with the intention of selling those upside calls against it if we rally to that point, dom. >> and jim lebenthal. >> yeah, general motors, we know the fundamentals a cheap stock with a lot of pent-up demand take a look at this chart, it's up about 10% in a week we got to respect that. >> thanks a ot, folks, for having me here that does it for "the halftime report." "the exchange" with brian sullivan begins right now. >> yes, indeed it does, dom. thank you very much. i am brian sullivan in once again for kelly evans. stocks are higher today and closinging out a strong week. can the fed get inflation under control without crushing the housing market plus, california in crisis the state is facing energy shortages and is now flip-flopping on nuclear we're going to dig into where the golden state went wrong. and then we're going to get three buys and a bail. focused on each kind of economic recovery we might see, l shaped,

v shaped or u shaped feel like i'm doing the ohio state song whatever it is, there's an opportunity there. we are going to get to that. we begin with today's markets. guess what i'm going to do i'm going to toss to myself. let's go down to the market desk here's brian sullivan. the dow, the s&p and the nasdaq are higher right now nasdaq the best performer on a percentage basis did i do that okay, dom? >> that's a good thing. >> i feel like dom chu today i'm only -- i'm a 50% dom. i love you all right. nasdaq up 1.9% right there we are seeing dow, s&p and nasdaq all higher. big tech among the standouts and it's the biggest of the big tech, the manaforts, the facebooks, the bgoogles, and amazons just named half of all etfs royal caribbean and bookings holdings, some or your biggest gainers there. booking holdings had the best insider buy of the week.

speaking of big gainers check out shares of zscaler, sharply higher following a big beat on the top and bottom lines stock also getting several upgrades today including wells fargo naming it a top pick i'm here we've got to talk about energy energy stocks higher along with the price of oil, but oil overall still on track for a pretty rough week. a second straight week of losses no decision yet, by the way, from eu ministers on the possible price caps or some kind of tax on excess oil profits, but they did meet today to tray to solve this crisis overall, stocks, they are looking to snap their three-wee losing streak, but guggenheim's scott minor warning hige sees a big drop, maybe as much as 20% your next guest says not so fast he expects to recoup the 2022 losses by the end of the year, and he is barry nab ironside's economic managing partner. he's a personal friend of mine,

he's made some big calls some have been right some not as much what's your knock on the call? >> well, i would say the biggest issue that i broadly have -- and i didn't listen to the interview with scott yesterday i worked at the same firm as he did for some time. we used to joke at leeman brothers that bond guys are always negative because the best they can ever get is par so i'll exempt my old colleague rick reiter from that, but otherwise we always yused to chuckle about that broadly speaking, my view is that what happened in the first half of the year was not the market discounting serious deceleration in economic activity it was not discounting a recession. it was in essence the mother of all paper tantrums this is what we expected to happen in the first of the year was a monetary correction as

monetary policy turned around, fiscal policy turned around to al lesser extent, and we were going to have a fed policy related correction so when we hit the two twins in late june, that was twin fed hawkishness, market expectations of policy tightening, and we hit peak inflation that was really the inflection point. now, what happened over the last couple of weeks was also something that we expected going into qt in reaching the maximum caps, if you consider the three channels for qe and qt which is liquidity that we felt was fully priced. the actions of the treasury earlier in the year drained a lot of liquidity out of the system the portfolio balance channel, which is the fed forcing investors into riskier assets, that's what the taper tantrum was all about. those two pieces were adequately priced what wasn't adequately priced was the level of five and ten-year real or noninflationary

interest rates we've just had a shock in that part of the kucurve. ten-year real rates were about seven or eight basis points. they're now almost 90 basis points that real rate shock, and by the way, that's what triggered the corrections in '18 that's why we had an after shock to the mother of all taper tantrums it's likely complete now, i wouldn't totally -- >> barry, let me jump in a second the stock market is not going to fall 20% from here i think what you're saying >> i think that's highly unlikely that it would do so now, there is a scenario where it could happen, which would be the currency declines that we've seen in dollar yen and chinese yuan get really unruly were the fed to push too hard i think that's a low probability outcome. i'm not totally dismissive of scott's scenario, and downside puts are cheap if you want to buy some portfolio insurance, that makes sense.

