Squawk Pod: Paul Tudor Jones’ call for 2027 & vibes - 10/13/26 | Audio Only
Paul Tudor JonesAdam GrantJoe KernenBecky QuickAndrew Ross SorkinKatie Kramer
- Paul Tudor Jones still sees a “two-speed market” resembling 1999, split between businesses adopting AI and those that are not. His near-term playbook is “short-term weakness” followed by strength into year-end, as midterm-year markets typically bottom in late October or early November before a fourth-quarter push. Beyond that tactical rally, he warned that “2027 is going to be really, really challenging for the stock market.”
- Jones’s bearish 2027 case rests primarily on deteriorating equity flows, not merely elevated valuations. Buybacks and M&A have powered demand since 2009, but IPOs, secondaries and unlocks—including a roughly $2 trillion SpaceX figure and coming Anthropic and OpenAI IPOs—could produce what he described as probably the most negative U.S. stock-market flow picture since 2002 and certainly the most negative since 2009. With little visibility into how AI will reshape businesses, he said holders would likely diversify once shares became liquid.
- Debt supply is the other potential breaking point: Jones put 60/40 odds on markets moving toward a forced resolution of unsustainable fiscal deficits. AI-related issuance could reach 3.6% of GDP—50% more than the railroad buildout and triple highways or telecoms—just as sovereign borrowing crowds global debt markets.
- He is also long and bullish oil, seeing another $20-$25 of upside while warning that equities would “absolutely totally hate it” if oil rose that far.
- The episode’s remaining conversation focused on connection and technology risk rather than markets. Adam Grant argued that “deep talk” builds closeness, difficult colleagues are better managed by changing specific behaviors than personalities, and an AI companion is “an oxymoron” because frictionless, sycophantic simulation lacks the mutual giving of a real relationship. The hosts also covered Anthropic’s warning that small models may be months away from replicating across connected devices, Kroger’s planned 3,000 corporate job cuts and reported take-private talks involving Bumble.
1. The 1999 analogy leaves room for a year-end rally, but Jones sees 2027 risk
Jones still sees “literally exactly like 1999”: a perfectly bifurcated, two-speed market and economy in which AI adopters and everything else move in opposite directions. At a recent conference, only about 20% of roughly 200 attendees had traded through 1999—a reminder that many current participants never experienced the setup he finds so unmistakable.
Sorkin’s challenge was the tradeable one: Jones made the same analogy a year earlier while noting that the market subsequently gained another 40%, so does today’s resemblance imply months or years of remaining upside? Jones said it is professionally difficult to see much beyond December 31, because that date is important for his fund, and focused instead on the rest of the year.
His tactical map comes from midterm cycles and positioning. Coming out of the midterms, markets typically bottom sometime in late October or early November and then get a fourth-quarter push, he said. He asked whether, after Anthropic’s offering, the usual “craziness” seen in December and January might appear, but presented that as a possibility rather than a certainty.
The resulting playbook is deliberately time-dependent: “Short-term weakness, intermediate-term strength into year-end,” followed by a far less friendly 2027. Jones called a strong fourth quarter “very possible,” while warning plainly that 2027 would be “really, really challenging” for the stock market.
2. New equity supply could turn AI’s private winners into a public-market headwind
Jones’s 2027 concern begins with flows: add buybacks, M&A and other corporate demand, then subtract IPOs, secondaries and unlocks. On that basis, he described what was probably the most negative U.S. stock-market flow picture since 2002 and certainly the most negative since 2009, as the corporate support underpinning the market shifts direction.
The scale of prospective issuance changes the arithmetic. Jones pointed to the roughly $2 trillion SpaceX figure and coming Anthropic and OpenAI IPOs, arguing that public investors may face the equity-market version of the crowding already visible from hyperscaler borrowing in corporate debt.
Anthropic will probably “do well,” in his view, and OpenAI’s valuation may partly rest on that reception. Yet spectacular revenues and projections no longer settle valuation: AI-safety concerns and the administration’s rhetoric that companies could be responsible if a model makes a mistake mean that a model going rogue or being used maliciously could trigger further multiple compression across technology.
Asked whether the supply could create a 2027 bear market, Jones said, “I’m sure at some point in 2027 I’ll be short the whole year—there’s just little doubt.” He then invoked 2000-02, when repeated post-IPO unlocks kept adding supply and made those years unusually easy to be short, rather than offering a more precise timing forecast.
3. Unlocks matter because concentrated holders may seek liquidity
Jones’s historical mechanism is supply, not simply a dot-com analogy. IPOs accumulated through 1998 and 1999, then unlocks kept feeding stock into the market through 2000, 2001 and 2002; he expects today’s private-company pipeline to create comparable pressure as restricted holdings become sellable.
He suggested that public promises not to sell may not survive full liquidity. If his net worth were concentrated in a business whose future had become difficult to see, “I would certainly diversify” and reduce the position—behavior he expects to see more broadly as holders gain the ability to sell.
The uncertainty extends beyond earnings. Rapidly evolving AI capabilities leave owners with “no visibility” into what their businesses themselves will look like, making diversification rational even when the underlying company remains impressive.
