CEOs Sound Off Against Tariffs & The NCAA Case Upending NIL
28:12 Share

It's smart to always have a few financial goals and a really smart one you can set earning cash back on what you buy every day. And with Discover, you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at Discover dot com slash credit card.

Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Jamie Dimon leads a chorus of billionaires slamming tariffs. Then how a single tweet added, then erased, trillions of dollars from the U.S. stock markets. It's Tuesday, April 8th. Let's rhyme.

So the Nintendo of America president was making the media rounds yesterday discussing the impact of the trade war on the Switch 2, the company's much anticipated new console whose pre-sales have been delayed due to tariffs. And that's interesting, but what you really need to know is this guy's name is Doug Bolling.

Bowser. Yes, Bowser, like Mario's arch nemesis. The Nintendo executive and the video game villain have no connection, but it could be a sign of normative determinism, the theory that people tend to gravitate toward work that fits their names. Well, if you thought that was a crazy bit of Nintendo naming lore, try this one on for size. There was this civil rights attorney, John Joseph

Kirby, who famously defended Nintendo in a major IP case that allowed Nintendo to keep using the name Donkey Kong. That win helped solidify the company's rise and also earned them the honor of being the namesake for their little pink character, also named Kirby. And get this, I'm named Toby because my mom stubbed her toe on a bee and Neil is named Neil because, okay, I'll stop. Let's get to the ad. A word from our sponsor, TaxAct.com.

If you run a small business and you're doing it in your own taxes right now, stop. Seriously, drop the Form 1040. There is a better way. TaxAct has a team of credentialed U.S.-based tax experts whose whole job is to know the tax code inside and out so you don't have to.

Let them be the heroes here. You've got a business to run. You don't need to spend three hours Googling whether that client dinner counts as a deduction. TaxActs experts can walk you through every scenario to help sole proprietors file with confidence. Plus, you can bundle your business and individuality

Just file before April 15th at taxact.com and let Tax Act experts be your tax sidekicks so you can keep being the hero.

So yesterday wasn't the Black Monday 2.0 many predicted it to be, with all three major U.S. indexes finishing the day right around even. But how we got to that relatively benign closing figure was an absolute rollercoaster. As expected, the market opened deep in the red as Trump showed no signs of backing down from his tariff plans.

But then things went haywire right around 10 a.m. Suddenly, the S&P 500 switched from red to green, soaring over 7% in a matter of minutes. The culprit? A rumor started on X that there would be a 90-day pause on all tariffs except for China.

The tweet in question came from an anonymous account that goes by Walter Bloomberg, no relation to the actual Bloomberg, who wrote that the director of the National Economic Council, Kevin Hassett, said Trump was considering a respite. That rumor spread like wildfire. It was eventually picked up by CNBC, leading to the massive stock run-up.

Then came the reality check. People started to realize that the rumor was exactly that, a rumor. And an hour later, the White House issued a statement outright denying the report, and the market quickly made a U-turn. Just to put the volatility into perspective, the entire stock market gained, then lost more money in a matter of minutes than it had ever

based on a single unverified tweet that it was worth 40 years ago. Two and a half trillion dollars of movement, one tweet. Finally, just to throw one more variable into the cauldron of volatility, Trump went on to threaten an extra 50% tariff on China if they didn't rescind their 34% tariff on U.S. goods.

It all combined to add up to a whole lot of nothing. The S&P 500 closed down just 0.2%, while the Nasdaq eked out a 0.1% gain. Neil, there were dumps, then pumps, then dumps again, enough to give your portfolio whiplash. It was pretty wild. I mean, the S&P 500 was down.

down 3.4%. Sorry, there was down 4.7% for the day officially entering bear market territory. Then this tweet comes along and everyone's like, well, where is this information from? So there's a wild goose chase on Twitter to find that, but it had really severe market implications. And then the S&P 500 went from down 4.7% to up 3.4% for the day before finding a sense of calm and futures look good this morning. They're all in the green. All three indexes are up

over 1%. Japan's Nikkei index was up 6% for the day. So it seems like markets are finding some measure of calm after two and a half days of truly insane volatility and a big sell-off. The Wall Street Journal kind of tracked down this tweet origins to an account named Hammer Capital on X. It is an anonymous account that with 692 followers and a bio that reads,

memes and vibes. That was the first time this rumor started. And then it got picked up by this much larger Walter Bloomberg account. And then just absolute chaos broke out. And I think a lot of people take the takeaway from this story is just how fast information moves in today's trading environment, because it really just underscores how one, many investors are just feverish for any information that might calm this market. But then

