9AM HOUR: Beyond the Post-Fed Rally, Buffett Steps Down as Berkshire's Chairman, Apple iPhone 18 Lineup Debuts in Stores 9/18/26

0:00The wrongs we must right. The fights we must win. The future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us. We are Marines. We were made for this.

0:30At Jared Jewelers, we know the right gift can bring a lifetime of meaning, a memory cherished forever. 20 % off storewide. Exclusions apply. See Jared.com backslash radio for details. Jared, make the holiday last forever. Shop Jared Jewelers. Market moving insight and analysis. Join Jim Cramer, David Faber, and me, Carl Quintanilla, on the opening bell hour of CNBC's Squawk on the Street. Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber, at Post 9 of the New York Stock Exchange. Coming off the best day for the S &P in a couple of weeks, trying to avoid a second down week in a row.

1:04Futures have lost a little steam as the 10-year is re-approaching five. Oil bounces after three days down, AAA gas close to$4.5. A roadmap begins with Buffett stepping down as chairman of Berkshire, effective immediately, transitioning to chair and emeritus with his son replacing him as chair. Plus, Apple's iPhone 18 goes on sale today. The company's new CEO, John Ternus, joining the throngs who are coming to the company's Fifth Avenue store for that launch. And Jensen Wang remaining bullish on the AI road ahead. He says he expects to sell twice as many chips next year as this year. Let's begin with the markets trying to extend their gains.

1:44Best day since early August, Jim. Getting through the Fed, was that key? Well, I think it was a big, bad event. People were worried that perhaps Warsh would maybe wobble on inflation, which, by the way, really the propensity of people to actually want inflation to die is much bigger than the ones who say, let's take it to one percent. Yeah, let's do that. Because there is such a thing as the supermarket. There's oil. There's all those things that make it so that we actually want a Fed chief who's tough. We had to wait to see what the commentary was. obviously he's changed his mind about the way or he's changed how he disseminates information in the way that he calls on people.

2:23He's very acumenical on who he called him. We no longer have a Fed chief who necessarily is part of what I regard a cabal of people who have been Fed chief followers. A cabal? Well, I mean, guys who are like on the inside. I mean, I didn't think there were any inside guys. Well, I'm talking, you know, the journal guy. The reporters are now seeded by alphabetical order. I like that. I think because I was a reporter trying to break in once, and it was like me, me, me. And what does this have to do with anything having to do with race? The seeding chart? What? Okay, listen to me for a second. I listen to you all the time.

2:58That's why I ask questions. Take a new approach. Actually, have it go in yours and then process it. I'm going to have Claude process it, if you don't mind. Like 26 % of all my other input. No, I'm kidding. Go ahead. Is that you, or is that A series of ants. All right. What do you say? I think he's got an approach. And his approach is to use these people as props. They're props to tell the story. It is not the previous Fed chiefs who actually was engaged. Oh, OK. He didn't choose to engage because he has his rap. And his rap, frankly, is about breaking inflation. So there really isn't any need to interact.

3:38And that's quite a change, I think. Got it. No, I'm saying he was— I hear you. That makes sense to me now. I can say he was stern. I mean, when you're a coach, you don't sit there and say, hey, what do you think? I know you're back up shortstop. Hey, what do you think? You're third-string cornerback. No, it's like, let me tell you what to think. I like that. Okay. Definitive. He's definitive. Where do you think—all right, here we are, ending a week. We've got the 10-year Treasury hanging around that 5%. We've got—we've talked about, obviously, oil. I haven't looked at it at this very moment. Diesel prices, the latest some reports that Saudi's not going to be furnishing much in terms of Europe.

4:15Not sure what that's going to mean over there. Can't be good. You spent three days in California talking to everybody having to do with AI. There's crude. I don't know. Give me your give me like your two two sentence summary of the world. OK, look, I think it's Jensen versus let's let's just say the people who say slow down. OK, we know who they are. I actually think the key figure that we haven't heard from, and I'm going to tell you this because I think it would change people's minds, is Musk. Because Musk has, Musk has probably, I think that, I think Jensen would say that Musk knows as much as Jensen about what to do.

4:53So I thought that was interesting that Musk was on this pace camp. He was a very, I mean, the one I'm remembering is just the social media post that simply said agree. Yeah, right. Which is why I want to hear him, because I need some arbiter. I mean, to me, the product liability issues are big. I thought the CARP interview was excellent that you had. I think the idea for these companies trying to get insurance is almost ridiculous. I do think the most important interview I had was with a fellow by the name of Todd McKinnon, who's one of the least promotional people on earth. He's Okta. He said, look, all we have to do is identify.