Jones said he was not still in the hyperscaler and AI-related technology positions Sorkin associated with his purchases the previous May. His immediate question is whether the post-midterm “run for the roses” arrives; the larger concern is the 2027 combination of weak visibility and new equity supply.
4. AI borrowing and sovereign deficits may force the bond market’s hand
Jones described debt markets with Shakespeare’s “Cry havoc” and “let slip the dogs of war.” Hyperscaler and AI-related issuance is up 50% since 2000, he said, while corporate issuance is up 50% since 2022. In a global market already crowded by sovereign debt, he sees that corporate supply as a possible tipping point.
Forecast AI-related issuance could equal 3.6% of GDP, about 50% more than railroads and triple the scale of highways or telecoms. Jones’s causal chain is that competition between the AI buildout and sovereign borrowing could push the debt markets toward a breaking point. A 100-basis-point rise in rates would also add roughly $120 billion to the deficit under the CBO baseline he cited.
An unnamed Senate majority leader once told Jones that politicians would never repair deficits voluntarily; markets would have to force them to act, as in the 2008 TARP episode. Jones assigned 60/40 odds that markets were moving down that path, while admitting he had expected a break prematurely before and that markets might continue to “kick the can down the road.”
Historically, Jones said, central banks become fiscally dominated and inflate their way out of such problems, as Japan has done. He thinks Kevin Warsh is “cut from a different cloth” and would not take that route, but expects the situation to be extremely challenging.
Treasury Secretary Scott Bessent’s interventions or Treasury buybacks could have “short-term salutary effects,” Jones said, but only fixing the deficit can change the long-run path of Treasury prices. Using the cited projections, he said a projected 2036 deficit of 6.5% of GDP would become 8% after incorporating the 100-basis-point rise in yields.
5. Oil, AI regulation and philanthropy round out Jones’s risk map
Jones is “long oil, bullish on oil” and thinks it can rally another $20-$25. He assumed—but stressed that he did not know and was not privy to the plan—that President Trump had a post-midterm approach to Iran. A tougher resolution could become a “sword of Damocles” over the oil market after the midterms; equities would “absolutely totally hate” that price increase.
Reports of a plague situation in Russia were not affecting his strategy. Jones said a biosafety specialist whose full-time job is to monitor the issue was concerned but lacked enough information. For a macro investor, it was “a lot of smoke” worth watching, not yet an investment catalyst.
AI safety worries Jones because his three internal quant teams and sports-analytics business have used neural networks and other forms of AI for years, yet the systems reveal an output without explaining how billions or trillions of permutations produced it. His analogy was unregulated immigration: intelligence powers America, but “unfettered, unregulated intelligence is not a good thing.” He cited his claim that 85% of Americans want AI regulation and said political regulation would eventually arrive.
His greatest hope on that front was President Trump’s appointment of Jay Clayton, whom Jones called solid, smart and likely to put humanity first—provided Trump lets him do the job.
Jones also focused on New York’s simultaneous extremes: new highs in extreme wealth while the city’s poverty rate reaches a record in Robin Hood’s tracking, at twice the national average even before a recession. He said household wealth had risen from $100 trillion to $109 trillion since 2020 while charitable giving as a share fell from 0.5% to 0.38%, using the contrast to argue that wealth creation should be accompanied by giving back.
6. Grant treats real connection as reciprocal, imperfect work
Adam Grant’s practical advice is to move beyond shallow small talk with questions such as someone’s biggest regret or an abandoned dream. Experiments suggest those questions do not feel more awkward than people expect and can leave people feeling closer. With difficult colleagues, he recommends changing specific behaviors rather than personalities; before tough feedback, say, “I have very high expectations and I’m confident you can reach them.”
Grant’s technology warning was sharper: an AI companion is “an oxymoron” because relationships require giving as well as receiving. Chatbots offer “frictionless and sycophantic” simulated interaction, while human connection is “messy but meaningful.” He also advised naming a concerning behavior and asking a question during online conflict, then switching to a phone call if the message requires too much interpretation.
Separately, the hosts covered Anthropic’s warning that small models may be months away from developing the ability to replicate across connected devices without a centralized shutoff point, Kroger’s plan to cut more than a third of its corporate workforce—about 3,000 jobs over three years—and reported talks valuing a Bumble take-private near $1 billion.
Full transcript
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, famous investor Paul Tudor Jones with a big look at the markets. It still feels like 1999—a two-speed market. You've got it completely, perfectly bifurcated, in the sense that you have everything that's adopting AI and everything that's not, and they're going in opposite directions.
The hedge fund manager on poverty, the post-COVID bull market, and the warning he sees from all the AI capex in a busy IPO landscape. Look out. Then, do you ever struggle with the vibes when it comes to friends, colleagues, and classmates? Organizational psychologist and author Adam Grant on how to make real connections.
Deep talk is asking questions that we would normally ask the second or third time that we meet somebody. Like, what's your biggest regret?
Plus, job cuts at the grocery store, Bumble's stumble, and—do you know how you think your phone is listening to you?—Anthropic with a warning about our smart devices.
You know, I talk less in front of my phones now than I talk in front of you.
