transcript
Speaker 1:
[00:01] Good Morning Brew Daily Show. I'm Neal Freyman.
Speaker 2:
[00:04] And I'm Toby Howell.
Speaker 1:
[00:05] Today, a soldier in the Maduro raid was caught bedding on the Maduro raid.
Speaker 2:
[00:10] Then, marijuana is being reclassified as a less dangerous drug. It's Friday, April 24th. Let's ride.
Speaker 1:
[00:22] Good morning and happy Friday. I just love this. Someone has invented an anti-grammarly, a tool that adds typos to your emails. Yesterday, Ben Horowitz revealed Sincerely, spelled wrong, which is a Chrome plugin that takes your email and rewrites it with mistakes to demonstrate to the recipient that a human, not AI, actually composed it. Toby, you downloading?
Speaker 2:
[00:45] The only way to fight AI slop is with more slop. I do like the three modes it affords you. There's subtle, which mixes up an I and an E here and there. There's human, which sprinkles in a few more typos. Then the maximum mode is CEO, which drastically reduces the word count and also spells a lot of stuff wrong in the process. This is obviously a joke product, but Kevin Roos, a tech reporter from the New York Times, quote tweeted and said, that an email marketer he knew started intentionally putting typos in their subject lines, and open rates jumped by 40 percent. Maybe something for the Morning Brew newsletter team to think about.
Speaker 1:
[01:20] Now we're from our sponsor on investing, an original podcast from Charles Schwab. It's hosted by Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research.
Speaker 2:
[01:33] Each week, Lizanne, Colin and their guests analyze economic developments and bring context to conversations around stocks, fixed income, the economy and more. You can download the latest episode and subscribe at schwab.com/oninvesting or wherever you get your podcasts. A bombshell insider trading scandal tied to the US capture of Nicolás Maduro broke last night with ABC reporting a special ops soldier who participated in removing Maduro from office was arrested for allegedly making $400,000 betting on Maduro's removal from office. Gannon Ken Van Dyke is the first person the DOJ has gone after for insider trading on a prediction market. An account Van Dyke created in December 2025 bet more than $32,000 Maduro would be out of power by January 31st. When it hit, it resulted in a 1,242% profit totaling more than $400,000. Van Dyke tried to cover his tracks, attempting to delete his Polymarket account and changing the email associated with it. But Polymarket referred the suspicious bets to the DOJ and after a months-long investigation, an arrest was made. This is the first case of its kind in the US., but more could be coming down the pipeline. Van Dyke is being indicted on a variety of charges, including unlawful use of confidential government info for personal gain and a wire fraud, as well as civil charges from the CFTC for violating the Commodity Exchanges Act. He faces a maximum possible sentence of 20 years in prison if convicted. Neal, this is probably the number one criticism of prediction markets. People with insider access are taking advantage of their info to profit on real-world events. Now it looks like finally the DOJ is cracking down.
Speaker 1:
[03:14] Yeah, we knew about this $400,000 bet and win on the Maduro raid. We didn't know who did it. Now we know that it was actually someone involved, a soldier involved in the Maduro raid itself. Pretty interesting how this happened according to prosecutors. Van Dyck on December 8th received a classified briefing about the plan to go into Venezuela, arrest Maduro, and he signed an NDA that you can't reveal the information quote by writing, word, conduct or otherwise. But then he made 13 bets on prediction markets between December 27th and January 2nd, all voting yes positions that Maduro would leave office by the end of January, turn $33,000 into $409,000, tried to cover his tracks, but Polymarket was on to him, referred him to the DOJ, and now he is being charged in the same exact Manhattan courtroom that Maduro is.
