C (2:36)

All right, this might sound crazy, but easily the life size portrait of Dorian Gray hanging in my attic.

B (2:42)

How so?

C (2:42)

Do you see any wrinkles on his face?

B (2:44)

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B (3:15)

Bruno Mars was right. 24 Karat Magic is in the air. Gold prices top thousand dollars an ounce for the first time ever. Yesterday, extending a 50% rally that will make 2025 the best year for gold in decades. It's not exactly cause for celebration. As Herbert Hoover said back in 1933, we have gold because we cannot trust governments. Investors have piled into gold this year because it's the OG safe haven asset where you stash your money when the world outside looks dark and stormy. Tariffs, high deficits, inflation, a declining dollar, an ongoing government shutdown this year has seen its storms, which has central banks, professional investors and even individuals flocking to gold, which has shielded value from financial tempest for thousands of years. And some of the most famous investors in the game say you should be gobbling up even more. Ray Dalio, the founder of the world's biggest hedge fund, Bridgewater Associates, said investors should allocate as much as 15% of their portfolios to gold because, quote, it is one asset that does very well when the typical parts of the portfolio go down. Jeff Gundlach of Double On Capital recommended an even higher weighting in gold, as much as 25% C persistent inflation and a weaker dollar. Toby, I don't know what stocks and bonds you've got in your portfolio, but I'm pretty much evenly split between Pokemon cards and gold bars.

C (4:34)

Can't fail with that approach. Let's talk about all the factors that are feeding into this massive gold rush. The government shutdown has not only created a lot of instability, but also this information vacuum, if you will. So that has spooked investors because they haven't had the typical data that you normally get. And that obviously pushes you towards assets that don't necessarily have to rely on official government data dumps like a jobs report. The saying goes that when Washington starts looking like an unreliable narrator, investors start reaching for assets that cannot lie. Gold is one of those. And then the traditional havens, the traditional safe haven assets of, you know, the US dollar, US Treasuries have been anything but. The dollar has slumped nearly 10% this year. There's just been a ballooning deficit. There's. It's forced Treasuries to lose their kind of pristine reputation. Moody's stripped the US of its top tier credit rating last year. So it has been a variety of things feeding into the once safe haven assets, not looking so safe anymore. And again, you know, gold has just been there. Gold's mentioned in the Bible multiple times. It has been truly the oldest asset class in the world. So of course that's where investors are flooding to.

B (5:47)

And if you want to sound like a Wall street pro on this, you would call this the debasement trade, because that is what professional investors are noticing is going on here. What is the debasement trade? Well, it's a bet on the idea that the value of money, and in particular the US dollar is going to go down over time. It traces its origins back hundreds of years, even thousands, to the Romans who reduce the precious metal content, silver, gold in their coins while keeping the face value the same. And so that's where you get the term debasement. But it's concerning a investors to see other investors bet on the declining US dollar. Ken Griffin, who is the CEO and founder of Citadel, huge investor in the space that he finds the idea of investors viewing gold as a safer asset than the dollar quote really concerning.

C (6:35)

Yeah, his takeaway is that the basement trade is not necessarily good. A modern flight to safety into gold is not necessarily good. A lot of, you know, the financial plumbings of the world are underpinned by the US dollar. They're underpinned by US government bonds as well. So if you are seeing people start to flock to a different asset as a safe haven asset, then that's not necessarily a good thing right now. So he's saying that there's a little bit of a sugar high in the US right now. And so that maybe some of this cocktail of shaky fundamentals, a booming stock market, but the government kind of running a ton of deficit right now. It's, it's all the ingredients of complacency. It's all the ingredients of something that is dangerous, not necessarily something that's a good thing. Even though some investors are probably celebrating while their portfolios are going up while being exposed to gold.

B (7:25)

Yeah, I mean, if you are exposed to gold, you are having an amazing year. Basket of gold equities has soared about 135% this year. Compare that to a basket of global semiconductor firms and you might think, oh, semiconductors, they're booming because of the AI trade and all of this money that's going into AI, well, that is up just 40% percent. So gold equities are absolutely trouncing semiconductor equities 135% to 40%, which is the biggest gap on record. And what do I mean by gold equities? Well, miners like Newmont Corporation, it's more than doubled in 2025 and you go down the list. Gold and silver miners in China, in London, in the United States, in Canada are all booming this year in association with gold's massive run up.