if i'm right and we go back to 4800, you won't mind having spent that premium on those downside puts. i think scott's -- what sound to me like his base case would be only a tail risk for me. >> okay. what is the risk of a significant policy mistake by the fed, which let's be clear is slamming on the brakes they've been going 100 miles an hour for a long time they're not trying to slow down. they're trying to stop the car now. >> well, i think the fed was trying to do two things over the last -- or since the july meeting, which they largely accomplished they were trying to talk the market out of 2023 rate cuts and you know, i was suggesting fading those as well because i think it's unlikely, and therm trying to talk up those rates in the five to ten-year part of the ku curve, and as i described they did that i think the fed's been largely successful my concern is that they pushed too hard and they send those energy dependent currencies, euro, pound, yen and rnb into

free fall. that's really where the fed risk resides, and externally, and then domestically it's in the housing market as you know, we've had this tremendous decline in demand for housing and the supply for housing. so those are the two areas of risk lael brainard noted those on wednesday, ask i think that was really what kicked off the market stabilizing was her recognizing, yeah, these are two areas of vulnerability that if we push too hard, bad things could happen. >> i love the fact you ended on housing. that's where we're going to start our next conversation. barry knapp, it's good skiing where you are now. you're like gavin newsom in a fleece it's like 110 degrees. thank you very much. >> still golf season hear, brian. >> still golf season we've got the slopes behind you. i love it. if there is one thing that the fed has been consistent on, it's that we will need to it see some kind of economic slowdown in order to bring down inflation

flts y you just can't do it if the economy is booming running on all cylinders. here's what vice chair richard clarida said earlier today. >> we could have a downturn in the u.s. with a sharp turn in growth it's too soon to tell what will be required. i do think it will be more of a rise than we've seen in the projection. >> there has been some good news on inflation gasoline prices are down in fact, morgan stanley said it's possible we could see a negative print on that cpi number on tuesday. here's the bad news on inflation. one of the biggest components is housing and rents, and you know they've been going up, up, up, and they matter a lot more to many people than gas so if the fed wants to bring down inflation, does that mean the fed has to bring down housing with it? steve liesman and diana owelick are here we're jumping off your excellent interview with richard clarida this morning i was listening as i was driving in, and he kept sort of

mentioning housing around the margins. first off, how critical is housing to the macro cpi print >> it's the easy -- it's a big chunk of it, and by bringing down housing, the fed can get a lot of mileage out of the decline in infralation we have a pie chart i think available here, and it shows that housing is 30% of the cpi look at that, and it's more than -- much more than food, much more than energy, more than food and energy combined is your housing. medical care is in there, energy is 9%, but shelter is 32% of the cpi, so you figure if you bring down housing, you get a lot of bang for your buck in terms of the impact on inflation. unfortunately, guys, if you go to the next chart, it's going the other way. take a look at the housing component of inflation versus the core index you can see the core index, brian, actually moderated and then look at that, that white line has kind of gone flat to a ril bit down but look at housing, it's going straight up and it's expected to continue to go up because of

stuff that die an iana olick isg it's her fault. >> i'm not the economic genius that you are, steve. is the housing components is that only rents, or does it somehow take into account price or probably takes in both? because somebody eventually owns the home you're renting. >> it's more complicated than you care about or have time for, brian. i promise you w what it is, it's owners equivalent rent. they don't want to get the price component into the basket. they only want to he cost component in there so they take an equivalent of renting your house from rents. hold on, we have a quote here from fed governor chris waller who spoke earlier today, and what he expects, take a look, on housing services, that's the general idea of renting houses, the cost of it i expect to see sizable increases in this component of inflation for a while at the -- as the recent rise in new rentals makes its way into