Speaker 2:
[04:06] That is an ironic level of symmetry. The world has a sense of humor, but beyond just the fact that Polymarket doesn't want this happening because of the financial implications, there's military implications too. The military really doesn't want this to happen because it raises risks about the confidentiality of the plans that you have. You want these raids to be a surprise, and if they are telegraphed by big bets on Polymarket, then you have a safety issue really. And Trump's response to this has been not good if you are Polymarket. He said yesterday that the whole world unfortunately has become somewhat of a casino. I was never much in favor of it, it being kind of betting. I don't like it conceptually, it is what it is, and I'm not happy with any of that stuff. So suddenly, maybe the tides are shifting when it comes to prediction markets, with Trump saying that he's voicing his opposition to them.
Speaker 1:
[04:54] And talk about the whole world becoming a casino. There's a lot of other very bizarre stories related to Polymarket going on right now, related to insider trading and tampering. And one of the most bizarre or intriguing is that French media reported that people may have been tampering with the weather sensor at Paris' Charles de Gaulle Airport to show that Paris had a higher temperature than was actually happening because they bet on Paris having a very hot temperature on Polymarket. So on April 6th and April 15th at Charles de Gaulle Airport, the temperature sensor showed temperatures rising 4 degrees Celsius and 5 degrees Celsius, which could not possibly happen in the real world, netting a couple of traders tens of thousands of dollars. So French authorities are looking into this. And another scandal that's going on is that Cal-She banned and fined three politicians in the United States for betting on their own races. So there's just too many to keep up with.
Speaker 2:
[05:54] The only organization that is cracking down properly on prediction markets is Tiny Desk over at NPR. NPR has restricted employees from betting on which artists will come on their Tiny Desk programming. So everyone was kind of ironically making jokes that Congress has less strict rules than Tiny Desk has when it comes to insider trading. I do think just zoom out, there is going to be a lot more scrutiny coming these ways. We said that there's gonna be more scrutiny. The fact that the DOJ is finally sort of bringing cases against people is a tip off that prediction markets are no longer going to be the wild west that it has been.
Speaker 1:
[06:31] Moving on, Cheech and Chong, Harold and Kumar, Donald Trump and acting Attorney General Todd Blanch. Yesterday, Trump and Blanch earned their spot in the Pot Supporters Hall of Fame by reclassifying state licensed medical marijuana as a less dangerous drug. It's a move marijuana advocates have long been calling for and what they considered the most significant federal cannabis policy advancement in over 50 years. By reclassifying licensed marijuana, the Trump administration is moving it from a schedule one drug to a schedule three drug. Schedule one drugs are considered to have no accepted medical use in the US, show a high risk of dependence and their availability is tightly restricted. LSD, heroin, MDMA and formerly marijuana fell into this camp. Schedule three drugs where marijuana is moving into are defined as having moderate to low potential of abuse and have a recognized medical use. Schedule three drugs include Tylenol with codeine, ketamine and anabolic steroids. So big picture, what will this reclassification actually do? It's not legalizing cannabis, which remains illegal at the federal level, despite being allowed in some form in 40 states. It's a major relaxing in how cannabis is regulated. It will greatly increase opportunities for more medical research into cannabis and gives companies operating this space a major tax break, potentially spurring a new wave of investment. Blanche said that the administration's overarching goal is to expand access to a greater variety of medical treatments. Toby, we've come a long way from the war on drugs.
Speaker 2:
[07:53] Yeah, happy belated 420 to everyone who celebrates it. One group that is celebrating is US. Cannabis Stocks. The US. Cannabis ETF spiked 19% when this news was first reported because it is expected to be a boondoggle, not only of research when it comes to finding the medical benefits of marijuana, but also these tax breaks are huge for these companies because they can do things like deduct various expenses from their federal taxes, stuff that normal businesses can do on a daily basis, on a yearly basis, but because marijuana had these restrictions on it, they were not allowed to. They can also seek investment more easily. It's just an unburdening is probably the word of everything, which is why these stocks kind of shot up. This has been long expected, but finally, it's a win for marijuana stocks.