5:26Once we identify, we know everything they do. If someone's doing something nefarious, which we know, then we'll stop it. We can stop it. And I said, well, is this like Predator? And he said, well, what are you talking about? I said, well, you know what? When Arnold says it's bleeding, if it's bleeding, we can kill it. And he said, that's exactly what it's like. We know what it's doing. It doesn't bleed. We can kill it. So I don't hear any of these guys talking about the idea of identifying. By the way, I don't hear any of these guys talking about what Nikesh is talking about, what George is talking about, what Todd's talking about, which is stopping it.

6:05They just don't. They like say, hey, you know, come on. Poor us. I mean, I think that I was going to use the they just seem unaware of the power that they have. They seem unaware of the swarm, whereas the cybersecurity guys ideal will say, look, the storm is everything. And so is North Korea and so is Iran. I mean, today the story is about these hackers having used Claude to break into chat. Into open AI, yes. Having fun. There is that. And then there's the report from Claude that we got last night where it talks about leading, I think it's 26 percent of the company's AI research and development work.

6:41So it's not fully recursive self-improvement yet, but it's getting closer. To put that in perspective, in February, less than 1 percent of the company's AI research and development work was led by AI, was led by Claude. Did you read Peggy Newton today? No, I don't typically read her until later in the day. She used the word recursive. She said that's got to be banned. All the words have to be banned because they're just obscure from regular people what's really happening, which is that these things are in charge. It's just teaching its next generation, and it's doing it without human intervention.

7:15So in this case, 90 percent of anthropics R &D, by the way, is now done at a level where Claude either collaborates or leads the human researcher. And then on from there. We'll have more on AI guys later, I'm told, in my ear. I just want them to be a little more responsible and get to bring in and sit down for a long time with cybersecurity people. And then we have to have an agency with the government that inspects the hygiene. So nobody does this. But how can we not be identifying these things? I mean, when I read the New York Times piece about the swarm, it made it sound like that they were, frankly, undercover.

7:51What? Nothing. We were told that we're not supposed to talk about AI anymore. And then you keep talking about it. Don't you ever listen to your producer? Much more later, I'm told. No, no one was in my ear. Oh, they're telling me much more later. They were playing music and talking about the Phillies. I don't know what that's about. I don't know. If you're going to go there, at least talk about these things. Yeah, yeah. We each get different things in our ears. Talk about Sunday against the Titans. I mean, honestly, I'm not hearing anything. Let's move on to some news about the Oracle of Omaha.

8:21Warren Buffett, Berkshire Hathaway announcing he's stepping down his chair, effective immediately after leading the conglomerate for six decades. He will remain on the board and serve as chair and emeritus. His son, Howard, succeeding him in the role. In this letter, he says, quote, Serving as your chair has been the privilege of a lifetime. I've never taken your trust for granted. Father time always wins. He has, however, been generous with me. He's given me the opportunity to see Berkshire reach a point where I'm more confident than ever about what lies ahead. Company's in excellent hands, and I look forward to remaining a shareholder.

8:5296. Pretty darn great. Congratulations to him. I think that if you don't understand the way he thinks, you have to work there all these years, then I just think that you ought to have those people in your ear telling you what to do. Because, David, honestly, don't you think he's got a legacy? How many people have created a succession plan that's as great as his? Jamie Dimon? No. That was a joke. I picked it up as that, although some people might not fully have understood your understated sarcasm. I'm the only person other than I can't find any company that has such a definitive succession plan.

9:29No, he did it. And obviously he did it when he was in his mid-90s, which was later than many would typically move to succession. But, of course, he's extraordinary in so many ways, including, of course, his longevity. But could Father Time have a draw this time? It would be nice, wouldn't it? Wouldn't it? By the way, as we keep moving forward with AI, you never know. We may be able to reverse aging in cells. We'll all live forever. He's going to cure every disease. If you get misaligned and you play recursive, I'm going to tell you, you're going to be signed on a 300-year contract. In Buffett's case, probably not quite there yet.

10:03Well, congratulations to him. Yes. One of the greatest, if not the greatest, careers of— Three cheers for capitalism. —in the capital markets of any person. He's a capitalist. Let's not forget that. So many people like—I mean, I now meet people who think that capitalism is evil. Who what? Who think that capitalism is evil. Where do you meet these people? Well, when I meet them, I have family, people I talk to, and they just say, why do we have capitalism? I mean, well, give me an alternative. Well, why aren't we socialists? Why do we take from the rich? I said, well, well, we get it. I mean, we've been over this a thousand times.

10:37The share of labor to the share of capital is it's out of balance. You can understand. The CEO world is ridiculous. Well, it's more than that. It's not just CEO pay. It's the incredible accretion of wealth to a very small group of people, in part because they've been great capitalists and built incredible businesses and happen to own a lot of them and then borrow against that ownership instead of perhaps paying as much in income tax as they might otherwise. And again, to Carl's point, there is an argument around why are we taxing labor at a higher level than we're taxing capital? Even Carp yesterday, you know, who argues like you— Emmanuel before I'm on Squawk Box talking about this.