aggregate price measures. >> look at diana and the giant screen she's thinking you're like your eyes were out and you're like waller where am i. how do you bring down housing, diana? >> well, i'm just trying to look at all these charts. his charts are a little more colorful than mine i'm looking at, you know, we are seeing rents start to moderate, ask i know we're seeing more single family rentals come onto the market we're seeing build for rent, and there's so much demand in that single family rental market. i've got new numbers out today that show that apartment rents are starting to moderate they're rising at much slower pace than they were even six months ago, and we do start to see home prices start to fall. we saw that from june to july, the first monthly drop in home prices, which usually always go up from june to july in over three years, and the largest single monthly drop in over a decade so we are seeing some of that heat come out of the housing market, and that's because of what you're seeing on my chart right now, which is the average rate on the 30-year fixed is twice what it was at the start of this year and what that means is that

affordability is just plummeting, and that means that it costs actually if you're buying a $400,000 home, it costs $700 more a month today than it would have on january 1st on that monthly payment so you are seeing prices come down you are seeing supplies start to come up and that, again, will bring praises bacices back a li. more argument is i know his chart had it going up. i don't want to understand the owner's equivalent rent, but i do but i do think there is some heat coming out of prices for -- >> here's the question i have. first i don't think about housing totals this is diana talk, she's like the 18th fed person to me, right? just to be clear, diana, here's the problem. you have this attempt to bring down housing cyclically by the federal reserve, and yet there's this secular imbalance in the supply we have been under building housing for ten years which says

to me or suggests to me there's a limit to how much it can fall, which says to me there's a limit to how much disinflation housing will every contribute to the cpi. >> exactly you have that supply demand imbalance, and depending on who you ask, it's anywhere from 1 to 5 million homes that we are lacking that we need right now, and that's why you see so much demand going into the rental market because people want single family homes, and so if you compare apartments go single family, it's now a completely different ball game in the rental market. the problem also is that homebuilders are pulling back because they're seeing fewer people coming through their show rooms, and they're concerned, so they're not building more, which is what we really, really need right now. >> and there's also been supply issues with getting the building materials as well. >> exactly >> i just think at some poirnt, there's a point at which you say a 6% mortgage is better that be another night on my parents' couch. >> maybe, but then you've got another problem, if you have

somebody who has a 3% mortgage rate, let's say i want to move up in the market i want to sell my entry level house -- >> you can't do it. >> and buy up. >> i can't fathom -- >> why would you want a 6% mortgage rate when you've got 2.75, just the whole idea of that says, you know what >> stay there. >> i'm going to take my money and put an adu in the backyard. >> we talked about this yesterday. people are going to build on so i guess this is where i want to go with this. and thanks for doing this because i think this is critically important if we're talking about getting to 2% inflation, inflation's coming down overall, but if housing remains high, how do we ever get to 2% >> it's going to be tough. you're going to have disinflation in a lot of places. the technology has to come forward. energy's going to have to go down you may get a negative print next week. i think what we heard today with fed officials is don't go too far with that number there are permanent aspects. don't get too excited what that

might mean for fed policy. there are permanent aspects, you've got global supply chain disruptions that may not come back the way they were before. and you tell me what's going to happen in europe when it comes to energy. i just think that you have to have the supply chain clear. you've got to have a moderation in mortgage rates, and ultimately, you have to have a decline in rents but there is one upside to this, which is that not everybody -- if you call up that pie chart, not everybody experienced -- there is probably no person for whom all of those percentages are accurate, right? like your mortgages -- your mortgage rate is going to be something different. wine on there. i'm trying to figure out where wine -- >> that may be a large percentage or beer for some people or for example, the gym for diana olick. >> that's called my basement, steve, which the price has not changed at all >> two things, quickly, you win the chart wars, steve 100%

