AI Replacing Humans, Tariffs Hurting Americans & Why Markets Feel Broken

16:27Michael Novogratz:I'm a network guy, which is why we both like Bitcoin. The dollar's network and the dollar's network effect is enormous, Michael. And then the last thing is our immigration and demographics. Despite the Trump pressure on immigration, people still want to come here. And it's a tractor beam for intellectual resources. So what do you say about those three things as a counterweight to what Ray is saying?

16:53Anthony Scaramucci:I think, you know, there's two and a half years left of the Trump presidency. I don't think things will get better in terms of U.S. appeal to foreign investors or to immigrants. I think we're going to actually we're going to we're going to have some group of immigrants want to come in. But we're losing scientists to Canadian universities, European universities, to Asian universities. We're throwing them out. And so I think we're making a horrible mistake there. But that's not going to last. I don't care if you're the next Republican or if you're the next Democrat that comes in. You're going to step back and say, okay, we cleaned up our immigration.

17:33You're going to declare victory one way or the other and get back to a rational immigration policy.

17:39Anthony Scaramucci:something that looks like, hey, let's let 2 million immigrants a year in. And let's, of those 2 million immigrants, have 25 % high education, right? Skills-based and money-based. And so you got a million and a half lottery. Let's base that lottery on geography closer to us, but spread it out. Let's have a five-year, if you've been here at least five years, there's a path to citizenship and you have four years to walk that path. And part of that path, if you're under 50, is learning English. And if you're not here for five years, if you got in in that Biden flood, you got to leave to come back.

18:18Anthony Scaramucci:Like if someone pitched that as an immigration policy, I think 80 percent of the hands would go up. Like this shit shouldn't be so complicated.

18:28Michael Novogratz:But, well, yeah, I mean, but it is. Yeah, I mean, yeah, they've made it about their significant tribes. And Biden really hurt this. I mean, not to talk politics on this, but he opened a border in a way that really got the Americans upset. I mean, 80 % of the Americans did not like it. So let's pivot to AI. We went from – you and I started this. We went from who are the winners, and we were listing different companies and so forth. But now it's about who the hell is going to get disrupted, Michael, right? Software companies, wealth management companies, insurance. We've seen asset management companies sharply sell off as we look at cloud perplexity.

19:15These others, Gemini, ChadGBT could potentially replace a lot of the – one of the smartest investors in the world called me and said, even you think Spotify has got a moat.

19:26Anthony Scaramucci:But at$9.99 or whatever it is per month, I probably get clawed to programming my own music app and just pull it off of YouTube and whatnot. I think it's going to be very difficult to figure it out. I talked to one of my competitors, a collaborator, competitor, friend. And he said they've already moved to 100 % AI coders and they are producing about 10 times faster than they were in terms of rolling out new product. I think this Claude code that came out, what, three weeks ago might be the most important thing that we just hit that inflection point of, oh, shit. And a year ago, I used to do this trick.

20:14I would say, hey, what car did you drive 20 years ago?

20:18Anthony Scaramucci:Often people have the same version. Well, I had a Suburban. I have a Suburban now. How much better is the new version of the Mercedes than the old version or the new version of the Lexus than the old version? And they'd say, eh, two times better. 20 years, two times better. We're now doing 10 to 20 times better every year. Well, 20 times, 20 times is 400 times. If you add another 20 times, you're in 8 ,000. And so the exponential growth, we've never seen this in our lives. And we don't understand it.

20:49Michael Novogratz:No, I've never seen anything like it. I mean, I could go on to Cloud. I paid the 300 bucks, whatever it was supposed to pay to get all the exclusive things and content. And I mean, I ask you questions. I feel like it's the smartest person in the room and it's got insight. And Cloud, to me, or Claude, however they pronounce it, is an incredible writer.

21:10Anthony Scaramucci:I thought you were going to call it Claude. day.

21:13Michael Novogratz:Yeah, well, we could call it that too. I mean, I could call it your job is about to be over. I mean, that's the, so what do you say to a young person? You've got kids that are adult kids. I have adult kids. How do you differentiate yourself? How do you make this distinctive?