C (8:11)

Moving on. Trump must be a 49ers fan because he can't stop building stakes in mining companies. The White House announced this week it will take a 10% ownership position in Trilogy Metals, a Canadian mining firm that operates in a key Alaskan region, home to minerals like copper, cobalt and gold. The news that Washington is now a direct shareholder sent the little known stock skyrocketing 225%, the latest example in a laundry list of Trump playing kingmaker in the private markets following similar moves to take positions in intel and two other companies that deal with rare earth materials. Trump says the stakes are critical to shore up mineral independence and reduce reliance on China, which controls 70% of global rare earth production and 90% of processing capacity. The more copper, cobalt and lithium the US can secure, the thinking goes, the more robust its ev, AI, defense and renewable infrastructure will be. But the criticism is that these moves smell less of national security and more of socialism in disguise. As economist Tyler Cowan put it, where the government ends up picking winners in building a state run industrial policy that conservatives have long attacked. NEIL in the meantime, investors have wisened up to Trump's approach. They have been pouring through energy and mining stocks trying to figure out what the next winner is going to be.

B (9:29)

And that's no surprise because we Talked yesterday about OpenAI maybe being the kingmaker by investing in these companies. But truly it is the US government because unlike OpenAI, they do have infinite money and when they invest in a company is seen as a huge endorsement. And you're seeing share prices absolutely skyrocket for all the companies that the US Government has invested in lithium. American Lithium Americas shares have nearly tripled since the Defense department loaned it $2.3 billion. Intel was sinking in the water until the United States government took a 10% stake. Now it's up 82% this year. And finally, this was the first company that kicked off this whole frenzy was MP Materials, a rare earth miner. The government agreed to take a $400 million stake company and its stock is up 376% this year. So you can see why investors are looking for the next fish that the US Government is looking to pick up.

C (10:21)

And again, the government is saying, hey, these are very important industries for US national security right now. We need to be involved here. We need the US Taxpayer to be involved in reaping the gains from these very important industries as well. But again, Tyler Cowan wrote this piece and I'll just read a little bit of his argument for why this is not necessarily a good thing. He goes, think of everything you know about the federal government, how it operates. Do you observe our own government being successful in cutting costs, keeping its debt and finances in line, enforcing standards of accountability? Given those realities, why should government ownership of private corporations be such a good idea? So again, the idea that the public entity that is the government dabbling in private markets is not necessarily something you want as a shareholder of those companies, even though you get this short term sugar high from it. Because it is. The Trump trade is alive and well right now. And I've seen a lot of people on social media and acts just peering through whatever speeches Trump gives trying to pick the next winner because it is just clearly a trade that is going to work if you can somehow figure out where his next attention is going to go.

B (11:26)

Yeah, there's two companies that surged without even a deal happening. Critical Metals Corp. Is one. Its stock spiked on Monday after a simple report that the lithium company was basically just talking with the the Trump administration. The same thing happened back on Friday with USA Rare Earth, which is another rare earth miner company and it was just a rumor and these stocks went ballistic. But you can understand why investors want to get ahead of any particular announcements. I'm scouring The S&P 500, the entire investment landscape to find what Trump is going to pick next because that stock is going to balloon.

C (12:01)

If you're training for the Chicago or New York Marathon right now, I have some bad news for You Strava and Garmin are beefing. In late September, the run tracking app Strava filed a lawsuit against fellow fitness stalwart Garmin, accusing it of violating patents and breaching a cooperation agreement the two had. Strava says Garmin stole key innovations that define its platform segments, which are a portion of routes where users can compete for fastest times and heat maps, visual maps showing where athletes most frequently train. Strava thinks Garmin replicated these two features on its own platform and devices, leading to this rift and sending the broader running community into full meltdown mode. 1l a based running influencer said it felt like mom and dad are fighting in a video with over 500,000 views, imploring them to please kiss and make up. Part of the issue is that both brands are so deeply embedded in the running community. Remember, the point of training for a marathon is not to get fit, it's to tell people you are training for a marathon. Which is why Strava is such an integral part of the ecosystem. Meanwhile, Garmin's GPS watches are one of the most popular models on the market. And Strava's own data showed that Garmin's Decade Old Forerunner 235 was still its most popular smartwatch among users. And now Garmin has threatened to pull API access from Strava on November 1, literally the day before the New York City Marathon. So Neil, that would cause a lot of runners to choose sides, keep using the watches they like or sync their data to Strava. A brutal decision ahead of the beginning of marathon season.

