Prof G Markets - The Iran War Risk Markets Are Ignoring

Episode Date: March 9, 2026

Scott Galloway and Ed Elson break down what markets are signaling about the war with Iran, and whether they think investors are getting it wrong. Ed also maps out the “what-if” scenarios Wall Street may be ignoring. Then they dive into Anthropic’s clash with the Pentagon and why Sam Altman might have botched the moment yet again. Subscribe to the Prof G Markets newsletter  Order "Notes on Being a Man," out now Note: We may earn revenue from some of the links we provide. Subscribe to No Mercy / No Malice Follow the podcast across socials @profgmarkets Follow Scott on Instagram Follow Ed on Instagram, X and Substack Send us your questions or comments by emailing [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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carefully consider the investment materials before investing, including objectives, risk, charges, and expenses. This and other information can be found in the funds perspective at getvcx.com. This is a paid sponsorship. You might be tempted to let Taco Bell's new Lux Value menu go to your head. Because 10 indulgences for $5 or less makes you feel fancy. Like you might think you need cloth napkins. Well, you don't.

Just use the ones that come in the bag. Don't let the Lux go to your head. Today's number 81. That's a percentage of Gen. millennials who plan to travel based on a movie and TV locations. Ed, why can't millennials take a joke? Why? Well, often it lands too close to their parents' house. You'll get it. Keep thinking. You'll get there. Junior year, classics, Princeton. Imagine you went to a real college. Hits too close to home. Their home is their parents' house. Oh, okay. What does a millennial get on his

wedding day? What's that? A participation trophy. life. How are you? I'm doing well. I'm good. I spent most of the last night. I did one of my favorite things. I took an edible and packed, which is like a seven-hour experience for me. That sounds awful to me. It actually sounds like my nightmare. This is what happens when you get older. A rolls d'ores starts looking cool. The duchiest car in the world starts thinking, I'd like the cut of my jib in a rolls. I already feel that way, but yeah. You like the silver shadow? It's pretty cool. I like the fancy cars. With the suicide doors and the umbrella that comes out of the backseat. I once, true story, I was at Chipriani and this rolls rolled up, and Jay-Z stepped out and he got that umbrella out of the back door. I think just for a fact, it wasn't even raining. Second thing about you can tell you getting older, you start thinking,

Wow, cruise actually sounds like a pretty good time. Like, I never would have thought I'd be attracted or drawn to a cruise. And then what were we talking about? We were talking about packing high. Oh, yeah, yeah. Packing becomes enjoyable. That's crazy to me. I love, I'm like, which shoes am I going to wear?

Do I need to transfer stuff to, you start thinking, you start checking the weather. You want to make sure that you're packing appropriately. I need, for me, packing used to be throw literally, you know, some, some toiletries, a hoodie, a pair of jeans, some socks, some underwear, and my edibles in a duffel bag. I used to be the lightest travel in the world. I'm like fucking Queen Anne now headed to Rwanda. That's me. But I hate it because it's so stressful for me.

I get made fun of whenever we go on work trips because I'll have a very large bag and then Claire will make fun of me because I'm being, yeah, exactly sort of Queen Anne about it. But I find it. I mean, I think it's the worst thing in the world trying to figure out and predict. what am I going to want to wear? Are there going to be variables? Is the way they're going to be bad? Is the weather going to be good? Doing all of this.

And then once you pack like, that's it. That's all you've got. I used to be the person that just left, you know, a few clean pairs of underwear and my toiletries in a duffel bag and I was ready to come and go. I don't have many things. I'm not that into things. I mean, I like homes.

So I guess that's a thing. But I don't own a car. I've never been that into watches or art. or anything like that. The, I do have a few things that I just absolutely love, and one of them, I love luggage. I love Ramoa.

I love, by the way, Ramo, if you're out there, you should absolutely be an advertiser and I'll take selfies of me and the Ramo going around the world to speak to the National Cotton Growers Association about the future of AI. But I love good luggage, and it tries me crazy when,

when people have bad luggage or, you know, especially people with money. Those Ramoa bags are ridiculous, ridiculously expensive, by the way. I mean, it's quite shocking. I mean, you have to spend over $1,000 to get even the smallest of those bags. Yeah, I think it's a pretty strong signal, though. And also, I sound like a privileged douchebag, but I'll go there. It's kind of like your watch, your phone, and your luggage, and if you have a car, your car are sort of your signal. And what guys don't realize is that if they ever get, if they're about to get down, the biggest turn on for a woman, I'm going to get sure for this, is if you have a decent, relatively nice place. Like, you actually put some thought.

I think that's fair. I don't think you're going to get canceled for that. Yeah. And it's clean, and she thinks, oh, I wouldn't mind waking up here on the occasional Sunday morning. 100%. But the chasm in your packing strategy is it's absolutely okay to pack a lot if you look nice. and that's where the casin comes in there. That's a good point.

We've got a lot to get into today, so I'm going to launch us right into it. Go ahead. Today we are discussing what the markets tell us about the war in Iran and also anthropic stand against the Pentagon.

