The Week: Iran, SpaceX, and a Nervous Bond Market

Summary

Podcast Summary: The Prof G Pod with Scott Galloway
Episode: The Week: Iran, SpaceX, and a Nervous Bond Market
Date: May 29, 2026
Host: Vox Media Podcast Network

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Episode Overview

This week’s episode of The Prof G Pod dives into three interconnected issues dominating the headlines and boardrooms alike: the ongoing war with Iran and its economic aftershocks, the tumult in the global bond markets, and the head-spinning valuation of SpaceX's planned IPO. The episode alternates analysis, sharp analogies, and a deeply personal moment from California Governor Gavin Newsom on leadership, vulnerability, and loss.

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Key Discussion Points & Insights

1. The Iran War & Geopolitical Fallout

[01:47 – 07:20]

• “Trump is me in the Hungarian forest right now.”
  — Ed Elson, drawing a vivid analogy between his own youthful visa mishap and Trump’s strategic position in Iran (04:32)

• No Leverage, No Exit:

  • Ed Elson’s story about being stranded at the Hungarian border transitions into a critique of Trump’s Iran policy: “He never bothered to consult Congress...never even signed up or even briefed European allies...He has no fucking cards. America wants him out. Iran knows America wants him out.” (04:35)
  • The recent ceasefire and reopening of the Strait of Hormuz is painted as a face-saving “exit ramp dressed up as deal making”; markets treat falling oil prices as good news, but the panel isn’t convinced real progress is being made. (05:06)
  • China and Russia are growing ever closer, as highlighted by James King, marking “probably the most consequential geopolitical shift that we’ve seen in the world over the last decade” (06:08). This realignment is not lost on markets or policy analysts.

2. The Nervous Bond Market

[07:20 – 11:51]

• Bond Market Alarm:

  • Bond yields surge to their highest since 2007; the 30-year U.S. Treasury crosses 5.2%. Odds of a rate hike by year-end surpass 40%.
    “The bond market is sounding an alarm that the stock market has been ignoring.” – George Hahn (07:20)
  • Jess dives into why:
    • Rising oil and energy prices push inflation, which pressures bond yields up.
    • Higher yields make borrowing more expensive—from mortgages to credit cards, corporate loans to national debt.
      “We keep saying the deficit doesn’t matter, until it matters. It feels like that mattering may be starting.” – Jess (08:39)
  • Unique 2026 Risks:
    • U.S. interest payments reach $1 trillion annually, equivalent to what’s spent on defense and education combined.
    • Private credit, especially for over-levered sectors like AI, is exposed as floating rates hit startups and cash-bleed business models.

• Limits of Market Discipline:

  • Ed Elson and Scott discuss whether the bond market—the “adult in the room”—can still rein in chaotic policy, as it arguably did in Trump’s first term (tariffs):
    “The trouble is the new policy is a war in Iran, which is a lot more difficult to just turn off...I’m just not sure that the bond markets have the power that they used to have, which to me suggests that yields will only continue to rise...” – Scott (09:58-11:51)

3. SpaceX’s Jaw-Dropping Valuation

[14:57 – 17:17]

• IPO Plans Revealed:

  • SpaceX files to go public at a $2 trillion target valuation, aiming for status as the world’s seventh most valuable company—on annual revenues less than Macy’s.

• Comparison to Nvidia:

  • Scott crunches the numbers: “They generated $19 billion...this means that this company is valued at 106 times sales. Nvidia...is trading at less than 22 times sales. The multiple, there is a 5x difference in that multiple, despite the fact that Nvidia is growing more than five times as fast as SpaceX.” (15:34)

• Skepticism from the Team:

  • “This thing does not price at $2 trillion...At some point people have got to put the crack pipe down. I think this thing is a $600 billion company.” – Jess (16:53)

  • The likelihood of a sharp post-IPO correction is high, with speculation that Xai (SpaceX’s AI subsidiary) may face cuts or closure within a year, and that SpaceX's value will be “sub a trillion dollars” within 6-12 months.

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Notable Quotes & Memorable Moments

• Best Analogy:

  • “Trump is me in the Hungarian forest right now.” – Ed Elson (04:32)
    This story ties together personal vulnerability and the perception of U.S. powerlessness and lack of leverage in the Iran quagmire.