B (13:33)

Yeah, this is more shocking than Nicole Kidman and Keith Urban breaking up. These are two giants in the space. Garmin stock is up over 50% this, this last year it reported a 20% increase in revenue to $1.8 billion. It sells all of the gadgets and smartwatches that runners really love to use. Meanwhile, Strava is a private company but has 150 million users in more than 185 countries. It is gearing up for an IPO next year. These companies have worked together, have very tight integrations for over a decade. And if you are a Garmin user, you're also likely a Strava user because you run with your Garmin watch. And then that Garmin watch tracks all your your running and for me it's a 10 minute mile. For you it's a 6 minute mile. But then it uploads all of that to Strava so you can share it with your friends or keep track of your data and They've just worked so closely together. So it's truly shocking to see Strava go out there and sue Garmin, one of its biggest friends in this space and one that runners use on a daily basis.

C (14:30)

Some might say that Garmin kind of threw the first stone because Garmin wanted API attributes. And so when you go out and do your run and then you upload that data that Garmin collected to Strava, Garmin says, hey, we want to have our name on any data that you are, you know, wrapping up in presenting to your users. Let's put a little attribution on there. Strava didn't necessarily like that. And I think Strava is looking ahead to its IPO and saying that, hey, we need our patents in line, we need our intellectual property in line. It's going to make our company more valuable. So let's start suing people who have similar features to us. But then maybe the smoking gun in this whole thing is that Garmin probably did invent the, the very features that Strava is trying to claim. The heat map and the segments all the way back. You know, in 2013, they have a case to saying that they were the ones that first came out with this idea. So that's why a lot of users are kind of siding with Garmin in this instance, saying that Strava is turning into this money grabbing enterprise. They want to shore up their finances and intellectual property ahead of going public. Just going public in general to people feels a little icky as this very, you know, community based thing that Strava is. So it's fascinating to see where the battle lines have been drawn. Right now it looks like Strava is being presented as the enemy in this instance. We're going to take a quick break and come back with a story about noise.

B (15:56)

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B (16:40)

Toby do you know my favorite word?

C (16:41)

Free?

B (16:42)

No.

C (16:43)

Vengeance?

B (16:43)

No.

C (16:44)

Capacious?

B (16:44)

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C (17:02)

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B (17:19)

The switch@mint mobile.com Morning Brew that's mint mobile.com Morning Brew upfront payment of $45 required, equivalent to 15amonth limited time new customer offer for first three months only. Speeds may slow above 35 gigabytes on unlimited plan. Taxes and fees extra. See Mint Mobile for details. Tell me if you've had this experience. You're watching your favorite TV show, House, on a streaming service to wind down from the workday. All of a sudden you jump from your couch, hands over your ears. The episode cut to a commercial and the volume for the ad was five times what it was for the show itself. Good news if you live in California, those jump scare days will soon be over. On Monday, governor Gavin Newsom signed a law that requires the noise level for commercials to be at the same level as the movie or TV series being streamed. The bill, which was passed unanimously by the legislature, was largely the work of one lawmaker, Thomas Umberg. Umberg had a legislative aide who complained to him that loud commercial on streaming services were disrupting the sleep of his baby Samantha, prompting Amber to take action. He said this bill was inspired by baby Samantha and every exhausted parent who's finally gotten a baby to sleep only to have a blaring streaming ad undo all that hard work, though Californians who aren't parents of young children probably appreciate his efforts as well. Toby this is a big deal because California is the entertainment capital of the country and most companies with streaming services are based there. The state's precedent on keeping ad volume consistent with show volume could have the entire nation in California streaming.