By the way, just a reminder, we will be recording our live episode from the Vox Media podcast stage at 10 a.m. this Saturday at South by Southwest. We're very excited about it.

We hope to see there. We've told you, about it. If you're in Texas, come hang out with us. It'll be a lot of fun. It will be great. I got another live event coming up, Ed. I noticed how you just classed over that on Sunday. Yeah, we'll keep moving. We'll keep moving. Ed's a little jelly. Ed's a little jelly of the other podcast. He just thinks because he has a foot and a half on Kara Swisher that somehow she's his nemesis. I don't know what you're talking about. I don't even know what that podcast is.

I hope you have plenty of the world. The U.S. and Israel launched military strikes on Iran last week. They killed Iran's leader Ayatollah Amanayi and several high-ranking military officials and damaged government and defense sites. The conflict shows no clear signs of winding down. President Trump said the campaign could intensify and last for weeks, while Iran has indicated it is not willing to negotiate with the U.S. Despite the turmoil, markets have been relatively calm.

The S&P is down quite modestly since the strikes began and the yield on 10-year treasuries climbed. However, one of the more significant reactions has been in energy, with crude oil prices surging to an 18-month high. So, Scott, our job is to look at the markets here, or at least our job on this podcast, is to look at the markets, what the war is telling us about what's happening. The markets, also what the market is telling us about what's going to happen in the war here. I think one takeaway is that if you were looking to the markets to tell you something about the future, it would be that the future of this conflict will probably be somewhat contained. Just the stock market's reaction basically flat since this happened. And of course, treasury yields climbing, which means that actually people have been,

investors have been selling their treasuries. And treasuries are usually the safe. haven asset. When conflicts break out, you'd expect the opposite to happen. Now, I'm not sure what I make of it, or I think I'm a little skeptical of the market's reaction, but let's just start there, your reactions to what the markets are telling us about this military conflict. I think you nailed it. I think the market thinks it's going to be an eruption. It'll probably ding some of the earnings of travel stocks, luxury stocks, dependent upon airport retail. It'll take travel down. I was thinking about going to India and Bahrain and we're now in April, now we're

contemplating whether we're going to go or not. So it's just a short-term hit to earnings. But in terms of a long-term war or real structural impact, it doesn't look as if the market believes that's going to happen. And if you look at most wars, typically stocks fall in the short term and then they actually recover pretty robustly. And what's happened essentially since 9-11, where stocks in New York real estate checked down but then came ripping back, the check down is usually shallower and shorter than usual because people look for the bump and start investing in the bump before it's even had a chance to go down. In addition, the kind of risk gone of metals going up, metals have come down. So what do we have? We have some of the stocks that have been hit really hard, the travel

stocks, right? So basically airlines and cruise stocks are down about 10%. I thought LVMH is Dan I thought the most interesting thing in the market was that the Cospy or the Korean market had its largest one-day decline, I think, in history or since teeth out for a long time. It was down, I think, at 1.11%. And I think it's because they're pricing energy. The flows, 20% of the oil flows through the Straits of Hormuz. The big, kind of the big loser here, arguably, is China, which gets 80% of the oil. exported out of Iran was going to China, similar levels or pretty big levels out of Venezuela. So the supply of energy into Asia has been hit hard. And also, there's just a general recognition. And it might be that the Kaspi was up so dramatically, this is just letting some air out of the balloon, that a lot of their biggest companies, whether it's Samsung or they're, you know, building microchips, they just require a lot of energy. And that if energy spikes, that will really have a big of big impact on their earnings. But I basically, I essentially think the markets are saying,

and this is why the markets are so powerful because it takes out all emotion or conflicts of interest. The markets are immoral. There's nothing like getting truth from someone than asking them where they're actually investing, right? Well, whenever a company asked me to call, I've been on boards and we're raising money and they asked me to call investors. The first thing investors ask is, are you participating in this round? And that's, you know, that's sort of, that's Wonder Woman putting a golden lasso around you. So I think what the markets are saying here, and the markets get it wrong, but is that they think this conflict is going to hurt some companies in the short run. But effectively, if oil is up 10 or 12 percent, diesel's way up more because of

supply chain concerns in Europe in the short term. But I think the market is essentially saying, and you tell me if you think I got this wrong, this conflict is going to hit certain sectors in the short run, but we think the conflict is short-lived and the world will return to some level of normalcy sooner rather than later. I think that's exactly what the markets are telling us. And to be fair to the markets and to your point, that is often what happens.

I mean, this is one of the strange things about war and about military conflicts, is that usually they are not that impactful to the markets, or at least you look back since World War II, three quarters of the conflict since then. If you measure a year after the conflict began, stocks ended up in the green. You saw a positive return. And actually, J.P. Morgan did this study, and they found that S&P returns were actually

the same on average during peacetime and following conflict. So I think recent history would tell us that this is strangely not that impassive. on markets. And I think that can be a little frustrating for us sometimes, because Rob Armstrong makes this point. We often want the markets to tell us what we really believe. And I look at the death and destruction that is happening. And part of me wants to think, you know, this is like a big deal. This is scary. This is problematic for various reasons. And I want the market to reflect that. The markets are definitely not reflecting that, at least not yet. The markets believe that this is going to be contained.