21:30Anthony Scaramucci:I think this is, in a weird way, the time to double down on a liberal arts education. You want to learn how to think. You want to learn how to read critically, think critically, write critically, and more important, communicate. This is going to be the age of the storyteller. And so you and I are both storytellers. And so I think we've got some moat. but the the hard skills accounting law anything technical is going to get replaced uh coding and so how do you become a human again like what does it mean to be human and those humanistic skills and how to articulate what things feel what we should have ethics all of that stuff is going to become more important um i know a lot of people said oh fucking liberal arts education, you should use it as toilet paper and wipe your butt with it.

22:30Anthony Scaramucci:I think they're exactly wrong. I think they're going to come back to be haunted.

22:34Michael Novogratz:You know, listen, it's an interesting thesis because as things swing back the other way, if you can have these computers do most of these tasks, you're going to look for experiences. You know, the experiential economy is going to come into fold. And all of a sudden, people that are entertainers, people that have iconic voices, people that are able to create art are going to be the people that are gravitated to because the other stuff is going to be done by the computer you know yeah it's a it's a it's it's going to be the difference between computational excellence and human understanding and understanding the human being you know i i i mean this is a passion i mean it's a i i had a rash on my leg probably I shouldn't admit that too much information.

23:23Michael Novogratz:I took a picture and I, I put it in. They said to me, ah, you must've ran into some poison ivy, which I, it turns out I did. Cause I was walking. Yeah, that was poison ivy. Sure, sure it was. Well, I don't know. Maybe it was something worse, but it went away with whatever, whatever, whatever Chad GBT told me to put on my leg. It was completely gone away. Okay. I think it's become an urgent care mechanism.

23:49Anthony Scaramucci:So this is going to be our, the first doctor is going to be your phone, 100%. I use it all the time. Yeah.

23:55Michael Novogratz:I mean, even my doctor told me, I did that cardio thing and thank God everything's good. He said, you know, we ran this through AI to simulate what your arterial structure of your heart's going to look like in 10 years. I said, you did? I'm a guy. I mean, has anyone ever done that before? No, we started doing that about six months ago. So the whole world is changing. And I guess the big question is, other than the liberal arts education, what are you telling your employees at Galaxy? What are you saying about this? Embrace it.

24:29Anthony Scaramucci:One of my peers, friends, he already – he looked at Claude. He got so scared. He put his company on a five-week plan. Week one, we're doing X. Two, we're doing Y. And we're doing – we're looking at the similar stuff right now at Galaxy. I was on the phone all weekend long. You know, my president was playing with Claude himself. One of the problems companies have is like the first thing you want to do is, hey, go into all my emails and tell me what Anthony calls. Pull up every email from Anthony and give me where I am with him. Well, a lot of these programs, your IT people for security reasons are very scared that you let it into the company treasure trove.

25:10Anthony Scaramucci:And so the coders use it, but it's hard for your frontline people to integrate it with your firm and figuring out how that works better. Like we got to get there. Right. The clean my contacts up, I got a guy full time trying to fix my contacts. And you kind of think that's all going to be AI at one point.

25:33Michael Novogratz:Listen, it's incredible the changes. is my last topic for today.

25:40Anthony Scaramucci:We're actually monitoring who in our firm uses the AI. Because I'm like, as you have to use it a couple hours a day, you're never going to learn. Right.

25:47Michael Novogratz:You're almost rewarding to people that do, is what you're implying with that statement, right? You know, get out of the habits you're in and get some AI in your life. President Trump is repeatedly telling the American people, and go to the New York Times, the Wall Street Journal, that the countries are paying the tariffs. A lot of people in our country think, well, who's paying the tariffs? Well, China or the UK, etc. But, you know, Michael, that's not true. You know, we both know that, that the Federal Reserve Bank of New York, the Columbia University finds that 90 % of the tariffs costs have fell on U.S.

26:29Michael Novogratz:firms and consumers through November of 2025. Okay, so even by November, 86 % was stillborn domestically. Yes, companies did eat some in the beginning. General Motors famously ate them in the beginning, etc. But the average tariff rate in the United States went from 2.6 % to 13%. You and I both know that that's basically just a consumption tax on the American consumer. And then guess what happened? And the import prices increased approximately 11 % due to tariffs. So do you think tariffs – I mean, have you changed any of your views on tariffs? Are your views still consistent?

