The Canadian Investor Sep 19, 2026 1h 13m 43m saved
With Simon Bélanger, co-host of The Canadian Investor and of the network's weekly macro show · Dan Kent, co-founder of Stocktrades.ca and co-host of The Canadian Investor
Canadian housing starts came in down 17% in a month when economists had penciled in down 6%, and the two hosts of The Canadian Investor spent the next hour on what that number says about the price of money.
Most commentary treats a rate increase as a brake on the economy and stops there. This episode spent a long stretch on the other side of the ledger: retirees, savers and corporate treasuries holding short-term government paper get paid more, and there are trillions of dollars sitting in that position.
"I think these guys are racing to become too big to fail, and they're comfortable with all of this circular financing because they want it to be systemically risky, so that they can continue running non-viable business models, and the government has to bail them out, to stop the economy from imploding."
The two co-hosts run this macro call weekly on the Canadian Investor Podcast Network, and they work from company filings rather than aggregate data. One of them pulled up the Polymarket odds on a Bank of Canada hike, a US Treasury chart on who owns fixed income, and Marathon Petroleum's cash-flow statement live on the call.
The full episode is covered here so you can skip it. 73 minutes of audio, 29 minutes of reading.
Here are the 15 takeaways that matter.
Key Takeaways
Canadian housing starts fell 17% against economists' -6%, and the hosts read it as the first clear sign that bond yields are biting
Rental construction is financed off the bond yield, and land is bought at prime plus zero to two points
A rate hike is partly a transfer of income to whoever owns Treasury bills, which is mostly older households and corporate cash piles
The market put the odds of a Bank of Canada hike near 70% on Polymarket, the highest reading the contract has carried in 2026
Warsh named three reasons long-term real rates are high: growth, AI financing by the hyperscalers, and geopolitics
The Fed cannot move gasoline or food prices and said so, which is most of what Canadians are actually feeling
One host puts $100 of consumer AI compute at $8,000 of cost to the provider, on third-party estimates he was careful to flag as estimates
OpenAI's $200-a-month plan is gone, and the hosts read the withdrawal as a margin decision rather than a product one
The largest US refiner is up 150% year to date on one host's screen, outrunning the AI trade nobody stops talking about
Grocery inflation ran below headline CPI for the first time since 2024, which does nothing for the price level people see at the till
The hosts' shared read on the AI safety debate is regulatory capture, not fear, and both said they may be too cynical about it
Canada went from the worst 2027 setup to one of the best, on one host's account, because oil is over $100 and the projects are finally being approved
1. Easiest Time for Macro
The show opened on why a stock podcast now spends a day a week on macroeconomics. One host said the volume of new information is the reason, and that he comes at it deliberately from a standing start.
There has never been more macro to talk about
It's literally the easiest time in human history to be a commentator on macro.
One host
He said he tries to approach it "from a place of ignorance" and learn each variable as deeply as he can, then asked whether any past cycle had a technology as productive and as existential as AI. The other host's list of comparisons was machines, the car, radio and the internet, plus oil shocks going back to 1979 and Iran. He did not think the analogy resolves anything.
Past cycles rhyme rather than repeat
History doesn't repeat itself, but it often rhymes.
The other host
2. Diesel Through the Roof
The first real subject was fuel, and specifically the split between gasoline and diesel. One host said US gas stations are beginning to run out of diesel and that diesel prices are at records.
Gasoline is expensive and diesel is something else
Yes, gas is not cheap. I'm not saying it is. But diesel is really through the roof right now.
One host
He walked through the transmission into company costs. Firms will absorb some of the increase and pass some of it on, and the split will land somewhere in the middle. Big trucking companies, he said, are already warning that this is not good. Railways stand to gain where a shipper has a choice, because they are more fuel efficient and can price more aggressively, though last-mile delivery by train is hard and often impossible. He cited Berkshire Hathaway's railway saying at its May annual meeting that higher energy prices are a tailwind for them relative to trucking.
The other host put a number on the freight bill. Tanker rates, he said, are a million dollars a day, and the cost of moving goods from overseas is up about a fifth.
The question is whether the consumer can carry a 20% freight increase
Okay, can consumers absorb a 20% increase in the delivery of the goods?
The other host
The answer they reached, from what Walmart and Costco have reported, was probably not. Both agreed Q3 earnings will be the real test, because diesel began spiking inside the quarter.