also how quickly Wall Street's high frequency trading algorithms react to news like that, which is why we saw this just incredible run up. It's one of the biggest intraday moves ever in the stock market. You have to go back to March of 2020 to find a move of similar magnitude. And it all comes from these

really these algorithms reacting to this one little shred of information. So I think it just shows the current trading environment we live in has the ability to make these massive moves based on just how quickly you can react to new information. And it also shows how thirsty investors are for Trump to roll back these tariffs. It perhaps is a preview of what could happen should he rescind the tariffs. Yesterday, we got

even more conflicting news. Investors really want to know. They're flying blind right now. They really want to know whether these tariffs are permanent or they're part of a negotiation. And Trump was asked this, whether they are permanent or up for a negotiation, because that would provide a lot of clarity for investors. And he replied, they can both be true. And this was

Also evidenced yesterday by conflicting reports by two of his trade advisers or his economic officials. Secretary of Treasury Scott Pesent said that following a very constructive phone discussion with the government of Japan, I'm starting to negotiate with Japan 11 minutes later today.

Peter Navarro, the key architect of this trade plan for Trump, wrote a Financial Times op-ed where he said, this is not a negotiation. For the U.S., this is a national emergency triggered by trade deficits caused by a rigged system. So you have one economic official saying we're starting negotiations, the next 11 minutes later saying we are not negotiating. And that has left traders very confused, which could provide an overhang for the markets for days to come until we get a little more clarity.

Meanwhile, the market turmoil since last Wednesday has lost Wall Street titans a lot of money. And anyone who's watched their portfolio tank, you know that you start to get a little cranky. A number of the biggest names in finance have spoken out against Trump's tariffs in the last few days, warning of severe economic headwinds to come and even possibly a recession. One of the more surprising critics is Jamie Dimon, the leader of the biggest bank in the country, J.P. Morgan, and the most tenured and influential of all.

all Wall Street CEOs. In his annual letter to shareholders yesterday morning, Diamond said that there were some legitimate reasons for the tariffs. However, he added in their current implementation, they will drive up inflation and slow down growth. And you better wrap this up soon because, quote, the quicker this issue is resolved, the better, because some of the negative effects increase cumulatively over time and would be hard to reverse.

That is a reversal from Diamond's position as recently as January when he told people worried about tariffs to, quote, get over it. Diamond's not the only one, not the only banking baron sounding the alarm. Bill Ackman, a Trump supporter, warned of economic nuclear winter over tariffs.

And the influential but typically private investor, Stanley Drunkenmiller, issued a rare statement on X saying that he doesn't support tariffs over 10%. Toby, the billionaire dam has broken. It absolutely has. And it's not just Wall Street specific billionaires as well. Elon Musk has also been sounding off against this tariff situation. He's kind of publicly sniped at the key tariff architect you mentioned, Peter Navarro, saying that his PhD from Harvard is a

bad thing and not a good thing. And then Navarro kind of struck back and said, he's just protecting his own interests. He's a businessman. Of course, he doesn't like this. So you are seeing some of these cracks form in kind of this coalition around Trump with Elon Musk, with Bill Ackman,

you know, sending a lot of tweets about how he wants a little 90 day timeout on this tariff situation. So you are seeing the who's who of wall street, basically influencers. I know that's a ridiculous thing to call Jamie diamond, but that's what they are kind of sounding off in letting their feelings be known about these tariffs. And another one of those influencers was someone we talked about last week, black rock CEO, Larry Fink.

think he got up at the economic club of New York and said he didn't talk about the tariffs specifically, but he said most CEOs I talked to would say we are probably in a recession right now. This comes after his annual letter last week where he said we were in one of the more uncertain economic environments.

that he's ever seen. So he's joining the chorus along with Bill Ackman. And another name to know that spoke out was Ken Langone. He's the co-founder of Home Depot, longtime Republican donor. He said, I don't understand the gosh darn formula. He didn't say gosh darn. He said something else similar. I believe he's been poorly advised by his advisors about this trade situation and the formula they're applying. So Ken Langone, Larry Fink, Bill Ackman, Jamie Dimon have all kind of said recently in the past few days that

we need to get this thing wrapped up because it's causing a ton of uncertainty and could lead to a recession. And then even on Washington as well, Ted Cruz has raised fears about the next election cycle. And then some Republicans have started pushing towards signing legislation that would allow Congress to remove tariffs with a majority vote. So you are seeing some pushback on the Hill as well. And then finally, we are going to hear from Wall Street once more again this week because JP Morgan, BlackRock and Wells Fargo are all due to announce earnings on Friday.