It's going to be, you know, maybe there's going to be a little bit of instability, but not so much that it's really going to hit investors very hard. That's what the markets believe right now. Now, the question you bring up is, are they right or are they wrong? And usually, I would say usually the markets are pretty much right. I'm not someone who thinks that the market. markets are always getting things wrong and investors don't understand what's happening. But I'm also someone who believes that the markets can get things wrong sometimes.

And that's how I felt about the Satrini article. I think that's how you felt about the Satrini article too when this AI blog post comes out. And suddenly everyone devolves into a panic. They start pricing in things that don't really exist yet. They don't have evidence of. And to me, that was a moment where the markets got it wrong. We'll see what happens over the next few years. On this occasion, I'm not so certain that the markets are getting it wrong, but I am struck by the market's certainty about what is happening here.

And I felt this way when we talked with Steve Eisman about this, where I said, you know, what does this do to your investment strategy? And he said very, very plainly, this doesn't change anything. This won't change my investment strategy by a single dollar. And I'm hearing this a lot, actually, among investors, that this isn't a big deal, it's contained. Trump has essentially concluded the problem, and we're now living in an era of actually more stability and more certainty now that the bombs have been dropped than we were before. I'm just not so convinced of this. And I think there are plenty of what-ifs that the markets ought to.

be at least considering, but they seem to be not even willing to even acknowledge. I mean, the first what if would be, what if Iran is destabilized even further? What if the nation devolves into something even worse? And by the way, that is not an unlikely scenario because it is exactly what we've seen in most of the regime changes throughout recent history. It's what we saw in Iraq as an example. I mean, we've seen many instances where there's actually been more instability, more chaos, more death and destruction within the region following a regime change. So there are a lot of what ifs here, a lot of what could go wrongs, a lot of worst case scenarios that to me are very big deals. And I am struck by investors' general consensus

here that none of this is going to happen. Whether or not you think that bombing Iran and trying to diminish their capacity to continue to sponsor and wreak havoc in the Middle East, it is clear that the American public feel that at a minimum the president should have gone to Congress, should have informed Congress, would have been much better off had he figured out a way to use diplomacy to enlist one or more European and Gulf allies. And also, it's reflecting a level of incompetence, and I call right now Iran as war as improv. It literally feels as if they're making it up as they go, right? So the messaging will be there for five days. We could be there a long time. This is a special combat mission, according to Republican senators. No, according to the president,

it's war. We want regime change. We're not necessarily interested in regime change. Both those statements came from the president, not being able to get American citizens out of the Gulf, not, no one actually thought through, well, what happens when everyone wants to come home? What's our plan for getting our own citizens out? Bombing Tehran, where we have probably more pro-West sympathy or empathy than many of the rural regions that are much more theocratic and loyal. It just feels as if it's not, tactically, they are absolutely diminishing their Navy, their missile launch capability. I do believe that they're going to totally neuter their capacity to build nuclear weapons. So tactically, you could say, I would argue, it's a win so far, they're achieving objectives. But when you have

no real thoughtful delineation of what the objectives are and the story keeps changing and you're going about it alone and you basically have held up the middle finger to democracy and aren't even briefing the Senate Intelligence Committee, I mean, I've never seen Senator Warner so apoplectic that, and it does, it shows just such extraordinary incompetence because, Because wouldn't you want to at least brief Senator Warner, who has had several presidents in front of him and oversees the intelligence community or informs the intelligence community to kind of get his thoughts? Wouldn't you want to brief Senator Kelly, who has flown dozens of combat missions to get the benefit of their thinking? Wouldn't you want to have Representative Seth Moulton, who was in the Marines, I think in Iraq and or Afghanistan, to get their feeling about what might be going on the ground? Because we haven't had diplomats there since 1979.

So other than relying on the Mossad, which is obviously going to have their own agenda and their own objectives, we have no color or real context here. And it looks as if America, this is another data point and the larger impact on the market is not the war itself. But another data point that America is no longer the operating system through which the world operates. We used to have, we controlled the, we controlled the supplies or the roots of energy, right? It was generally speaking, ships in maritime passageways were kind of off limits. We just sunk a ship with a torpedo for the first time since World War II in international waters. We were the one, everything was settled in dollars. Loosely speaking, our trade and our IP agreements were the ones that people lived by.

It was our 700 military bases overseas ensured the safe flow of global trade and international norms. And now what they see is, okay, here's a rogue nation. We used to be the one ensuring no nations went rogue. Now we are that rogue nation. And something happened that I actually think, you know, it's the stuff you don't see that's or that doesn't get reported that has a bigger impact. India and Canada just struck a trade deal. And they say, we're going to do, it's a $50 billion deal. And the really interesting thing within that deal was they've decided they're going to settle all of that trade in non-dollar denominated currencies.