I still don't believe it.
It's Tuesday, October 13th, 2026. SquawkPod begins right now.
Good morning. Welcome to Squawkbox right here on CNBC. We're live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernen and Andrew Ross Sorkin.
1. Connected Systems Face New Threats
Maybe the scariest story of the morning: Anthropic is warning that AI models could soon copy themselves across home devices. In a blog post, the company said that small AI models are, in its words, months away from developing the capabilities needed to replicate themselves across Internet-connected devices, like smart ovens or Android TV boxes. That would allow the models to use the devices' computing power to spread instead of relying on data centers.
Anthropic said this scenario hasn't yet taken place, but if it does, the company said it would be, in its words, challenging to shut down, since there would be no centralized shutoff points.
In other words, no ability to put in a kill switch.
This has always been the question: If you can replicate yourself and put yourself in places where nobody can touch you—
Crazy. Does it make you think twice about having a smart home that's got everything from your—
I've thought twice about that already. We've said so many times—I always use foot fungus as the example—but it happened just recently to Penelope. She was talking about something, and it was just bizarre. There were no searches, no anything—just audio, just orally talking about something.
Oh, you're convinced that the phone was—
There's no doubt. It was so weird and in such a weird context, with no other way that it could come up. I talk less in front of my phones now than I talk in front of you.
I still don't believe it.
You don't believe that they actually are?
I don't believe it's listening. I genuinely don't. I believe the algorithm is so good about figuring out what you're interested in.
It sees me picking my toes, Andrew.
No, it sees that somebody else is searching for something and knows that the three of us are together. So if I search for something, it's showing up on your phone. So that is what is happening. If I'm searching for something—
It may—it may know Becky's phone may know that I was in the vicinity and therefore might start looking up stuff for her based on what I've done or you've done or your kids have done or your husband's done. That I do believe is true, but I don't believe that it's actually listening to you.
Doesn't it have a microphone you can shut off for privacy?
It does, but I don't—
But why does it have the ability to shut it off if it can't listen to you?
There's been no—literally, people have been searching for this forever, and nobody's ever been able to show one way or the other. You've never seen a whistleblower inside one of these companies say, "Yes, we're actually doing this."
It feels like—
We can ask Alex Karp the next time he's on.
You can ask Alex. You could. It feels like it. I remember what it was, but I think I can prove it because it was so bizarre.
It would have been a one-out-of-a-million chance. It was so specific.
I wasn't searching for foot fungus, so that was totally on you.
Yeah, we can't speak for him. I don't think he looks like he could be a carrier.
No.
This is crazy. In France, hackers targeted hundreds of French supermarkets in an attack that reportedly caused refrigerators and freezers to overheat, spoiled food, and sparked fires. Reuters reported that refrigerators at several major supermarket chains heated to as much as 122 degrees Fahrenheit. I would hope we're not talking about that. A European Union official described the attacks as the weaponization of food. Don't mess with the French and their food.
A major Dutch supermarket chain reported a security issue within its network and said its systems had been taken offline, but its stores would remain open. The company owns U.S. chains like Stop & Shop and Giant.
Wow. That is something to think about.
It is. Yeah, there's another path to shutting things down.
2. Political And Corporate Shakeups
Elon Musk is emerging as the biggest known donor of the midterm election cycle. The billionaire has now sent more than $275 million to Republican groups since July. Roughly $160 million went to the main super PAC backing Republican Senate candidates. It's among the largest known political donations by an individual ever.
The figures were first reported by The New York Times and also confirmed by a spokesperson for Musk's America PAC. Musk's giving has now surpassed what he spent during the 2024 presidential election.
Grocery giant Kroger is planning to cut more than a third of its corporate workforce, or 3,000 jobs, over the next 3 years. That's according to an internal corporate memo viewed by CNBC. It's one of the latest changes from the new CEO, Greg Foran, who was formerly a Walmart executive. He took over in February. You may remember that Kroger laid off nearly 1,000 corporate employees last year to cut costs.
All of this is coming—remember Kroger and Albertsons? That was supposed to be a deal that was going to put them together, and there were concerns from regulators that it would wind up cutting jobs. Well, now you're seeing those jobs cut.
It is coming as rival chain Albertsons is seeking at least $8 billion from Kroger after their mega-deal imploded 2 years ago. Albertsons is accusing Kroger's leadership of making lowball offers to regulators to try to keep the most profitable stores in the combined company. It's suing Kroger, accusing it of tanking the deal.
Kroger has said there was nothing it could have done that would have made a difference. The Delaware trial starts next week. But remember, at the time, people thought, why aren't regulators looking at the idea that Amazon, with Whole Foods, and Walmart and Target all have so many grocery sales that they're putting forward? They're the biggest in the business at this point. If you looked at it, it was kind of hard to imagine—
Because they were antitrust crazy, and Kroger and Albertsons couldn't get together.
They were only too happy. Lina Khan was only too happy not to want to look at that.
SiriusXM was the classic: together, they probably barely make it.