11:15Of course, part of the reason you're talking about it is the rise of the far left. Right. And that line of thinking, which is, you know, going to we'll see what happens in the midterm elections. Not far from now. Well, the reason I talk about this is that when I talk to people who are off, who are not CEOs in California, and I try to ask all of them about democratic socialism, I've got far more people who are democratic socialists than I think they're Democrats. Really? Yes. And at one point I said, wait, working in tech? What do you want to defund? Tell me what you want to defund. No, I just want the CEOs to make less.

11:47I said, no, you don't realize democracy is an ethos. It's an ideology. You have to defund. You have to take away. I said, no, we just want to make it so that the rich aren't as rich as they are. Well, that's not, first of all, they use the word CEO. It's interesting because in California in particular, oftentimes it's the founders. They're not paying themselves enormously in terms of salary. They're making their enormous gains as a result of the increase in the overall value of the company that they started. So I'm not sure what these people are talking about. Well, that's kind of why I brought it up.

12:19I don't think they know what they're talking about. Honestly, I mean, like, hey, you want me to take my wallet and give it to you? What do you want? What do you want? I want the rich to make less. Well, hey, Lennon, game plan. How'd it go? Well, we're going to get to, for one example, is Mike Mayo today out of Wells looking at the banks and how they perform when Dems own a house. They're taking rich people and making them less rich. The bank stocks? Yep. Yeah, we'll get to some of these critical levels on Amex and some others. Speaking of Buffett, we'll talk, speaking of Buffett as well, we'll talk some Apple.

12:53The iPhone 18 hit stores today. Jim's already been to, what, the Midtown store? Yes, it was very exciting. Find out what John Ternus told Jim at the company's flagship this morning. One more look here at the pre-market as we'll try to get back to the break even for the week around 7660. Don't go anywhere. We believe in starting with your financial goals, not a formula. At Oppenheimer, we put the full strength of our longstanding expertise to work, understanding your life and your ambitions, and designing the precise strategies that build and protect your wealth with confidence across this generation and the next.

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14:57Apple's iPhone 18 Pro and 18 Pro Max goes on sale in stores worldwide today. A major event in the early tenure of John Ternus. The company's flagship in New York opened a little more than an hour ago. Customers up and down the block. Jim was there, posted some photos. What did you see? Yeah, look, it was a big crowd. It was not a crowd where people were tenting. There were no tents. I've seen that happen. But people were excited. And people were excited. This camera, remember, this is not the Duo. You're not going for the Duo with this. This is a camera, the 18 Pro. This was, what, 645 somewhere in there?

15:32Yeah, it was 645. So it was early. I've seen it at 645, and it's very crowded, and you're trying to push people aside. But this is a very big crowd. But what people are going for, this is the Pro Max. This is not the Duo. And it's got up to 45 hours of battery life and great aperture. And they have some tremendous pictures there. You know, Chin, the man who does the great work. Where are we on Siri and its AI capabilities and or at least just its ability to... It's getting smarter and smarter. It doesn't want to take you over. What do you want it to do? It's getting smarter and smarter. Don't say Siri because whatever you say, if it's Siri, you're going to follow it.

16:07Siri's going to know. Yeah, yeah, yeah. Like Siri, call my wife. You know, it's that kind of thing. Got it. I don't list her as my wife. I was safe on that. But genuine excitement. And Chernis is, he's, let's say, he's kidding. He's kidding. I think that's the right word if you're speaking with him. He's very excited and just feels like this is his time. He knows that the duo is going to be unbelievable. I said to him that I'm going to get this phone, and I'm going to get the duo, and I'm going to have two phone numbers. And he said, you know, people are doing that. I've never had two phones before, but I told him, I said, listen, If I'm watching the Eagles and I get a phone call, I can watch the Eagles without anyone knowing.

16:49And he said, that's what people are doing. Two phones. Two phones, David. Okay, Jim. Whatever you say. I've only had one phone because I go back to the dark ages when my first cell phone was issued by the company. So I never knew they'd have another phone. Is that the five? This is an original. No, I've got to tell you, this duo, I've spent a lot of time in the duo. I didn't know that there was a crease. The color was amazing. When Starlink is on a plane, like I came back from San Francisco. Yes. Blew by Francisco. Boy, my arms are tired there. I gave you that. Yeah, but I'm bummed. And what, you know, it was the usual Wi-Fi, and I'm watching the little dots playing along the game cast, you know.