Company commentary beats the aggregate data on timing
But if you start looking at what companies are saying, you tend to actually have the information faster than the data coming out.
The other host
He was careful to say he does not claim to be a macro analyst, only that most macro analysts ignore earnings calls. The example he gave is a retailer that can see its own customers change behavior at a specific pump price.
Walmart watches the pump, not the CPI release
They start seeing changes in behavior — they can tell just based on the behavior of their consumers — when it hits $4 a gallon, and spoiler alert, it's above $4 a gallon.
The other host
Both noted gasoline, jet fuel and diesel were already elevated before crude moved, because refining capacity has been damaged in Ukraine, Russia and the Middle East. One host's point was that refinery repair takes a long time, so the increase in crude arrives on top of a refining bottleneck rather than instead of it.
3. The Travel Squeeze
Jet fuel got its own segment. One host had the crack spread on screen, which is the difference between the price of a barrel of crude and the price of the refined product made from it.
Jet fuel has doubled in a year
I think the part that always surprises me the most — actually, while I have the jet fuel thing up — jet fuel costs now twice what it did a year ago.
The other host
Most of an airline's cost structure is jet fuel, and the winter travel season is ahead. He described two forces hitting Canada-US travel at once: a trade war that cooled over the summer and has restarted, and price. Canadian travel to the US had already fallen as a political statement, and he expects more of it this time.
The affordability half of the decline is the bigger half
It's like a lot more people can't afford it and a lot more people don't want to go to the U.S. from Canada.
One host
He recalled an airline that had already gone under and thought it was Spirit without being sure. The other host agreed it was one of the discount carriers and treated it as the first spike rather than the main event.
4. Yields Bite Housing
The credit side was the other host's subject. He listed the constraints in order: fuel, tanker costs, bond yields, AI capital spending, and then the Canadian housing data released the day before.
The starts print missed by eleven points
They came in down 17 percent and economists are expecting down 6 percent, right?
The other host
He explained the mechanism in Canadian terms rather than in the language of a rates desk. Rental construction is financed against the government bond yield plus a spread, and land for development is bought at prime plus zero to two percentage points.
Every rental project is priced off the bond yield
The easiest way to understand that in Canada is, if I want to build rental housing, I select financing, and that's a function of the bond yield.
The other host
His conclusion was that the direction is not in dispute and the timing is. He expects the constraint to show up in economic growth, and said the part that always surprises him is how long it takes.
5. Polymarket's Hike Odds
The hosts then turned to the Bank of Canada. One had the Polymarket contract open, which prices the probability of a rate increase by the end of the year, and put it at about 70%. The Fed's own hike, he said, had gone into the day at roughly a 90% probability, with 9% on a hold and 1% on a cut.
The odds on a Canadian hike are the highest the contract has seen
But yeah, it's the highest it's been since Polymarket has had the Bank of Canada rate hikes in 2026.
One host
The other host's framing was that the Bank is responding to things it cannot control. His list was oil, the trade war and, at the first host's prompting, the cost of financing artificial intelligence.
Central banks are watching AI drain the capital pool
And they're keenly aware that AI is sucking out a lot of capital and making bond yields rise.
The other host
He attributed the point to Carolyn Rogers at the Bank of Canada and to Kevin Warsh at the Fed, who he said named the same three forces in his press conference.
Warsh's three reasons for high long-term real rates
So in terms of the three things he said — strong economic growth, AI financing, specifically the hyperscalers, and then geopolitical developments — he said those are the three main things.
The other host
6. The Refiner's Quarter
The discussion of damaged refining capacity produced the episode's one single-stock digression. One host pulled up Marathon Petroleum, ticker MPC, and called it the largest publicly listed refiner and close to a pure play on refining margins.
The refiner has outrun the AI trade this year
So it's almost like a pure play. This has been just year to date, it's up 150%.
One host
He said the company is running at capacity and that the cash generation is at levels last seen four years ago.
A quarter of free cash flow it had not matched since 2022
So you saw the latest quarter, $9 billion in free cash flow. They hadn't seen that since 2022.
One host
The same segment covered Saudi Arabia cutting cargoes to Europe after drone attacks damaged an export pipeline in the Red Sea, and headlines that shipments could resume by rerouting through Oman. One host noted that governments manage information in every direction and that a listener cannot easily tell what is true.
