Title: The Fed, Oil, and a Trade War With Canada Investors Aren't Pricing In
Show: RiskReversal Podcast (RiskReversal Media)
Hosts: Dan Nathan and Guy Adami (two-host show — no outside guest)
Date: 2026-09-07 (published; recorded Friday 2026-09-04, a little after 10:00 a.m. ET, the morning of the August jobs report)
URL: https://youtu.be/zuTHfkV8H6Y
Length: 33:49 (2029s)
Note: Auto-generated captions, cleaned. Fillers (um/uh/you know/I mean as interjections) and stutters/false starts removed; wording otherwise verbatim and timestamps unchanged. Auto-caption name garbles corrected: "Worsh/worse" -> Warsh (Kevin Warsh, Fed chair), "Bessant/Bent" -> Bessent, "Ducken Miller" -> Druckenmiller, "D'Amico" -> Adami, "Koshi" -> Kalshi, "Kedrosky" spelling normalized.

(00:02) Hi, welcome to the Risk Reversal podcast. I'm Dan Nathan and that is Guy Christopher Adami. Hi Guy. >> I am Guy Adami. How are you, Dan? >> I'm doing great. I had a nice long weekend. Well, actually I haven't had it yet cuz you and I are recording. This is Friday. >> We don't want to try to fool the people.
(00:17)  This is a Friday at a little after 10:00 a.m. on East Coast. >> Yeah, I'm just hoping that you had a nice long weekend. How's that? And we celebrate our people who do the labor. So >> Aren't we all laborers in some way, shape, or form? >> I am laboring through this week. I think this is like our fifth podcast.
(00:32)  While we enjoy it very much, we're still just kind of closing out the summer here. So, maybe we thought we'd get a little R&R. >> Do you consider our voices like our working tool? >> I would say our brains. I would say this thing, if you're watching on YouTube, is obviously a pretty good tool there.
(00:50)  They call that the money maker, Guy Adami. All right, listen. We just got done looking at the all-important August jobs report. We're going to go through that a little bit, some of the market reactions. Yields are not doing a whole heck of a lot. You do see gold coming back in a little bit. The stock market really didn't know what to make of it.
(01:08)  You saw some kind of movement one way or another. This week we're going to have Oracle and Adobe earnings, which might be interesting. More on the Oracle side, Guy, cuz that's probably the clearest connection between what SaaS and where it sits as far as AI build out and all that sort of stuff that we've been talking about.
(01:26)  Today some interesting price action. I think it's worth noting. Yesterday we were talking about the raging Mag 7 and the weakness in the semis. And now that's flip-flopped today for no apparent reason. The SOX is up as I'm looking right here nearly 3% or a little more than 3%.
(01:42)  Where do you want to start? >> Well, let's start there because you said no apparent reason and I agree with you. A lot of times we try to find reasons why things are happening and we search for these things because you feel it necessary to have an explanation, but sometimes there may be no explanation. By the way, this has been going on for a while.
(02:01)  It's been a few months now where we've seen days of down 3% in these different ETFs and indices, and on the flip side, up two and a half, 3% the next day, seemingly on nothing. What I think is going on, if I'm trying to read the tea leaves, the jobs number was good, which makes a rate hike more feasible, I guess.
(02:23)  Maybe there's some interpretation of the market that if again, this puts the Fed further in play, we're going to get away from interest rate sensitive things, and maybe get back to things that are not nearly as dependent upon interest rates. And maybe people think that semis are that space.
(02:39)  And that's just me trying to read the tea leaves, not suggesting I'm right, but that's as plausible an explanation as any that I've heard. >> Yeah, and I guess that makes sense to me, but I'm also looking at a VIX guy that's about to print 14, right? And so, on the year, going back a year, Christmas Eve, that would be Dec 24, it printed 13.38, so that is the 52-week low, and just the level of complacency, I think is very high, especially when you consider the fact that you're seeing
(03:12) this volatility within sectors in technology. Why are we so focused on technology? Well, obviously, it makes a huge part of the major indices, but there just doesn't seem to be any fear, and we got through earnings season, and I think the narrative coming out of it was that we had 20-plus percent earnings growth.