17:32I will, we will, when we get Starlink, we will have to have two phones. We will have a phone that just does nothing but watch, because it's going to be joyous. I can't believe the screen. I can't believe it. I can't believe it's real. I thought it was, you know, he had Jaws there. I thought it was just an amazing, wonderful man who's involved with all these interests. And I'm just saying, no, it's not possible. It wasn't possible, David. I'll tell you what, Jim,$337 today is, what, a few bucks off the highs of the year. Not that much. Well, we were talking about the real price. Now, there's a lot of people saying, well, it's going to be too expensive.

18:08Why don't you make a couple calls, do some work, go to the right phone company, get the plan, do some buy now, pay later, and return these because the – oh, no. Yes, two numbers. And what's going to happen is you're going to get this and you're going to get that and you are going to say – You're going to get this and you're going to get that. That's great, Jim. I think there's a song about that. You can go with this or you can go with that. $850 for the turnover. With a$50 return. Oh, return. This hell is priced better than Jensen's GPUs. And I just think everyone, okay, all the wealthy people that they want to string up, we'll go for two.

18:52While you mentioned chips, Jim, you did make note of some short-dated call action in Marvell and SanDisk, Micron. You know, there's a kind of thing where you say to yourself, oh, my, oh, my. I remember there was a fellow that did, though. I don't know if you saw the calls I posted online. Like, you know, giant vibes of Mar-Vell and Sanders. It sounds like a story I did a week ago or so. Yeah, it could be Loeb this time and not Leopold. Why did you ever get that? Because it's such a horrible joke. Is that what it is? What, Leopold and Loeb? Yes. Nobody understands what you're talking about. I probably was probably going to have that family.

19:29But why is that any different than any other day? They'll kill us all. They'll kill us all because of Leopold and Loeb. Okay, Intel. The Octobers, the 115s, bought up to, get this,$7.3 million of those. $10.3 million. Is this, by the way, just to clarify. This is 100 premium. Explain what you are talking about. This is like October 2nd? Yes. You're talking about new buying potentially from... Someone bought proprietary calls. Right. And this is new buying. This is not what I was referring to last week. New buying, they say Marvell,$3.8 million Marvell calls. Those are 250s. The Intel's are 115s.

20:01The Sandus are$1 ,600. There's$41 million. and the microns are, well, I like this, and 1 ,000, that's 44 million. Now, the amazing thing about this is there was a fellow that did this stuff. Right. And someone must be imitating him almost to the point of being him. He's back, yes. How do you know it's not Claude? How do you know it's not Claude? Claude is actually, by the way, Claude, if not, will very soon be managing portfolios. Oh, Claude's going to crush it. That's actually already underway. Anyway, his stuff, now here's what happens, okay? But that said, this is likely Ashton Brenner. Yeah, and I get a little confirmation there.

20:35Here's what's going to happen. People are going to shoot against these. He said he doesn't really understand the way the world really works. Shoot against him. We're going to look at some other names. Meta's going to open up close to 690. We'll get Kramer's Mad Dash countdown to the opening bell. Nails hate it. On a busy Friday. Don't go anywhere. Welcome to the circle. In this game, you never meet the other players. Your goal is simple. Become the most popular. But should you play as yourself or catfish as someone else? With the new host, celebrity contestants, and this time, audience voting will influence the game.

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21:54A milestone. A memory in the making. Make every moment unforgettable with 20 % off storewide. Exclusions apply. See Jared.com backslash radio for details. Jared, make the holiday last forever. Shop Jared Jewelers. Take a look at the 10-year. Just south of 5 % this morning. We did get industrial production was unchanged. Just missing expectations slightly. Next week, though, is going to get awfully busy with FedSpeak. We will get Bowman and Schmidt today. We'll get the opening bell in a few moments. Don't forget, you can catch us anytime, anywhere. Just listen to and follow the Squawk on the Street opening bell podcast.

22:32All right. Two more minutes before we get started with the final trading session of the week. Let's get to a mad dash. I was going to do that Microsoft tie up with. Never mind. I don't want to do that. Let's do Lennar. OK. All right. So what I I'm kind of really if it's no kidding. I'm kind of really sad about this. Lennar is one of the great home builders of all time. I covered Leonard Miller when I was at Goldman Lennar. Stuart Miller has done a great job. Other than Tobler, this is the best home builder in our country. And look at that. And what happens when we go to seven and a quarter on rates?

23:11What I'm seeing here, Barclays underweight, cut 79 to 70. I just think that while we raise rates, and I do think rates should rise because of inflation, the problem is that this industry, which is so big, It's just going to get further crushed. And I have no solution for that, other than the fact that Lenard down here tells me, wait a second, remember that there is an industry that's being decimated by your rate increases. Remember that. Well, yeah, it makes affordability when it comes to owning a home something that is out of reach for many. And then the affordability issue, of course, on the inflation front, Carl, is the other side of things.