C (18:50)

I find this very fascinating because basically they're regulating annoyance as policy now. It used to just be regulating what a company can say, what content they can put out into the world. That's what most entertainment regulation has been around, but now it's a shift in focus on to how consumers are actually experiencing that, that content. So it's like user experience regulation is becoming this new field and I could see it seeping into other industries as well. I mean, dark patterns is something that we mentioned a lot on the show. When you're trying to stop a subscription to Amazon prime or something like that. The hoops that companies make you jump through, that's a user experience issue. And we have seen that become increasing regulated. Now it's coming to noise of ads. When you're what you're sitting and experiencing, you're getting almost like noise pollution. So user comfort is becoming almost a right in a way. So it's interesting to see California dive into this kind of new frontier.

B (19:47)

Yeah, it's not really new. Back in 2012, the Federal Communications Commission passed this commercial advertisement Loudest Mitigation act and the acronym for that is calm. So that went to effect over a decade ago that that compelled linear TV and radio to keep the volume of its commercials the same as the shows itself. But that did not apply to streaming tv. I don't think they knew exactly what streaming TV was. So the law that was passed in California essentially compels streaming services to abide by the COM act as well, because they were exempt for it originally. So it kind of brings them in line with this act that was passed back in 2012, which was passed by the FCC after it received more than 130,000 complaints in 2010, the vast majority of which were concerned with excessively loud sound of commercial. So this is not a new problem that people are complaining about.

C (20:41)

And also noise in general is an economic issue. Again, I am going to cite Tyler Cowen again. I found this on his economics blog. But some researchers looked into the construction of highway noise barriers to see how they change property values. And they found that if you are within 100 meters of a noise barrier, property prices actually rose 7%. And so they put a dollar amount on basically traffic noise and found that the economic burden of traffic noise is $110 billion because it depresses property value. So you can literally put a dollar amount on noise pollution in general. So I wonder what the dollar amount is being saved here as long as your streaming ads aren't getting blared into your ear holes.

B (21:22)

It's the textbook definition of a negative externality, which I do remember from Econ101. Another angle here is why are we seeing so many ads on streaming services? I thought if you pay Netflix $17 a month, you don't see an ad but with, you know, Netflix and Hulu and Disney plus getting so expensive now, a lot of people are trading down and getting the ad supported versions. So they're seeing a lot more ads on streaming services, which is another reason why this has become a big issue. And the hope is that when California passes something like this, they have such weight in this industry that Netflix, Hulu, Disney plus will say, well you know, if we have to do it in California with its, you know, 55 million people, then we'll just do it for the rest of the country.

C (22:02)

I don't know about you, but I just mooch off my siblings subscription account so I don't have that issue of paying for those. Let's sprint to the finish with some final headlines. Tesla's teaser videos earlier this week primed its fans for a big announcement yesterday. And a big announcement yesterday it provided. If you're a fan of cheaper versions of its Model Y, that is because that's what the hype was building towards. A cheaper $37,000 version of its Model Y that aims to keep demand strong after the US Tax credit for electric vehicles expired. The new model costs about 15% less than the previous base version, though it sacrifices some features like a shorter range, fewer speakers and no second row touchscreen. Tesla executives say that they delayed building this particular lower priced vehicle until after federal incentives ended and warned that production would ramp up a little bit slowly. Despite a record delivery quarter Last quarter, Tesla's U.S. sales have dropped roughly 6% this year and let's expect nationwide EV sales to plunge about 24% in the fourth quarter. Neal, it wasn't a flying car or a Hennessey partnership, but was this still exciting?

B (23:07)