diana had like a line. >> if i didn't it would be very bad. >> i had more. i had more charts. i had a bunch. >> it's like the chart above her shoulder, look at the red. >> i will give her the final word -- >> i have to have the final word on one thing. >> when will we get more data on housing that's really meaningful when will we know when the 6% number is starting to hit if it's not already >> what we're watching most closely is prices and inventory because they rely on each other and that's the most important thing driving this market right now. i'm not looking at ckay shiller going back two months ago. i'm looking at what we're getting right now from monthly moves, which we don't usually track in prices, but monthly moves in home prices, which show discrepancies in the seasonality of housing that is prices usually go up in the summer they didn't this summer. prices usually go down in the fall what will happen this fall month to month >> steve liesman loves his seasonal -- you love your seasonal adjustments. >> if i can get some help from

d dia diana, i can do some damage. there is no such thing as a comfortable couch bed. they're uncomfortable for a reason was it ben franklin, fish and guests both stink after three days remember that. great discussion important discussion thank you. still on deck, what's wrong with big foam? verizon shares seven-year lows of t-mobile popping. craig moffett will join us with more on the convergence apoc apocalypse, whatever that is. if you believe we're already in or heading into a recession, how would you position your stock portfolio? we've got a special recovery dex of three buys and a bail on tap. "the exchange" back after this >> announcer: this is "the exchange" on cnbc.

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i want to bring you the price of crude oil it is back up today, gaining back what it lost yesterday. it's up 4% right now at 86 and change brent overseas is back above 92. here's why, the weekly rig count numbers came out, and they dropped again. the baker hughes number of operating oil rigs minus 5 we're hoping for more production we're hoping for production gains, folks

we've been talking about this for a long time. the ceos have told you there's no people. there's no drilling rigs there's no steel there's no water there's not enough, especially in the permian to grow production maybe we'll see a pop next week, but another week down, drilling rigs losing five, price of oil is up. you know what else is up shares of t-mobile that's up over 25% year-to-date. and that is vastly outperforming most other communication stocks. names like at&t, verizon, cnbc parent company comcast, all trading lower this year with verizon and comcast down double-digits, and the big loser of the bunch, charter communications falling 40% this year your next guest has been warning of a convergence apocalypse that is wireless entering cable's broadband sand box and vice versa. what does the trend mean for communication stocks who stands to win? who has something to lose? let's ask craig moffett, founder and senior analyst of moffett,

nathanson and craig. it's good to have you on let's put t-mobile aside i kind of feel like that's almost a meme stock. they got their own thing going on everything else is down. i feel like we're in an -- i'm watching russell crowe in "gladiator" at the end because they both die. >> that, in fact, is exactly what the convergence apocalypse thesis is. to be fair, i want to be clear i actually think the convergence apocalypse thesis is not exactly right. in some ways it's a bit of a straw man to say it's clearly where consensus is which is to say there's no winners here, other than consumers perhaps certainly a deflationary industry in the context of a lot of inflation i actually think there are some winners here, and there are some companies that are better positioned than others as we get this competition between cable entering the wireless business and wireless operators increasingly offering broadband

service. >> that sounds really bad. i mean, it's like if burger king, mcdonald's, wendy's, and you know, yum brands just all drove each other out of business, at some point someone's going to have to win or buy the other one or crush the other one. >> well, let's take buying the other one off the table because i think realistically regulators aren't going to let any of these companies -- >> deals are done, and by the way, the deals that have been done are terrible. awful. >> that's right. but the deals tissu-- we're notg to see any new deals first let's zoom out a little bit and understand for context the broadband business has been a fantastic business, right? one of the reasons it was such a good business is that in most of america the cable operators more or less had the playing field to themselves what we're talking about for the cable operators is seeing real competition or today they overlapped with fiber say 37,

