transcript

Speaker 1:
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Speaker 2:
[01:14] Or at adobie.com/do that with Acrobat.

Speaker 3:
[01:19] Support for the show comes from Amazon. There are the things you can plan for. A first birthday party, a movie marathon, a renter-friendly bathroom reno. And then there are the things you can never plan for. A surprise rainstorm, a Blu-ray player calling it quits, stick-on tiles that looked way better on the package. For all things planned and unplanned, Amazon has you covered. You'll find low prices on everyday essentials and last-minute lifesavers. Shop Amazon and save on essentials. Save the everyday.

Speaker 4:
[01:56] Today's number, 62. That's the percentage of influencers who report feeling burned out, according to a new content creator mental health study. Today's other number is zero. That's the percentage of Americans who care. If money is evil, then that building is hell. Welcome to Prof G Markets. I'm Ed Elson. It is April 23rd. Let's check in on yesterday's market vitals. The S&P 500 and NASDAQ hit record closing highs on the ceasefire extension. The Dow also rose. Meanwhile, the price of Brent crude rose back above $100 per barrel after Iran seized container ships. The dollar and treasury yields climbed. And finally, cannabis stocks soared on news that the DOJ is moving to reclassify marijuana as a less restricted substance. Okay. What else is happening? Anthropic built an AI model so dangerous, they refused to release it to the public. We discussed that last week. However, we just learned that unauthorized users got a hold of it anyway. Bloomberg reported that a small group of unknown, unapproved users have had access to the model Mythos for two weeks. They broke into the model the same day Anthropic launched Project Glasswing, a controlled rollout giving a select group of companies exclusive access to the model. Anthropic says it is investigating the security breach from these unidentified individuals but has found no evidence of malicious use so far. The question is, if they can access Mythos without permission, then who else can and how bad could it get? Here to help us answer those questions, we're speaking with Sherri Davidoff, founder of LMG Security and co-host of the podcast Cyberside Chats. Sherri, thanks for joining us on the show here. We discussed Anthropic's Mythos model the other week. It's extremely powerful. How powerful? I don't know, but I know that it was so powerful that they refused to release it to the public. I also know it was so powerful that we saw meetings at the White House where they convened among some of the most powerful people in the nation to figure out what to do about this thing. Now, we learned that someone accessed it, I guess, and it was unauthorized. I can't tell how much of this is real and how important it really is. That's why I have you. What do you make of this?

Speaker 5:
[04:35] Well, I mean, this is something we've been expecting from day one. They say three can keep a secret if two of them are dead. Mythos Preview has been released to over 40 tech companies, and Lord knows how many people at those tech companies. So from day one, I'm sure there was unauthorized access. The question is, who is accessing it when they shouldn't be? Is it just people at those companies? Is it someone who has wormed their way in from the outside and has actually hacked in? But honestly, the part that I didn't expect was that we would actually hear about it. So bravo to Anthropic for investigating and for whoever it is that figured this out and has started to publicize it.

Speaker 4:
[05:14] Well, it wasn't them. It was Bloomberg. It was the reporters over at Bloomberg who figured this out. I mean, I guess if we could just go back a little bit, from my understanding, the problem with Mythos is that it can basically hack any cybersecurity infrastructure anywhere in the world. And you are an expert in cybersecurity. Could you just take us through what is the danger of Mythos exactly and how powerful is it? What are the capabilities?

Speaker 5:
[05:45] Sure. Mythos is completely changing the security risk landscape right now. I was just saying to somebody, I have been in this industry for 25 years and I have never seen something that completely altered the security landscape to this extent. So absolutely, we need to be paying attention and it is very serious. The capabilities of Mythos Preview, according to Anthropic and those that have used it are, it's basically like a hacking ray. You can point it at software and even if you don't have the source code, it can still detect vulnerabilities and write code that will exploit it. So a human doesn't need to do anything to break into that software. That means that already researchers have discovered thousands upon thousands of bugs and there are working exploits to go with that. So what that means is that literally anyone who has access to this could potentially just point it at wherever they want and break into that system before the vendor has a chance to even think about patching it. So there are some defensive measures that we all need to be taking right now. The goal by releasing it to some tech companies was hopefully to give them a leg up. But let's be honest, that's a lot of people that have access. When that many people have access, it's going to get abused.