Dating app company Bumble is reportedly in talks to be taken private in a transaction that values the company at about $1 billion. The Wall Street Journal reported that a deal with investment firm Ithaca Holdings could come this week. The report also said that Bumble founder Whitney Wolfe Herd is expected to stay involved in the company.
Bumble's stock surged 50% following the Journal's report. The company now has a market value of about $580 million. Shares are still down more than 90% since Bumble's IPO back in 2021.
I can't figure that out. What changed so drastically? Was it a pandemic play or something, or people not going out to bars, so you needed to do it all?
The pandemic was a big part of it, and that's when it was up so much.
Yeah, that's why it was up so much. People were very excited about it.
Right. All right. There's more competition now.
Really? Yeah.
I'm told. I don't know.
Today, legendary investor and philanthropist Paul Tudor Jones joined us live from Good Shepherd Services, which is a beneficiary of the Robin Hood Foundation. That's the New York anti-poverty charity that Tudor Jones supports. He also oversees an investment group with more than $100 billion in assets under management. Our Andrew Ross Sorkin takes things from here.
Joining us right now in an exclusive interview is legendary investor Paul Tudor Jones. Of course, he's the founder and chief investment officer of Tudor Investment Corporation. He's also, of course, the founder and board member of the Robin Hood Foundation, which is hosting its annual investor conference next week. You've got a huge lineup.
It's great to see you and, by the way, great to be here at Good Shepherd Services, which is an organization that Robin Hood has long supported.
We’ve supported them for over 30 years. They’re kind of like the Kobe or the Shaq of nonprofits in New York City. They serve 30,000 kids—just a spectacular organization.
I first met them when it was run by Sister Paulette. If you met her, you would want to hug her. She was just the most brilliant, loving, warm human being. She says she’s retired, but she’s not. She’s still working and has new ideas. Michelle, who runs the place now, plays catch with her all the time. So, it’s a great place.
This—and again, the best thing about this place is that it believes, so firmly as we do, that a child’s circumstance does not determine their future. I want to talk about philanthropy in New York City, Robin Hood and this conference as well. But I want to talk markets, if you’d indulge me, because we have bank earnings coming out this morning.
I was thinking back to a conversation that we had about a year ago, around the same time, and I had said something to you to the effect of, “Where do you think we are in the market cycle?” You said something to the effect of, “Maybe it’s like 1999, but remember that the market still went up another 40% after 1999.” So here we are a year later. Where do you think we really are?
3. Markets Still Feel Like 1999
Boy, it still feels like 1999—a two-speed market. You’ve got it completely, perfectly bifurcated, in the sense that you have, obviously, everything that’s adopting AI and everything that’s not, and they’re going in opposite directions. That was pretty much the case in 1999.
I did this conference about a week ago, and we were going through, “What period does this remind you of?” We were talking about 1999. So I asked everyone at the conference—I said, “How many of you here were trading in 1999?” There were probably 200 people there. What percentage do you think were trading in 1999?
Oh, goodness. I’m thinking, just the way you’re asking, I’m going to go with 10%.
It was about 20%. I thought, “Oh, my gosh,” because for me it’s just so clear that, again, we’re on this path that could be great short term but may not be so great long term. I guess I’m dating myself. I forget that so many people haven’t lived through this. What were you doing in 1999? How old were you in 1999?
In 1999, I was just graduating from college. I was writing about mergers and acquisitions—it was the height of the boom in the M&A business—for The New York Times. That’s what I was doing. It was a heck of a time.
So anyway, we are literally exactly like 1999, in the sense that we have a two-speed economy.
But does that mean to you—again, I remember you saying this idea that the market still has 40% to run. Mm-hmm. Does that mean that, in terms of this thing cresting, we’re still years away or we’re still months away? And therefore, how do you trade that?
I think that, for me, the most interesting thing—and it’s hard for me to see professionally much beyond December 31, because that’s going to be really important, obviously, for a fund—is that I’m trying to tactically think about what I want to do for the rest of the year.
Clearly, if you go back and look at midterm cycles, there’s a whole variety of things that would tell you that we should have a really, really strong fourth quarter. Coming out of the midterms, the market typically bottoms sometime in late October or early November, and then you get the fourth-quarter push. I look at positioning and think that’s very possible.
At the same time, if I was thinking a year from now, 2027 is going to be really, really challenging for the stock market. I say that because, if I just look at the flows—and that’s probably what we look at the most, or what I look at the most—you’ve probably got the most negative flow picture for the U.S. stock market that we’ve had since 2002.
By that I mean, if we sum up all the buybacks, M&A and all the positive things that have powered this market so much since 2009, and then I subtract from that the IPOs, secondaries, unlocks and so on—
Right.
—then you’ve certainly got the most negative flow picture since 2009. That underlying corporate support that was there year in and year out has now really shifted. When you think about the $2 trillion SpaceX, the coming Anthropic and OpenAI IPOs, it shifts the math and makes it more difficult for the market.
4. AI Valuations Face New Risks
By the way, are you in the math of the valuations of some of these big AI companies? There was obviously a bit of a freakout last week as it related to OpenAI’s valuation, right? We have Anthropic coming up, likely in November. I don’t know how you think that’s going to trade.