• Geopolitical Warning:

  • “What we're seeing is the axis of authoritarianism in action...the sort of closeness that we've seen between Russia and China since the Russian invasion [of] Ukraine is probably the most consequential geopolitical shift that we've seen in the world over the last decade.” – James King (06:08)

• On Market Discipline:

  • “The bond market was the adult in the room...But the trouble is, the new policy is a war in Iran, which is a lot more difficult to just turn off. I’m just not sure that the bond markets have the power they used to have.” – Scott (09:58)

• SpaceX Skepticism:

  • “At some point people have got to put the crack pipe down.” – Jess (16:53)

• Personal & Vulnerable:

  • “It was such a wake up call and, you know, you don’t get it over there. No do-overs here, man...You want to be a son, you want to be a leader, be other people oriented. It’s not just about you.” – Gavin Newsom on being present and facing loss (17:37)

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Timestamps for Key Segments

| Segment | Timestamp | |----------------------------------------------|------------| | Iran war/Trump “Hungarian forest” analogy | 02:32-04:35| | Ceasefire & energy markets | 05:06 | | China/Russia power shift | 06:08 | | Bond market alarms, inflation, interest | 07:20-09:53| | Will market discipline work this time? | 09:58-11:51| | SpaceX IPO valuation vs. Nvidia | 15:34-16:44| | Panel skepticism on valuation | 16:51-17:17| | Gavin Newsom on loss, leadership, presence | 17:37-19:30|

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Tone & Style

The episode weaves sharp economic and geopolitical analysis with signature Prof G humor and realism. The team calls out delusion (“crack pipe” valuations), illuminates the global chessboard with analogies and context, and finds space for honest reflection about what really matters as a human and leader in challenging times.

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For listeners and non-listeners alike, this episode delivers not just a forecast but a diagnostic of America’s strategic, financial, and cultural crossroads—with a little advice about not missing your moment along the way.

Transcript

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[George Hahn]

Welcome to the Week from Propg Media where we break down what mattered and what it all means. I'm George Hahn and it's Friday, May 29th. This week we take a look at why the bond market is panicking and why that panic has been a long time coming. War is pushing up oil prices. Oil is feeding inflation fears and inflation fears are pushing borrowing costs higher. Let's get into it. Let's start where the news started. Iran, day 88 of the war. On Tuesday's raging moderates, Scott had a fitting analogy for where things stand right

[Ed Elson]

after When I was at Morgan Stanley and I was going to do a third year, I called the MD at Morgan Stanley who ran the LA office and said I'm quitting and I got a backpack and I went to Europe and I was traveling around Europe and I met up, I tracked down this woman who I was just enormously in love with and we spent about three weeks traveling around Europe and we were in Vienna and we thought let's go to Hungary. There is a point here, and I'll get to it in about two hours.

[Scott]

I got all the time in the world for a backpacking love story. This is so much better than nuclear dust.

[Ed Elson]

This will date me, but I went to the American Express office and cashed travelers checks.

[Scott]

I remember doing that with my parents. Yeah.

[Ed Elson]

And I had one of those fanny belts because we were also worried about having money stolen from us from these evil Europeans. And I got literally a stack, a brick of forance of Hungarian Florence. And so we're head to Pest to Budapest. And I'd heard some sort of rumors or murmurs of needing a visa, but we got on the train anyways, and they stop at the Hungarian border and they come and they say, visa? And I'm like, no. And she and I look at each other and we're like, no. And they pull us off the train in the middle of the Hungarian forest and say, you're on your own. And there's one cab driver there driving a lotta, which is the Russian equivalent of a Yugo. And because clearly this happens, there's always a couple of dumb Americans who don't get the visa. We're in the middle of the forest, and I'm thinking, okay, he's gonna murder me and rape my girlfriend. One car. And the guy. And I say, how much? And he says, I don't know, whatever. It was like 100 bucks or something. And I'm like, 90. And he looks at me and just smile because he recognized at that point, in the middle of the fucking Hungarian Forest at 11pm and there's one way out of the Hungarian forest. I have no leverage. Trump is me in the Hungarian forest right now.

[Scott]

There we go. Close the loop.