(03:31)  We haven't seen that in a very long time. There's optimism that is going to continue. We had John Butters from FactSet in his Earnings Insight blog right on Friday that the last two quarters, through the first two months of the last two quarters, you've actually seen earnings estimates rise. You usually see it the exact opposite way.
(03:52)  So, you're seeing strategists, analysts, that's what I think. Basically not really worried about what might be headwinds and we have lots of things going on. We have the macro moving around. We have geopolitics. We have a consumer that's under stress. So, that's what I think. So, I think there's money to be made on a short-term basis if you're willing to come in and out of software and semis and Mag 7, that sort of thing.
(04:13)  But I don't know. So, let's You want to talk about the jobs report because I think heading into the print especially a week on from Jackson Hole, I think a lot of folks looked at what Fed chair Warsh had to say and walked away, it seemed pretty hawkish, right? For the most part.
(04:29)  I don't know pretty is the right word. Why don't we just put a bow on that and then where we are today with the jobs report? >> Well, for somebody and this is I'm speaking about myself that has thought the labor market is deteriorating, today's number obviously makes me look somewhat foolish. So, let's break it down a little bit.
(04:45)  August jumped by about 160,000 jobs. I think the estimates were 55,000 and the prior 2 months, I think were revised up by north of 50,000 jobs. So, private sector was sort of in line, but here's where I think if you really want to say, you know what guy, you were wrong, participation rate was actually better.
(05:06)  So, more people coming back. So, this is a number at least for August that absolutely surprises me, which speaks to maybe a labor force that's not nearly as not dire, but not nearly as I don't know what's the word I'm looking at, tenuous as I may have thought. Now, look, you can't just, again, 1 month is not a trend make because we've seen other months where things weren't as good, but this month in a vacuum was pretty damn good jobs report.
(05:35) >> Yeah, if you're looking where there were jobs, it was basically in the hospitality industry, that sort of thing and a lot of the narrative, when we had June and July, what there was surprising underperformance in those spaces despite the fact that we had the World Cup here.
(05:51) The one thing I'll just say guy when you say tenuous and by the way you were wrong. The fact that you've been saying that there's going to be a weakening labor market. There's no way to look back over the last year guy and say that it's been gangbusters, and the one thing I'll just say is I'm looking at this report average hourly earnings up 3.
(06:12) 1%, that's basically flat, it's actually down a little bit at 3.2% last month. Well, look where inflation is and that's where we're going to get to on Friday, 3.4%, right? So you're basically and we talked about this and much smarter people than me have been making this point is that inflation is eating up all wage gains, right? And so that's why this is going to be a really difficult one when we get to the CPI then we're going to get
(06:45) to the Fed meeting on September 16th. This CME FedWatch tool guy did not move a lot. I think it was like 64% for 25 basis point hike in September. I'm looking at it right now. It says like 60 and a half. So does that surprise you cuz we have a 10-year at 4.77 right now. >> Which I think it's going to continue to go higher.
(07:05) We've had that conversation so I won't bore people although that might be too late. But I think part of the reason again, this is just me trying to read tea leaves that the CME FedWatch tool may be ticked lower a little bit is because once again, the president is talking about the need for lower interest rates.
(07:22)  So say what you want. The administration carries a pretty big stick. So the market might be sniffing out that President Trump and the administration can continue to talk about the need and actually the reasons why rates should be lower in this country vis-a-vis the strong economy at least according to what they say that it's going to be really hard as you've mentioned for Kevin Warsh to move in terms of a rate hike ahead of the midterm elections.
(07:48)  So, there's so many things at work here. Again, I've been saying this for a while. I think the constant back and flow nature of the data suggests the Fed should do nothing at all. And today's number, by the way, has not changed my view. I think when I say stay the course, it means there's no reason to cut or raise rates for the foreseeable future.
(08:08)  And if you look at the way the market's trading, I think it's come to the realization that might be the best way of doing things at this point. >> What you just said though, Guy, is exactly what Kevin Warsh, when he was coming into the Fed, had laid out about how they were going to operate or how he was going to operate, right? He was going to listen to the markets, he was going to look at the data, right? And they're going to make decisions based on that.
(08:31)  And I guess if you're looking at the data, it's about as clear as mud what they should do. But I think more importantly than the data, more importantly than what Kevin Warsh has said that he wants to run the Fed, like the way he wanted to run what he does, it's the president lording over all of it, right? And so that political pressure at a very key time.