No. I mean, just look at the stock price. It was down 4.5%. This was very underwhelming for investors. In fact, the price cut of about $5,000 was less than the lost 70$500 tax credit. So they are still more expensive than investors wanted. You know, other auto companies are taking much bigger swings at this point when it comes to EVs than Tesla. Ford reimagined its entire assembly line, said it was ripping up the assembly line that its founder had pioneered back in the 1910s in order to make a $30,000 truck. Seems that Elon Musk just isn't interested in the car business that much anymore, even though that's where they get the bulk of their profits and their revenue. He set his sights for robotics and AI and the changes that they're making on their car models, which remind like let Me remind you they have not released a new car model since the Cybertruck in 2023. In the Cybertruck has been a huge flop. So that's why investors were certainly underwhelmed by this particular announcement. And you know, I think the hype videos kind of like LeBron saying, just didn't do a whole lot for anybody. And aside of how the old guard of investing is trying to stay hip to the new trends, Intercontinental Exchange, the owner of the New York Stock Exchange will invest $2 billion in Polymarket, a betting platform that allows you to wager on the least streamed song of the life of a showgirl by 10-10-10. The deal values polymarket at about $8 billion, illustrating how prediction markets have become a force in finance ever since their breakout moment during the 2024 presidential election. To review prediction markets like Polymarket and rival Kalshi allow people to bet real money on event outcomes in elections or sports or niche things like music streams. They face loads of regulatory scrutiny and polymarket was even banished from the US in 2022. But with the Trump administration adopting a lighter touch, prediction markets have pivoted from defense to offense, especially in the area of sports related contracts. Piper Sandler estimated that prediction markets revenue could climb to $8 billion in the next five years as they claw market share away from sports gambling giants like DraftKings and FanDuel.

C (25:10)

Yeah, Intercontinental Exchange ice. They need to recognize and hop on these financial infrastructure trends that are happening right now. And there's no bigger one right now than real time prediction markets. They want this data, they want to feed it into algorithmic trading. They want as much data as possible. And this is the wisdom of the masses here. It's become something that we reference consistently on the show to just get a gauge of what people are thinking about any issue, literally anything that's going on. So I think the financialization of everything is just going to continue to happen. This investment just accelerates it and markets are just no longer stocks and bonds and golds and whatnot. It is the life of a showgirl most streamed album. It is sports in general. So I do think that this is becoming just the de facto position of financial markets now. Everything becomes tradable data.

B (25:58)

And if you're wondering what the odds on favorite to be the least streamed song on the life, don't say well, by October 10th it is. Honey.

C (26:05)

Okay, okay.

B (26:06)

All right. Finally, public television is turning to one of its biggest stars to help it recover from cuts in federal funding. 30 Paintings by Bob Ross the soft Spoken host of the Joy of painting in the 80s and the 90s will be put up for auction to raise money for public television stations suffering from $1.1 billion in funding cuts passed by Congress. It might not make a huge dent, but it'll be something. The 30 paintings have an estimated value of 850,000 to 1.4 million and will go directly to stations to help them pay licensing fees for programs like America's Test Kitchen and the Best of Joy of Painting, which is based on Ross's show. Toby, I don't know about you, but I definitely have a spot for a serene mountain vista right in my living room.

C (26:48)

I would love a Bob Ross original. I mean, who wouldn't love a Bob Ross original? I think they're a little bit underpriced. The estimated value of his 30 paintings is between 850,000 to $1.4 million. That is in the broader art market, not that much. So, everyone, if you have the means to bid on this thing, let's bump up the price of a Ross a little bit, because obviously everyone loved a Bob Ross painting.

B (27:12)

That is all the time we have. Thanks for starting your morning with us, and have a wonderful Wednesday. I want to wish a very happy birthday to one loyal listener. My dad. Happy birthday, dad. The sports gods cooked up a playoff baseball quadruple header for you. What a treat. And, Toby, you also have an important announcement.

C (27:30)

Well, it doesn't feel as important anymore, but we are asking you guys once again to help us win the Signal Awards, which are kind of like the Oscars of podcasting. We're nominated for best Business Podcast, Best Commute Podcast, and Best Daily Podcasts. Unlike the Oscars, fans can actually vote, so we need your help to win. Neil. We are tied in a couple of categories right now, so don't tell anyone, but I voted for us with my personal email and my work email, because every vote counts. If you want to help break those ties, head to the link in the show description to vote for Morning Brew Daily.

B (28:02)

And if you have any feedback on today's episode, send a note to Morning Brew Daily at Morning Broadcom. Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our association associate producers are Olivia Graham and Olivia Lake. We can't reach. Hair and makeup must be on airplane mode. Devin Emery is our president, and our show is a production of Morning Brew.

C (28:20)

Great show, Danielle. Let's run it back tomorrow.

B (28:31)

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