Every government manipulates what it puts out
There is manipulation of the information being put out there from every single government.
One host
He said he used to work at the Canadian War Museum and had walked past a gallery of Canadian propaganda posters from the Second World War, so none of this is new, only more pervasive.
7. CPI and the Price Level
Canada's inflation print came next. Fuel was slightly lower month over month and decelerating year over year, which one host said surprised him, though he was clear that a slower rate of increase is not a fall in prices. He expects September to pick back up, with half the month already at higher pump prices.
Grocery inflation ran below headline for the first time in two years
And I guess just to get back quickly on CPI, so it was the first time since 2024 that food from grocery stores increased less than headline CPI.
One host
His broader point was the difference between the rate of inflation and the level of prices, which is where central bank communication keeps failing.
A falling rate does not make a grocery basket cheaper
I think it's an important reminder because I'm sure, just like me, you go to the grocery store and you're like, wow, I just spent a hundred dollars and I feel like I do not have much in my grocery bag for a hundred bucks.
One host
The other host said the three categories where people feel inflation are food, shelter and fuel, and that the frequency of the purchase is what makes them salient: a mortgage payment once a month, groceries once a week, fuel once a week. His conclusion was that anchoring inflation expectations is unusually hard when the pain sits in the most visible places in a household budget.
The first host offered a local observation. Core inflation has been relatively stable for a couple of prints, but the demand on food banks has not.
The line outside the food bank keeps getting longer
And I had some bike repairs, so I picked up my bike and right next to it, there's a food bank, and just the lineup there is crazy now.
One host
8. Defending the Loonie
Asked why the Bank of Canada is under pressure to raise rates at all, one host's answer was the exchange rate. The Canadian dollar has weakened since the Fed's announcement, and the spread between Canadian and US policy rates is the reason the market is pricing a hike.
The hike is about stopping imported inflation
I mean, that would be my guess. They want to avoid imported inflation. I know they observed it in their last monetary policy report.
One host
The other host added counter-tariffs, which push in the same direction, and relayed a point from Mark Cahote, who is booked on the show next week.
Oil is holding the currency up
But he was saying, imagine how much lower the loonie would be if the price of oil wasn't that high right now.
The other host
Both agreed with the logic: oil exports create demand for Canadian dollars, so a weak loonie at over $100 crude would be considerably weaker at a normal one.
9. Canada's Resource Bid
That led into an argument about Canada's position going into next year, which one host said has reversed.
The country went from worst-placed to well-placed
I feel like we probably would have had one of the worst economic experiences for like 2027 in the world, and now we might have one of the best economic experiences.
One host
His reasoning was that a trade war is a better fight to have with crude over $100 a barrel and gold just off record highs than without them. The other host brought up the Canada Investment Summit and a chart from Katusa Research breaking the announced projects down by sector.
Where the summit's project money is pointed
So there's a good presentation here on Twitter, just giving an overview from Katusa Research, saying the type of projects — so 38% were mining and metals, 19% clean energy, 11% advanced manufacturing, 10% marine and port infrastructure, 7% conventional energy, and then it goes to power and utilities, digital technology, at both 7, 7, and 6%, and transportation, the last one, at 4%.
The other host
He flagged the numbers as a third party's summary rather than his own work. His reading of the mix is that mining and metals leading it says what Canada actually has, and that a government now willing to develop those resources is the change.
On Mark Carney floating an associate Canadian membership with the European Commission, one host said the obvious objection is that Europe has the lowest productivity growth in the developed world. He then made the case for the other reading. European capital is trapped in economies with poor domestic returns, an American investor has better options at home, and Canada has just announced a list of projects that need funding.
The whole exercise is about making capital flows easier
So I think really the whole thing is a bid to try and make capital flows easier into Canada, to try and pull some of that capital out of those places where it is probably trapped.
One host
He was explicit that this is the generous interpretation, and that most of the proposal sounds silly when you first hear it.
10. The Mega Deduction
The tax change in the federal budget got its own passage. Last year's version was called the super deduction; this year's is the mega deduction, and it front-loads the capital cost allowance so a business can write off most of an asset in year one.
Pulling demand forward is inflationary and they want it anyway
So if you go — the idea is we're trying to pull forward demand, right, which is inflationary, by the way.