(08:50)  Think about this. We're almost what, 6 weeks to the midterms or maybe a little more, that sort of thing. And so the idea that you come into the Fed and whatever you do, if it is a mistake, if there are political repercussions for that, you are tagged with that. Think about that. That is going to be like a scarlet letter for a long time.
(09:13)  And don't think for a second that even though Kevin Warsh is one of those guys who was a very popular choice, he was right out of central casting, like Trump likes, and all that sort of stuff, he'll be dead as a doornail, man. You know what I mean? For the next whatever years, that sort of thing. And so, you tell me that that doesn't factor into Warsh's psyche.
(09:33)  Look at what happened in the last year or so. They got some crackpot guy who's doing the housing department or something like that, digging up stuff on a voting Fed governor. And they basically brought charges against her. They didn't bring a lot of receipts for that. So, Kevin Warsh is not going to feel that, but man, that would put a lot of pressure on the Fed.
(09:54) >> No, look, as a human being, obviously, we all are susceptible to those types of feelings. I agree with you there. And he's obviously keenly aware of what's happened in the past and to a certain extent what he's gotten himself into. So, I think your point is well taken. I do think and this is just my opinion.
(10:14)  I do think there's an autonomy to him that's going to be able to stand in the pocket in the face of all these things going on around him. But I also think he's smart enough to know that, hey, I can talk hawkish here because I can, but I don't have to act. And by the way, cuz Karen said it to me on Fast Money before the show on Thursday night, there are more people that are starting to write about if the Fed were to raise rates, let's just say they were to raise rates, that actually might be a calming force to the bond
(10:44) market. So, in some peculiar fashion, you might actually see longer-term rates go down on the back of a Fed rate hike, which is something I've been saying for a while. I know that's completely counterintuitive and I'm not suggesting I'm right, but there is a chance that the market would say, "Hey, wait a sec.
(11:01) We have some adults in the room here. We're not going to start to challenge them vis-a-vis the long end of the curve, and then things actually might calm down." So, I'll just throw that out there as well. By the way, Demi Moore was a great Hester Prynne. Back to you. >> Yeah, I mean, she had >> No.
(11:18) >> Do you know what year Nathaniel Hawthorne wrote, excuse me, The Scarlet Letter? Just throw a number out. >> 1794. >> That's not bad, actually. It was 1850, but well done by you. >> You saw where I was going there. >> Not really, but >> Not really? Well, that's an interesting point you make.
(11:38)  You raise 25 basis points, 30-year comes in a little bit and we're what? Five and a quarter right now. We're basically five and a quarter when the Treasury did that little twisty sort of thing. So, how would that raising 25 basis points by the Fed and the inclination by the Treasury to continue to, right? So, issue short dated, buy longer dated, don't those things kind of cancel each other out? >> 100% and that's the point I made earlier on Fast Money and we've talked about it on our shows
(12:09) that in some ways what Treasury did a couple weeks ago sort of boxed the Fed in a little bit and people have said that Treasury and Fed are on the same page effectively Scott Bessent and Kevin Warsh. Maybe they're on the same page, they're not on the same chapter is the point that I've made or the same paragraph and I think that's true.
(12:29)  I think it somewhat counters what's going on and by the way, earlier this week we definitely saw I don't know anything for sure, but we definitely saw some sort of intervention in the yen. Dollar yen got down about 155 and change having been sort of either side of 160. That seemingly came out of nowhere. I'm pretty well convinced the Japanese are going to raise rates in the month of September and I also think it gives people something to think about over this long weekend in terms of okay, they're clearly
(13:00) there are warranted concerns out there that people in positions of power have acknowledged and are trying to do something about and we're going to try to figure out how to game that out and what's amazing to me and you said it earlier, with all those things you have a VIX that's almost below Dan 14.
(13:19)  [snorts] >> You know, maybe crude oil and our friend BK Brian Kelly used to say this, maybe oil's the new VIX and he said that at a time where well before >> the BK. >> We're going to see BK. BK is on the show. If you're listening to this on Tuesday, BK is going to be on CNBC's Fast Money 5:00.
