🕶️ “Smuggle, Inc.” — Mexican Drug Cartels’ biz. Crocs’ microdrama. AI’s Sci-Fi essay. +Self-Blowing Snowblower

Summary

Podcast Summary: The Best One Yet

Episode: 🕶️ “Smuggle, Inc.” — Mexican Drug Cartels’ biz. Crocs’ microdrama. AI’s Sci-Fi essay. + Self-Blowing Snowblower

Date: February 25, 2026
Hosts: Jack Crivici-Kramer & Nick Martell

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Overview

This lively episode from Austin, Texas, brings together three punchy business stories with signature banter and humor. The hosts break down:

1. The viral, sci-fi “Substack Sell Off” essay on AI’s (potential) economic destruction.
2. Crocs’ wild move into microdrama media as shoe sales slow.
3. The sophisticated, surprisingly corporate business models of Mexican drug cartels.

Along the way, Jack and Nick offer sharp takeaways, memorable quotes, and an on-the-ground feel for the latest trends (plus the neighborhood flex of a robo-snowblower).

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Key Discussion Points & Insights

1. AI’s Sci-Fi Apocalypse: The Substack Sell Off

Starts: [06:02]

• A viral, speculative blog post on Substack titled “The 2028 Global Intelligence Crisis” set Wall Street on edge.
• The essay, written as a “future history,” imagines AI destroying jobs, the stock market, and social stability by 2028.
  • S&P 500 is “down 38%,” unemployment is spiking ([08:02]).
  • AI agents do all commerce, humans have no work or income: “The current crisis in 2028 in the article is the mortgage market.” ([10:15])
  • Tech companies, delivery giants, even credit card firms are gutted by open-source AI and automation.
• The only winners? Consumers, in the short run, some with AI agents who fiercely negotiate everything.
  • “An AI agent who cancels subscriptions… books your own honeymoon for you and saves you like $5,000” — Jack ([09:06])
• But then: with nobody working, nobody is spending.
• The essay ends with scenes of “Occupy Silicon Valley” and mass unrest.
• This “action-mongering” (not fear-mongering, hosts stress) is meant to spur real debate on AI policy, as previous warnings have fallen flat.

Notable Quote:

• “Each company’s individual response was rational. The collective result though, was catastrophic.” – Substack essay, highlighted by Nick ([11:13])

Key Takeaway:

• “This isn't fear mongering, it's action mongering. And that's a good thing.” — Jack ([11:09])
• The US has no real AI policy; the essay argues we need urgent, coordinated national action (taxing AI, sharing AI prosperity) before the worst case is real.

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2. Crocs Gets Steamy: Microdramas & “Toxic Competition”

Starts: [12:37]

• Facing slowing shoe sales, Crocs launches its own racy “microdrama” mini-series: “Charmed to Meet You.”
  • Plot: Flirtation with Jibbitz charms, two-minute episodes, available on a popular short-form video app ([14:52]).
  • Built on the red-hot microdrama trend—serialized, one-minute episodes, $0.99 micro-payments for “just one more episode.”
• Microdramas are booming globally (especially from Chinese studios):
  • 6 of top 200 apps in the US App Store are microdrama apps.
  • The format: “C-list actors, D-list scripts... Their A-level business model is making Hollywood jealous.” — Jack ([13:48])
  • Revenues soared 35% last year to $26 billion ([14:12])
  • “We humans are spending more money on microdramas than we spend on Spotify.” — Jack ([14:24])
• Crocs is just one of several brands going Hollywood-in-house — JCPenney, Procter & Gamble followed suit.
• The hosts call attention to “toxic competition”: microdramas are engineered to be addictive (endless cliffhangers), not better.
  • “It's focused on making the most addictive product that maximizes your time spent. A lot like TikTok and Instagram.” — Jack ([16:54])
  • “Microdramas… credit their success to what we call toxic competition. Like a toxic relationship. You stay in a microdrama for way longer than you want to.” — Jack ([17:11])

Key Takeaway:

• Brands are betting on keeping consumers hooked—sometimes against their own interests. Microdramas out-earn Spotify because they’re super sticky, not because they’re “better.” Positive competition builds better products, toxic competition hijacks attention.

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3. Cartels, Inc.: The Business of Narcos

Starts: [19:06]

• Triggered by recent violence after the killing of Nemisio “El Mencho,” head of the Jalisco New Generation Cartel ([19:33]), Jack and Nick dive into the real business models of drug cartels, inspired by the book Inside the Cartel by FBI agent Martin Suarez.
• Cartels run like Fortune 500 companies:
  • Vertically integrated supply chains.
  • Franchise models with local gangs.
  • Diversified portfolios: “They have diversified portfolios of drugs, gambling, and farming.” — Jack ([22:32])
  • Branding and even lobbying-like corruption.
• A key focus: “Smuggling, Smurfing, Selling, Laundering” ([21:17])
  • Smurfing: Breaking down large cash piles into small deposits to evade suspicion.
    • “Divide the cash into piles just under $10,000 and deposit them… so none of those deposits get reported.” — Jack ([21:42])
  • Money laundering innovations, including getting into the legal cigarette business ([23:19]).
    • “The cartel sends illegal cocaine to the United States and eventually receives legal cigarettes in return to sell for cash.” — Jack ([23:38])
• The most crucial player?
  • “The most important person in a drug cartel is the guy who went to business school and wears a suit now.” — Jack ([23:06])
  • Cartels need financial professionals—cleaners who devise schemes so illegal profits become legal cash flow.

