. Thanks for having me. — So, you know who Michael is friends with? — It's not Graham. It's Colin, but I knew he came from somebody.
Colin Ro. — Yeah. — Oh, I love Colin Ro. How do you know? — My god. College. — Oh, you kidding me? — Yeah. — But I just watched on the on the on the train home. — Yeah. Larry of Arabia. — Larry. — Are you going to listen to me?
Yes. — It's four hours. You're going to have to watch it like a TV show. — I'll watch like a TV show. I watch like 40 minutes a night. — It's 4 hours. But I They digitally restored it for Netflix. And
Is that is that with Jake Gyllenhaal? — Yeah. No, it's from 1962. Everyone's dead. Some of some of the best actors who ever lived. Like literally who ever lived. And uh I'll I'll let you watch it. I won't tell you anymore.
Thank you. Thank you for — So I met Freaky Friday. — Thank you for spoiling this. doesn't sound like something I was going to put any — Lawrence Lawrence of Arabia digitally remastered for for Netflix. — So, Michael, I'm a I'm a big movie fan and to the extent that I can, I like to raw dog everything. Meaning, don't I don't want to know anything like you can't avoid the you can't avoid the trailer for Disclosure Day.
Yeah. — But I don't want to hear I don't want to look at the reviews or Rotten Tomatoes.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai capex
- data centers
- productivity gains
- prediction markets
- fed rates
Companies and tickers mentioned
- MS
- Morgan Stanley
Watch the episode
Watch “The World You Knew Is Never Coming Back | TCAF 247” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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