38% of their footprint maybe that goes to 50 to 55% of their footprint. it's a material step up where they face competition, where they face competition, by the way, it's still only a duopoly, so it's not the worst thing in the world. but they'll see it a step up in the percentage of the footprint where they see competition but it's probably not calamitous what the market is trying to grapple with for the cable stocks is is this idea that this is a business that was once great that's now only very good, and how do you price that? the wireless business is different. for the wireless operators, verizon and at&t in particular again, let's leave aside t-mobile, which is very much the winner here. for verizon and at&t, the problem is this was never a very good business to begin with. it was a highly competitive business it always had three players and the cable operators being

competitors now, i mean, it feels more like a four to five player market. that's a much, much tougher place to make money, and so it's -- the road forward just on that basis alone, there are a lot of other reasons we can talk about. on that basis alone, the road forward is not as good. >> craig, i'm biased i own one stock, it's the only stock i'm allowed to own i own one stock through our employee stock ownership program, that is comcast obviously i want people to know i'm a little biased coming in. but who wins ultimately? the cable players or the phone players? >> actually, they probably do. i mean, remember -- >> who's they? does comcast come out a winner >> i think comcast and charter come out winners here, and as i said, the market is grappling with how do you value these things if -- look, i mean, remember the cable companies have been through a long evolution they went from an act one, which was video. it turned out that act two for them, the broadband business was a much better business than act one, and so after everybody

stopped wringing their hands over, oh, my god, video cord cutting is going to kill the cable companies, people came to realize the cable companies are going to be better off than they were before. now what people are struggling with is act three for the cable companies is wireless, and they have some real advantages in wireless, and it will be a profitable business, but not as profitable as broadband, so what people are struggling with is is this next leg of growth going to be as zbgood as the last one again, it's still a really good business >> we're going to leave it there. i like that we're going to end it on an optimistic note for our parent company, craig, so we're going to leave it right there. craig moffett, thank you very much. we've got a market flash for you. let's go down to the west coast, steve coe vawhat do you got? >> shares of roblox are surging 7% after the company announced it's going to open the door to let advertisers into their virtual world. this is something people have

been waiting for for a while the ceo has been teasing it for the better part of most of this year i'd say, and now they're finally giving more details about what that will look like they've experimented with brands before, spotify, vans and some other fashion brands have made their own little worlds within roblox the company is going to allow more in and sort of pay to play to get in and show off what you can do in the metaverse if you're a brand this is very similar to where facebook was more than a decade ago. they got a lot of young users, tens of millions eventually they started monetizing those users from advertising. what i've been hearing from the roblox side, they don't want to make this the 3d version of a banner ald they're really coming up with more interactive and virtual experiences for people to interact with these advertising instead of just a typical banner. >> there you go, roe beblox up today. >> yesterday too. >> i think my son was a part of that by the way, happy birthday to my

boy today. coming up, record breaking temperatures, threats of blackouts, and terrible fires. all hitting california again michael shellenberger is here to talk about it all and what california really needs to do with energy. you n'wot want to miss this. "the exchange" is back after this are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. aflac! seriously? now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap?

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happy friday dow's up 363 over 1%, but the nasdaq big tech, the big winner. there you go, it's up more than 2%, ending out what is turning out to be a pretty decent week guggenheim is downgrading

enphase energy to neutral. saying the stock is fairly valued enphase up nearly 50% in just 90 days but is the worst performer in the s&p 500 today sticking with batteribatteries,e is a battery company the lithium company albemarle hitting an all time high the firm is raising its price target from 294 to 345 and says albemarle is a top pick rjt all ri right, if we go into a recession, the question is what kind of recovery will we get we've got three buys and one bail for alphabet soup of different recovery scenarios, and you're looking at the bail that is down more than 50% so far this year. the name and why it is not okay even in a recovery stick around

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welcome back recession certainly front of mine for many folks from wall street to main street, but if we're headed for one, or maybe we're already in one, what about the other rshs word.

that is recovery you always hear a v shaped recovery, a k-shaped recovery. with so many scenarios, how should investors position themselves, joining us is gina sanchez, chief market analyst, she's got three buys for three different type of recoveries and one name to bail on. apparently also an english teacher because you're going to tell us what k and l and all these other things mean. abbott labs up about 5%. you say this is your l-shaped recovery play. >> that's right. brought to you by the letter l so a lot of people are talking about an l-shaped recovery where we basically don't really recover after the fed is done hiking and begins its easing cycle later in 2023. that really is an ugly scenario, one where you're going to want cash, where you're going to want really defensive names obviously abbott labs is right in that health care space. it's super defensive. >> yep.