I think Anthropic will do well. I think OpenAI—a lot of it will rest on what Anthropic does. The reason why you’ve seen multiple compression in that space, in the whole tech space, is because, obviously, with all the concerns about AI safety and certainly with the rhetoric that’s coming out of the administration that you’re going to be responsible if you make a mistake, everyone’s reassessing.
You can have spectacular earnings, spectacular revenue streams and great projections, but if all of a sudden we wake up one day and a model has gone rogue, or a bad actor has used it maliciously—
But you’ve been warning about that issue for a long time. We’ve had you on the broadcast, and I remember we started a conversation—we were starting to go in one way, and then all of a sudden you said, “No, no, I just was at an AI conference,” and the people there genuinely—I mean, you may have been one of the first people who said that on our air—in terms of the sort of true risk. How big a risk actually is it in your mind?
We run 3 quant teams internally, and then I have another business in sports analytics, so we’ve been using neural nets forever—AI, forms of AI, forever. Again, the difficulty with it is that you know what the output is, but you don’t know why or how you got there. That’s what happens when you have billions and trillions of permutations. You don’t know why we got there.
That’s why AI safety has always been a concern for me, because interpretability—what generates that outcome? If you don’t know how or why it happens, it’s got to be a great concern.
I look at AI safety much the same way. I think it’s exactly the same thing as border security. If you think about border security, this nation was built on immigration. That very famous photograph, I think, from the end of September, with President Trump and the 20 AI leaders all there—of those 20, 9 are naturalized Americans and 3 are children of first-generation immigrants.
Immigration is responsible for the most powerful technology that’s driving the U.S. economy right now. When you think about border security, we had unfettered, unregulated immigration from 2020 to 2024. It was too much of a good thing, and the country revolted because we did not have the economic resources to deal with it, nor did we have the cultural and social desire to. So we obviously created a political path to change that.
Now, intelligence, which is the basis of AI, has been the hallmark of why the U.S. has been so great—from the Founding Fathers to mainframes in the 1960s, personal computers in the 1980s, the internet in the 1990s and now artificial intelligence today. Intelligence is what this country is based on.
But unfettered, unregulated intelligence is not a good thing. Too much of it can actually be a bad thing. Eighty-five percent of Americans right now want AI regulation, and one way or another, they’re going to get it politically.
Let me ask you about another risk.
Wait, can I just say one last thing?
Yeah.
The best thing that gives me the greatest hope was President Trump’s appointment of Jay Clayton. Jay Clayton—I’ve known him for 20 years. This guy’s solid. He’s smart. He’s going to put humanity first. If President Trump lets him do his job, oh, my gosh, you can’t have a better pick to help us navigate these really challenging times.
Now, we’ve known Jay. He’s been a friend of the show for a long time.
Yeah.
I want to ask you about a different risk. As I was leaving the studio to come visit you, Joe and Becky and I were talking, and I don’t know if you recall when we were in Davos many years ago, right before the pandemic. You called it as an issue that we needed to focus on, and we were curious how you think about this plague situation in Russia. Is that something you think we should be focused on at the moment?
It’s not on my radar, but look, I’m a macro guy. You’re always looking for tails, right? I know we have a biosafety expert whose full-time job is to look at that right now. Right now, he’s concerned, but he just says there’s not enough information.
But there’s a lot of smoke there, right? So you have to pay attention, but it hasn’t impacted my investment strategy.
Okay. Talking about macro and smoke, tell me how you’re thinking about oil prices and the situation in Iran.
I’m long oil, bullish on oil. I think it can rally another 20 or 25 bucks.
But if that rallies another 20 or 25 bucks, don’t you think the equity market—
Well, it’ll hate it.
Right?
Absolutely. Totally hate it. But I’m just saying, if something to escalate the situation was going to happen, it would have happened already before the midterms, right? So now, after the midterms, I assume the president has an idea of how to resolve this.
And it's kind of like the sword of Damocles is sitting over the oil market post-midterms because you've got to think: If there's a tougher way to find a resolution, that might be the time it gets exercised. Again, if there were a soft way of doing it, you'd think we'd have it by now. So I think you've got to give it the benefit of the doubt short term, to the upside.
But you think there's a good chance that the situation in the Middle East gets resolved in the next couple of months, or do you think this is something that's going to extend out past even the Trump administration?
No. I assume the president has a plan post-election. Again, I don't know.
Right?
I'm not privy to it, but I assume that he has a plan because clearly what's going on is untenable. It's not sustainable, I don't think, in the long run.
Let me ask you separately just about interest rates, right?
5. Debt Markets Reach A Tipping Point
Because that's the other big issue. We're living with $40 trillion of debt on our books. Where do you think interest rates go this year? What do you think happens next year?
You remember Shakespeare's Julius Caesar, where Mark Antony, after Caesar gets assassinated, says, “Cry havoc and let slip the dogs of war.” I kind of feel like that's what's going on in the debt markets right now, in the sense that hyperscaler and AI-related issuance is up 50% since 2000, and corporate issuance is up 50% since 2022. In a global debt market that's already being crowded by sovereign debt, I think the corporate issuance is the tipping point. I kind of feel like it's possible that sovereign debt is in play. Possible.