23:49But whenever rate hike cycles begin, we have this chat. Yes, we do. House is on fire. The water is going to go everywhere, even in rooms that aren't on fire. Right. Well, I do think that the difference is a lot of us have a 3 percent mortgage from the heyday. And even if we saw a house that we really loved, we don't want to change. We don't want to lose our mortgage. That's the big part. Yeah. Home Depot and Lowe's consistent 52 week lows here lately. Let's get the opening bell on this Friday at the big board on Wall Street. at SysTuck management giant. Lockrock, Hispanic Heritage Month at the NASDAQ in Times Square.

24:27Specialty insurance group Orion 180 with an IPO and a CHEBO in Chicago. It's the University of Colorado in Boulder. Leeds School of Business. A bunch of us alums are proud of what Leeds has become. What a school. I don't know if Boulder ever got some of these pals like Burlington. To me, it's the St. Grady's pal. My sister-in-law is there. It's just fantastic. So, Jim, we are getting into, seasonally, some of the toughest weeks of the year. Yeah. You think we can get through it? I think there's going to be another downturn. Not a September surprise. But with the president talking about, well, maybe it's time to get big, then we are going to have, you have the Hulies, you have the Saudi pipeline, not so good.

25:14We're not going to stay in this area. I think we could go, I mean, it's deceivable we could go to 120. David, you know that. On crude? Yeah. And that would be a big leg down because then people are just saying, listen, supermarket ban, rates ban, oil ban. In other words, go away. Well, and the Chinese are buying crude again. And, you know, we've mentioned that a number of times this week. I think there's been some coverage of it now as well because, of course, they were able to rely on their reserves and everything else. They're buying our LNG. Isn't that something? I didn't know that. But I do know they're buying crude.

25:45But as we've said, they're buying it largely to refine it because the margin is so enormous. And the refined product being diesel. But there's more demand now. Now, that could mean, of course, diesel prices eventually might start to moderate or come down a bit, which would be good. We've talked about the impact on farmers, for example. Running a combine for a day is becoming extremely expensive. There's a great chart today of the diesel cost to run a truckload from L.A. to Dallas. Before the war, it was about$600. Today, it's$1 ,400. Wow. Look, we're just going to send less. There's going to be a slowdown in commerce for the wrong reason.

26:27We haven't seen a slowdown in commerce as much as just higher prices. Obviously, this leaks into food prices because it's such an important component overall of the cost of getting your food to the supermarket. That's why I still think that Walmart's trying to keep prices down. They really are. They're trying to make it so that this is a Sam Walton moment, where you know that there's one place that was good to you, so when oil and gas comes down, you'll do fine. The LNG comment that I got is from RBN Energy. They have a really good piece about how the Chinese are back. They kind of disguise their buying, of course.

26:58We did think that their strategic petroleum reserve was so big that this wouldn't happen. And a lot of people are worried about the Xi Trumpian. And when he says, listen, we'll wait for the tariffs to see how it goes, I don't think Xi, I hope it feels better, come back from India, didn't look like it was accurate. I think it was a rubble. Yeah, I don't know about those reports about Xi's health, what's accurate or what's not. Also on diesel, we've mentioned this, but as we move into the colder months now, particularly in the Northeast, that's another byproduct of the refining process is fuel oil, and it's going to be expensive.

27:31I just wonder how many red turns blue. I mean, I think the people are starting to... I'm starting here again. I actually spent some time with some leaders of the Democratic Party when I was out west. They don't know what to do, but they know they're going to win. I said, your hubris is ridiculous. You were in the state of California. No, I was. I was, okay? I praised Colorado, second of. And there were some young people who asked me, what do you think they should do? And I said, one word, refining. Refining? Refining. Not unlike plastics. How quickly could you build a refiner? There hasn't been one new one in this country in 40 years.

28:10Oh, well, maybe you've got to get started. How about nuclear power? Remember that? I know you've got some land in New Mexico. Why don't you get it going? No, that's for... Yeah, since it didn't work out on the Disney park. It didn't work out for Disney. New Mexico has... Wait, what was the other one? What was the latest one? Okay, listen to me. Data centers, what were you doing? Listen to me and listen to me. I'm listening. New Mexico, because the Bureau of Land Management decided to open things, has the most available oil of any state in the union. New Mexico, you're not even listening. I am listening.

28:39You're looking about Nokia. No Netflix. No Netflix. Okay, this New Mexico land, and I know this from some very good sources, is going to be, it's, someone described it to me as fecund. It's fecund. Have you ever heard anyone use that word other than a book? Jimmy, it's fecund. Yeah, not usually. I said, oh, it's fecund. Very productive. Yes, it's fecund. We used vituperative yesterday. I did. I used matuproative yesterday. You would have been, yeah. I would have liked that. So often I reach back in my English major. You're an English major? My God, did you do Shakespeare? I'm not as up on Shakespeare.