Speaker 4:
[06:58] So are you concerned that this will get into the wrong people's hands? It sounds like your view right now is that people who aren't supposed to have it have it. But since we haven't seen a mass data breach or at least something that is extremely concerning yet, then it's not a problem yet.

Speaker 5:
[07:16] Well first of all, unauthorized access is absolutely inevitable when this many organizations already have access. And I've actually been wondering for those companies that do have access, how are they being vetted? How are their security procedures being reviewed? How are they limiting this access? Because there's only so much you can do to secure any one company, but I'm hoping that Anthropic is maybe vetting them in this process. The challenge is you have to weigh that with the desperate need for these companies to start patching bugs. When you think about it, some of this software is used on millions and millions of systems, whether it's antivirus software or operating systems or systems in the cloud. So when, not if, an adversary is able to find and exploit these vulnerabilities, it's going to have a massive impact and we need to give these tech companies a leg up.

Speaker 4:
[08:07] So what does it mean for some of the largest tech companies? I mean, these are big names in the world of markets, companies like CloudFlare and CrowdStrike, all of these cybersecurity firms. What does this actually mean for them? I guess this is a debate, whether it's a bad thing or perhaps even a good thing, because I guess now you need cybersecurity more than ever.

Speaker 5:
[08:31] Well, in the long term, it means we're going to completely change how we manage software vulnerabilities, because up until this point, at least in theory, you find out about a vulnerability, you work really hard, you patch it, maybe it'll take a few weeks, maybe it'll take a few months, and you hope that the bad guys don't manage to figure out the same thing and exploit it first, right? So we've had that lag, and now I'm sure this is a complete emergency for all the major tech companies. And honestly, I'm concerned about every organization in the software supply chain because frankly, your small businesses, your smaller suppliers also need access to this to patch their bugs as well. So I'm sure they're scrambling, they're trying to figure out how on earth are they going to patch these thousands of vulnerabilities? How are they going to prioritize? They've got to be using AI to help counteract this, but AI can also introduce bugs. My guess is right now they're scrambling to work on the system, to make it so they can patch things faster than we've ever been able to before. And we're going to need to be shifting to more continuous software updates instead of like, oh, you get an update once a month or something like that.

Speaker 4:
[09:36] Do you think the government should have a role in this? I mean, some people have made the comparison of AI to things like nuclear bombs. And I mean, I'm not sure if that's the analogy to be making, but I think you can compare it to a weapon at least.

Speaker 5:
[09:53] That's very insightful, Ed. And when I first heard about this, I thought it reminds me of the cyber disarmament movement where there was a talk that the CIA and the NSA were stockpiling vulnerabilities and that creates risk for everybody. And certainly AI with these capabilities creates risk for everybody as well. And so one of my questions is, what other companies beyond Anthropic have access to these capabilities? They may not be the only ones that have invented an AI that is capable of doing this. And so where I see the government potentially being involved is maybe setting some standards for disclosure. If you have an AI that has certain capabilities, do we need to track that? Do we need to notify anybody? And how is this going to be coordinated?

Speaker 4:
[10:41] Right. Do you think that, I mean, some would say, or I think some people think or suspect that maybe it's all being overhyped, that part of this is sort of like a fear-mongering marketing tactic to say, look how powerful, look how scary our technology is, to kind of get investors excited about, wow, this is going to be really transformative. And I guess it's sort of tough to understand, because I think that's a pretty compelling point. Like, it would make sense for Anthropic to say, look how crazy and bad this is, and get a lot of headlines and generate a lot of heat, and then people like you and I come on podcasts and we talk about it. But then at the same time, it also seems very dangerous and frankly stupid to just assume that it's marketing and sort of cover our eyes and say, no, this isn't going to be a problem because it could very well be a problem. I guess, where do you stand on this? Like, to what extent is this hype and fear mongering to get everyone kind of excited and also scared versus, no, this is very legitimate and we actually should be scared?