One host
His argument for tolerating that is the other side of the cycle: with oil prices and capital costs rising, disinflationary and deflationary forces are coming, and the pulled-forward demand offsets them. The eligible list runs from small-business vehicles, computers and machinery up through pipelines, fiber optic cable and research and development.
Capital in private hands is the point of the policy
So spending money, spending more money on business growth is trying to be incentivized here, which is a good thing.
One host
He added that he wants more capital with businesses and consumers than with government because he considers them more fiscally responsible. The other host agreed, and blamed the election cycle: politicians who make the hard decision usually lose their jobs for it.
11. What Warsh Said
The Fed's press conference was short, and the hosts' read was that the tone had shifted. One host described a chair being careful not to blow a hole in the market while still being specific about what the committee is watching.
The chair would not call financial conditions restrictive
He said that he was hard pressed to describe the financial situation as restrictive.
The other host
The vote was unanimous, which the other host noted was a change from the dissents at previous meetings under the same chair, and which he thought the chair was pleased to be able to say. The stated logic was that inflation is not improving quickly enough, conditions are not particularly tight, and strong growth gives room to move. Employment did not appear to worry him.
The admission the hosts found most interesting was about the limits of the tool.
The Fed cannot move the two prices people feel
But he also said that they can't impact gas prices — they admit they can't really impact that, or food prices. But he still said, we want to prevent second-order effects, which I find a bit funny because it's still indirectly tied to those potentially.
The other host
A question about the president went unanswered. The other host's own view is that the White House was given advance notice and that the public anger is partly theater, which lets the president blame someone else before the midterms.
A 1% policy rate against a 5% 10-year
And he keeps saying that they're the best economy in the world and rates should be 1%.
The other host
If that is the case, he asked, why is the bond market requiring 5% for the 10-year. He called it a tangent, then made the broader claim that the phrase free market is doing no work.
Neither country has run a free market for a long time
There's no such thing as a free market economy.
One host
Both listed the evidence they had in mind: central bank intervention, protected industries in Canada, protected industries in the US, and the same in every other country.
12. A Hike That Pays Out
The section the hosts flagged as the counter-intuitive one came next. A rate increase removes money from borrowers, but it adds money to anyone holding short-dated government paper, and one host had a US Treasury document on screen showing who that is.
Raising rates creates income as well as destroying it
So when the Fed raises rates, it actually creates more income for a lot of households, a lot of businesses that will hold U.S. Treasury bills.
The other host
His examples were retirees, whose fixed-income allocation rises as they age, and corporate treasuries.
Berkshire's cash pile is the corporate version of the same trade
Like think about Berkshire Hathaway, most of their cash pile, I think it's close to $300 billion, is in pretty much short-term Treasuries.
The other host
He kept his own hedge on the figure. The scale of the effect, on his account, is that trillions of dollars reprice at every quarter-point move, enough to offset part of the restrictive effect on the other side. The distribution is uneven and skews old.
Boomers own the houses and the bonds
So I know for the younger generation, I know they own all the houses, but they also have a whole lot of the fixed income.
The other host
The first host's response was that this widens the gap between generations rather than closing it. The other host then raised a second chart, on more money going into equities than bonds for the first time on record, including among older cohorts, and drew the risk out of it: a wealth effect that reverses is a spending effect that reverses.
The wealth effect runs backwards when markets wobble
So that is always something to keep in mind, because if they see the fluctuation, we see markets being volatile, they may be like, okay, well, I'll be a bit more conservative with my spending.
The other host
13. Who Inflation Hits
A listener comment turned the conversation to distribution. The hosts said the chair had made the same argument from the podium.
The chair's case for hiking was made on behalf of low-income households
And that's what Warsh kept saying during this press conference — he kept saying trying to lower inflation, because the lowest income households are the ones that get the most impacted by inflation.
The other host
One host's framing was that inflation erodes the middle class from both ends, pushing people with costs and no assets down while pushing people who own inflating assets up. He cited a figure from the press conference and attributed it to his co-host's notes.
Half of households have no assets to draw on
I think you even mentioned, during the press conference, it was like 50% of households don't have any assets, they don't have home equity, for example.
One host
The other host made the timing argument: someone whose wages lag their costs runs out of money immediately, where a wealthier household has six months, and a much wealthier one has six years.
The gap compounds for anyone living on a paycheck
So if their wages are not keeping up with inflation, they're just falling behind and more behind and more behind. And that's just not a great place for society.