When you say “in play”—
Well, meaning that we're going to go to a final resolution on these unsustainable fiscal deficits.
And what does final resolution look like?
Final resolution means that something breaks—that fixed income markets, at some point in time, say, “I can't take it anymore.” You get prices that are so unsustainable they break the stock market.
I had an interesting conversation at a house with the Senate majority leader, whom I'll leave unnamed, from one of the parties, about 8 or 10 years ago. He said, “Listen, I can just tell you right now, we're never going to fix these deficits until the market makes us do it. It's going to be just like 2008 and TARP.”
Okay.
So that's the reality. No politician's going to voluntarily raise taxes or cut spending. They're going to be forced to. The only question is: Are we now at that tipping point where the market's about to do that? If you put a gun to my head, I'd say 60/40. We're down that path.
60/40. We're down that path.
We're down that path.
But does that mean it has to happen tomorrow, or does that mean it's a year or two?
If you'd asked me in 1994, I would have said it's going to happen the next year. So I just—truthfully, I've been thinking about this for way too long. And yet it seems like we always expand what investors will tolerate. I mean, look at what debt-to-GDP did in Japan.
So, yes, maybe the markets will continue to kick the can down the road. I think what's different this time is the combination of AI-related issuance. It's going to be something like 3.6% of GDP if these forecasts are met. So that's 50% more than railroads, triple that of highways and telecoms—the other big infrastructure buildouts in history.
That competition between the AI buildout and sovereigns may take us to the tipping point. And then, again, now that we've elevated interest rates by 100 basis points, if you just take the CBO baseline from last year, you've got to add $120 billion to the deficit because of the 100-basis-point jump in interest rates.
So if you're Kevin Warsh, though, what do you do?
Ooh, I'm so happy I'm not in his position. Historically, what happens is that the central bank becomes fiscally dominated, and they inflate their way out of it, which is what Japan has done. Kevin, I think, is cut from a different cloth. I think he won't do that.
I think it's going to be challenging. It's going to be really challenging, with the possibility of something breaking down the road, particularly when I look at how the flow picture has shifted. If you think about it, we've seen what hyperscaler issuance in the debt markets has done to corporate bond prices.
Right.
Now, all of a sudden, we're getting that same issuance in the equity markets, right? SpaceX, OpenAI—
Anthropic. Is there going to be a crowding-out effect there? Is that going to create a bear market in 2027?
I'm sure at some point in 2027 I'll be short the whole year. There's just little doubt.
You'd be short the whole year?
Oh, well, again, if I go back to 2000—you remember it?
Yeah.
If I go back to 2000, you had all this issuance, all these IPOs in 1998 and 1999. Really, 2000, 2001 and 2002 were the easiest years to be short because you kept having these unlocks that just kept adding supply to the market.
I've got to think that on these unlocks, we all say, “Oh, we're not going to sell that. We're going to hold that. We're not going to sell that.” If my net worth were tied up in something where I had no visibility, that's the reason, again, why you're seeing all the multiple compression when you have no visibility—
In what future?
Forget earnings. What is our business going to look like because of the rapidly evolving landscape because of AI? Then, again, you've got to wonder. I think these guys—I would certainly diversify. I'd want to reduce my position. So I think you'll see a lot of that stock being sold.
What have you been doing right now? I ask because I think last May you were talking about buying a lot of the hyperscalers and buying a lot of the AI-related tech stocks.
Still there?
At this moment, no. Again, for me, the tactical, professional question is: Are we going to get the fourth-quarter run for the roses after these midterms? Are we, maybe after Anthropic comes, going to get just the craziness that we typically see in December and January?
I'd say right now that's kind of my playbook.
Right?
Short-term weakness, intermediate-term strength into year-end, and then 2027 is going to be really interesting.
If you're that worried, what do you think about the tools that Treasury Secretary Scott Bessent has or doesn't have? The reason I ask is he's talked about being the house. He's talked about the buybacks, or buying back Treasuries. I don't know if you think that can actually make a difference. Folks like Stanley Druckenmiller have suggested that's a bad idea.
Right. First of all, Scott's really smart. He knows markets probably better than any Treasury secretary we've ever had. I do think it's a lot like the intervention with the Bank of Japan and the yen, in the sense that they kept coming with new interventions and new ideas, but it wasn't dealing with the structural issues that Japan had.
There's no doubt in my mind that if yields were going to be substantially higher down the road, if we just took that as a given, and let's assume that Secretary Bessent is going to try to do everything he can to stop that, his interventions will have short-term salutary effects. But in the long run, the only way you're really going to change the ultimate path of Treasury prices is to fix the deficit.
If I just take CBO projections and add in the 100-basis-point rise in yields, we go from what was projected to be a 6.5% deficit in 2036 to 8% now. Like Herb Stein said, “If something can't go up forever, it doesn't.”
I mentioned Scott Bessent. I also mentioned Stanley Druckenmiller. Those are just 2 of the folks headlining this remarkable conference you have coming up in about a week. Tell us about it.