[Ed Elson]

There we go. Close the loop. Because he never bothered to consult Congress and offended them, because he never even signed up or even briefed European allies, because he did not in any way coordinate anything around intelligence, around the Straits of Hormuz, getting expats out of the Gulf, figuring out, putting in place the right defense mechanisms. He has no fucking cards. America wants him out. Iran knows America wants him out.

[George Hahn]

The reported framework of ceasefire extension, Hormuz reopening and resumed Iranian oil sales may sound like progress. Markets certainly treated it that way. Oil prices fell this week on hopes that shipping through the Strait of Hormuz could normalize again. But the details remain murky, and even the White House has disputed parts of this reporting. Scott and Jess call it like it is. An exit ramp dressed up as deal making. Trump declares A vague victory and leaves Iran probably comes back stronger. And while the US Is stuck in the forest, China has been inching closer and closer to Russia. Putin and Xi met in Beijing this month with new signs of energy and strategic cooperation on China Decode. James King reminded us that America's rivals are not watching this war as bystanders. They're watching for leverage.

[James King]

I think, you know, the big picture here is that what we're seeing is the axis of authoritarianism in action. This kind of bromance between Putin and Xi is really striking. And I've been looking at the fact that since Russia's invasion of Ukraine, we've seen these two big powers draw together much, much more closely. That includes diplomatically, economically, but also militarily. And that's why it really matters for the world. I would say actually that the sort of closeness that we've seen between Russia and China since the Russian invasion, Ukraine is probably the most consequential geopolitical shift that we've seen in the world over the last decade. I mean, I know there are several competitors for that title, but this one is really big. On the one hand we have a superpower, China. On the other, a big power, Russia. Their combined population is about 1.55 billion people. Vast territories, it's the second and the ninth largest economy. And both of these countries are nuclear weapons powers.

[George Hahn]

It seems the markets are finally catching up to what the war has actually done to the economy. Last week, inflation fears sent bond yields to levels not seen since 2007. With the 30 year hitting 5.2%. The odds of a Fed rate hike before year end, which started the year below 10%, have now crossed 40%. The bond market is sounding an alarm that the stock market has been ignoring. On Monday's Prof. G Markets, Scott discussed what the downstream effects may start to look like.

[Jess]

The bond market has stepped in and said, okay, with energy going up, we have greater inflation, which is pushing bond

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[Jess]

Typically, when the bond market goes up, it draws money out of the equity market because people can get a better yield with what they feel is a safer investment. And also fewer deals get done because it gets more expensive to buy things. It gets more expensive. Everything in the economy, your auto loan, your mortgage, your credit card goes up and the yield on the ten year treasury kind of sets the bar for interest rates across the economy.

[Ed Elson]

Right.

[Jess]

And higher yields also increase the cost of servicing our debt. In 2026, you also spent a trillion dollars on interest payments that's $88 billion a month, roughly what we spend on defense and education combined. And then the question is, could this trickle down to software and AI who've taken out private credit loans? Private credit loans are typically floating rates. So what happens when the AI shell companies that are built on debt? What happens when their debt service costs go up and then they hit a bump in the road where their capex continues to go up but the revenues don't scale in line with their capex, which according to the FT and every other analysis I've read, says it'll be nearly impossible for revenues to keep up with capex at AI companies. So you could have shavings of shit on a shit salad here, right? You could have costs go up so consumers take their spending down and then the companies that are most levered or who have been tapping the credit markets see their costs explode while maybe registering a decline in revenue growth that can't, you know, there's no way they can live up to their expectations. So, you know, we keep saying the deficit doesn't matter until it matters. It feels like that mattering may be starting.

[Scott]

Yeah.

[George Hahn]

Ed explained why this time there doesn't seem to be an easy way out.

[Scott]