One host
The politics followed. The other host's view is that a president cannot survive a stagflationary economy whatever else he does, and that central banks are paying attention to affordability because governments are not. In Canada, he said, elections moved from affordability to the trade war, which has given the government cover to stop talking about the thing that was driving populist anger.
14. Central Bank Credibility
The hosts' last macro argument was about independence. One host said a central bank that refuses to move when the bond market is demanding it pays for that in credibility.
The two-year note is the market's instruction
So if they don't hike rates when the bond market is clearly telling them that they should be hiking rates — I mean, we've talked quite a bit about the two-year, it's now around 4.7 percent.
One host
The other host, quoting a theory he attributed to Luke Gromen and others, described a hike whose purpose is the signal rather than the policy: one or two increases to demonstrate that the Fed is not taking orders from the Treasury, then cuts.
A hike that exists to prove independence
So it's almost like a courtesy hike too.
The other host
He said he would not be surprised if that is what is happening. The first host's related worry was political pressure on central banks generally, and he was careful to make it a two-country problem.
This is not only an American problem
And this is again, not just a Trump thing, not just a U.S. thing — Pierre Poilievre said he was going to fire Tiff Macklem.
One host
The other host pushed back that politicians have always done this, citing a half-remembered story about a president and a Fed chair getting into a physical altercation decades ago, and said the difference now is social media coverage rather than the behavior itself. He framed it as a question rather than a correction.
15. Subsidized Compute
The second half of the episode was artificial intelligence, opened with a Terminator poster held up to the camera. The other host laid out the sequence: a researcher left one of the labs and posted a thread accusing his former colleagues of recklessness, and Anthropic's chief executive published an essay days later arguing the industry has to slow the pace of capability gains.
His view of the author was blunt and hedged at the same time.
He thinks the doom framing is marketing, and says so as an opinion
I don't think he believes in earnest that AI is capable of becoming sentient or choosing to eradicate mankind, but I think he thinks that's clever marketing, and I think he's wrong, and I think that the market is communicating that he's wrong, but he does it anyway.
The other host
What he found strange was the agreement. Sam Altman responded thoughtfully, Elon Musk said something, and Demis Hassabis at Google DeepMind agreed as well.
These people do not usually line up
And that was what was weird about it, right? You haven't really seen these folks align.
The other host
The follow-on was a television interview the next day in which the same executive raised government investment.
The ask, as the host heard it, was for the state to take a stake
The next day he was on 60 Minutes or whatever, some other TV show, CBS, and he was talking about basically that they want the U.S. government to become invested in them, right, like financially, and they want to see AI almost like nationalized.
The other host
His explanation was the unit economics. He had circulated a chart estimating that consumer AI subscriptions are sold far below the cost of the compute they consume.
A maxed-out consumer plan costs the provider eighty times its price
So if you, on a consumer plan, if you go buy their fixed price plans and you use $100 worth of compute, or use every dollar of compute, if you max it out, they're paying Nvidia or one of these data center companies $8,000. And it doesn't take a rocket scientist to understand why that business model doesn't work.
The other host
The first host read the estimates off the chart for listeners on audio, and both flagged the source and the vintage rather than presenting them as fact.
What each subscription tier is estimated to be worth in compute
So ChatGPT Plus is $20 a month, they say it's the maximum spend that it would cause them, I guess, in actual cost of tokens, would be the equivalent of $700 per month. You're paying $20 for $700 of value. Well, a maximum of that — the 5x plan, so the one I'm on, is $100 a month for about $3,500 max value per month. And then the Pro 20x, the one that you have, is $200 a month for approximately $14,000 max value per month. So you can tell — and again, these are estimates, it came from semianalysis on Twitter, it came in June, so the numbers again were estimates, they've probably changed.
One host
The supporting evidence they offered is that the most expensive plan has been withdrawn.
The plan that burned the most money is no longer for sale
I think even OpenAI said that they underestimated how much users were actually using the $200 plan. And now it's no longer available.
The other host
The other host, who is grandfathered into that plan, said he now hits usage limits regularly on the newest model where he never did before, and put his own valuation on the service.
What the software is worth to him, and what he will not pay
I would say I'm easily replacing five to ten grand worth of labor a month with agentic AI, but I'm not paying eight thousand a month in API tokens, and that's on Claude — if you're on ChatGPT, it's fourteen thousand, right?