>> and they have been doing incredibly well. with a 1.7% dividend yield that's been growing, that's also attract zbive. >> okay. other recovery stock microsoft, why >> yeah, microsoft is what we call our u-shaped recovery kind of story, which is that the economy slows down without the fed having to put the screws to it, but they don't really -- they wait a while until they start to cut microsoft is one of those stories that just has a secular trend behind it. that cloud computing trend, it's no the going away regardless of what happens to the economy. larger or smaller, it's still going to be a big part of it at 24 1/2 times it's actually quite attractive in terpsms of valuation. we think that's what you use to play the rest of the recovery. >> i don't think tesla has a model k. you say if there's a k shaped recovery, please explain what that is, okay. tesla is the name. >> so a k-shaped recovery is a recovery where part of the

market is a winner and part of the market is a loser. right? so we're going to talk about kind of what wins in a k-shaped recovery here we're actually leaning into the big fiscal announcement, you know, the inflation reduction act. we think that tesla is going to be a huge beneficiary of that. it's not cheap by market standards, but it's cheap by tesla standards. 54 times forward earnings, and all of the supply chain disruption that they experience, they're really starting to catch up there so we think that the road to -- you know, the road leads to ev right now, and tesla is the poster child for ev. >> okay, it's three biasuys and bail the bail i guess is what you get out of -- bitcoin. >> the bail is the other side of the k. right? so we're highlighting bitcoin, but here we're just talking about the fact that because we think that the fed balance sheet, it's contracting and we think it's probably not going to expand for a really long time,

that just hits anything that's super speculative. bitcoin has been a huge beneficiary that's grown beyond inflation. inflation is back, and money supply growth probably is not back for a while we think bitcoin is going to be dead money for a while >> gina sanchez, appreciate it thank you very much. now let's get to tyler mathisen for a cnbc news update. >> thank you very much king charles using his first speech as monarch to stress how he will continue the traditions of the crown while also honoring queen elizabeth and her devotion to the nation. >> queen elizabeth was a life well lived, a promise of destiny kept, and she is mourned most deeply in her passing. that promise of lifelong service i renew to all today >> he also promised to serve great britain and uphold its values for the rest of his life. >> as the queen herself did with

such unswerving devotion, i too now solemnly pledge myself throughout the remaining time god grants me to uphold the constitutional principles at the heart of our nation. >> on the news tonight, team coverage of the first full day of king charles iii's reign, and what the coming days hold as britain transitions to its new monarch. major league baseball is set to vote on rules later today among the changes, a 15-second pitch clock when the bases are empty climbing to 20 seconds when runners are on bigger bases. and bigger bases if approved, the changes will take place in the 2023 season, brian, i can't tell you how good i think a pitch clock is for baseball. >> got to speed it up, 100% correct, tyler mathisen, thank you very much. all right, coming up, sam bankman-fried, founder of

digital asset ftx is at it again. this time he's not bailing out crypto firms he's take ago big stake in anthony scaramucci's skybridge capital and the other companies he's looking to invest in. that's next. bal secure networkig from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

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let's call this the odd couple crypto edition. anthony scaramucci and sam bankman-fried. the ftx ceo taking a 30% share in skybridge capital a look at bank man-fried's growing empire, which apparently does not involve shoes. >> that's right, brian the big crypto industry news of the day, sam bankman-fried buyinga 30% stake in anthony scar scaramucci's skybridge capital, $40 million of that will go directly to skybridge's balance sheet to buy more crypto

it comes after skybridge had gated some redemptions earlier this year as crypto prices crashed. still less than 8% of that firm's assets are in its crypto fund it will show up investor confidence in that fund. it also adds to bankman-fried's growing empire an equity holder in voyager founded alameda research, and he's got a personal stake in robinhood as well. ftx ventures also has its own web of startup bets on top of that, and bankman-fried telling "squawk box" it was really about merging digital assets in traditional wall street, which is really key here bankman-fried is moving further into that world of traditional finance. it has shown some more interest in merging these two worlds. finally, brian, the deal builds on this conference relationship we've seen between these two skybridge owns salt, for those who don't know, that's a large