Speaker 5:
[11:46] Yeah, I wish I thought it was hype, but I myself have been using Claude code. I've been looking at the capabilities of Opus. Last year, I actually did a research project with my colleague Matt Durin, and we researched the dark web and looked at tools like WormGBT and FraudGBT that were already pretty darn good at finding vulnerabilities and writing exploits without all of the ethical guardrails that we have on legitimate tools. So absolutely, I think that there are some real capabilities here. I do think that the future will be different than any of us are predicting. The other thing to remember in security is that frankly, cyber criminals have had the ability to get into most organizations for a long, long time, and it doesn't always mean there's some disaster that comes out of it. The same thing is it's possible to burn down a building. That doesn't mean all buildings will burn down. Even adversaries have limited resources. And so there's always going to be that balance. But yes, absolutely, this is a huge change to the cyber risk landscape. I'm sure Anthropic is capitalizing on that. They put out a press release. I also suspect that there are probably many other organizations and groups that have similar capabilities that are not putting out press releases. But we should absolutely be concerned.

Speaker 4:
[13:04] Do you think that China, this is the kind of thing that China would be focused on, or Russia or any other, or perhaps Iran? I mean, to what extent is this like a real national security risk?

Speaker 5:
[13:16] Well, I'm wondering if China already has capabilities approaching this. If not, I'm sure they're trying to get their hands on it. Same thing with Russia and other nation states and organized crime groups. I also thought about when Tesla was almost hacked. This was several years ago, and I don't know if you caught this news, but Russian agents tried to bribe a Tesla employee into installing malware on Tesla's network, and they offered this employee a million dollars. Amazingly, that employee turned around and reported this. But what if the bad guys offered any employee at one of these 40 tech companies a million bucks? Is somebody going to take them up on it and say, oh yeah, you can come into my computer and access it? So we really need to be thinking about how our nation state's going to get these capabilities if they don't already have them.

Speaker 4:
[14:06] Really good point. Sherri Davidoff, founder of LMG Security, co-host of the Cyberside Chats podcast. Sherri, I appreciate your time. Thank you.

Speaker 5:
[14:14] Thanks, Ed.

Speaker 4:
[14:16] After the break, a breakdown of Tesla's earnings. And by the way, we are heading out on tour at the end of May. So for more info and to get your tickets, head to profgmarketstour.com. Can't wait to see you.

Speaker 1:
[14:36] Support for the show comes from Framer. First impressions matter, and if you're a business owner, then having a messy website is basically the same as not showering before that in-person job interview. Thankfully, Framer helps show off the best parts of your business. Framer is an enterprise-grade, no-code website builder used by teams at companies including Perplexity and Miro to move faster. With real-time collaboration and robust CMS with everything you need for great SEO, not to mention advanced analytics that include integrated A-B testing, your designers and marketers are empowered to build and maximize your.com from day one. So whether you want to launch a new site, test a few landing pages or migrate your full.com, Framer has programs for start-ups, scale-ups and large enterprises to make going from idea to live site as easy and as fast as possible. Learn how you can get more out of your.com from a Framer specialist or get started building for free today at framer.com/markets for 30% off of Framer Pro annual plan. That's framer.com/markets for 30% off. framer.com/markets. Rules and restrictions may apply. Support for the show comes from Anthropic. When you're solving a problem, just scratching the surface isn't going to get you anywhere. You want to understand the deeper questions and implications and that's where Claude can help. Claude is the AI for minds that don't stop at good enough. It's a collaborator that actually understands your entire workflow and thinks with you. Whether you're debugging code at midnight or strategizing the next business move, Claude extends your thinking to tackle the problems that matter. And Cowork brings Claude code's agentic power to your desktop, no terminal required, so anyone can use and have Claude do real work. Just point it to a folder on your computer or add connectors like Google Drive and Gmail, describe what you need and it handles the rest like organizing files, building spreadsheets, or drafting reports from scattered notes. You can queue up tasks and come back to finished work. Ready to tackle bigger problems? It started with Claude today at claude.ai/markets. That's claude.ai/markets and check out Claude Pro, which includes access to all the features mentioned in today's episode. claude.ai/markets.