(13:35)  Yeah, he's going to be on with us, Guy Adami. And let's just talk about the volatility in crude. When BK used to say that, there's been times where the volatility index on the S&P 500 just hasn't been a particularly interesting tell, right? At some point, you do see correlations go to one-ish.
(13:56)  If you saw a VIX up at 25 from 14 in a very short period of time, that would likely mean that everything's going down at the same time, right? And we don't see a 25 VIX particularly often, but if you go back and you measure it against correlations within the S&P 500, they are correlated. Okay, so let's just put that aside.
(14:15)  Crude oil though, and again, it's been going back and forth on these headlines. It feels like the narrative has clearly changed, Guy. It just feels like this is something that the Iranians are digging in, our allies in the region are super pissed off, and nothing's going to change between now and let's say mid-November or something like that, and maybe through year-end.
(14:36)  And I do think it's interesting that I think J.D. Vance said this the other day, and it is interesting to note. I don't know if you know this, they don't have a defense department briefings anymore. They don't exist, and we're in the middle of a war, right? And they haven't had since the press secretary left, I think a month ago or so, they haven't had White House briefings.
(15:00)  Okay, so a lot of this we're literally taking off of Truth Social from the president. And I guess J.D. Vance finally did something in the press room or whatever. This was maybe Thursday, and he said, "It's really up to the Iranians when this is going to end." >> So, I think his point there was and again, I'm just trying to understand what he was trying to make.
(15:23)  His point was as long as they continue to send missiles to ships and stuff. Until they stop doing that, this hasn't ended. So, I think his point, whether it was taken correctly or not, was we can't control what they do in terms of the once they stop sending missiles is a time where we can have a conversation to end this thing.
(15:44)  But, until then, it's up to them. Now, once again, I'm not saying whether I'm right or wrong, but that's just what he's throwing out there. >> Guy, it's so stupid. We started a war, right? And so, you're going to say >> I'm not saying >> that the not you. One will say that the country that we attacked, it's on them when the war ends? Like what are you talking about? Wars are basically two sides shooting at each other.
(16:09)  Well, the one that attacks has a motivation, right? And the one that is being attacked, they defend themselves, right? And this is just pretty generic. I'm not taking sides. Obviously, I want the war to end. I want our people to be not in harm's way. All that sort of stuff. But, if you start a war, you finish it.
(16:28)  You don't let the other side who's just sitting there lobbing one-off things or whatever say, "Hey, listen, when you guys are done doing that, we're going to be done." What does that show >> I think that's the point that other people have made that that's sort of an odd way to look at the situation that you just outlined.
(16:45)  And again, that was my interpretation of what he said. I'm not agreeing with it. I'm not disagreeing with it. I'm just trying to understand where he was coming from. But, the point about energy is, and this is the point that I've made for a while, the structural change in the energy market is exactly that, a structural change.
(17:04)  The world has now come to realize that this is in our own national security. Whatever country you want to talk about, for us to get our stuff together in terms of our energy dependence, wherever that comes from. So, yes, the energy market is absolutely structurally changed. Doesn't mean that crude oil is going to 100, doesn't mean it's going to 60, but what it does mean is the companies, the publicly traded companies that service the sector are absolutely in play.
(17:28)  And you've seen that, today notwithstanding, you've seen that over the course of the last few months. XLE basically a new all-time high earlier this week. OIH is nowhere near its all-time high, but we're approaching the levels that we saw earlier this spring when crude was north of 100. So, and we've talked about the refiners till we're blue in the face.
(17:49)  So, that's why I think the energy sector is interesting. And again, I've said this, I'll say it again, it has nothing to do with the price of crude oil as much as people want to make it that linear. >> Yeah, all right. So, here's a narrative that I think is dumb, and I'm not saying this is a narrative that you've put forward, but >> Spouse.
(18:07) >> So, we have the war, right? And the war is clearly putting upward pressure on the commodity, right? Before the war started, we had a six handle on crude oil per barrel, right? And so, here we are, we're in a war that we really don't have much control over when it ends, right? Let's just be clear on that.
(18:25)  And the president is willing to say, "Hey, listen, we're going to put up with higher gas prices, right? Because we have a goal here." Well, the goal is not pretty, it's not well defined anymore. We've kind of moved the goal post, right? So, that's fine. Okay, so we have this upward pressure on gas at the pump. But then we also have a trade war with our second largest trading partner who actually is our biggest, basically we import more heavy crude from Canada than we do from anywhere else.