So they're not only, they're not only rerouting their supply chain and trade agreements around the U.S. They're purposely trying to figure out a way to de-dollarized and no longer have what I would argue is the most formidable carrier strike force in the world, and that is the U.S. dollar. Everything settles in dollars. So we have access to everything in terms of flows of capital and power, and we also have the ability to sanction people really severely because everyone wants to settle in dollars. So what this is, I think the markets have said, okay, this conflict will probably be ring-fenced. It'll probably end sooner rather than later. But I do what you're going to think what you're going to see over the next year. I think the market, the U.S. market is going to underperform, and we're going to see a weakening of the dollar because this is yet another example where nations think, Jesus Christ, the operating system we've been operating on is no longer, we can no longer depend upon it because these guys, quite frankly,

are out of fucking control. They no longer see themselves as part of the West. They no longer feel the need to, you know, if we'd gone in with British, French, and German intelligence and resources, fewer of those missiles would have landed or hit targets in the Gulf. Now, granted, those missile launches have been, have largely diminished. It looks as if Iran may have run out of munitions to fire at their neighbors. If we had figured out a way to try and get one or two Gulf states to join us. It would have just had so much more legitimacy. It would have been another example of how the West brings people together and has some checks and balances. Instead, I think the biggest danger to the markets is not the actual action in Iran. It's another data point that we are now that rogue nation. But I don't understand why, because all of the

points you bring up here should not instill or inspire much faith in Trump's decision-making on this issue. At least that is my view of it. Agreed. And so what I don't understand is why there seems to be this kind of blind faith and trust in his ability to handle this competently. And what I've seen, all of the points you made, no congressional approval, no willingness or effort to inspire or reach some level of legitimacy and consensus on this issue, either in America or with our allies. Also, the fact that he was the anti-war candidate for many, many years. I mean, this whole thing, his whole political career really began with, I think Iraq was a bad idea, I think Afghanistan was a bad idea. Personally, I don't see that much evidence that this situation

is that much different from what we saw before. I don't think that he's proven that to us. There seems also, as you say, the messaging, you know, what are we actually trying to achieve here? are we at war, are we not at war? And to me, that's not a function of bad messaging. That's a function of actually bad strategy. I don't think it's that they don't know what to say. I think it's the is that they actually do not know what the plan is. They don't have a strategy. And so all of that makes me think, we are getting into very, very dangerous territory here. We are we are potentially witnessing what might be the next trigger of some very, very difficult, long, war, something similar to what we saw with Iraq, which, by the way, they also told us

was only going to last a few days, a few weeks. They said it wouldn't. I mean, Donald Rumssel literally said, I doubt this will last six months. That's what he told us. It ended up lasting eight years. It ended up costing $3 trillion. Nearly 40,000 Americans were injured. Four and a half thousand Americans died. So all of this, to me, says we don't really know what we're getting into here. And there are so many other downstream effects that could be really dangerous. For example, you know, if one very likely scenario would be that this isn't contained, that Israel hits Iran's oil facilities, Iran starts hitting other nation's oil facilities to just cause some chaos because they're frustrated. They're on the back foot. Oil starts, the price of oil starts to go up,

could easily breach $100 a barrel, at which point, what does that do to inflation at home? What does that due to the interest rate policy of the Federal Reserve, that's its own thing. What this could do to the affordability crisis and to gas prices in America and also in Europe could also massively destabilize Europe. And we're already seeing this in liquid natural gas prices, which are skyrocketing in Europe, not the case for America. We're insulated from the issue a little bit more because we have our own supply, so that's good. But then even things like cyber attacks.

I mean, we've already seen a huge increase in cyber attacks on Israel, literally days after they struck Iran. What if that happens to America too? What if there is a refugee crisis? I mean, this is a country of the population of 90 million people. What happens if they all decide, okay, we're out of here. This is a hot zone, which it is. And they decided to start fleeing to Europe. What does that mean for the political complexion of Europe?

What does that mean for the rise of rights? white-wing populism, which is already gaining some steam in Europe, what would that do to European markets? How would that affect American markets? My mind is like whirring with all of the what-ifs, and I get that I'm more of a pessimist than most. But I feel like that's kind of what the markets are supposed to be contending with right now. And purely based on my conversations with investors, I feel like no one is honestly contending with those potentially bad outcomes. We'll be right back after the break, and if you're enjoying the show so far, send it to a friend, and please follow us if you haven't already. Support for the show comes from Monarch.