27:11Anthony Scaramucci:There was a debate a while ago. Should we kill the income tax and put everything to a VAT tax, right, which is a sales tax? People say, well, you know, like you can tax people lots of ways, right? Tariffs is a quiet way to tax people. He's raised a ton of tax revenue from it, right? And Trump was like, I'm going to give it back. I'm going to give you rebates. I'll kill the income tax. And so I think if I was looking at a government that needs to raise 20, 25 % of GDP each year in tax, I'd look at all the different ways to raise money in tax. I would say what resonates with American ideals. And I have a core principle that my tax code would be fair.

28:06Anthony Scaramucci:And tariffism is certainly a weapon of tax. And it's a fair one if you want to use it, just like a sales tax is, just like an income tax is, just like an inheritance tax is. And so what happens though is we have this complete broken tax code that special interests have worked over for 50, 60, 70 years. And so you've got things like carried interest for hedge funds and private equity funds, private equity funds and oil partnerships that make no sense. Treat us like a capital gain instead of income because the lobby is good. You've got step-up basis for real estate just because the real estate guys have a good lobby.

28:51Anthony Scaramucci:And so we have all these things that make the tax code unfair. And we have very few people that are honest with the American public about where the taxes get paid. And it is complicated. And so, yes, I think tariffs are a tax. I think they've been an effective tax, right? You've passed to the consumer. The economy is still growing at 4 % GDP. now what's not as obvious i think from the big numbers is for most people in america it doesn't feel like we've got the stock market on the high four and half percent gdp and inflation low it feels worse well one reason is because we're paying the tax through the tariffs right and so the trump economy sounds like the biden economy is like the people at the bottom think it sucks it's that what they call a k-shaped economy and tariffs is part of that but in some ways thank god we have them because if we didn't

29:52Michael Novogratz:we would even have a bigger deficit hey listen you know we we we need to tax ourselves more i mean i'm i'm i'm completely understanding of that i'm just would would like more clarity for the american people you know we're talking about a bitcoin clattery act how about a clarity act for what we need to do as a clarity and honesty clarity and honesty and that's that's not that's

30:13Anthony Scaramucci:a bipartisan statement.

30:15Michael Novogratz:Yeah. And so but, you know, the Supreme Court, you know, the rumor out there is that they're going to rule against Trump and the authority. But Roberts is canvassing the court. He doesn't want this to be a five four decision. He's probably not going to get it to be nine zero, but he's he's looking seven two or at least six three before he renders the decision. But, Michael, I mean, is that going to stop the tariffs? I sort of feel like Trump will find other places in the government other rules to pull the levers of tariffs what are you hearing on that

30:48Anthony Scaramucci:the scariest thing about trump in the first administration was at the very very end the supreme court said hey you could only have temporary secretaries for six months and after that they've got to vacate you've got to fill them with someone who gets approved by congress right that he realized oh just read the supreme court doesn't have an army they don't have a police force what are they going to do to me right right beginning of a constitutional crisis this administration doesn't seem to care about what the supreme court says they don't seem to care about what federal courts say they have violated more federal court orders than any administration in history i think you could combine all the administrations and they've violated more of those federal court orders and so it's a great question i don't know if he's going to care you know like we are we are in such uncharted territory uh in how the three branches of government are holding each other accountable right they're trying but no one really is holding the executive branch accountable and you know as a as a market participant you have to understand that listen if they say tariffs no good what's my first trade uh stock higher right that's a big rebate to the u.s uh consumer a monster rebate right that's not going to come to the consumer directly it's going to come to corporations stocks are going to go higher period uh probably yield curve steeper dollar weaker because our deficit is going to get much and maybe bitcoin higher.

32:33Anthony Scaramucci:And so as a market participant, see that headline. Those are your trades. As an American, shit, what do we do with 40 trillion now predicted to go to 64 trillion in debt? Like that ain't good.