Speaker 3:
[16:48] Support for the show comes from Amazon. There are the things you can plan for. A first birthday party, a movie marathon, a reggie-friendly bathroom reno. And then there are the things you can never plan for. A surprise rainstorm, a Blu-ray player calling it quits, stick-on tiles that looked way better on the package. For all things planned and unplanned, Amazon has you covered. You'll find low prices on everyday essentials and last-minute lifesavers. Shop Amazon and save on essentials. Save the everyday.

Speaker 4:
[17:30] We're back with Prof G Markets. Tesla reported first quarter earnings yesterday that largely beat analyst expectations. Revenue rose 16% year over year, with both cash flow and profit coming in ahead of estimates. The company also signaled that vehicle demand is picking back up. That said, not everything was strong. Q1 deliveries came in below expectations. Nonetheless, the stock rose as much as 5% after hours. So, here to help us break down Tesla's first quarter, we are speaking with Seth Goldstein, senior equity analyst at Morningstar. Seth, thank you for joining us on the show here. Better than expected, pretty much. Stock rising 5% after hours. Let's just start with your top line reactions to these earnings.

Speaker 2:
[18:20] Yeah, so we knew deliveries was only up 6%, which did come in below consensus from the report at the start of April, but I think what the stock was up and reacting to were positive business developments and namely positive free cash flow in the first quarter of 2026. With Tesla starting a heavy capital expenditure program, at least 20 billion, if not higher, to fund its transition to an AI and robotics company, I think the market was worried coming into 2026 of where would that cash come from and could Tesla still generate strong free cash flow or even some positive free cash flow while that program is ramping up. And so positive free cash flow in the first quarter puts them to a good start to the year. And then if we look operationally at the businesses, Tesla was able to launch its RoboTaxi in two new markets by April, where we see them starting in Dallas and Houston. And interestingly, they're launching immediately into the unsupervised RoboTaxi. So if you remember, when they started in Austin, there was a human safety monitor who would ride in the front passenger seat of the vehicle. But with the Dallas and Houston launches, they're going directly to no safety monitor, which tells me that the software is progressing well, testing is going well enough to enter new markets and immediately not need the safety monitor. Then if we look at factory expansion plans, the transition to take the factory that was making Model S and Model X vehicles and take that to produce the Optimus Humanoid Robots is still on track for to enter production by the end of this year. And so with Tesla's two big pillars in the future going to be self-driving cars and Humanoid Robots, both of those initiatives are on track with the positive free cash flow and that led the stock to rise after hours.

Speaker 4:
[20:14] That does sound pretty good. I guess let's just start with the Robotaxi for a moment. I mean, it seems that we're on a better path, but if you look at the Robotaxi over the past year or two years and you compare it to the growth of a Waymo, for example, the fact that we're just getting to having actual Robotaxis, as in there isn't someone sitting there monitoring the thing in the driver's seat, i.e. basically a driver. It seems that this has been largely a failure so far. But it sounds like what we're learning is that actually they are kind of getting there. I mean, there have also been some reports that they've only launched one vehicle per city here, which seems a little bit concerning. I guess what you're hearing from me is a skepticism about the Tesla Robotaxi program, which I feel like has been hyped for a very, very long time. And I always feel like, oh, it's about to get good. They're finally figuring it out. They're finally launching and then we come back like a quarter later or even a year later. And it's like, we're in the same situation we were. So I guess, tell me a little bit more about the Robotaxi because I still feel skeptical.