conference that focuses on alternative investments. ftx have teamed up on conferences in the bahamas they had a big one earlier this year we'll see if that continues. back to you. >> not a bad place to travel kate rooney, thank you very much speaking of anthony scaramucci, and speaking of kate rooney, they will both join us tonight at 6:00 p.m. eastern on crypto night in america with more on today's big deal, you won't want to miss that i won't want to miss it. i can't miss it because i'm hosting it so for pete's sake, tune in. all right, still ahead, how did california, once a shining star of energy in america, end up with energy shortages and dangerous potential blackouts. chshellenberger is up next with that. ou on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

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welcome back to "the exchange." what is wrong with california? the state just came dangerously close to shutting off power in places where people were suffering through temperatures over 100 degrees in other words, potentially cutting off air-conditioning at a time when most people needed it most to stay safe now politicians mostly blaming the record heat and that certainly played a role in energy demand, but with climate change, we should expect it to be hotter for longer, and we

need to prep for it. california seems to be going the other way and only just finally did a major u-turn on nuclear power. joining me now is the author of "apocalypse never," it's a real eye opener if you're interested in climate change and energy i don't know how you don't read it i grew up in the shadow of san know fray, in california we used to go there and surf that is no longer a nuclear power plant. the state just agreed to keep its only nuclear power plant open for a little bit longer, which is good news here is my question to you, how in the hell did we get to a point where people actually considered shutting off the only reliable thing that was 10% of the state's daily energy supply? it's mind blowing. >> well, yeah, first thanks for having me on i grew up as a taeenager when chernobyl happened, i was a big

advocate for renewables. it's become a bit of a religion out here in california we certainly have been talking about climate change for a long time there's no excuse for not being prepared for heat waves. but yeah, i mean, people got a very apocalyptic world view around nuclear starting in the 60s. the last nuclear plant that we still are operating in diablo canyon was supported by the sierra club. the turn against it was really because people didn't to have enough energy to support a growing population, and that continues to be the reason that we in california don't allow desalination plants that we desperately need it's the reason why they don't create enough water storage facilities and why we have water shortages. so there's just a kind of, you know, for lack of a better word, just an anti-human, anti-civilization, very romantic world view shutting down natural gas power plants as well, and now they're burning diesel and kerosene to keep the lights on it's a really serious situation

actually >> i want to get you back on to talk about desalination because arizona, nevada, and utah would love that, but environmental boards won't allow it. that's a different segment california also has to buy power from other states in order to meet sometimes peak load does it not? and the risk there -- and i don't think i don't think people realize how close this came, if arizona or nevada decides they don't want to sell california any more power because they need it all for themselves the lights, the heat and the air-conditioning are going off in the richest state in the work in america and the world >> well, yeah. we pay the most for electricity than any other state except for hawaii we've had the most expensive gasoline prices and we've paid the highest tax and it's certainly not for lack of money and it's because we've been spending so much trying to move to renewables and we're just experiencing the limits of trying to rely on what are fundamentally unreliable weather

dependent energy sources you're right, in 2020 when we came close to having blackouts, the problem is we share weather with the states around us and when it's hot here it tends to be hot in neighboring states and they need their gas-powered power plants online and now we're -- because we underinvested in maintaining our forests we have the catastrophic forest fires, the smoke from the fires is now reducing the output from the solar farms and from solar. so it's a badly managed state and i think it's a state of where ideology actually has created incompetence. >> it's also listen from a media perspective, and michael, i'm sure i've screwed stuff up in the past and you actually dig into the numbers and i have a buddy of mine who lives in calistoga. his house almost burned down and