(18:56)  And you talk about energy independence, and this is the thing that I think is dumb, okay? So, we are energy independent because we produce more crude than we use. That is simple math. Is that fair, right? Okay, so if we're bringing in this heavy crude that gets refined down in Texas for the most part, right? And then that is leading to our energy independence, well, if we have a dial up, a tit-for-tat, the president or Treasury Secretary, they're threatening 50% tariffs or something January 1, right? The economic D-Day,
(19:29) okay, well, that economic D-Day, can I tell you something? The Germans had no idea when the allies were going to land in France. They just didn't. There was all these decoy actions. You ever see this sort of stuff? They had inflatable tanks and stuff like that.
(19:45)  They were putting over in Belgium and everything like that. So the Germans thought we were maybe going to come up from the north or something like that, okay? And you know who lost next to the Americans or actually the highest per capita casualties on D-Day? >> Canadians. >> Yeah. And so my point is we are not energy independent if we are in a trade war with our ally, with our largest trading partner, which is contiguous to the United States.
(20:12)  And so there's a lot of things that could go wrong here, guy, and I'll just leave it at this. Until we are in control of when this war ends, until we have some sort of clarity on whether D-Day happens on January 1st with Canada, okay? Then there's going to be an underlying bid for crude oil. It's just that simple.
(20:30) And there is an uptrend if you're looking at it for the last few months and you can attach some points and it gets you to about 82, the 200-day moving average is in and around 80 bucks. And so maybe from a technical perspective, that's the floor here. >> Yes. I agree with everything you said.
(20:48)  I was familiar with the whole inflatable tanks. There was obviously a lot of deception around what happened back then. And to your point, the reason why using D-Day in the capacity that they're using it is that was a I don't want to say a sneak attack, but that was an invasion that was done literally under the cloak of darkness.
(21:07)  Whereas this one they're sort of telegraphing. So, well done by you. I like history, by the way. >> Have you ever been to >> I've not. We've talked about going there. I would break down in tears if I did. And it's Well, there's nothing funny about it, but last weekend this is how, you think I'm this Neanderthal, which I am, but we were in the city over the weekend, and when I see certain things we went to one of the engine houses across down the street from Balthazar. I don't know if you're
(21:38) familiar with that or not. >> Sure. >> Yeah. Because a friend, one of Linda's friends from many years ago, a guy named Johnny Burnside, was part of that firehouse, and he perished on 9/11. And we went in, I've been there before, by the way, and we went in >> Street, right? >> we looked at the pictures, and I just started crying because I can't help myself.
(21:58)  So, when I think of something like D-Day, when these people knew what they were facing, young men predominantly, we talk about heroes all the time, and typically the heroes we talk about are people that can hit a baseball or cuz they can do things that we're not capable of doing, but heroism is something that we're all capable of if we just put our mind to it. Back to you.
(22:19) >> Greatest generation. I'll tell you one thing about Saving Private Ryan with the beauty of that movie. And again, it was taking, let's say, Tom Hanks's character, who is the captain, who is doing a mission. He was bringing what? Eight or nine guys to go rescue one guy, right? And the guys below him just questioned the decision-making.
(22:39) Obviously, came down to the captain, but the entire first half of the movie, if you recall, when they're going out and they're kind of weaving their way through France to find Private Ryan. They're all trying to guess what he did at home. Do you remember that? And towards the end, they figure it out.
(22:56)  He was a school teacher. Here was a guy who was just an exceptional leader. And I think that was just something that to me has always resonated. That movie came out, I want to say almost 30 years ago, and it's still probably one of the best war movies that has ever been made.
(23:15)  And I think you and I can agree on that. Do we agree on that? >> Yes, and we've gotten a little off track, but what's amazing is when that came out in the theaters, there were stories of men that had been there, again, predominantly men that had to walk out of the theater because it was so realistic in the first 8 or 9 minutes of that movie.