The bond market was the adult in the room. Trump issued these tariffs. He came out with his stupid billboard in the garden and everyone freaked out. Stock market investors freaked out. Bond investors particularly freaked out. Where you saw the 10 year yield jumping more than 50 basis points in three days. It was the biggest three day jump in more than two decades. It was huge. And Trump admits, oh, the bond market's freaking out here. And then he tacos and he puts the tariffs on pause. And the learning from that was okay. The bond investors, the bond vigilantes, as they call them, they're the ones who are going to sort of steer Trump's sort of wacko policy in the right direction if he starts to do things that are going to have real serious consequences in the markets. So the question then becomes like, is, is the same going to happen in, in the current situation? Will bond yields today change Trump's economic policy like he did with the tariffs? The trouble is the new policy is a war in Iran, which is a lot more difficult to just turn off. I mean, we've already spent, I mean, according to Pete hegseth, more than $25 billion on the war. That was a month ago that he said that. So it's probably a lot larger. Trump's already requested 1/2 trillion dollars for the defense budget for next year. We've already lost 13 lives, nearly 400 wounded. Many other lives have been lost. I mean, the costs here are a lot more significant and a lot more personal, a lot more sensitive. I'm just not sure that the bond markets have the power that they used to have, which to me suggests that yields will only continue to rise, which increases the likelihood that all of those dominoes will fall in the way that we just laid out.

[George Hahn]

We'll be right back after the break.

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[Jess]

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[George Hahn]

Welcome back. While economists are trying to price the true cost of a war, Wall street is busy pricing something else entirely. SpaceX filed to go public this week. Target valuation $2 trillion. That would make it the seventh most valuable company in the world. More valuable than Meta, Berkshire Hathaway and Broadcom combined on revenues lower than Macy's. On Monday's Prof. G Markets Ed ran

[Scott]

the comparables and let's just look at what that valuation actually means. We know that they generated $19 billion or a little less than that in 2025. So this means that this company is valued at 106 times sales. Just want to compare this to Nvidia. By the way, their Q1 revenue, which was $4.7 billion, the revenue was grew 15%. So this company is the next hot company. It's growing at 15% and it's valued at 106 times sales. Let's compare it to Nvidia. Nvidia just reported their earnings. They grew their revenues by 85%. They generated 58 billion dol net income. That's gap net income up 211% year over year. They are trading at less than 22 times sales. So the multiple, there is a 5x difference in that multiple. Despite the fact that Nvidia is growing more than five times as fast as SpaceX and also it's generating billions of dollars in in in in cash flows. This is a losing money business.

[George Hahn]

Scott went on record with his predictions for Musk's ipo. This is where he thinks it's headed.

[Jess]

Oh God, I'm going to hate this one.

[Ed Elson]

This thing does not price at $2 trillion.

[Jess]

At some point people have got to put the crack pipe down. I think this thing is a $600 billion company. If you look at generously at the windup of all of it, I think they're going to have to cut back on the, on the capex at Xai. I wouldn't be surprised if they end up closing that thing down at some point. Yeah, I think that's, I think a safe bet is that within 6 to 12 months it's sub a trillion dollars.

[George Hahn]

And after a week of war markets and great power politics, the most human moment came from Thursday's Conversations episode with Gavin Newsom. Almost eight years as governor of California, the fourth largest economy in the world. But the moment that stayed with us wasn't about policy.

[Gavin Newsom]

You know, it was all about me. And I was just dealing with my own insecurities, my own anxieties, put a mask on and, you know, tried to be what I thought it needed to be. But my face was starting to grow into it. I was becoming someone I wasn't and I wasn't present. I wasn't there for my mom, I wasn't there for my sister and the people that mattered most. And it took a phone call from my mom, which you're referring to in a book where she left a voice message that says everything. Talk about a young man. Hurry was never around. She had to leave a voice message saying that her last day in life was a few days later on a Thursday where she was going to do assisted suicide. She was in so much pain because of advanced cancer and she just left the message saying, well, if you want to see me before then, it will be my last day. And it was such a wake up call and, and you know, you don't get it over there. No do overs here, man. You know, don't dream of back to dream of regret. I don't want to dream regretting. And you know, I sat there with her last breath and you know, it was a tough moment being there with her, holding her hands until she took her last breath. And you know, I still didn't have the courage to say what I said to her after she passed away. And I stood there 30 minutes sitting there with my hand, my head on her stomach, just saying all the things that I wish I could have said and had the courage and guts to say before she passed. And you know, I don't wish that on anybody. And so you want to be a man, you want to be a son, you want to be a leader and, you know, man up and be a partner, be a caregiver, be other people oriented. It's not just about you. And you know, it came for me a little bit later than it should have. But I hope and pray for others it doesn't for them.

[George Hahn]

We'll be back next Friday with a fresh edition of the week from profji Media, breaking down what mattered and what it all means. Until then, we'll see you around the profji universe.

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