Speaker 1:
[08:42] And you can't divorce it from something that happened earlier last week actually on Saturday when Trump also signed an executive order about psychedelics loosening restrictions around psychedelic research. We got a very broad loosening of drug restrictions, whether it's psychedelics like Ibogaine or marijuana, which has been considered as dangerous a drug as LSD and heroin for decades. And some point out that perhaps it's a way to shore up his standing with particular influencers like Joe Rogan, who Joe Rogan was the precise reason why he signed that executive order around psychedelics. Rogan texted him saying, you should do this. And then a week later, he said, okay. Rogan has also been a huge proponent of legalizing marijuana. So it's a big win for these influencers as well.
Speaker 2:
[09:28] Yeah, a lot of the critical response though, is that this is just a tax break to big weed. Some people from marijuana legalization opponent groups said that marijuana research is necessary, but there's other ways to pursue that research than a rescheduling of the drug. So the tax break and the business boon that you get from reclassifying is not something that some critics think should go marijuana's ways. They should say research should happen more responsibly, but not necessarily with the tax breaks involved.
Speaker 1:
[09:58] But public opinion in the United States is behind this. An Economist YouGov poll conducted this month found 53% of adults supported legalizing the drug including 35% of Republicans to just emphasize that this is not legalizing, it's just reclassifying. And it comes at a time when pot use has reached historic levels. Daily use of marijuana is outpacing daily drinkings. Nearly 18 million Americans report in 2022 that they use marijuana every day or nearly every day, which was up from less than 1 million three decades earlier. At the same time, this is what marijuana opponents like to call out, it's a lot more potent. I mean, when your parents were at Woodstock, they were smoking pot that contained less than 5% THC. Today, THC potency in some flower concentrates can reach 40% or more, and that's what some people are saying. It's a little dangerous when it's a lot more potent.
Speaker 2:
[10:48] It's Stock of the Week, Dog of the Week time, the segment where Neal and I pick one stock that goes out of its way to make dinner plans with friends and one stock that shuts out the people that care about it most. I won the pre-show game of who can run a marathon faster, so I'm up first, and my Stock of the Week is the AI coding startup Cursor, who is the belle of the AI ball after SpaceX secured the right to acquire it for $60 billion later this year. The deal feels a lot like a high school relationship where both parties are just trying to figure out if the other likes it or not. Cursor will bring its well-liked coding product to the XAI arm of SpaceX, while SpaceX will provide its colossus supercomputer to give Cursor some much-needed horsepower in the compute department. And if things don't work out, SpaceX will pay $10 billion for their work together, but won't be on the hook for the rest of the 60. Cursor was the hottest coding startup last year, but markets have shifted a little bit. In-house tools like OpenAI's Codex and Anthropics' Cloud Code are now much more popular, which leaves it on shaky footing, especially since it still runs on other companies' models to power its product. Neal, on paper, this deal makes a lot of sense.
Speaker 1:
[11:54] Yeah, but I'm not sure their workplace cultures are going to mesh. So Cursor was started by four MIT grads in their living room in 2023, and they grew this company crazily. I mean, now it's worth $29 billion, perhaps $60 if SpaceX ends up buying it. They have a no-shoes policy in the office, and they're these ornate rugs that really work on your feet, on your socks really well, and they have a chef named Fausto who comes in and serves lunch six days a week. I don't know what the culture at SpaceX is like, but I'm pretty sure you have to wear shoes around rockets.
Speaker 2:
[12:25] Not Fausto. That sounds delicious, honestly. The reason why I said this deal makes a lot of sense on paper is because each one is getting something that they don't have from the other. So Cursor, very hot coding assistance, it actually still relies on open-source models to power much of its coding assistant. It doesn't have its own frontier model. Guess what XAI has? It has Grok, which is a frontier model, so it can finally feel steady that OpenAI or some of these other companies won't pull the rug out from its coding assistants. They also just don't have the money to invest in these massive supercomputers that the likes of Meta and Microsoft and all the big tech companies are doing. XAI has invested in that, and Cursor is like, let me get some of that compute. From the XAI side, they don't have a very popular coding product. They are lagging behind. Grok is not used for coding the way Cloud Code is or Codex is. So they're both getting a little bit of something from the other, and if things go right, maybe $60 billion looks like a bargain. If things don't go right, $10 billion is a fee both of them are willing to bet that this pays off.