he's a smart guy to your point, we always blame the fires on energy, the reality and sometimes it is -- a power line goes down, but if the power line is 75 years old and nobody has bothered to cut the underbrush from the trees for 30 years because of some reason, lack of money, lack of effort or they just don't want to do it, it's a tinderbox you are literally creating, man is creating these conditions >> that's right. there's no need for electricity shortages and no need for high-intensity fires and you have to maintain the forests, and you have to have a combination of prescribed burns and the chemical thinning of forests. in some ways we used to reduce more paper and pulp and thanks to our iphones you don't need to use newspapers as much anymore, so we don't have as much of that and you have to maintain the

forests and it's expensive and it requires a lot of people's efforts and when we've had this incredible, heavy focus on climate change to the exclusion of doing things like maintaining our forests which the governor actually cut the budget for, you end up with these catastrophic fires. it's just a management issue and these issue, it's not -- it's not like going to mars or something. it's just maintaining your civilization >> yeah. it shouldn't be that hard or complicated, but you have to have adult conversations that make some people uncomfortable once in a while. pleasure on having a good chat and we'll talk desalination next time the state of my birth, still love it. a lot of problems, but still love it. it has been a huge year for stock buybacks and the dollar value of share repurchase of one arctor that is cut in half by ye end we will find out who and why next

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welcome back to "the exchange," according to data, more than 1300 companies have reported buybacks in the second quarter and the record achieved back in 2020, but the volume of buybacks fell 15% from the previous quarter bringing the total value of buybacks to $270 billion and the third highest on record financials were particularly responsible for the drag with the dollar value repurchase falling 44% as big banks stopped repurchasing to shore up capital requirements and where was the biggest increase, the russell 2000, hitting a new record of 20 billion in buybacks and you go small caps joining me is the man behind the numbers director offy research. how do we read the data buybacks and they've been the stock market run in the last couple of years. >> thanks for having me on, brian. as we discussed in the past, buybacks are a leff are for the market and certainly can be.

my read on the data is the dollar value is not like the buybacks so when we have more than 1300 companies the buyback stock which is the second best quarter ever after the pandemic quarter of q1 '20, that's what we want to see that's what we talk to our clients about and our clients are looking for investment ideas from stock buybacks. they're looking for opportunistic buybacks and that's what we saw a lot of in order. >> we got this tax implication now and the 1% thing are you hearing, are you thinking that we'll see a big slowdown and it's an annoyance, but it's not going to stop it. >> i think it's an annoyance that's a good way to put it. the simplest way to look at this is if you're managing a company you're not going to sniff and worry about paying $101 a share. so a 1% tax isn't going to deter management teams that really

have the stocks undervalued and again, that's what you want to see. you want to see management teams in the buybacks when they think the stock is undervalued. >> i want to ask you very quickly about insider buying we did it on my show, worldwide exchange at 5:00 a.m. eastern time and ben, you're my guy on this booking holding was the number one buy. give us more color on the booking insider buy. >> so the chairman robert mulad who is the cfo of the company bought 3.79 in shares in august and it was 1.8 million, so he doubled down here. what's interesting here is this is a company that doesn't see a lot of insider buying and in fact, it was his first in 18 years. so that's the deviation in behavior by a longtime insider that investors should be looking for and that's what they want to see. they want to see someone putting their money where their mouth is, put in significant cash and

doing so especially at these companies that they don't typically see insider buying >> i think it's a really interesting point which is how frequent is the buying and this guy stepping out of nowhere and that is up 3.5% and probably on the data we appreciate it ben, thank you very much >> we do that almost every friday and urg did the blackout periods on worldwide exchange at 5:00 a.m. eastern. that does it for "the exchange." "power lunch" starts right now ♪ ♪ >> welcome to "power lunch." i'm contessa brewer in for kelly evans today. is inflation about to collapse that's the call from a longtime market watcher to tell us why he thinks that is the warning of permanent price hikes and why it's wrong signs of a bottom. there are three things investors need to look at to see if the market downtrend is ready to reverse and we'll tell you what they are and wha