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to not create a multilateral force and go into Kuwait and push out Hussein, to not fight their war again after we got nothing from World War I but a bunch of injured and maimed Americans and to strike a deal with Hitler. And, you know, there was a very large movement. The biggest hero, the Elon Musk, the biggest hero in 30s America, was Charles Limburg, who was absolutely against. There was a huge anti-war. Basically, a lot of people accused FDR of lying to the American public to try and send armaments to Europe. So there is always a thoughtful and reasoned argument around how any war or any conflict could result in Armageddon. I get it. I would argue that, and this is my prediction, oil in a year from now will be less expensive than it was at the beginning of this conflict or war, let's call it a war, and that the biggest opportunities from an investment standpoint, if things go right, if we can figure out a way to ensure that if the war on Ukraine comes to an end,

and we can figure out a way to ensure that they have some reasonable sense of security, I think the amount of investment that's going to pour into Ukraine because of the spillover of technology and drones and surveillance technology, I think the Ukrainian economy is absolutely going to boom. But the key will be to make sure that we help them, at least win the war, have enough negotiating power such that we're preventing the next war, just not scheduling it. If we, in fact, can figure out a way,

if the Iranian military is diminished to the point in their launch capabilities, their ability to lay mines in the Straits of Hormuz, their ability to enrich uranium, if all of that is absolutely neutered, I think the Middle East is safer. If we can, and this is the optimist viewpoint, and let's go to what Josh Brown says, what could go right, if we got, not even get a pro-West, a government or ruling party, but a neutral one that embraces technology, maybe normalizes relationship, relations with Israel, which has a lot of technology, normalizes or has enough, a neutral enough relationship with Europe and the U.S. to get better oil infrastructure and technology. I think you're going to see an economic boom in Iran. I think the private. equity guys will all of a sudden be flying in, there'll be four seasons in Tehran where they're trying to figure out a way to invest. So a lot of times, look at World War II.

What have been the two most productive economies the last half of that century? Germany and Japan, but those are the exceptions to the rule, kind of here. If we're talking regime change and if we're talking U.S. involvement, like those were success stories. Do you think the Venezuelan economy is going to be better two years from now or two years or two years back? I think it's a very open question. I think right now, I think right now there is some support for the U.S. And I think that there is, as you mentioned, in Tehran and Iran, there is support for the American cause because they have been so oppressed. But, I mean, my mind just goes, I feel like we've seen this movie before. We saw this in Iraq where there was also some support for the U.S. and then there was so much instability over the next few years

that suddenly everyone decided to go, actually, we wish these guys didn't come in here. Whether they're right or wrong, I'm not going to leave that up to them, but the reality is, you know, a year after the invasion happened, the Iraqis were pretty split, and then three years later,

all of them decided that America was the enemy. So far, that was the worst geopolitical mistake of this century, was George Bush lying to us and getting propping up as CIA director and General Powell to say there are weapons of mass destruction. There wasn't. He wasn't, he himself didn't have plans. The organizing principle of Iraq, unlike Iran, wasn't death to Israel and death to America. But this is how I would summarize it.

The why and what they're doing, I think that Trump would have had potentially, had he gone to Congress, he would have gone for an authorization of the use of military force. They never get a declaration of war. And I think he may have gotten or may not, but he needed to do that because what it forced him to do was to say, oh, this is a defensive posture. Well, why is it defensive? Because they were about to be attacked, and if they were attacked, they would attack us back. Okay, so you're saying that Israel is now running the military and U.S. policy? The what and the why here and why now, I think, have real.

rational justification. The problem is no one trusts the guy that's driving the bus to execute it correctly and that it could backfire because if our messaging is wrong, if we don't execute well, if we, I mean, right now, quite frankly, I believe everyone just wants this war to be over. I think the worst thing we could do right now is make a much of hollow excuses for pulling up stakes and leaving because what's the next time we want to take military action? The nation just points it's missiles at its neighbors and says wait four or five days and hire a bunch of troll farms to piss on the president on social media. Russia to their, I don't want to say to their credit, but Russia has lost a million people and has spent four years and has not moved an inch.

Meanwhile, Spain won't put a single fucking boot on the ground. And I hate to say this, but it kind of goes back to what the one smart thing that I forget the guy, Maschiosi Sun said, who would you rather be less rather be in a fight with, someone who's really smart, or someone who's fucking crazy. And the reality is if the West leaves right now, and I understand that there was no legitimacy going into Iran, that they lacked, he lacked the legitimacy when you declare war, and this is war, you are supposed to get congressional approval and let the U.S. public have a vote in this vis-a-vis their representatives. And you have more legitimacy going in if you go in with a multinational force. He did not do that. People on the left and right are pissed up.

By the way, he's got about, I think it's 72 or 77 support of Republicans, 17% of Democrats. This has everything is a dramatic political divide. The more probably better litmus test is independence, and it's only got about 30, 32% support. But again, I go to, this is another data point that the leader of the free world does not know how to allocate resources in a responsible, safe way. I think he could have made a very solid argument for why this was a good idea if he'd outlined objectives that were. very straightforward, measurable, had a multilateral force, including European nations and Gulf nations, gone to Congress, brief the right people. And if Congress, if he didn't get the votes, then he shouldn't do it because this is war. This isn't a defensive act where he's

understandably given the rights to move quickly. So this isn't, in my opinion, this is moved from whether or not this was the right thing to do. The bottom line is, this is another data point where we think we have an autocrat who does not think things through, who acts based on the last person he spoke to, whether it was Secretary Rubio or Bibi Netanyahu, and is allocating our resources in a very irresponsible, dangerous way, and has the whole world going, Jesus Christ, the knock at the door now that we're supposed to be scared of

was supposed to be the good guys. Now they're the knock at the door. The one thing I don't, I'm not sure I'm aligned with you on, is when you say that their messaging, I mean, as the example, they come out and they say in so many words, this was Netanyahu's decision. He brought us into this. That's what Rubio basically says. That is the stupidest thing they have, and this is not, this is a high bar. That is absolutely the stupidest, most damaging thing they could have said. But what if it's true? Like, I mean, if it's a messaging problem, I mean, if it's, they, they flubbed their explanation, that's one thing. So you think that Netanyahu and APEC are effectively controlling the president and deciding if and where we declare war?