(23:33) >> Yeah. I remember right after that movie came out, my dad, who's a retired lieutenant colonel in the army reserves, we went to Normandy, and I just remember, as somebody, he was very emotional being there, and it was a really interesting time. >> It's one thing, people have a lot of preconceived ideas about France, even if you've never been to France, and you met them in Normandy, the people there could not be nicer to Americans, and I
(24:01) just think that's pretty interesting. >> [music] >> This is a name that we have not talked about in a very, very long time. This is Tesla, and it's interesting because the company had a horrible quarter. We can agree on that. That's going back about a month, and the stock I think had a move from almost like 370 to 300, and in a few trading days, and it filled in that gap yesterday was the day that it actually filled in the gap.
(24:31) There was a lot of optimism into this cyber cab event. So, this is the robo-taxi. It's a two-passenger sort of thing. They basically was invite-only down in Austin. They're talking about other rollouts and stuff. Whatever. Stock's down today 6%. Now, the only thing I find interesting about this guy is that SpaceX really did take a lot of air out of the Tesla story, and I think it's easy to see how Elon would be more focused there, especially out of the gate. But this
(24:59) story still sucks. The EV business sucks. Optimus is just dumb because humanoid robots are just not going to be a thing. Robotics is going to be They're not going to look like humans. They're going to be in factories. They're going to be in health tech. They're going to be stuff like that.
(25:14)  So, in my opinion, you better take the over on whatever Elon's saying about when that's going to be a material part of their business. But it's just interesting to me that there still is that muscle memory that you can rally into one of his events and you get excited and then it's kind of the sell the news after.
(25:32)  I'm just curious, is this worth even talking about, Guy Adami? >> Personally, no, because there are the Tesla enthusiasts that look at this entirely differently than I look at it. They say, "Okay, this is a company with a market cap of basically a trillion dollars-ish on either side." And they think it's potentially not a car company.
(25:52)  I am not one of those people, but there are people out there. If you watch CNBC, there are a number of people that talk about that. There are other people that say, "If it is in fact a car company, it should not be given the valuation that's given, even with the moves lower that we've seen.
(26:07) " I find myself sort of a healthy ambivalence as to what this entire thing is. It's hard to bet against the guy, but with that being said, since December, I think it was December when it made its all-time high, I want to say what, almost $500? On what's been a pretty good tape. It has not traded well.
(26:25)  It's had bounces along the way, but it's a series of lower highs and lower lows. >> Yeah, the only reason I bring it up, it feels like sort of a cute sort of thing that we're talking about, a product announcement, where the stock rallied into.
(26:39)  It just seems like that was so 3 years ago and that's what we had. One of your all-time favorites, Apple, on September 9th, >> Oh, I love the Apple. >> They're releasing their new iOS. It's going to be Siri. It's going to be Apple intelligence. It's supposedly going to have a $2,000 foldable phone. Mark Gurman from Bloomberg, who's like the Apple whisperer, he's basically out on a story this morning that would be Friday talking about this is the largest product slate that they've had in a very long time. They have a brand new CEO.
(27:06) That quarter wasn't great. There was a lot of issues as far as input costs, that sort of thing. That stock went from 343, an all-time high, down to 300 guy in almost two trading days. It's made up a bunch of that today. It's down two and a quarter. And the reason why I wanted to bring up the Tesla, I think this will be a sell the news, too.
(27:24)  I just feel like there's a lot of anticipation about it, and I think that folks are generally going to be a little disappointed. >> Well, the conversation we've had around Apple is obviously the premium valuation that it gets, whether it's deserved or not, and whether if their services business, which is now, I think, 27% of their overall revenue, if that can grow to either side of 30%, what does that mean for the multiple, or does that justify the multiple? And then furthermore, if they get their
(27:51) hands around AI, what does that do for the margins of their service business? And Gene Munster talks about this all the time. So, good on Gene. He's been right. Again, I'll say I think you're right on that. Apple's been in this uptrend now since I want to say July of last year.
(28:11)  It's traded down to this uptrend a couple times and has bounced, but I think your point in terms of the sell the news event, I think that's spot-on. >> All right. So, a big story this week also was the bounce in Meta. And this was one that >> Facebook. You notice By the way, didn't they used to call this iOS the iPhone operating system, and then they just changed it to iOS, or is that me? >> I think it's you.
(28:35)  I think >> I don't know. It's me. I don't know. >> But maybe I don't know. It's like Palantir, those geniuses over there, they call their big AI platform AIP. That's what they call it. That's pretty unique. So Meta, the Facebook as you refer to it, >> I'll never, I think you know me by this point.