Speaker 2:
[21:24] Well, the Robotaxi has been a year away for most of the past decade. And so I understand the reason for the skepticism, but we're seeing tangible progress now where the Robotaxi is launching a service with no human safety monitors in the vehicles in three cities in Texas, with plans to expand to five more cities in over this coming quarter. And so we're actually seeing progress, but Tesla wants to go intentionally very slow here. Like we saw Waymo go very slow for years at first, because nobody wants to repeat of the cruise incident where the vehicle injured someone, and then all cruise operations were paused indefinitely. So I think Tesla is intentionally going slow here and we're going to see them grow in new cities, but they want to be confident in the technology, confident that the software can handle all of the edge cases that you might see while doing a Robo taxi trip, so that they can progress in a safe manner. And so we do have real revenue. We have real operations in three cities, but I expect it to be a very slow pace of ramp. But then if we look, you know, three, four, five years down the road, then all of a sudden I think we'll start to see, you know, the vision for the future where we see many Tesla, Volvo taxis throughout cities, probably mostly in the southern part of the US still, but being able to be a full ride hailing participant, not just in this sort of early testing phase that they're in today.

Speaker 4:
[22:53] Yeah. Let's talk about sales or deliveries as well before we get to the humanoids. So as we mentioned, missed expectations on deliveries, but we already knew that because they had already reported it before. They produced 50,000 more vehicles and they delivered this quarter, the largest gap in their history. I mean, I'm still someone that views Tesla as a car company. At least that's what it is right now. They haven't launched these other businesses yet, and the car business does seem to be deteriorating. That does seem to be concerning. What do you make of the sales of the vehicles this quarter?

Speaker 2:
[23:33] Well, sales were still up 6% year over year. So, while it did miss consensus, it still grew at the end of the day, and we did see solid profit margins. Over 20% if you include the regulatory credits, 19% if you exclude the credits, and that still tells me that that's a strong business. We also saw full self-driving subscriptions grow. Another over 100,000 subscriptions added during the quarter. So, that tells me there's consumer enthusiasm for full self-driving subscriptions, even though it's still a level two product today, it can still make for an easier driving experience, and that's an additional revenue stream for Tesla. We're also seeing insurance grow. And so, Tesla's plan for their vehicles was not only to sell the car, but then also to have these other recurring revenue streams that consumers would buy with the vehicles, namely the autonomous driving software, insurance in some US states, and charging all over. And this plan seems to be going well. And so, yes, Tesla today, autos is still the biggest business, and I think it will be for a number of years. But we're still seeing a decent automotive results, even if the deliveries came in below expectations. You know, and I'll note one other thing. We did see about 50,000 or so Model 3, Model Ys produced more than they delivered, but they just recently got approval in the European Union by the Dutch regulator to launch full self-driving software, which I think differentiates Tesla. And without that, Tesla in Europe is just another EV company. And right now in Europe, there are many long range EVs at a similar or cheaper price point for consumers to choose from. So it's no longer that Tesla is the only choice for a long range affordable EV. And as we see the Dutch regulators approved FSD throughout the next one to two quarters, likely to see the entire European Union and multiple countries approve full self-driving, which I think will really boost deliveries. And so Tesla could have been producing more in anticipation that they were going to see increased demand just like we saw in China last year, where deliveries were falling to start the year, but then full self-driving was approved and we saw deliveries immediately improve once consumers could buy that software.

Speaker 4:
[25:56] Yeah, I mean, hearing it makes me feel a little bit more optimistic about the prospects. I think the question is kind of going to be for Tesla, like can they come back, especially in Europe, from this massive slump that we did see in sales, where everyone basically just turned against Tesla as a company because of, essentially because of Elon. Just looking at the valuation here, Tesla is trading at 185 times forward earnings. It's the most expensive stock in the Mag 7, by far the next most expensive is Apple at the moment, trading at 30 times forward earnings. How do you justify that? Is it basically just humanoid robot expectations?