I think that what Rubio said, I could see as being true, which is that Netanyahu said, we're going in, join us or not. And then America decided to join us. I don't think America scares that easily. I don't, even Trump, I don't think that, I think it's more likely when something like this, and we won't know until, you know, those tapes are eventually the truth is like oxygen trapped underwater. At some point, there's a bit of an earthquake and the oxygen reaches, the truth reaches the service. I think what more likely happened, I think he respects Netanyahu, and Netanyahu was one of probably several voices saying, this could be your legacy.

you could unlock vis-a-vis this incredible resource in the best performing organization in the world, the U.S. military. You could unlock unprecedented peace, prosperity, and stability in the Middle East with this bold leadership action. And oh, the free gift with purchase, wink, wink, is you're going to push Epstein out of the news for a few weeks. But I don't, I just do not buy, and I'm uncomfortable with the notion that I feel kind of plays into this trope, that 2% of the population in the U.S. that is Jewish is somehow, controlling, you know, the U.S. government. Agreed. I don't doubt that Trump listens to Netanyahu and respects him.

But this was Trump's decision, not, and if they said we're going in with or without you, they could have, fine, they're not afraid to do that. What's become clear since October the 7th is that Israel is the superpower in the Middle East. Yeah. That they are, I mean, if you look at, we talked about. geopolitical disasters. Iraq, disaster, total fucking disaster, and set off a hallucination that has damaged your generation that can be distilled down to the following. Oh, hey, everybody. Hey, old people. We can cut your taxes and go to war. Because guess what? We have so much built up trust because of

previous generation's responsibility and leadership that we have massive borrowing capacity. George Washington to George Bush, seven trillion in deficits. George Bush to Donald Trump. another 30 trillion in deficits, right? So that was a huge mistake. The second biggest geopolitical mistake and may have surpassed was October the 7th. If someone had told Sinwar and Khomeini, you're both going to be dead and Assad is going to be playing video games in Moscow. And Hezbollah, the supposedly great fighting force is going to be neutered. The Houthis in Yemen are going to have, are basically going to be just bothersome but not a real force. And Iran is not even going to have control over its own skies. And Syria is now run by some, I mean, this was the

biggest mistake. We made the second biggest mistake or biggest mistake so far of the century. I think Sinwar and Iran, and let's be honest, it was Iran, made the biggest mistake. Again, let me just wrap all this up. How are the markets responding? They believe this is short term and going to be ring fenced. There is always an X factor because the enemy has a say in it. I do believe that the biggest mistake here, I think that Trump could have made a very strong argument for why to do this, why now, why it's an opportunity right now, if he'd set very clear objectives, and quite frankly had a Secretary of War that didn't have his head up his ass and was a little bit more competent. We are veered so far from the markets. Realist back in, Ed, realist back in. We have veered far, but I do think that it all relates. That's the problem. It's we're trying to price. massive levels of uncertainty here. That is what the market's job is to do at this point.

And so that is the question. They believe we're okay. And then I guess the question is, if you're an investor, do you agree with that? And I think there's a decent argument for that. And I also think there are some decent arguments on the other side as well. Well, let's make a bet here and let's timestamp it. And I keep saying let's timestamp it and our producers don't listen to me.

In a year, do you think oil is going to be higher or lower than it is now? I think it will probably be lower. I think I agree with you. But my certainty rating on that is very low. That's not a bet that I'm willing to put a lot of money on because I don't feel much conviction in it. But if I had to gun to my head, I would agree with you, oil goes lower.

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apply, NMLS 696891. We're back with Proftery Markets. Last month, we thought Anthropics Super Bowl ad was going to be its big moment, the ad went viral, racking up nearly 5 million views on X in under 24 hours. But the buzz then faded. And now, the real big moment may have actually arrived. At the end of February, Anthropic rejected a $200 million Pentagon contract. The company refused to allow its technology to be used for surveillance of U.S. citizens or autonomous military strikes. Trump swiftly blacklisted them, and hours later, Open AI picked up the contract. But taking that stand appears to

have paid off for Anthropic. Claude climbed to number one in the App Store, and Anthropics' enterprise market share rose to 32% overtaking OpenAI. Meanwhile, CHAPGPT's uninstall rate in the US reportedly jumps nearly 300% after news of its Pentagon deal broke. Now, the question will be,

how hard of a line is Anthropic actually willing to draw? It looks like the company is now back in negotiations with the Pentagon, seeking a compromise that would enable the government to keep using its technology, it would also prevent Anthropic from being excluded from the military supply chain. So, Scott, I think this is very interesting because this goes back to something that you were saying a long time ago when terrorists were unfolding, where you said, actually, if you're the leader of a large public company, a lot of them were very scared to say anything bad about Trump

or to stand up to him or to disagree with him in any way. And you made the point, actually, this could be good. for you. In business school, we have, we have ethics, we have leadership, and we have sustainability courses, and they each cost, every course costs $7,000. Let me save you $21,000. Ethics. Think about right and wrong.