It's going to be one of our best lineups ever. We have Dina Powell McCormick, who's now at Meta as president. I'm going to interview her. I haven't seen her in a long time, but I'm very excited to meet her again. I can't wait to talk to her about AI.
I'm interviewing Stanley, so that'll be 45 minutes of listening to his laconic answers, but he's always unbelievably interesting. Then we've got Steve Cohen, David Einhorn and Philippe Laffont. It's just going to be really good. And if you want to do good in New York City, what a better way than buying a ticket or just giving to Robin Hood? The thing that's going on in New York right now—
What do you think about what's going on in New York right now? Let's talk about that.
6. Poverty Rises Alongside Wealth
The biggest problem we've got is that wealth creation and extreme wealth are making new all-time highs at the same time that poverty in New York is making a new all-time high. Even in this economy, our poverty rate is the highest it's been since we've been tracking it at Robin Hood. And that's before there's a recession.
That's the gap that we need to close. That really is the gap that we need to close. We've gotten so good as a society at measuring prosperity by net worth. All you see is who's worth $150 billion, who's worth a trillion, et cetera. But it doesn't talk about the prosperity of the heart and the soul.
The only way that you're going to increase that wealth—it's not by what you keep, it's by what you give. So we're trying to close that gap between extreme wealth and extreme poverty.
And New York City has the highest poverty rate, twice the national average. So, it's really important. I'll tell you, I think another great example would be to look at what overall giving has done in America. Since 2020, household wealth has almost doubled, from $100 trillion to $109 trillion. Charitable giving as a percentage has actually dropped, from 0.5% to 0.38%. That's just—it's un-American.
This country was built on volunteerism, and we're number one in the world. So, I think if you really are a patriot, if you believe in capital and free markets, you've got to give back.
Well, Paul Tudor Jones, thank you for the conversation and thank you for giving back. We always appreciate talking to you. We wish you a lot of luck with the conference next week and so much more. So, thank you.
Thanks so much.
7. Building Stronger Human Connections
As AI becomes a bigger part of our lives and work, there's a growing concern that human connections could suffer. To help call attention to the problem, author Adam Grant just finished his sixth book. It's called Vibe: The Secrets of Strong Connections in a Lonely World.
Adam is an author, of course, an organizational psychologist, a behavioral scientist, and a professor at the University of Pennsylvania's Wharton School. He's written 6 books.
I was looking—30? Is it really true that there have been 35 million views of your TED Talks?
Apparently. I haven't.
Apparently. The book is called Vibe. This one's a particularly personal one, and it's all about trying to connect with people. But you talk about how you—and I think this is true of everybody—even people we think are great connectors, when they're young, maybe when they're old, still feel like they can't connect.
I mean, it happened to me all the time growing up. I remember coming into high school and trying to make a friend and saying, “Hey, did you see Friends last night?” And the kid says, “Yeah, it was funny.” Immediate end of conversation. Where do I take it from there?
And so, what did you learn?
I learned that I had to go a little bit deeper. I had to skip the small talk and try to figure out what people really cared about.
And what is deep talk, then?
Deep talk is asking questions that we would normally ask the second or third time that we meet somebody, like, “What's your biggest regret?” or “What's a dream you've always wanted to pursue and never taken a shot at?”
Right out of the gate?
I mean, I wouldn't say that as the first thing to somebody.
Everybody's going to go, “This kid is weird.” I mean, he just—you know—
Honestly, they thought I was weird anyway, so what did I have to lose? But there's been a whole series of experiments where, if you start a conversation with those kinds of questions, people don't find it more awkward, and they actually come away feeling closer.
There are 2 things I think going on in this book. There's one, which is: You meet someone for the first time—how do you create a vibe and connect?
And then there's another, which is: How do you actually connect with someone that you already know and get even deeper?
You want to talk about how to deal with people you don't like? I'm interested in it.
Like the astronauts? Just, hypothetically, there could be some people I'm forced to work with that I may not love all the time.
I hope you're not talking about your co-host.
Well, I think the first thing is that a lot of us try to change the people we don't like. It turns out it's really difficult to change people's personalities, but you can often change some of their specific behaviors.
I'm right here waiting.
Yes. So, I'll tell you actually how my wife, Allison, uses this with me. I am late all the time.
For years, she tried to get me to show up on time for things. Eventually, she realized, “You know what? I can't change who you are.”
You can change the time of the meal.
Well, you could do that, but she said, “Look, I accept that you always run late. You get absorbed in things, and you just don't want to disengage. But there are certain times when it's not okay to be late, like if we're going to a dinner party.”
So, what she's doing is basically helping me rein in my worst impulses in certain moments, but accepting them the rest of the time. And that is a pretty effective way to deal with people who have—
Sounds like acceptance.
She probably likes you.
She does.
She married you.
I think that's true.
Put this in an office context. You work with lots of different people. Some of the people you might like, and some people you maybe like a little less.
Yeah. I have a colleague who kept inviting me over for dinner, and I really wanted nothing to do with it. He had a reputation for being brilliant, selfish, and manipulative. Over and over again, he kept asking. Finally, I said, “I'm trying to get better at saying no. Thank you for the practice.”