What if I told you that Florida beating Houston last night in the men's national championship game was not the most important thing to happen in college sports yesterday? Perhaps the more significant development happened in a courtroom in California where a judge heard the final hearing and a settlement that will rip up the NCAA's amateurism model as we know it and allow schools to directly pay players for the first time.

Experts say it's the biggest structural change in the entire history of collegiate athletics and arguably one of the most significant legal milestones in sports history, not just college. The settlement stems from several massive multibillion dollar lawsuits filed against the NCAA over player compensation, which the organization has worked for a year for over a year to resolve.

The judge still needs to approve it, and she declined to yesterday, telling lawyers to make some small tweaks and get back to her in a week. But when she does, as expected, the landscape of college sports will never be the same. Among the sweeping changes, schools would be able to start sharing revenue with student athletes. Team sizes would be governed by roster limits instead of scholarships.

and name, image, and likeness deals, NIL, would be overseen by a third-party clearinghouse that ensures they are fair value. Toby, there's two major parts to this settlement, one looking back and one looking forward. Yeah, let's look at the backward-looking one first. It offers a remedy for college athletes who played before 2021, which is when...

uh, the NCAA allowed players to cash in on their name, image, and likeness. And so there's about a $3 billion, $2.75 billion pot that is set to be distributed to those players. And that is really based on which sports you played in that, which schools, um,

The majority of that money is going to go towards the Power 5 conferences and money-making sports like football and basketball. So if you are a swimmer or maybe if you are a soccer player, you're not going to get a large sum, but you will have a little bit of money waiting there for you. But it really is the future where the big transformation is kind of aligned here because going forward, allowing schools to share revenue with student-athletes is just a complete –

rewritten and a complete upending of the old amateurism laws that governed NCAA sports. So this is definitely one of those things that completely rewrites the rulebook around how college sports are going to be approached. Yeah, so schools will have a, for now, a $20.5 million salary cap to spend on sports.

And it applies to those big four power conferences, plus the Pac-12 and other schools can opt in. And the question is, will this increase or decrease parity? And as always with NCAA changes, it appears like this is a rich get richer situation. Alabama, Ohio State, all these companies make a ton or all these schools. They are basically companies. Yeah.

They make so much money in their athletic departments because of these powerhouse football programs and secondarily basketball. So they will have more money to marshal to pay players. And also, while NIL is not going away, it's moving to a third-party clearinghouse.

situation managed by Deloitte. They will probably have more resources at their disposal to broker NIL deals, so players will be able to get some of that revenue sharing and NIL deals. So it does seem like the power conferences will put even more distance with the rest of the pack. One knock-on effect of this, too, is that it's a totally new way of running an athletics program, and it's a lot more

pro based and so what you will be seeing is more of these gm figures come in to say hey how do we manage a roster how much is a player worth what salary should we devote towards them so you're going to see colleges and universities hiring sometimes former athletes like

Steph has been named the GM of Davidson's basketball program. So you are going to see people coming in to run these like professional sports franchises because that's basically what they are. And then finally, one thing that we have to mention is that with these new roster sizes incoming, a lot of players who maybe were under scholarship will now no longer be

receiving the aid that they thought they would. So that's been a big pushback from a lot of current and former athletes is saying, hey, you are upending these kids' lives here. They're probably going to have to transfer, but transferring is a very traumatic situation. You don't bring your friends with you, even though you might play a sport there. So you are seeing some pushback specifically around this roster limitation from athletes, which is maybe one of the big sticking points that will hang this settlement up. Up next, let's talk about Toby's Trends.

Have you heard what's happening in Ohio lately? The list is long, folks. The economic development corporation JobsOhio is making it insanely easy and appealing for businesses to lay down roots in the Buckeye State. That's right. Since it's both a private and a non-profit corporation, JobsOhio is uniquely positioned to give companies very hands-on support with complete confidentiality.

Yeah, you can really see their work in the accolades Ohio's received lately. CNBC ranked it at number seven in its list of top states for doing business and number two for the cost of doing business. It helps that Ohio has the third largest manufacturing workforce in the U.S. and the cost of living is 5.8% lower than the national average.