Okay, that's the ethics course. Leadership. Do the right thing even when it's hard. Boom, you're done with leadership. And the sustainability, thinking about doing the right thing, doing the right thing when it's really hard, you might make money on it. Boom, you're done. I just saved you $21,000.

When you don't speak out on behalf of our wonderful allies and other companies and speak out on behalf of your own company, just wait, folks. In the long run, it's just really bad for you, not speaking out. Someone's now tried it in Dario Amadee, who stood up to the president, and what happens in store rates of Anthropic and of Lord skyrocketing, rocket, and actually their revenue, their ARR, went from $14 billion to $19 billion in two weeks, which is a 36% increase.

It's just unbelievable. So it seems that they have actually proven your point here. But let's get your reactions to what's happening between Anthropic and Trump and the Pentagon and Open AI. He's the first CEO who said, no. And he's absolutely right. Andoril builds weapons so the government can. kill people. The Silicon Valley wokester ethos was, no, we're going to walk out during lunch because

we don't like Google working with the Defense Department. Well, good for you. That'll show them, you little woke bitch. Meanwhile, they go back to the cafeteria and get your sushi and cry into your Atlantic. Anyways, they get to do that. A Palantir, if they want to provide data to Israel, as long as they get security clearance, they're allowed to do that. Because as long as you comply with the law, you get to operate within, you're entitled to, and subject to the laws. When the Pentagon starts saying, no, you got to do this. And he said he stuck up the middle finger. And guess what?

We're here for it. America's here for it. And as I mentioned before, on Sunday we're going to Minneapolis. We've had this resist and unsubscribe movement highlighting a bunch of companies to unsubscribe for. from the next evolution of it is the following. We're going to try and put out a bunch of data and a bunch of messaging and a bunch of media, encouraging people to not use and unsubscribe

from the Open AI, but to subscribe and patronize Anthropic. If you believe that companies have the right to operate under the laws and should not be subject to intimidation from the president or the Pentagon to do exactly what they want when they're not comfortable with it, then sign up for Anthropic. He's the hero we were waiting for. And we have been saying this for, I've been saying this for six or nine months.

There's an enormous commercial opportunity for the first person who gets off their knees and says, fuck you. I'm an American. This is an American company. We get to operate by the law. We get to decide who we work with. We can't do it based on sexual orientation. We can't not serve people because of their sexual orientation or their race.

Actually, that's not true. Now, I think the Supreme Court has decided you don't have to make a cake for someone, a gay wedding cake. But anyways, my point is he's the guy. Finally, someone took advantage of the biggest commercial opportunity of the last six months. And that is to stand up and say, you know what? Last I checked, being an American and being incorporated in America means we have to We absolutely have to operate by rule of law, but also we are protected by rule of law,

meaning we get to make these decisions. And he's been articulate, he's been forceful, and this goes to another prediction we made, I think about three, four months ago, that within a year, Anthropic would be worth more than Open AI, mostly because I think Open AI is going to decline in value. It's been proven now. I mean, I just returned to this unbelievable number that their ARR, their annual recurring revenue, two weeks ago was $14 billion, and today it is $19 billion. Like, we literally have the data in front of us that getting off of your knees, as you say,

standing up to the president, literally translated into a $5 billion revenue opportunity, and who knows how much it'll increase in the future. Meanwhile, look at the damage that it is levying on his greatest competitor, which is Open AI, and Sam Altman, they step in, they say, okay, we're going to take the contract with the Pentagon, and suddenly the uninstall rate absolutely skyrockets, one and a half million users leave chat GPT, and then there's this movement online that starts to trend, hashtag cancel GPT. So we're watching the evidence play out in real time, and I think the other thing that is so interesting is how badly Sam Altman is fumbling the bag every time from a PR and communications perspective, something that is quite,

striking. A year ago, 9% of Americans said they disliked Sam Altman. That's already a pretty big number. Today, that number is 20%. So it has more than doubled in the past year. And you think about all the things that he's gotten wrong, obviously his response to that Super Bowl ad, his very awkward Senate hearings, his very awkward interview on Jimmy Fallon, where he tried to present as this fun, likable, relatable guy ended up being quite awkward and seeming quite. honestly a little evil in a lot of ways. But then I think the worst moment we've seen from him happened a couple weeks ago.