29:12Dante, you ever heard Dante? A little bit, but not a lot. I don't know what the heck I read. Who cares about Dante? These days I forget most of it. No one even talked about my Hawk Tan interview. No, nobody. Nobody. And it just felt like it. Dead silence. And I felt horrible because Hawk Tan said there would be no slowdown and the orders are great. And people are like, well, who's that guy? Nobody cares, Jim. Nobody cared. A$1.6 trillion company doesn't mean anything? Well, look, it's up 3.5%. It's back to where it was when they reported. Yeah, all of your fiber stuff's working today, that's for sure.

29:39Yeah, I just think people don't understand that someone's ordering all time. Now, these two companies that we keep hearing about, they are, what, 99%. What's the percentage, David? Of what? Sorry? The percentage of Anthropic and OpenAI. Some people say it's highest. 90 % of all the stuff that's being used is then. 90 % of the tokens. Ah, I don't know. Oh, okay, there you go. You're trying to define what it was we were talking about. Will you tell me what you're doing? I'm looking at a downgrade of Netflix, and I'm looking at it because the stock is down. It's a Wells Fargo downgrade. You know, they were doing it earlier.

30:21I think Dom may have done it earlier on Squawk Box. You can see, though, it's having an impact on the stock, down almost 6%. Engagement's softening, not just decelerating. They call about something a top 100 problem. The top 100 titles are only 0.01 % of content, but 20 % of all viewing hours. They say that's where the zeitgeist lives. And they also talk about a thinner bench, not enough hits, and breakout titles, and losing share to YouTube. So that's where they are, Carl. We have talked often about the fact that the stock has never been able to regain the levels at which it had prior to it having a deal to acquire Warner Brothers that was eventually broken apart by Paramount.

31:05I mean, their target's 57. And it's already having the worst years since 22. When I read that piece, I said, this is sometimes a lot of people are chartists. And Netflix had maybe the best chart in the book. And now, I mean, this shows you because it was just now starting to curve up. I thought we were going to get the reverse head and shoulders. And it just reminds you, don't don't bank on a chart. Talk about the fundings, not the tech. Right. So, you know, the engagement trends, by the way. Yeah. I mean, will they move? Will they start to, you know, move even more to live sports? Will they start into news in some way?

31:43Are they still in the market for another significant content property? There is one that is being split from another company that we all know very well, because we were a part of it for many years, being NBC. Would there be interest there at some point? So these are questions around Netflix, not just, of course, what Wells seems to be focused on, which, again, as we said, is the engagement trends, which they say look worrying to them. I mean, YouTube, by the way, is the beast. It's what you hear. It's all you hear. YouTube is the beast. And the packages got better and better. The NFL packages.

32:19You're talking about packages. I'm talking about just in terms of people using it. Right. Not just YouTube TV, the aggregator, but YouTube itself. As we're talking, we're getting some breaking news from the Fed and SVB. Let's bring in our senior economics writer, Matt Peterson. Matt, what do you got? So this morning, the Fed is releasing its independent review of the Silicon Valley bank collapse. This was the bank that very dramatically suffered a bank run back in 2023. It had a lot of Silicon Valley clients, VC clients that had a lot of uninsured deposits. The bank's treasury holdings lost a lot of value when the Fed started raising interest rates.

33:01And the FDIC and the Fed had to step in and stop this bank run. So Michelle Bowman, who runs the Fed's regulatory arm, asked an outside firm to look into this episode again after an earlier review. She found, according to the outside firm, found, according to Bowman, that the Fed's supervisory staff knew or should have known about the bank's vulnerabilities as early as a year before the bank collapsed in 2023. agree. This review found that earlier supervisory changes didn't result in the bank's collapse. This is a change in the way that the Fed described. Excuse me. Bowman's report revises a lot of what the Fed had found in an earlier review by Michael Barr, who is the previous vice chair for supervision, which had found that a 2018 law and some regulatory changes that followed that might have been at fault here.

34:06This new review initiated by Bowman reaches different conclusions. This new review finds that supervisory staff didn't take prompt action to encourage Silicon Valley Bank to reduce interest rate risks and found that there was a culture of risk perversion at the Fed. Back to you. Matt, you've written a lot this week about the White House probably not going after Warsh in your view, but that they could open avenues to go after other members of the committee like Cook. Does this make Barr vulnerable? Yeah, it very much makes Barr vulnerable. We're going to see how he responds to this. Recall that he stepped down in 2025 as vice chair for supervision, the Fed's top regulator, but stayed on the Fed's board.