Speaker 2:
[26:41] Yes. Well, Tesla is in the midst of trying to transition its business from selling cars, which tend to be lower margin, to selling autonomous driving software, which is high margin and humanoid robots. So it also be accompanied with a software likes recurring revenue stream. And so if Tesla is successful, they're going to enter from a lower margin business, cars and batteries, to a higher margin business, mostly subscription software. And that would generate strong free cashflow and strong earnings growth over time. And at the current valuation, the market is giving them a lot of credit for successfully being able to transition in into these new business lines. I think Elon Musk's ability to make what's what seem to be impossible inventions, a cool long range EV that's affordable or rockets that can land themselves, as we see with SpaceX investors are giving him credit for these new ventures as well. As we're seeing tangible progress with things like robotaxi testing launches in multiple cities and the Optimus robot moving from testing to now starting a dedicated production line, I think investors are taking these signals as a sign Tesla will be successful and the stock price reflects this future Tesla transitioning to these higher margin businesses.

Speaker 4:
[28:03] What do you make of the valuation? Do you think it makes sense?

Speaker 2:
[28:06] We have a fair value estimate of $400, so we think the stock is fairly valued. We do think Tesla will be successful in transitioning. We were skeptical of the robotaxi rollout. We thought it would take longer than management was saying. And we had years of data of management saying it will be ready next year, it will be ready next year, and we didn't see it. And yet when Tesla was able to move to no safety monitors in Austin in just less than a year after launching the robotaxi service, that really gave us confidence that this isn't just management hyping up the business, that the software is actually working, which for Tesla, that's going to be the ultimate question. Does the software work? Can it make cars drive themselves? Can it make humanoid robots perform tasks that you can replace a human with to be valuable enough that both companies and potentially consumers would want to buy one to be useful, not just to be sort of a gadget or a toy. And if Tesla is successful, if the software works, then it's going to be a very high margin free cash flow stream that's coming. So we think the stock is fairly valued. We don't think it's a screaming buy. But if you think that Tesla will be successful in these new ventures, then the stock is not overly valued or undervalued. We think it's trading at about a fair price.

Speaker 4:
[29:30] I have one last question about SpaceX. Obviously, SpaceX is planning to IPO. It's going to go public at close to a $2 trillion valuation, which is going to be remarkable. I have a theory or a hunch that this might be a bad thing for Tesla because Tesla seems to be the vehicle that investors pour their excitement and hopes and dreams about what Elon can do for the future and for the future of the economy. They put it all into Tesla, and that's why you see that extraordinary multiple. I wonder if SpaceX sucks that energy out of the stock, and that becomes the vehicle for Elon Musk and your excitement about him as an entrepreneur. What do you make of that and how do you think SpaceX could affect Tesla stock if at all?

Speaker 2:
[30:18] Well, I think that SpaceX offers investors a second Elon Musk growth of the future platform, and I think there's going to be a lot of institutional and retail excitement for both. I don't necessarily see a lot of people trading their entire Tesla stake for a SpaceX stake. I would think institutional portfolio managers might trim multiple companies to make room for SpaceX. As we're seeing, SpaceX will likely enter all the major indices fairly quickly after the IPO, and I think for retail investors who are going to be allocated what appears to be a decent portion of shares, I think they will hold both Tesla and SpaceX shares. For SpaceX, they're going to be doing a lot of cool futuristic, potentially trying to make something like data centers in space a reality, and trying to build a base on the moon and explore interplanetary travel. That's the long-term risk for SpaceX. Tesla is going to be a key supplier for SpaceX to make that happen. If you believe in SpaceX's mission that they can be successful, they're going to need Tesla Solar Panels, Tesla Batteries. They already are a major buyer of things like Tesla Cyberstrux for work trucks, and they would need the Optimus Robots to likely make the data center work and be able to run some space operations in space, which I think could be a good use case for Optimus, if we see Elon Musk continue to integrate the businesses operationally. I think for investors, there's going to be a lot of excitement and enthusiasm for both what SpaceX is doing, but where Tesla is going as well. As we see the two businesses continue to work together, I think investors would be willing to hold both. I don't necessarily see this sort of sell all your Tesla to buy SpaceX just because that became public.