Speaker 1:
[13:29] But it's fascinating that this is not necessarily XAI buying Cursor, it's SpaceX buying Cursor. And I was under the impression that SpaceX was a rocket company, but no, Matt Levine of Bloomberg says SpaceX right now is a satellite internet rocket launch, space data center, Mars colonization, frontier AI model, and social media company. That's because SpaceX bought XAI, which bought X, which is Twitter. So SpaceX is becoming basically Elon Musk's all in one moonshot, and he is all in on AI right now. And now he's basically saying that you can't have Mars or moon exploration without AI. And he's talking about putting one million AI satellites in space to power data centers. He's basically said that you can't have space exploration without AI. So we're seeing SpaceX become this all in one company ahead of its blockbuster IPO later this summer, the biggest one ever.
Speaker 2:
[14:21] A Russian nesting doll of Elon all the way down. All right, we're going to take a quick break and come back with our dog of the week right after this.
Speaker 1:
[14:31] Toby, you ever found a big problem with a teeny tiny solution?
Speaker 2:
[14:34] Yeah, locked doors.
Speaker 1:
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Speaker 2:
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Speaker 2:
[15:10] Neil, think fast.
Speaker 1:
[15:11] About what?
Speaker 2:
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Speaker 1:
[15:50] Toby, have you ever flown a friend?
Speaker 2:
[15:52] I think you mean phone a friend?
Speaker 1:
[15:54] Nope. I mean F-L-O-W-N, flown.
Speaker 2:
[15:58] Like when the founders at unfiltered hospitality use the rewards to fly a new hire for onboarding?
Speaker 1:
[16:03] Exactly. The rewards from Capital One's Venturex Business Card redefine premium for small business owners like unlimited double miles on every purchase with no preset spending limit.
Speaker 2:
[16:13] It's straightforward and lets you earn travel bonuses.
Speaker 1:
[16:15] Spend more, earn more. Your rewards grow with your business. Enjoy big purchasing power that adapts to your business's needs. Terms apply. Head to capitalone.com/morningbrew. My dog of the week is QVC, which filed for bankruptcy last Thursday and since then, watched its stock tumble 82 percent. Of all possible bankruptcies, QVC is one that may not be particularly surprising. The owner of home shopping channels, QVC and HSN. The company feels like an artifact you'd see in a museum and tell your kids, when I was young, salespeople would pitch you random gadgets on something called a television and then you'd pick up something called a landline, call someone over the phone and buy it. It felt like the future. Now the future is something very different. Scrambling the business model, underpinning QVC, television viewership is dying a slow death while social media upstarts like TikTok have assumed the role QVC once played in American's homes. But while they're swimming upstream, the old guard isn't giving up. Bankruptcy isn't the end of the road, just a financial restructuring to reduce debt. QVC and HSN will remain in operation as the company charts a more economically sustainable path forward. Whether they can successfully reinvent themselves for the live streaming age despite all the headwinds remains to be seen.
Speaker 2:
[17:26] I was very surprised that the best year ever for QVC was in 2020, which was when everyone was locked at home during the pandemic. I would assume that the shifting TV trends had mean QVC peaked long before 2020. But when everyone returned home, it looked like it had a second life. But the flip side of the coin was that TikTok also became very popular. So the pandemic looked like it was saving QVC, and then it actually ended up killing it because once short form video platforms became the de facto way people spent their time scrolling and once TikTok invested in TikTok shop, it just absolutely ate its lunch and QVC's business model looks very outdated. It is in an ironic twist of fate to QVC is now on TikTok shop and does relatively well there, but they just haven't been able to keep up with the times and it's looking like an uphill battle.
