Title: AI Terminator Fears Grow & Rates Breach 4.9% | The Weekly Wrap Show: The Real Eisman Playbook — The Weekly Wrap (solo episode) Guest: Steve Eisman (host, solo) Date: 2026-09-11 (week ending Friday, September 11; recorded Thursday night, September 10) URL: https://youtu.be/XYD6kWTygho Length: 23:23 Note: Scripted monologue with short clips. Remove-only cleanup per skill Step 1: the [music] audio artifacts were deleted and a few stutters collapsed ("I'm I'm"→"I'm", "a a strategic"→"a strategic", "beginning beginning"→"beginning"). No words were changed, added, reordered or paraphrased; every (mm:ss) cue is preserved exactly where it was; ">>" speaker-change markers (clip boundaries) are kept. The Granola sponsor read (~10:12-11:40) is left in place — it is advertising, NOT a pick. Auto-transcript garbles are LEFT INTACT here and corrected only in the analysis pages: "Where's Your Ed Act"=Where's Your Ed At (Ed Zitron's newsletter) · "Bessant"=Scott Bessent · "Worsch"=Kevin Warsh · "Real Estate Playbook"/"Real Vision Playbook"=The Real Eisman Playbook · "steveaisman.com"=steveeisman.com · "Stewart fails to save the universe"=as spoken (an HBO show). UNVERIFIED: "Jacob Coksun" 07:12, the former Anthropic researcher — name left as spoken, not guessed. NUMBER GARBLE: at 19:58 "second-quarter adjusted EPS of last year" drops the actual EPS figure — left verbatim; the analysis pages do not supply one. The opening 00:00-00:37 cold open repeats lines from later in the episode. =====
00:00 The Trump administration is issuing multiple and somewhat threatening statements that the Fed should not raise rates. My guess is that these threats will be ignored. The market is projecting a 60% chance that the Fed will raise rates at the September meeting. Oracle reported Thursday night.
00:14 In some ways it was a very good quarter. Macy's reported. GameStop reported. When it comes to the robo-taxi business, Elon Musk has a history of over-promising and under-delivering. The future of this company depends on the success of the robo-taxi. Former Anthropic researcher warned that artificial intelligence has a realistic chance of causing human extinction by the end of the decade.
00:37 So, I think there's some other shoe that could drop here. So, let's get started. >> >> Hi, this is Steve Eisman and welcome to the weekly wrap. This is for the week ending Friday, September 11th, but recorded Thursday night, September 10th. This last Wednesday on our premium Substack subscription service, we posted a great interview with Ed Zitron, creator of the newsletter Where's Your Ed Act.
01:10 >> The hyperscalers are starting to expect real money from AI entirely from Anthropic and OpenAI spending money on compute. And that's why they're still spending all the money on CapEx. They're doing it so they can capture revenue from two companies that they themselves have to keep inflating. This is a catastrophe.
01:25 >> Ed is a prolific writer and critic of the entire AI ecosystem. Premium Chat is a lively forum, and today I will reference two relevant comments about Ed Zitron and explain their significance in the AI debate and my opinion on this rapidly evolving and fascinating conversation. This coming Wednesday, September 16th, we will drop on premium part one of a two-part masterclass on how to analyze banks.
01:55 I'm you with all the tools to understand how banks work and how to think about large cap, mid cap, and small cap banks and the investment banks as well. Part two will drop two weeks later. This is a shortened post-Labor Day week and it was mostly a slow week with some earnings that I will comment on. And on this week's wrap we will discuss one, the war in Iran and the 10-year bond.
02:19 What is Scott Bessent really after with respect to buying Treasuries? The Terminator question. Will AI destroy us all? Thoughts on Tesla's robo-taxi announcement? My thoughts on the feedback from the Ed Zitron interview? Thoughts on OpenAI cutting price? Qualcomm and Amazon making arrangement? Oracle reports? Bill Pulte goes after FICO again? Macy's and GameStop report? And one mailbag question about gold versus 5% Treasuries? So, let's get started.