34:50There are a lot of people that worry that the president would use this as an excuse to try to fire him. It's also possible that, you know, Chair Warsh could look at this review and say, you know, this is damning, Michael Barr. I think you ought to get off of my board. So, you know, I've reached out to the Fed for comment about this. I haven't heard back yet. We'll see what he has to say. Matt, appreciate it. You've been all over the Fed, obviously, in an important week. That's our Matt Peterson. Thanks very much. Jim, we mentioned the Mike Mayo call on banks, speaking about regulatory risk. Mike points out that when the Dems hold a chamber of Congress, there tend to be hearings about bank regulation 90 percent of the time, he argues.

35:35Right. Well, a lot of us were hoping that there would be a lot of bank mergers, and now we're just hoping that the banks don't, that there isn't tough regulation the way the Democrats had. Actually, when you listen to SVB, you think, well, shouldn't the regulators, a Democrat or a Republican doing it right? But these were really some... The meetings were terrible. I mean, my charitable trust owns Goldman, and I was shocked that Goldman fixed income was solved. I really was. I mean, Bank of America, I had interviewed him the week before. I thought things were well. It just turned out that things were just okay.

36:06All the banks there have said to me, Jim, do not overreact. These are not things that are really existential. David, I come back and say if numbers are going down, the stock's going down. And that is not what we want. If you're a shareholder, it's pretty simple. Don't tell me not to work. That makes me work. Right. Well, this started with Bank of America Monday when they presented at the Barclays conference. And it has raised sort of the concerns, at least about the current quarter. That said, they're so deeply involved in so many aspects of the capital markets in terms of the AI build-out, whether it's placing bonds or whether it's potentially IPOs or the likes of Anthropic or at some point OpenAI.

36:51Not this year, obviously. And on and on from there, the fees are enormous. They should be making more money. Maybe they're all just under-promising. There's one guy, again, who keeps coming through as being tougher, smarter, better. And his name is Ted Pitt. Morgan Stanley. Yes. Ted Pitt. Who speaks to no one. Well, okay, maybe. Big Rangers fan, from what I understand. Well, I mean, that's not why I bring it up. I just want to say his numbers. I didn't know where you were going. Did you guess Ted Pitt? I did not get that one. I thought maybe it would be Jamie or maybe it would be Charlie Sharp.

37:35Ted Pick was not on my card there for the NFL. Ted Pick was going up from Santander. Her numbers just consistently go up. Right. I mean, Ted Pick, really? Well, David, yeah, really. No, I made it up. You see what happened is I said, you know what? I'm going to fool my partner, David. Yes, he's doing better than everybody else. Yes. Okay. I talked to Simkowitz, who's the co-president there earlier in the week. What, he said they weren't doing well? No, he said they were doing well. Q2 was great. Q3 is no Q2. That was the line out of Simcoids. Yes. Thank you, Carl. Yes. That makes sense. Look, I think that these stocks are so cheap, it's crazy.

38:12But in a tightening cycle, count me out. That's the problem. In a tightening cycle, these guys are some of the first that you don't want to own. Now we know that Jim's trying to get an interview with Ted Payne. You know, that's really unfair. And true. I will admit it's a little unfair. That was unfair. It was unfair. And if you see the people who call me. I retract. Oh, I know all the people who call you. You do? You know this way? Yeah, but I know. I know. Who's the latest? Oh, God. Jeez. Don't answer it. Don't. Don't answer it. I won't. Viewers are very curious now, Jim. That's for sure. Nope, we're not going to know.

38:54I've got to get the 18. While you were out, while you were on the road coming home, we did have a brief discussion about Amex, which is now down almost 20 percent for the year. We tend to talk about it as a proxy for consumer health or at least at the high end. Travel's good. Going out is good. Those areas haven't been hurt. This is a total theoretical sell. Betting that Steve Squirey can't deliver with a stock that sells at 17 to 16 times earnings. Do I want to buy it right here? I think if I had, I mean, look, I think it's pretty low. The last quarter wasn't bad. It's just that people just feel that this is what you sell in a tidying cycle.

39:32And you can't defeat that logic because it's happened so many times. It's not what you buy. And you can buy some real estate stocks. You can buy utilities. And you can buy some tech, select tech. Leopold Tech. It's been kind of a nice here, refreshing day. You have what tech? Leopold Tech. Oh, Leopold. Right. Leopold Ashenbrenner. Yes. Man who manages situational awareness. It's been kind of refreshing, guys. We talked a lot about a lot of stocks that have to do with AI, but I did want to come back to it. Why are you slumping? Because you told me not to talk about it earlier. Well, we didn't talk about it earlier.