The world's best get better in Ohio. Learn why companies like Andruil, Honda, and Intel are moving to Ohio. Head to Jobsohio.com slash whyohio. That's Jobsohio.com slash W-H-Y-O-H-I-O.

If you're trying to elevate your style, it's all about tailoring. And Theory's Motionwool takes tailoring to a new level with premium, expertly engineered Italian wool. Theory is known for creating collections with exceptional fit, innovative fabrics, and enduring styles. Now they're doing it again with Motionwool. Motionwool's one-of-a-kind fabrication is where form meets function. It's breathable,

So you can head from the office to happy hour to date night. Whether you've got a long day of meetings or you're packing for a long haul flight, MotionWool is made to move with you. It's also designed to keep its shape over time so you can keep arriving in style. Step up your wardrobe with MotionWool. Head to theory.com slash morningbrew to get started. That's theory.com slash morningbrew.

What if I told you that the hottest new fashion trend wasn't wide-legged jeans or biker shorts, but something much more attached to you, something you probably dealt with in middle school, something on your teeth? Yep, brace yourself for another Toby's Trends, because today we're talking about braces making a comeback. Suddenly, jaw hardware is the hottest new status symbol amongst the youths and adults alike. Orthodontists have reported a rise in interest in the once uncool OG metal braces that

as wearers are embracing their imperfections and flashing metallic smiles with pride. Part of it is tied to popular culture, old and new. There was Marcia Brady in the Brady Bunch and of course, America Ferrera in Ugly Betty. But contemporary stars like rapper Lil Uzi Vert are also proudly flaunting their orthodontic infrastructure, leading to an uptick of young people wanting to do the same.

Part of the appeal, though, is undeniably tied to price tag. Braces can range from $3,000 to $10,000 and are often not covered by insurance. So rocking 10 racks on your face is just the latest way to flex. Plus, accessories like colorful rubber bands and jewels

turn braces into tooth bling and offer wearers another outlet to express their individuality. Neil, as a former brace face myself, I'm happy to see this narrative shifting, but it is a bit baffling at the same time. Well, I was going to say, I wish they were cool when I had them in eighth grade. And when I think about

a braces comeback. That usually refers to something you respond to someone when they make fun of you for having braces, which, you know, I think happened to a lot of us back in the day. It's a little baffling, but, you know, as you mentioned, you can see it as a way to personally express yourself. Recently, I did do Invisalign and...

you know, in this article about braces, they were like, they quoted a bunch of people saying Invisalign was boring. And I'm like, yeah, that's kind of the point. You want to keep this thing a little discreet because it's very visible. But the tides have turned, the youth have spoken, and I guess braces are cool again. Braces are cool, but you are right that part of it

is that Invisalign is not only boring, but people don't like having to remember to wear their trays, and you have to wear them for 22 hours a day. You have to take them out when you eat. So part of it is just the logistics of it all. They'd rather just have these braces. But part of it is that a lot of people are just saying that they're embracing this idea

they are literally working on self-improvement. So like, why would I hide this thing? Like I'm trying to invest in my appearance here. So now you're seeing kids who used to, you know, beg to take them off, begging to leave them on because it's become a part of their personality and something like that. And these orthodontists are posting in Facebook groups, national Facebook groups and going, is anyone else seeing this? And they're all like, yes, for some reason, these kids do not want to take them off. So I think it's a good thing overall though, because

braces were traumatic for a lot of kids. Like you didn't want to even smile. It made us all do those smizes where you don't open your teeth. But now if people are embracing them, I think that's overall probably a good thing. Now let's sprint to the finish with some final headlines. Shopify has drawn a line in the sand when it comes to AI usage at the company, stating that not only is it encouraged, but AI use is now a fundamental expectation for all employees.

Shopify CEO Toby Lutke emphasized the critical role AI will play in a memo he posted on X yesterday. He told staff to treat AI as a tool for innovation and efficiency and push to integrate it into tasks like product development, performance reviews, and even hiring decisions. Lutke highlighted that teams must demonstrate why AI cannot fulfill the needs before requesting additional resources or headcount.