02:53 The war in Iran continues with Iran bombing the US and the US retaliating. As a result, oil prices rose well above $100 and the 10-year yield breached 4.8% and then the 4.9% level. 4.9% is the highest level since November 2023. The equity markets, in my view, will not be able to tolerate some level of higher long-term rates.
03:20 What that level is, no one really knows. Now, I thought 4 and 1/2% was the Rubicon and I'll admit I was wrong. We are higher now. So, the Rubicon is that much closer but still unknowable. Regardless of the impact on the stock market, the rise in long-term rates is a negative for the real economy. This perhaps explains why last week Treasury Secretary Scott Bessent announced that the Treasury would be buying long-term Treasuries in order to drive rates down.
03:54 He stated initially that he was setting aside 4 billion to effectuate such purposes. The famous hedge fund manager Stanley Druckenmiller wrote an opinion piece in the Wall Street Journal criticizing Bessant. Moreover, since the announcement, long-term rates are higher. So, many are arguing that this plan is already a failure.
04:15 On Wednesday of this week, Bessant came out and up the repurchase authority to 6 billion and the market was frankly just not impressed at all. And the 10-year climbed to 4.845% from 4.80% that day, which in Treasury world is a big move. Bessant needs a bigger bazooka. The irony is that the new Fed chair is a big critic of quantitative easing.
04:41 QE was a Fed policy whereby the Fed went out and bought Treasuries in order to drive rates lower and jump-start the economy. Now, since the GFC, the Fed has done several QEs with the last time during COVID. In my view, QE did not help the economy, but it did inflate asset prices, in particular the stock market. It also ballooned the Fed's balance sheet, which today stands at 6.
05:07 7 trillion dollars, a crazy sum. Fed Chairman Warsh wants the Fed to get out of the QE business and he wants to gradually shrink the Fed's balance sheet. The ironic part is that just as the Fed is getting out of the QE business, Treasury is stepping into its shoes. However, the 4 billion that Bessant originally allocated and now 6 billion is just not anywhere close to being able to do the job.
05:34 After all, US federal debt stands at 40 trillion. Now, taking a step back, when someone who you think has a brain does something you think looks dumb, it's always best to ask, "What am I missing?" Bessant needs a large buyer of Treasuries, and it can't be the Fed or Treasury. So, I think there's some other shoe that could drop here, but I don't know quite what it is yet. One last point on Bessant.
05:59 This week, Republicans hosted a midterm political convention. Nothing wrong with that. However, Treasury Secretary Bessant spoke at the event in a very partisan manner. Now, what I'm about to say is, I want to emphasize independent of whether you do or don't support President Trump. No Treasury Secretary has spoken at a partisan political event in literally 50 years.
06:25 This is a norm that when adhered to, provides the Treasury Secretary with gravitas. Given that Bessant is trying to manipulate the bond markets, he could use all the gravitas he can get, and speaking at this partisan event does not help. And one last point on the Fed. The Trump administration is issuing multiple and somewhat threatening statements that the Fed should not raise rates.
06:46 My guess is that these threats will be ignored. The market is projecting a 60% chance that the Fed will raise rates at the September meeting. Now, I have no idea, but I do think Worsch will do whatever he wants to do. I also want to flag one more story. Former Anthropic researcher Jacob Coksun warned this week that artificial intelligence has a realistic chance of causing human extinction by the end of the decade.
07:12 Count me a skeptic. There is still no evidence that AI is ever going to achieve AGI, artificial general intelligence. Gary Marcus, prior guest, still thinks it's incapable of doing so. He had >> for several years people insisting that AGI was about to be here tomorrow. >> Mhm. >> And people finally backed off on that. What we really need right now is maybe not magical infinite intelligence, but we want intelligence we can trust that does not hallucinate.
07:39 >> Now, I will be the first to admit I am no expert, but this story expresses a theme I've noticed about people in the tech world. They grew up reading a lot of science fiction, and they take it very seriously. In the SpaceX prospectus, if you recall, it says that one of the goals of the company is to mine asteroids.