The other host
His conclusion was that the providers cannot price their way out, because raising the top tier to five thousand dollars a month sends buyers to Kimi or DeepSeek. The first host asked whether Chinese models are structurally cheaper. The answer was no.
Nothing makes a Chinese model cheaper to run
But the challenge is, there's nothing that materially makes Chinese models cheaper. They still have the same problem.
The other host
Both noted the Chinese labs still develop on CUDA while trying to move to Huawei silicon, and the other host was careful about the limits of his own knowledge.
The chip layer is where the monopoly sits
But Nvidia basically has a monopoly in the space, right, with the way AI is developed on CUDA, to my understanding
The other host
He also pointed at the second-order beneficiaries, naming SanDisk and storage demand as an example of a derivative play, and said Meta is the interesting one in the group because it already has the distribution for consumer agents. Meta delayed shipping its personal agent, Muse, on safety and security grounds, and its chief executive told the essay's author that the response to a genuine worry is a product decision rather than a blog post.
The hosts' own answer on sentience was narrower than the debate around them.
A model does not need to be sentient to do damage
I don't think LLMs are capable of becoming sentient, they're just organized characters.
The other host
His qualification was that an agent with the right instructions and the right access could operate an unsophisticated control system attached to something dangerous, and that a human would still be in the loop. The first host's version of the risk was proliferation rather than autonomy.
The real exposure is the technology reaching the wrong people
I think one of the takeaways too is just the technology going into the wrong hands.
One host
His comparison was the fear after the fall of the Soviet Union that nuclear material would leak out of a collapsed state, and his example from this year was an Iranian attempt to use Claude against computer systems. He also put the cynical reading on the record.
The alternative explanation for the departing researcher
I don't know, you never know this stuff, you don't know if this guy was basically paid to say that and like, oh, it's not coming from us, leave the company, we'll make sure you're taken care of financially, don't worry about it, with the ultimate goal of getting regulatory capture
One host
Both allowed that they may be too cynical. The other host said his interpretation is self-preservation by a group of people whose businesses lose large amounts of money, and that he might be wrong about it.
Then the financing structure, which is where the episode landed.
The circularity is public this time, and nobody is stopping
I mean, you think about how bad this was, like stuff that we didn't know about during '07-'08, all the cross-collateralization and how systemically significant the financing circles were around this space. We see it now, it's out in the open, for this trade, and people are still piling into it
One host
His point about scale was that the same structure now carries four more zeros and sits under a technology nobody has priced before, and that he expects a significant financial event at some point on the timeline. The other host brought a secondhand number to the same question, relaying Danielle DiMartino Booth on the Julia La Roche podcast citing work by Bloomberg's Anna Wong, and he labeled it as repetition rather than his own analysis.
Effectively all of US growth is attributed to AI spending, on a figure the host relayed
And essentially she was saying that according to Anna Wong's analysis, it's almost like 100% of growth in GDP now is tied in some ways to AI spend.
The other host
That is what produced the bailout argument. The two had disagreed about it the previous week, with one host saying he could not see the government rescuing an AI company and the other saying he should not be so sure.
The systemic risk is the business model, not a side effect of it
And I think these guys are racing to become too big to fail, and they're comfortable with all of this circular financing because they want it to be systemically risky, so that they can continue running non-viable business models, and the government has to bail them out, to stop the economy from imploding.
The other host
The first host's addition was the national security frame: whoever governs the best models gets the most users, the most data and the most visibility into what is being attempted. His expectation is that cheap models become good enough for what consumers need, that China keeps distilling and releasing open weights, and that every country ends up with a domestic producer of frontier-quality models. What he thinks is economically wasteful, and also the part that is genuinely existential, is superintelligence itself.
Bonus Insights
The crack spread, explained for listeners who had not heard the term
And maybe just a quick — the crack spread, for those who are not familiar with it, it's just the difference between the price of a regular barrel and, for example, diesel or jet fuel that you're talking about.
The other host
That is why a driver at the pump feels less of the increase than someone running a diesel pickup, he said: the diesel crack spread is much wider.
Trading pickup trucks is one way to trade diesel
That's how I trade diesel — is what I'm driving.
The other host
He had driven a diesel 2,500 HD for three or four years, traded into a 1500 gasoline model this year, and called it a pig on gas while conceding the timing was good. The tax conversation produced a related data point: someone in Alberta filling a one-ton diesel reported paying $2.58 a couple of days earlier.