He also warned against stagnation, arguing that embracing AI is and will be essential for staying competitive as a business. Neil, outside of Klarna's AI-obsessed CEO, this might be the most explicit endorsement of AI we've seen from a major company. And Shopify, Toby, has always been...

the Toby with an eye, not you has always been kind of pushing the technological bounds of workplace productivity in early 2023, kind of rocked the HR world. He sent this memo directing employees to stop holding an absurd amount of meetings. The company literally went into people's calendars, deleted 12,000 events, freeing up 95,000 hours. And now he goes with this very, you know, buzzy or interesting, uh,

boundary pushing AI memo as well, saying you can't get more people on your team if AI can do that. And you have to prove that AI can't do that. And you just wonder how big the overall head counts of tech companies is going to be. Now we saw huge hiring during the pandemic. It then there were major layoffs and now it's kind of stagnated spot Shopify, uh,

had a total headcount of 8,100 at the end of December from 8,300 a year earlier. And you wonder with this new directive, whether that will ever grow again. Klarna, as you mentioned, is another AI forward fintech company that wants to decrease its headcount from 4,000 to 2,000. You just wonder what this means for the overall picture for tech jobs.

Another company thought, hey, what if we did Game of Thrones, but make it real? Colossal Biosciences announced yesterday that they had created three direwolves, which haven't existed on Earth in more than 12,000 years. If Colossal sounds familiar, that's because it's the $10 billion company trying to resurrect the woolly mammoth and de-extinct a bunch of other lost species like the dodo and the Tasmanian tiger.

But it surprised the world yesterday with the introduction of the direwolves, two brothers named Romulus and Remus, and their sister named, of course, Khaleesi. How did they do it? A team took gray wolf cells, edited the genes to focus on specific direwolf traits, like heavy muscles, inserted those cells into domestic dogs, then finally implanted those into different dogs that served as surrogates. Voila, you get a

dire wolf. Toby, are you impressed? I am impressed, mainly because these dire wolves are going to be really big, bigger than normal gray wolves when they're fully grown, 140 pounds. But also these animals were bred by studying DNA from original dire wolves, which date back to a 13,000-year-old tooth, a

72,000 year old skull. So they had to pick and choose these genes and insert them into genes from a gray wolf. And yeah, their next stop is de-extinction. But I'm also impressed with this other announcement that was kind of overshadowed by bringing direwolves back. And that was that they had cloned four red wolves, which are currently a critically endangered population in the US. And the aim is to bring more genetic diversity to the population of

captive red wolves. So they're trying to breed and help save this species. So even amongst these buzzy, you know, bring back Game of Thrones, extinct era wolves, they also are working towards, you know, supporting and trying to save species that are currently alive today. So that's kind of the colossal playbook that we've been seeing make headlines with this big announcement, but also work to save current species on earth today. I have to make an admission. I didn't know dire wolves were real. That is

That's a fair admission. Yeah. I thought they were straight up Game of Thrones characters. Well, I mean, are they real still? Because technically these are crossbred with Grey Wolves, but that is a fair admission. I probably was on the same page, but I would never admit it live on this podcast.

Alright, let's move on. Some people will do anything for clicks, even if it means risking death or potentially causing a micro-apocalypse. In March, a YouTuber who goes by the name of NeoOrientalist illegally visited North Sentinel Island in the Indian Ocean, home to the ultra-isolated Sentinelese tribe, leaving behind a coconut, a can of cola, and a whole lot of risk.

The Sentinelese have violently resisted all contact for decades to protect themselves from outsiders and more importantly, their diseases. Even the simple flu could be catastrophic to this community because they have no immunity. Neo-Orientalist has since been arrested by Indian authorities

Certainly not. And this is not the only instance recently of U.S. influencers taking off countries where they visited by, you know, just doing things that...

are pissing off the government. I mean, one one U.S. influencer, this is back in March, took a baby wombat from their mom. And this was this this is an Australian sparked a huge amount of backlash. They were reviewing her visa and she was like, all right, I'm out of here. The Australian prime minister. So there's a lot that people would do for clicks. Many of those are not acceptable to the people where you're doing that. Yeah.

All right. That is our show. Thanks so much for starting your morning with us and have a wonderful Tuesday. For any questions, comments or feedback, send an email to Morning Brew Daily at Morning Brew dot com. Let's roll the credits. And just a heads up, we've got a few changes in store. Don't be shaken. Emily Milliron.

is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Uchenna Waogu is technical director emeritus. I know he's leaving the show to work here on a daytime schedule at the brew. We'll never forget you, Uchenna. Garrett Peck is on audio. Hair and Makeup is skeptical of the new braces trend. Devin Emery is our president. Congrats on the promotion. And our show is a production of Morning Brew. Great show, Daniel. Let's run it back tomorrow.