08:01 Now, we have a tech researcher predicting Terminator. I've read a ton of science fiction, and some of it actually does have incredible predictive power. For example, the major premise of Isaac Asimov's Foundation trilogy is that it is impossible to predict the actions of one human being, but mathematics can predict the future actions of many people.
08:27 He wrote the first Foundation book in 1951. Incredible. This concept is the entire premise of all current loan underwriting. Making a loan to one person is dangerous. Making loans to many people is much more predictable. So, science fiction is great, but it sometimes leads to people predicting the end of the world.
08:48 I want to emphasize this is not Stewart fails to save the universe, the new show on HBO, which is all about multiple dystopias. Life goes on. Last week, Tesla hosted a robotaxi event. Not much new emerged, and the stock was down 6% on the day of the announcement. When it comes to the robotaxi business, Elon Musk has a history of over-promising and under-delivering.
09:12 He seems to have done so again. The future of this company depends on the success of the robotaxi. How do I know this? Well, the consensus estimate for Tesla for 2026 is $1.66. So, the 2026 PE is 220 times. Auto stocks, by contrast, have very low multiples. GM's 2026 PE is 6.5 times. The only explanation for Tesla's crazy multiple is that some investors believe that Tesla's robotaxi business will conquer the world.
09:47 Now, I have no skin in this game. Just count me a skeptic. A quick side note on Tesla. Earnings reached a peak in 2022 with EPS at $4.07 and EPS has gone straight down ever since. With the 2026 consensus estimate at $1.66, the 2026 EPS estimate is 59% lower than the peak. So, the people who were short were right on the fundamentals.
10:12 So, the stock has done nothing for 5 years despite the massive decline in earnings. This shows once again how difficult it can be to short a cult stock. You know that sinking feeling? A meeting ends, everyone's nodding in agreement, and then 2 days later you realize nobody actually wrote down who was doing what. Or worse, you're digging through your notes trying to piece together what actually happened.
10:38 That's why I use Granola. Granola is an AI-powered notepad that makes your meeting notes useful. It captures what happens in your meetings and turns it into clean, structured notes with decisions and action items pulled out and made easy to find. And the best part, Granola integrates seamlessly with how you already work.
10:58 No setup, no configuration, no friction. It transforms messy meeting calls into something you can actually reference weeks later. Your notes become searchable, organized, and actionable. You get better notes in a central place, while you get to stay present in your meeting with no extra costs. I use Granola, and I have to say that it has transformed the chaos of my meeting information into easy-to-use and organized information flow.
11:26 Once you try it on a first meeting, it's hard to go without. You can try it totally free. Head to granola.ai/eisman. That's granola.ai/eisman to get your time back. Go to granola.ai/eisman and try it on your next call. Before I dive into AI, I want to explain that our community on Substack has grown enormously.
11:50 I write a note and chat in Substack almost every day, and I get many comments, which I learn a great deal from, and I'm now going to share some of them. When I share these comments, I may jump into the middle of the comment to explain what the commentator is getting at. So, here we go. The Ed Zitron interview got a lot of responses from viewers, many positive, but some negative.
12:10 One viewer sent in a long email criticizing Ed's negative thesis on AI, and I quote it below. Steve, I'm surprised you characterize Nvidia's strategy as circular financing. Historically, semis were roughly 45% gross margin businesses. Nvidia is now operating at close to 80%. Economically, Nvidia is extracting rent from hyperscalers and then using it to finance their emerging competitors.
12:35 What the subscriber is pointing out is that Nvidia's margins are unusually high. They weren't 80% this quarter, I think they were 74%, but still very high, and it is using some of that excess profit to support the AI ecosystem with financing. I continue. Initially, those competitors were the AI labs. Increasingly, they are the neo clouds and the open-source open-weight ecosystem.
13:00 Hence, the strategic logic of acquiring Hugging Face, which Nvidia acquired, I believe, last week. Hyperscalers hate this dynamic. They are responding by developing their own silicon, working with Broadcom, Marvell, and others, but this takes time. His point here is that the hyperscalers know that they are overly dependent on Nvidia, and they hate it, and they are looking for alternatives. I continue.