The information age may be making history harder to trust, not easier
Imagine how much — imagine how much we know about history is actually revisionist history, right?
The other host
A text message became the episode's cheapest piece of evidence
One host read out a message he had just been sent by a co-host, who had switched from Claude to ChatGPT on the theory that it would be cheaper.
I got the $20 subscription and I got three prompts with Astra before it said I ran out of compute.
One host
The Canadian bank theme that has not happened yet
And I always just thought, I always felt like that was going to be — we're going to get that headline at some point, that Trump does this thing to harm Canadian banks, as the next escalation in the trade war.
One host
He said the sanctions announced on Monday appear to have hit an unrelated foreign bank rather than a Canadian one. His reasoning for why the theme existed at all is that Canada has large diaspora communities from countries the US treats as adversaries, and that earlier pressure came through banking rules and then fentanyl and cartel financing, which has touched TD and HSBC. He does not expect the escalation to arrive, and said so.
Next week's guest is a short seller, and the hosts plan to moderate him
Yeah, he's deep, and we will do our best to make sure it still stays on track, because Mark's a great follow, but he has pretty strong opinions, especially on Canada, so we'll do our best to moderate that as well.
The other host
Mark Cahote, on one host's description, takes a short position and then does investigative work to substantiate it.
The two hosts' bottom line is that the direction of travel is not in dispute and the timing is: higher fuel costs and higher bond yields will constrict the economy, the Bank of Canada is more likely than not to follow the Fed to protect the currency, and the AI trade is being financed in a way that makes a government rescue the most likely outcome of any accident.
Products, Companies & Tools Mentioned
Marathon Petroleum (The largest publicly listed US refiner, which one host called close to a pure play and said is up 150% year to date with "$9 billion in free cash flow" in the latest quarter)
Berkshire Hathaway (Cited twice: its railway said at the May annual meeting that higher energy costs are a relative tailwind, and its cash pile is the example of a corporate treasury earning more when the Fed hikes)
Walmart and Costco (The retailers whose reported results the hosts use to judge whether consumers can absorb higher freight costs; one host said Walmart can see behavior change at a specific gasoline price)
Polymarket (Where the hosts read the odds of a Bank of Canada hike, put at about 70% and described as the highest the contract has carried in 2026)
Nvidia (Named as the destination of the compute spending in the subsidy estimate, and as the effective monopoly because models are developed on CUDA)
OpenAI and ChatGPT (The subscription tiers the hosts walked through, including the withdrawn $200 Pro plan and the newest model's usage limits)
Anthropic and Claude (The company whose chief executive published the pacing essay, and the model one host is replacing labor with)
Meta (Called the interesting trade in the group because it already has consumer distribution; it delayed shipping its personal agent, Muse, on safety grounds)
Google DeepMind (Demis Hassabis was one of the lab heads whose agreement with the essay the hosts found surprising)
Grok and X (Used as the example of how quickly a model can be distributed when the platform is already owned)
DeepSeek and Kimi (Where one host says buyers would go if the top Western tier were repriced; he argued nothing makes Chinese models structurally cheaper to run)
Huawei (The alternative chip system Chinese labs are trying to develop on while still building against CUDA)
SanDisk (Named as a derivative play on storage demand created by AI workloads)
Katusa Research (Published the sector breakdown of Canada Investment Summit projects that one host read out, leading with 38% mining and metals)
Bank of Canada (Carolyn Rogers is cited as having flagged AI's pull on capital; the hosts expect the bank to hike to defend the currency)
Books & Resources Mentioned
Dario Amodei's essay on pacing the frontier (The Anthropic essay that set off the week's AI safety argument, which the other host reads as marketing rather than belief)
SemiAnalysis (The source of the June estimates for what each ChatGPT tier costs in compute, which both hosts flagged as estimates that have probably moved)
The Julia La Roche Show (Where one host heard Danielle DiMartino Booth's take on the Fed hike, including the secondhand claim about AI's share of GDP growth)
QI Research (Danielle DiMartino Booth's firm; she argued the Fed is watching the wrong indicators and should be cutting)
Bank of Canada Monetary Policy Report (Where one host says the bank recorded its concern about imported inflation)
US Treasury household fixed-income data (The chart one host shared on screen showing who holds Treasury bills, and the basis for the argument that a hike creates household income)
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