Speaker 4:
[32:12] All right. Seth Goldstein, Senior Equity Analyst at Morningstar. Seth, appreciate your time. Thank you. A quick update on Iran before we go. First off, let's recognize the extension of the ceasefire. Two days ago, before the deadline of the original ceasefire, Trump announced he was extending it. He said the ceasefire would continue until, quote, discussions are concluded. And this is also what we discussed with Professor Justin Wolfers as well. However, just after that, we heard a rebuke from Iran, specifically from an Iranian official who said that the ceasefire extension quote means nothing, which obviously confused things. But at the same time, it was also kind of fair, because just a few days earlier, during the original ceasefire, we witnessed footage of a US Navy destroyer firing weapons at an Iranian container ship, which was clearly a violation of the ceasefire. And that was in addition to the US blockade on Iran, which Iran had explicitly said was also a violation of the ceasefire, and in addition to Israel's attacks on Lebanon, which Iran had also said was a violation of the ceasefire, and in addition to Iran's own attacks on US ships during the ceasefire, which was, of course, a violation of the ceasefire. In other words, the original ceasefire wasn't actually a ceasefire. So to extend it doesn't actually mean anything, because there was no ceasefire to begin with. So as Iran said, yes, it means nothing. And we already have proof of this, because just yesterday we learned that Iran attacked another three ships in the Strait of Hormuz. They fired at one ship that was passing just off the coast of Iran, and then another two that were in the Gulf of Oman. So there you have it. It does indeed mean nothing. So let's go back to Markets for a moment. Conventional wisdom among investors is that over the past few weeks, things in Iran have started to get better. Things have changed. Perhaps this war might be just about coming to an end. That is the consensus at least. And as a result, Markets have ripped back up, and we are now looking at all time highs. But in light of my previous point, I will propose the following question to Wall Street. What exactly has changed? And that is a genuine question. Because the way I see it, nothing has changed. We're still at war with Iran, now approaching two months. We said we had a ceasefire, but in reality, no, it wasn't a ceasefire. We then said that we had an extension, but of course there was no extension. We said oil markets would calm down, but they remain very volatile. Prices remain around $100 a barrel. We also said gas prices would come down, but they haven't. Gas is still more than $4 a gallon. It is still up 35 percent since the start of the war. Put another way, I look at our situation, and I don't see anything different. In fact, the only thing that seems to have changed here is our tolerance for this war. I mean, two months ago, if I told you what I just told you, you would have said, that's insane. But we've now been out this for long enough, that we are now starting to normalize it. The philosophy is, war is war, Iran is Iran, this is what happens. And as I said on Monday, I believe that that is the overwhelming sentiment that is driving markets continually higher. We are entering the next chapter of the story, which we ought to call news fatigue, where the headlines become overwhelming, the news becomes confusing, and eventually we get bored of it, and we decide to stop caring altogether. This is what happened with Iraq, it's also what happened with Afghanistan, and it is now happening with Iran, and we are seeing that reflected in the markets. Despite the fact that we are in the same place we were a week ago, and that we were a month ago, and that we were now two months ago, we have decided for our own sanity that things are improving, or at least that things don't really matter anymore. That is the consensus that things have changed. But if you look at the price of oil, and you look at the price of gas, and you look ahead to the price of everything else, I think the economy is about to tell us a hard truth. They haven't. Okay, that's it for today. This episode was produced by Claire Miller and Allison Weiss, edited by Joel Patterson, and engineered by Benjamin Spencer. Our video editor is Brad Williams, our research team is Dan Sholan, Isabella Kinsel, Chris Nodarno, and Mia Silverio, and our social producer is Jake McPherson. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson, and tune in tomorrow for our conversation with Andrew Yang.