13:22 In this knife fight, you want to be the one selling the knives. Upstream semiconductor suppliers such as ASML, KLA, LAM Research, and Applied Materials, together with memory suppliers such as Micron and SK Hynix. They benefit regardless of whether the winner is Nvidia, a hyperscaler, an AI lab, or some architecture we haven't seen yet.
13:46 A second order effect is that all this competition should drive the cost of inference and models sharply lower. Lower prices should stimulate usage, which in turn drives greater demand for compute, memory, and semiconductor manufacturing capacity. So, Nvidia's actions may actually accelerate the commoditization of the very economics from which it currently earns extraordinary rents.
14:09 In that sense, Nvidia is a modern-day Robin Hood. It extracts rents from the hyperscaler aristocracy and uses some of the proceeds to arm their challengers. And then he says, "I would go one step further, although this part is more debatable. I think the social consequences could ultimately be beneficial.
14:30 If inexpensive, widely available AI erodes the rents earned by a class of incumbent corporate aristocrats, the resulting diffusion of capability could be strongly pro-competitive and pro-productivity." That was a very interesting comment, and I take his viewpoint very seriously. This viewer is arguing that the cost of compute could be driven sharply lower, and the new companies will replace Anthropic and OpenAI.
14:55 And I'll admit this could be correct, but with one major caveat. If Ed Zitron is right, the current, and I do emphasize current, AI ecosystem is dependent, almost completely dependent, on the health of Anthropic and OpenAI. Now, one of them could fail before these new companies are capable of replacing the commitments of Anthropic and OpenAI, and this could be like the dot-com bubble bursting.
15:18 The first generation of dot-com companies failed miserably, and it was only the second generation companies like Google that went on to glory. I still believe that if Open AI fails within a year, there will be a massive correction in the stock market. We shall see. Moving on, summer is over and equity conference season has begun.
15:38 At a Goldman Sachs tech conference, the CFO of Open AI announced that Open AI had cut price on its GPT 5.6 Luna model shortly after its release in July. The CFO claimed that this created a tenfold increase in model usage. I wonder if Anthropic will have to follow with its own price cut. Is this the harbinger of a price war? We shall see.
16:01 There was a very interesting announcement this week from Qualcomm. Qualcomm announced a collaboration with Amazon to build custom AI chips and optical networking equipment. The deal is designed to create competition with Nvidia. As part of the deal, Qualcomm issued a warrant to Amazon giving Amazon the right to buy 25 million Qualcomm shares at $161.26.
16:24 Now, since Qualcomm stock is over 175, the warrants are in the money and are worth over $4 billion. Frankly, I'm a bit bewildered by this deal. Not by the partnership, by the warrants. This does not appear to be another version of circular financing. When warrants are issued, no cash changes hands until later and Qualcomm does not need any cash anyway.
16:46 So, why give away warrants? I addressed this question in a chat to my Substack community and got many great answers. I quote two. The first one, one subscriber said, quote, "Think of it as a strategic customer acquisition cost. Qualcomm trades equity upside to guarantee a 60 billion revenue pipeline and secure AWS as a flagship anchor customer.
17:10 Desperate to break out of its mobile roots, Qualcomm saw this as a golden opportunity to establish credibility in the data center market." An interesting comment. The second comment states the following. Maybe it's naive, but Qualcomm is mainly known for modems. As such, their expertise in XPUs is not established. Maybe Amazon's contribution of IP will be important for Qualcomm to succeed, and that would explain Amazon's asking for warrants.
17:36 Oracle reported Thursday night. In some ways, it was a very good quarter. Revenue increased by an impressive 30%, and non-GAAP EPS increased by 30% as well. What's the difference between Oracle's GAAP and non-GAAP EPS? Stock-based comp. Non-GAAP EPS excludes it, which is a common practice in the tech world, which I just think is wrong, but nobody cares what I think on this topic.
18:01 On the somewhat negative side, remaining performance obligations, RPO, a form of backlog, reached 664 billion, which is not that much greater than the 600 billion of the prior quarter. And Oracle remains highly dependent on OpenAI, with approximately 50% of its RPO coming from OpenAI, a company that we all know has massive negative cash flow.