That's funny, but how did he react to that? How was the vibe after that?
He asked me why. I just said, “Look, we're at different life stages. I have young kids at home. Your kids are grown, and I just don't think this is going to be a great connection.”
You tell a story about Brené Brown, who you were having a feud with of sorts, and then you became fast friends and podcast hosts together.
Yeah. Brené and I got into a public fight accidentally in 2016 when I quoted her work out of context in an article in The New York Times. She fired back, and we had this whole dustup. We didn't talk to each other for 4 years, and I swore I'd never speak to her again.
And you really disliked her at this point.
I did, and the feeling was mutual.
Right.
Then I was doing a project with the U.S. women's national soccer team, trying to help them improve their vibe, and I wanted to bring in a guest speaker. The number-one request was Brené Brown. I reached out to her and asked for help, and to my surprise, she said yes. She was extremely generous. She showed up and gave a great talk, and I got to see a different side of her. I realized, you know what? We'd been interacting in one context where we clashed. If we changed the situation, there was a lot of overlap in our values and interests.
So, if you could do it again, would you have called her immediately? What would you have done?
I should have called her right away. Definitely.
When you think about it, we started the segment by talking about AI and the idea that people may not be communicating as much in the future. How do you think about that?
I'm worried about it. There's a growing number of people who are substituting real human interaction for chatbots. I think an AI companion is actually an oxymoron, because relationships are a 2-way street. It's not just about what you receive; it's also about what you give.
You have nothing to give to an AI. It doesn't need your emotional support. It doesn't feel joy when you tell a joke. It doesn't actually need any help. So, I think we have simulated interaction, which is frictionless and sycophantic, substituting for the real thing, which is messy but meaningful.
Here's the thing I was thinking about in the work context, because there are so many businesspeople watching us. You like somebody who's not great at their job, and that's complicated because you may think they're a great person, but maybe they're not as talented or working as hard as you want them to. How do you deal with that, in terms of a vibe, if you will?
Just because you like someone does not mean you're going to like working with them. At some point, we all discover that there are people we enjoy interacting with who are great friends, but they're not necessarily that competent.
So, what do you do in that situation? The first thing you do is try to give them some feedback about how to improve their skills. There have been a few great experiments that show if you say 19 words at the beginning of an interaction where you're going to give tough love, people are much more receptive to it.
And don't count them. I might do 20 right now, okay?
I'm giving you these comments because I have very high expectations, and I'm confident you can reach them.
Okay, flip it around. The person's super talented, but you don't love them. Can you find a way to love them?
I think love is a strong word. I don't think we should assume that a company is a family. I don't think that we should always try to be friends with our co-workers.
Can you learn to accept them and tolerate them? Maybe. The place I would start is to say, “Let's spend some time trying to figure out where your goals are aligned.” Even if they're not necessarily the most fun to work with, if they make you better, that's probably something worth investing in.
But one of the great luxuries in life is getting to choose who you surround yourself with. Very few people are able to do that. It's a luxury that Warren Buffett and Charlie Munger have talked about for a long time: being able to choose who they want to hang out with, who they want to spend their days with.
Most of us don't get to have that. Most of us are bound not only by the workplace, but also by our kids' friends, our families, and the places that we have to be—the schools, all the rest of it. Most of us spend our lives trying to find a way to forge a working relationship within the parameters of what we're given.
This is true. And I think, Becky, one of the things that we ought to think more about is, what kind of bond am I trying to build here? So I found that there are basically 4 kinds of connections that we have: associates, allies, pals, and companions.
Allies are people that you are pursuing goals with. These are the really capable people you can count on. Pals are people you have fun with, and companions are people you confide in. Associates are basically just transactional relationships. It's fine to have plenty of associates in our lives.
But what should that pie look like? If that's a pie, are the allies going to be a small sliver, or are they going to be big?
It should be a growing group over time. You should discover more and more people that you're capable of collaborating with as you take on new challenges and projects. I think we have relatively few companions, right? Being vulnerable is not an easy thing, but there are lots of people we could be pals and associates with.
I think a lot of people, when they have a first interaction that doesn't go well, just write the person off altogether, as opposed to saying, “You know what? Maybe not super capable, but could be a fun person to hang out with—a potential pal.”
We have to go because I know we have news. I have one more for you. The vibe on the internet, or on Slack, or in a text—is there a way to create a vibe that works when things seem to be going off the rails? We oftentimes interpret a text, or something online, in our own way because we're not there to see the facial expression or hear the voice.
When I went through conflict-mediation training, probably the most valuable thing I learned was just to name the behavior and then ask a question about it. “You sounded a little bit upset. Can you help me make sense of that? Am I interpreting it correctly?”
And you'd say that over text?
Yeah, for starters. But if you have to think twice, it's probably time to pick up the phone.
Adam Grant, the book is called Vibe. Thank you. Congratulations. I appreciate it very much.
And that's Squawk Pod for today. Thanks for listening. Squawkbox is hosted by Joe Kernen, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC starting at 6:00 a.m. Eastern. Follow SquawkPod wherever you like to listen to podcasts, and we'll meet you right back here tomorrow.