(28:56) >> The news last week that they settled this suit that was for a trillion dollars for a [clears throat] year and a half of >> by the way. The litigators should be embarrassed. And you got to think to say we got to go, but I'll say this. I think it was 1998 big tobacco. So you can do the math.
(29:12) That's almost 28 years or so ago. So the dollar was worth a lot more than it is now. I think the settlement was north of 200 billion dollars for big tobacco 28 years ago. This 17 billion whatever it was is embarrassing. Facebook has to be laughing their way all the way back to the bank.
(29:32)  With that said, it doesn't mean they're not going to be further suits in terms of class action stuff. I guess on sort of a smaller basis, but that settlement is an embarrassment. >> From an inflation adjusted basis, 250 billion in 1998 is at least 500 billion.
(29:49)  So, the fact is that you're getting a 17 billion dollar settlement. All right, so that was one piece of news. I didn't think that was one of the reasons why the stock rallied, but later on in the week I think it was actually really folks looking to find beaten down names and then just kind of rip them, right? And I think that was a part of it and then they had a model release.
(30:06) One of the knocks on Meta is that they basically have been lagging in the performance of their models to OpenAI, Anthropic, even Gemini. And the monetization of all that spend. They don't have that big cloud business like Amazon, like Microsoft, and like Google.
(30:22)  And I made this point the other day and sometimes narratives are so dumb and listen, I can be dumb and I can get things wrong or whatever, but the idea on one given day that a stock like Meta is up three and a half percent because some third-party rating is just basically saying that Meta's new model is that much better than Anthropic's Claude 5892 or whatever.
(30:48)  That sort of thing. It's so dumb because at the end point, and you know this, and I know that as far as tech is concerned, you pay attention, you don't really give that much about it, right? I'm just saying the actual tech, but you are fairly certain, as I am fairly certain, that all of these models have a ball people, spend hundreds of billions of dollars training them, go back and forth, this that whatever.
(31:10) They're all going to be commoditized. They're all going to be sitting on AWS or Azure or whatever other cloud platform, and you're going to be able to choose anyone you want, okay? And you're going to choose the cheapest one from a token perspective, and that's what you're going to use. So, the idea today that that thing was better for a week than the other ones really stupid.
(31:29) >> How important to mankind was the invention of or the discovery of electricity in your opinion? >> Fairly. >> Fairly important. What has electricity become if you had to think of one word? >> It has become ubiquitous. Wait, was that the word you were going to know? >> I like you. >> I like >> It's a good word.
(31:52)  I was going to say commoditized, but that's fine. The point is exactly that. The most important, one of the most important discoveries in the history of mankind is now basically to your word ubiquitous. So, if you think all this AI is that important, by the way, Jensen Huang has said similar. This is going to be the most important thing since electricity.
(32:14)  Electricity is a commodity. Think about that for a second, and then I'll let you go. By the way, week one of the NFL, things start to move very quickly now. The NFL season goes by like >> Wait, wait. Is Danny Moses on the On The Tape podcast giving out his picks because >> We should get him on for that. >> We should do that. Okay.
(32:32)  So, on that note, it will be interesting to see how the market reacts this week to the anticipation of CPI, PPI, and then really how that Fed funds moves around as we've been talking, guys. Basically, it's about 62.5. It was 60.5 before. But again, I think you and I are in the camp that they don't do anything prior to the midterms.
(32:57)  Great conversation on AI with Paul Kedrosky, SK Ventures, former equity analyst, former startup founder. He's an advisor to some big hedge funds. He's a brilliant tech mind. He's the co-host of the Dick and Paul podcast. That is in your favorite podcast store. Go follow them on YouTube. After the conversation I had, which is in the Risk Reversal podcast feed, we put their latest episode on there. So, check it out.
(33:22)  AI is the new Enron or something like that. It was a great title. It was a great conversation. Go listen to that. We'll see him on the market call this week, guys. 11:00 a.m. Tuesday, Wednesday, Thursday. Thanks so much. See you guys. >> Apollonia. >> This podcast is for informational purposes only.
(33:42)  All opinions expressed by me, Dan Nathan, Guy Adami, and any other participants are solely our opinions and should not be relied upon for specific investment decisions.