18:24 After hours, Oracle stock was up 4%, which is okay, but the stock is way off its highs as the market continues to be concerned about Oracle's over-reliance on OpenAI. Moving on. Last week, Bill Pulte, the head of the FHFA, the regulator of Fannie Mae and Freddie Mac, voiced massive criticisms of FICO and the credit bureaus for price gouging.
18:49 For example, he said, "Over the last 5 years, FICO raised prices by something like 1,600%." This week, Pulte was back at it, criticizing FICO and the credit bureaus again. Prior to last week, Vantage Score, the competition for FICO, was only available as a pilot program. Now, it is available to all lenders. My view? I think FICO's monopoly is going to break and break badly, and I still like this short. Macy's reported.
19:18 Generally, no one cares about this retailer anymore at all. It's market cap is only 10 billion, but it had a good quarter, and it looks like this is now a turnaround story that is beginning to work. The company beat and raised, but what I thought was most interesting was a total same-store sales increased 2.
19:35 7%, which is not bad, but not great. However, it's high-end division, Bloomingdale's, saw a same-store sales growth of 11.3%. The reason for this strength at Bloomingdale's is that Bloomingdale's benefits from the demise of Saks. Despite the good quarter, however, the stock was down because it projected worse than expected earnings per share in the coming quarter.
19:58 But still, the strength in same-store sales comps was a pretty good sign. GameStop reported higher profits in its latest quarter, boosted by an increase in collectible sales, and raised its full-year outlook. The video game retailer on Tuesday reported second-quarter adjusted EPS of last year. Despite the slight increase in earnings, revenue fell to 790 million versus 972 million last year.
20:26 GameStop now generates more revenue from collectibles than video games. This was once a crazy meme stock. No longer. It's generating a profit, but EPS growth is slow, and revenue growth is negative. The market cap is 9 billion. Despite its occasional volatility, the stock has done nothing in years, and is down slightly this year.
20:47 No one seems to really care anymore. Finally, I also received a question about gold. The subscriber asks, "Steve, I'm a subscriber to the Real Estate Playbook, and wanted your take on something I've been tracking. Gold's behavior against the 10-year caught my attention. Since June 30th, the 10-year has moved from 4.42 to 4.81%. It's now higher obviously.
21:10 Normally, I'd expect that to put real pressure on gold because you can earn nearly 5% owning a treasury. Instead, gold had a second run higher. End quote. Great question. Gold marches to its own music. The subscriber is correct that a higher 10-year yield makes treasuries more attractive. That is partially why higher rates are generally negative for the stock market.
21:34 Why buy stocks when you can get 5% risk-free? Gold is different. Rightly or wrongly, investors view it as a hedge against inflation and against the debasement of fiat currency. The 10-year yield has marched higher because the war in Iran has driven oil prices higher and that creates fears of inflation. And those inflation fears drive some investors to buy gold.
21:58 Owning the tried-and-true precious metal feels safer to many than pocketing the interest being paid by what seems to be an overstretched government. That's the argument. Now, I don't own gold and I think our government is stretched but not yet overstretched. 5% seems like the better choice to me. This coming Monday, September 14, we will post an interview with my former Big Short partners, Vincent Daniel and Porter Collins.
22:24 >> This is our old sandbox, right? This is the Fed, this is monetary policy, this is the Treasury. They're at a point where they have to try these extraordinary measures because they're out of things to do. >> We had a wide-ranging discussion and touched on topics such as interest rates and Scott Bessent, the deficit, and why it is a lot harder to short stocks these days.
22:48 They also each gave a long that they like and own. The best way to support the Real Vision Playbook is to subscribe to Substack through steveaisman.com. Subscriptions are free and we appreciate your support. And that's the wrap. >> This podcast is for informational purposes only and does not constitute investment advice.
23:09 The host and guests may hold positions in stocks discussed. Opinions expressed are their own and not recommendations. Please do your own due diligence and consult a licensed financial advisor before making any investment decisions.