40:02So we can talk about it now. I can come back to sort of the latest from Anthropic in terms of, again, this not fully autonomous yet, but getting closer and closer. 1 % of all of their R &D work, essentially AI R &D creating the new models was done in February. Now it's 26%, 90%. Did you mention that? I did. I did. I wanted to come back to something, though, because the idea of the pacing and the slowing has worried people that, well, maybe it will translate into less demand for compute. But there's a case to be made, actually, that they're spending more and more time on the safety. So the more autonomously things are created, the next code is created, the more time you have to spend having that code checked for all the different things that you need to make sure that it won't do, that won't be bad, essentially.

40:57And that's the NVIDIA run. That was NVIDIA 5. I'm getting the same rap. Because they're talking about this thing now called compute allocation to safety, Jim. That's what they're sort of bringing up. And it does look like in the sample they studied that 6 % of AI-related R &D compute was devoted to safety work. But among this AI-driven, where it's writing the code, it was 12%. So that could mean that even though your models may not be coming out quite as fast, although actually it could still pick up because, of course, the models are being done by the AI. Right. Nonetheless, you're going to have to devote a lot of time and compute to safety.

41:34Well, I'll tell you what's interesting, because I like, you know, I like NVIDIA. There's a put-up by Evacor today, which is talking about the long live of a NVIDIA chip. It's even longer than we think. Yeah, well, look at the Nibia's pricing moves on the H200, the H100, the B200, the B100 this week, right? 20 % of price likes. No, I just really think that people understand these things are not only holding their value, but if you bought one a few years ago, I mean, how many things other than wine you bought like six, seven years ago is worth more? Name something. Maybe a Ferrari? They're not holding it like this.

42:10No? No, Lamborghini, no. Private airplane, because now you can write it off in year one. Appreciate the entire value of a private aircraft. Are those going to be confiscated when the... Is that another confiscation? That was an interesting part of the big, beautiful bill. One year. Well, he's right about that. It did drive a lot of investment of all kinds this year, that's for sure. As we go to break, let's check out bonds as the 10-year. Again, kind of flirtatious with 5%. I don't think we got there at least so far this morning. We'll get a little more data on today. LEI and then Schmidt at 1145.

42:44Stay with us. Watch communication services, one of the best sectors of the week. I think Meta is in there, Jim, which did get to 690 today. News number one in the Apple store. This is a very exciting time. A lot of the people felt, I remember I looked up and see tobacco, the tobacco moment. There were eight different news organizations said that that attorney general thing was a bad loss for Meta. There's been no real increase in lawsuits. That stock's up 140 points. Yeah, we'll see if it can get past the other day. It's tried a couple times to get past these lows. I think it can. It's still inexpensive, and this muse has taken the country by school.

43:18Yes. We did get, I was looking at other downgrades today. We got an upgrade of Tyson, which was interesting because the worst is over. Darkest before the... No, no, no. There's sometimes it's darkest and it's dark. You know, have you ever been to Iceland? That's kind of an Iceland. It just stays dark. Yeah, it's just dark. And then, you know, it's darkest. Wow. It's really dark. Yeah. That's nice. Nice people. Yeah. That's been tough. Still a loser on the year. About 10 percent. We'll take a short break here. Be back in a minute. Jim, you've had an epic week. Congrats. Thank you. Thanks. What's tonight?

43:53OK, we got Robin Hood. Always, always knowledgeable. This time talking about the Trump accounts. We're talking about Michael Dell doing some great things. This guy, Roland Bush, is the man. Okay, Zemans is the largest industrial company in Europe, and they have switched their business entirely to AI, entirely into helping companies with AI. They've gotten rid of the healthcare business, for instance, and this man is a delight. And he just says, look, here's the future, digital twins, let me help you. I think he's the most advanced industrialist when it comes to AI I've ever seen. Oh, that's interesting.

44:27He's really smart. I'm just looking at Hood, 25 % gain in a month? Wow. Wow. He's had the inflows are incredible. The 3 % back card is doing incredibly well on its own. For the first time, he has a product that is not related to stock trading, and it's bringing in a lot of people. The 3 % want to treat me. But, yeah, tonight you're going to hear, look, he's on a major roll. It's going hard. Major roll. David. Yes, sir. Have a great weekend, Claude. Oh, I'm sorry. Go birds. Oh, hold on. Yeah, tightens. It's the easiest part of our schedule. That's where I'm going. Yeah, I mean, the Jets beat the Titans, so you guys should not.

45:05That's why I'm worried, because last night, it's Josh Allen. I'm just voting for Josh Allen for president. Oh, what a game. He's president, as far as I'm concerned. We'll see you tonight, Jim. Okay, absolutely. 6 p.m. Eastern time. You've been listening to the opening bell on CNBC's Squawk on the Street. All opinions expressed by Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion.

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46:24Thank you.