32:50Michael Novogratz:Your economic dashboard, you're looking out while you travel in the world. You look at our GDP growth relative to other countries. You're looking at this tariff issue, other things going on, Bitcoin, et cetera. What do you see on the horizon right now? What do you like and what do you dislike about what you're seeing on your economic dashboard?

33:11Anthony Scaramucci:I think it's harder to have supreme confidence in the three to six month view. I do think, right, foreign stocks outperform US stocks this year. I think wealth gets preserved. The reserve currency is a basket of the best hundred global stocks that rotates, right? Because I think money, there's so much money, you're going to still debase currencies everywhere. And so how do you protect your wealth? You want to be in equities. Literally, I need to make a token that's the wealth protecting token. That should be the stable coin for people that want to protect their wealth, right? That's a sad statement because the dollar traditionally has been that.

33:52Anthony Scaramucci:And I don't think the dollar is going away anytime soon. but the dollar's weakening. It's weakening versus lots of stuff. And so I'm probably still net long global equities. I'm net short the dollar. I think dollar yen could go all the way to 130, right? We've got a really strong new conservative prime minister who just was given a mandate. She's a nationalist and she's going to build up the Navy. There'll be a little friction with China. She's going to be tougher on immigrants. You saw what she did already with the Muslim population, said no mosques, no halal food, no call to prayer to wake me up in the middle of the night.

34:41Anthony Scaramucci:You can worship just quietly. Don't try to impose your religion on our country. That resonates with a lot of people all of a sudden. It's not great because it starts, while you might agree with it, If you do it too loud, it goes into racism. And where that line is between I want to protect my culture and I'm a racist is complicated. And so I think she's going to be like the Maggie Thatcher of Japan. And I wanted to bet on Maggie Thatcher. I bet on Ron Reagan. I'm a little bit of a Republican. That was our era. You were in the American military.

35:17Michael Novogratz:So you had to like Reagan a little bit.

35:20Anthony Scaramucci:I worked in the Reagan White House. right no you told my first job uh and listen my first experience with foreign exchange was over in germany my parents got a mercedes and i was like how'd you get a mercedes because the dollar was so strong yeah owning a mercedes in our house that was a big freaking deal well

35:39Michael Novogratz:i think i think i think that we're we're heading into more uncertain territory uh uh what i what i had predicted for 25 didn't happen uh and i'm now revising my predictions on in in 26 you know i think you're a bear i'm a little bit of a bear yeah a little bit of a bear yeah i'm look i'm looking out and i'm saying to myself unless you're telling me pal cuts and and warsh comes in he cuts warsh is gonna go and and and and we've got a surprise economic data uh more surprising than what I'm currently looking at. Yeah, I'm a little bit of a bear. I think things drift lower here. My whole office is bearish.

36:21Michael Novogratz:As people get more disenfranchised.

36:23Anthony Scaramucci:And I fight with them a little bit. I hope I'm wrong. So the one thing that scares me to be bearish, and I got bears in my office, and I wish we had a charting machine on this podcast. If you pulled up the S &P 500 chart and you look how many times it's bounced off 7 ,000, markets, great markets, bubbles don't end like this S &P has shown. Rolling top. This is a rolling top. Great markets don't end with rolling tops. They end with freaking spears to the sky. Right. And it would be weird if this, the greatest of all bubbles, the AI bubble with the technology that's going to change everything, ends with that rolling wimpy top.

37:10Anthony Scaramucci:And if you go through 7 ,000, every bear is going to get stopped back in. And so in some ways, if you could have free options, the option I'd want is the December 7 ,050 S &P call for a billion dollars. And I'd sleep like a baby because I don't care if it doesn't go above 7 ,000. Then you're right, it might grind lower. In some ways, that number in Bitcoin is 100. now it's 80 first but it really for the bull bitcoin bull market to start again you gotta you gotta crack 100 and it's 7 000 on the s &p you can take those numbers and bang them let's see

37:49Michael Novogratz:what happens we'll be back next week and uh where are you right now if you don't mind me asking jackson hall wyoming oh good oh good came out to ski for two days god finally got some snow oh it's coming in all right good all right god bless you enjoy i'm in the cayman islands which is an annual February trip for our family. So I'm excited to be there. Nice warm weather. Go enjoy the skiing and we'll be back next week.

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