E112: Is Davos a grift? Plus: globalist mishaps, debt ceilings, TikTok's endgame & more

The controversy over Ron DeSantis blocking AP African American Studies in Florida will ultimately benefit him politically; opposition to state-funded CRT-style curricula will prove to be roughly a 70% popular position with Florida voters once polling and political outcomes are observed over the following months/years.

“Make a prediction right now. This will all redound to his advantage... if the question is whether CRT is going to be funded by the state and he's preventing that again, I think that'll be a 70% popular issue. So let's just wait and see how this plays out.” View on YouTube

Nikki Haley will unexpectedly win the 2024 Republican presidential nomination, emerging from a relatively weak initial position in early 2023.

“I actually I think Nikki Haley's going to come out of nowhere and win this thing.” View on YouTube

Nikki Haley will not win the 2024 Republican presidential nomination.

“She's not gonna win the Republican nomination.” View on YouTube

Future Republican Party polling (after January 2023) will show Glenn Youngkin as the clear third-most popular national Republican figure, behind only Donald Trump and Ron DeSantis.

“Based on interest in the party. And, you know, I've talked to people and I think the polling will eventually reflect this. He's very talented.” View on YouTube

Glenn Youngkin will launch a campaign for the 2024 U.S. presidential election, since Virginia’s single-term governor limit leaves him no choice but to "make a play" in 2024.

“Virginia has this wonky one term term limit on governors. So you know he's got no choice but to make a play in 2024 because he's going to be termed out anyway.” View on YouTube

Over the next few decades following 2023, the world will move away from peak globalization and will spend that period searching for and converging toward a new equilibrium level of globalization that is lower, with more local production and higher but more broadly shared prosperity.

“And I think that these next few decades will be about finding it. We have decided it's categorical that that level of globalization that we have had this unitary, singular, monocultural way of thinking about things is over.” View on YouTube

The global political trend away from Davos-style globalist leaders toward more nationalist leaders prioritizing their own countries’ interests will continue over the coming years beyond 2023.

“And I think that the resistance to the imposition of their, again, their globalist policies... has been receding in favor of more nationalist leaders who want to promote their own country's interests. And I think that that trend is going to continue.” View on YouTube

In the 2023 U.S. debt ceiling standoff, Republicans will ultimately agree to raise the federal debt ceiling. The deal will allow continued deficit-funded spending to support deglobalization-related domestic investments, particularly in red states, and this economic-competitiveness argument will be key to getting Republicans to capitulate.

“people will him and her, but ultimately they'll capitulate, they will raise the debt ceiling, and they'll continue to fund this transition away from globalism. And I think that's the argument that will get the Republicans over the line, because it's going to bring a lot of spending and stimulus and jobs to, frankly, a lot of red states that would otherwise kind of continue to wither and die on the vine.” View on YouTube

From early 2023 onward, TikTok/ByteDance will face escalating political and regulatory pressure in the US that materially harms TikTok’s US business and ByteDance’s enterprise value, including a significant pullback in advertising demand as advertisers come under political pressure to reduce or stop spending on TikTok.

“I think this is really bad news for ByteDance… So I don't think this is going to end well for TikTok. And I think the goal, if I were any of these people on the cap table, would be to sell it in secondary to somebody else and get out. I think the next big shoe to drop is going to be advertisers who come under a lot of pressure… So I think it's very, very bad. I think the enterprise value of this company is quite challenged, and these guys should try to sell and get up.” View on YouTube

Political and regulatory hostility toward TikTok/ByteDance in the United States will intensify noticeably through late 2023 and further increase going into the 2024 election year, making the company’s operating environment in the US significantly worse than it is in January 2023.

“You guys have to remember this is the first 3 or 4 weeks of 2023. Wait till we're here in September and October and November. Wait till the election year starts. It's not good.” View on YouTube

US policymakers and ByteDance will pursue and ultimately implement a restructuring in which TikTok’s US operations are placed into a separate US-based corporation (TikTok US Inc), with all data and algorithms controlled and hosted in the US and ByteDance retaining only a passive, non‑voting economic stake.

“If TikTok US were set up as TikTok US Inc, it's its own c-corp. It's based in the US. And ByteDance owns passive, non-voting shares in TikTok US Inc… that asset is entirely managed. Run… That should be a goal in the US. And I think that's what it's going to do that.” View on YouTube

ByteDance will ultimately be forced, due to US regulatory and political pressure, to sell TikTok’s US business to a US-owned private equity consortium at a heavily discounted price on the order of roughly $10 billion, substantially below its prior implied valuation, with ByteDance having little practical choice but to accept such a deal.

“What if ByteDance sold TikTok US to a US owned private equity consortium, a US private equity consortium that effectively bought TikTok US and operated it here in the US?... That's exactly what should happen. But my point is those people are smart enough to not pay full price. They'll say you're fucked. That asset is worth zero. I will buy it for $10 billion. Take it or leave it, and you know what they'll have to do? They'll have to take it. So my point is the equity value is so impaired in this thing.” View on YouTube

Within the coming years after January 2023, some form of major structural transaction for TikTok in the US—such as a spinout, sale, or similar ownership/oversight restructuring to US-controlled entities—will occur, rather than TikTok continuing indefinitely under its existing ByteDance-controlled structure in the US market.

“Okay, well, look, something like this is going to happen, so it'll be interesting to watch.” View on YouTube