And I just want to play this clip for you, get your reaction, because I think this is probably the worst thing Sam Altman has ever said in a public forum. People talk about how much energy it takes to train an AI model relative to how much it costs a human to do one inference query. But it also takes a lot of of energy to train a human. It takes like 20 years of life and all of the food you eat during

that time before you get smart. And not only that, it took like the very widespread evolution of the 100 billion people that have ever lived and learned not to get eaten by predators and learn how to figure out science and whatever to produce you. And then you took whatever you, you know, you took. So the fair comparison is if you ask Chachibatiya question, how much energy does it take once its model is trained to answer that question versus a human? And probably AI has already caught up on an energy efficiency basis measured that way. Let's get your reactions. There are certain looking glasses into people's character and souls, and I've also saw two

easy ones are how people treat service stuff. Do they look them in the eye? Are they patient with them? Do they tip well? And then also how they treat their pets. I have a close friend who I like to drink with, and no matter what, at exactly 11, and I might lose him as a drinking buddy. He's like, I got to get home and get my dog out.

It just how you treat your pets and how you treat staff, looking glass into people's soul. And there's a lot of different things, right? This was a rare moment when we had a bit of a looking glass into Sam Altman's soul. And he's a fucking nihilist. He is basically saying there is a rational reason to invest more in non-sentient beings because sentient beings require too many resources. And it's like, well, all right, boss, that means you're the guy who's looking for the fuck doll. And rather than having a human to have a relationship with, that you don't, you really don't understand what the shooting match.

The reason we're here is to is to create friction and resources and investment in relationships and resources to create sentient beings we can have. relationships with, and that he even thinks that way, that it's unfair. When you think about the amount of energy we have to put into raising a child to get to the point where it's intelligent, that, wait, I can replicate that with less energy. Just that he's thinking that way feels, it feels, quite frankly, it just feels frightening. Someone who sees power and ROI as best in emotion, relationships, and sentience. And no, power and ROI and the markets and AI are all meant to unlock greater prosperity and an absence of anxiety such that you can focus on those little energy consumptive nightmares called children. That's the whole fucking point, is that we do all this other

stuff such that we can make the investments in these children that are worth it. And I thought this is such a, this is such a statement from someone who has not had enough love in his life or has an experience what it's like to raise children and generally sees maybe a legitimacy of the rise of the robots. It's kind of this Peter Thiel nihilism weirdness that would they just look at stuff as, as ROI being the end game? No, the reason why we pursue ROI is such that we can waste time and money and be very inefficient with the investments we make. I still haven't got my money back on my children. I'm not sure I'm ever going to.

In almost every calculation of ROI, I say this to my kids all the time. I'm like, I talk to them about becoming a man and the idea of surplus value. And I'm like, you're surplus negative right now. I'm like, the school is spending way more than you're giving back. We give you so much more love than you give us. I can't, I'm like, do you know how much I'm spending on you? Like my son's been selling Pokemon cards and I'm like, okay, give that to me back. I forced my kid who just got into college to go through and tell me how much I will have to make pre-tax such that he can join a fraternity and sorority and, you know, and make out with girls from, you know, from Richmond, Virginia.

Negative, negative value. But this is the whole point. The whole point of humanity or of being a parent is that you make these investments because, That's where you give in to purpose. That's where you give into the most loyal Americans and some of the most satisfied Americans are veterans. They will never get an actual return on their service and being away from their families, but it gives them purpose that they're able to invest in something, that you're able to give up your resources and your emotions and invest in something, realizing on a tangible anodyne level, you'll never see a return.

What you get back is knowing that you added value. I think that's well said. I think that it is a very significant concern and question for us. I mean, what do we do about the fact that the leaders and the builders of the technology of tomorrow appear to have a genuine fundamental misunderstanding of the point of life, of the point of why we're all here, what existence and humanity is actually all about? I mean, what does that mean for us? I totally agree with you. I think Sam up we saw into his soul there, he does not have an understanding of these things.

He doesn't have an understanding of purpose. And I think that quote said it all. Now the question's going to be, Dari Amadee now appears to be in talks again with the Pentagon. Is he going to fold on his previous position? I mean, I hope not. We'll see how these talks unfold. But I think he has something good here,

which is standing up for his actual beliefs and his values, If he caves, then maybe it was fake. Maybe he didn't have values, at which point we'll have to turn again. But it is very interesting to see how this is all unfolding. I'm going to wrap us up here because I know that you need to go. Let's take a look at the week ahead. We will see inflation data from the Personal Consumption Expenditures Index for January and the Consumer Price Index for February.

We will also see earnings from Oracle and Adobe. Any predictions, Scott? My prediction is no. And that is, Dario Amadei has taken his company from $14 billion a year in AR to $19 billion a year in AR with one simple strategy. No. And by the way, the average SMP company, I think, does $18 billion a year. And I think that is going to give CEOs the confidence to say no. I think you're going to see a half a dozen to a dozen CEOs over the next 30 days, find their testicles and say no. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer,

video editor is Jorge Carty. Our research team is Dan Shalon, Isabella Kinsel, Kristen O'Donoghue, and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Profty Markets from Proffty Media. If you like what you heard, give us a follow and join us for a fresh take on markets tomorrow.