Speaker 1:
[18:14] Yeah, I thought this was an interesting sort of review of QVC. Amanda Mull of Bloomberg wrote that QVC was actually ahead of its time. It was a victim of its own insights. It saw that home shopping. It understood that a skilled messenger could almost sell anything to board people alone on the couch. And, you know, and that feels pretty relevant right now where you can go to Amazon by anything you want. Or if you go on TikTok or any other social media these days, there is an e-commerce arm where live streamers can sell you anything. And it's just sort of a social media extension of what QVC and HSN pioneered decades ago.
Speaker 2:
[18:47] Yeah, it is fascinating because QVC was so smart because they created this personal relationship with people that were selling you stuff. And now what do influencers do? It's just QVC times a million. So fascinating that it's both a trailblazer and it just got laughed by the very people that followed it.
Speaker 1:
[19:02] A little more convenient, I think, than picking up the phone and buying something. Okay, let's sprint to the finish with some final headlines. Big tech's big spending on AI is coming at the expense of human jobs. Yesterday, Meta and Microsoft revealed sweeping job cuts and buyouts that show how giant technology firms are downsizing their workforces to prioritize artificial intelligence. In the first announcement, Microsoft is offering voluntary buyouts to 7 percent of its US workforce, nearly 9,000 employees, which amounts to the largest buyout in the company's history. Then, Meta confirmed rumors that it will cut 10 percent of its workforce, about 8,000 employees, citing the need to streamline the company and offset the costs of other investments, aka AI. It's also closing down 6,000 open roles. Toby, it's hard to keep up with all the tech layoff announcements.
Speaker 2:
[19:49] Yeah, this is the first time that it feels like the AI spending trade-off is explicit, because before, it was a little hand-wavy that it was business decisions that companies were cutting layoffs. Now, the fact that other investments is being cited, this is money that is going not to employees and going to AI spending in the first place. So that is a big shift. Also, if you just look at the total amount of impact on the workforce, Metta is also not filling 6,000 open roles. So those jobs effectively are disappearing from the labor market as well. So if you factor in the 8,000 jobs that they're cutting, the 6,000 open roles that they're not filling and the Microsoft-eligible buyouts, it reaches 23,000 actual workforce reductions or non-creations. So that is a hefty amount that is, again, directly tied to AI spending. So earnings are 6 days away for both these companies. We'll see how it plays out, but it looks like things are getting a little bit more explicit when it comes to AI-induced layoffs.
Speaker 1:
[20:48] Yeah, they're not the only two companies in the tech world that have announced pretty sweeping layoffs recently. I'm thinking about Block Jack Dorsey, which cut 50% of its entire workforce a few weeks ago. Up next, JetBlue is being sued over alleged surveillance pricing. It all started with a tweet it desperately wishes it hadn't sent. Last week, one customer posted on X that they love flying JetBlue, but quote, a $230 increase on a ticket after one day is crazy. I'm just trying to make it to a funeral. The JetBlue account responded that they should try clearing their cash and cookies or book using incognito mode. That post went mega viral in all the wrong ways, with scores of internet users accusing JetBlue of surveillance pricing or using someone's personal data to set individual fares. JetBlue took down its post and said it was a mistake by an employee. It added that its fares are not determined by personal information, but rather by real-time availability and demand at any given moment that wasn't enough to prevent the lawsuit.
Speaker 2:
[21:44] Okay, so the reason why this went viral was definitely because of the funeral aspect, the fact that it seemed like JetView was preying on people and changing prices based off of the reasons that they needed for travel. But also everyone in the back of their head has always known this to be true, where it seems like you check a price for a flight on one day, and then the next day it's gone up by X amount of dollars. And it looks like clearing your cookies or searching an incognito mode can help because wiping that data resets what the airline thinks that they know about you. And I recently just experienced this as well. I was trying to book a flight over to Edinburgh. And literally within 20 minutes of looking, it had gone up $800. And then as soon as I went back to incognito mode, it reset down to that initial price. So clearly it is looking at your browsing habits in some way. There's all these lawsuits coming about surveillance tech and as algorithms become even more popular, they might be able to target you even more closely. So the fact that this JetBlue tweet actually got off this entire conversation again, I think we're going to be hearing more about what states are going to have on the books when it comes to surveillance.
Speaker 1:
[22:54] The main take was you should have booked your play when I did a couple of months ago.
Speaker 2:
[22:57] I know, oh my gosh, yeah, it was brutal. It was eye opening to see, especially because, you know, jet fuel prices are also contributing things. That one was expensive. Finally, the first round of the NFL Draft came and went last night and Fernando Mendoza, quarterback from Indiana University, went number one overall to the Las Vegas Raiders. After Mendoza, the Ohio State became the first school in 59 years to have four of the first 11 picks of the draft led by wide receiver Carnell Tate. Another day made history with two running backs taken from the same school in the first round for the first time ever. The host city of Pittsburgh showed out to NFL Commissioner Roger Goodell said a record 320,000 people attended the first night of the draft, beating out the previous record from Detroit two years ago. Neal, you told me yesterday that the draft ranks very, very low on your list of must-see sporting events. Did last night change your mind?
Speaker 1:
[23:49] Well, like a lot of other NFL fans, we've been glued to an unfolding scandal separately from the draft that has really overshadowed it. And there is this growing body of evidence or relationship between Patriots head coach Mike Vrabel and NFL reporter Diana Rusini. And it's a lot of personal stuff, but it is spilling out into the actual league itself. Vrabel revealed that he would miss the third day of the NFL draft to undergo counseling. Rusini has resigned from her role at the Athletic, deleted her really big ex account. And if you want to dive in, I mean, there's some crazy stuff there, a lot of conspiracy things going on. But also, yeah, it is a very juicy scandal involving a head coach of a team that went to the Super Bowl last year and a very well known NFL reporter that's been allegedly going on for many years.
Speaker 2:
[24:37] I wonder if this is going to bring more attention to the draft or left because I was showing my fiance the scandal and she was kind of getting into it as well because it is just a very juicy human interest story around one of the biggest pre-season events, which is the NFL draft. I don't know, I was watching last night because after we had the conversation, I was like, I'm going to toss it on. It was kind of lovely because this is a huge moment of these kids' life. You realize how young they are, you realize how powerful it is for their families. They all break down in tears. In terms of the human interest aspect, I was more compelled to watch than I have in years past. Maybe I'm just growing older and I feel happy for these kids. After the first 10 picks or so, it does start to drag a little bit, so I see your point.
Speaker 1:
[25:22] Well, congrats to Mendoza. He's a big business guy and hopefully he listens to this podcast. He entered during the summer at commercial real estate and investing firms. The only social media that he has on his phone is LinkedIn.
Speaker 2:
[25:34] What a legend.
Speaker 1:
[25:35] All right. This is all the time we have. Thanks so much for starting your morning with us and have a wonderful Friday and an even better weekend. If you're in the New York City area, there's going to be a really fun Morning Brew survivor-themed comedy show next Thursday, hosted by our hilarious coworkers Meg and Annie. We'll be there and we'd love to see you there too.
Speaker 2:
[25:52] Meg and Annie are very funny people. I actually participated in their last show. They didn't invite me back for this one, but I highly recommend showing out. The caveat is a very fun venue, so if you have no plans on Thursday, come check it out.
Speaker 1:
[26:07] If you like to reach us, send an email to morningbrewdaily at morningbrew.com or DM us on Instagram at MBDailyShow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Lue is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lee. Hair and makeup is not allowed to bet on this show. Devon Emery is our president and our show's a production of Morning Brew.
Speaker 2:
[26:28] Great show today, Neal. I wish you all well.