Key Takeaway:

• Modern cartels are highly sophisticated businesses. Money laundering—the creation of a front and clean cash flow—is as vital as the drugs themselves.

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Memorable Quotes & Moments

• “You don't do this [robo snowblower] because it’s economically viable. You do this for the neighborhood flex.” — Jack ([03:09])
• “It's basically airport fantasy novel meets TikTok algorithm.” — Jack, on microdramas ([13:21])
• “You can't even order a burrito.” — Nick, on the AI essay's dystopian world ([10:55])
• “Like a toxic relationship. You stay in a microdrama for way longer than you want to… and more than you know you should.” — Jack ([17:11])

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Timestamps for Important Segments

• 00:49 — Mexican cartel violence: why are they so hard to stop?
• 02:05 — Robo snowblower: self-blowing, self-charging, viral blizzard hero
• 06:02 — The Substack AI doomsday essay: summary and analysis
• 12:37 — Crocs microdrama and the “toxic competition” of micro-payments
• 19:06 — “Inside the Cartel”: Drug cartels as Fortune 500 companies
• 23:06 — The "business school guy": why laundering is the cornerstone
• 24:47 — Quick hits: Moncler’s fashion win, Zuck’s AMD deal, Anthropic & the Pentagon, Gen Z’s iPod craze
• 26:08 — Best fact yet: Rum raisin ice cream’s Italian origins

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Episode Tone & Style

• Energetic, irreverent, accessible ("besties," "yetis").
• Real-world business lessons from wild stories.
• Mix of hard data, sharp analogies, and running jokes.

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For Listeners Who Missed the Episode

This hour blends business news, pop culture, and sharp business-school analysis. Nick & Jack move smoothly from AI anxiety to quirky shoe marketing to the Fortune 500 playbook of narco cartels, all with clever analogies and actionable insights. If you want the wildest new trends (and a few laughs over oatmeal), this T Boy has you covered.

Transcript

[A]

This is Nick, this is Jack.

[B]

It's Wednesday ceviche Wednesday, February 25th. And today's pod is the best one yet. This is a T boy.

[A]

The top three pop business news stories you need to know today.

[B]

You hear that sound? Is that the bats? Is that the black cod white mole taco I had last night? That was now my love language.

[A]

Somebody cracking into a shiner box.

[B]

Yeah, it's McConaughey, I think because we just landed in Austin, baby. We got our live T Boy show later tonight.

[A]

The next three episodes of this show are gonna be a little more boisterous than usual. Yeah, they first because I'm in the room with Nick right now, which is great. It's a beautiful thing tonight. Wednesday night, we're recording the show live. Thursday morning, that live show's coming to this podcast. And Friday morning we have a guest interview.

[B]

And all of it's slathered with barbecue sauce and Stetson hats, baby. Jack, three fantastic stories for today's T Boy. What we count the pie.

[A]

For our first story, Mexican drug cartels have been all over the news this week.

[B]

So why are drug lords so hard to stop? Well, it's because they run their businesses like a Fortune 500 company.

[A]

For our second story, the newest product from Crocs isn't a shoe. It's a show.

[B]

True.

[A]

A Crocs microdrama.

[B]

Because there are toxic relationships and then there's toxic competition.

[A]

And our third and final story is the substack sell off, a viral doomsday essay about AI destroying the economy.

[B]

Besties, this wasn't fear mongering. This is action mongering. And that was actually a good thing.

[A]

But yetis, before we hit that wonderful mix of stories.

[B]

I mean, what a mix of stories. Love the mix. It is bigger in Texas.

[A]

Another humongous blizzard hit the Northeast. The second one of the year, Jack.

[B]

Providence just got got 30 inches of powder.

[A]

Broadway and New York had to cancel their shows for a second night in a row.

[B]

Okay, even the news stopped, literally.

[A]

The Boston Globe didn't print for the first time in their 153 year history.

[B]

Honestly, Ben Affleck, that's pathetic.

[A]

Now the only one still working the last two days in the northeast was New York City food delivery bikers.

[B]

Yeah, heroes. They don't wear capes, they wear gloves built into the handlebars.

[A]

But yet he's the biggest winner of the 2026 February Blizzard. The only winner, a self driving snowblower.

[B]

True story. It's a robo snow blower.

[A]

It's A Plowbot.

[B]

It's a cyber cab for clearing snow. Robo snow. Waymo.

[A]

This new hardware is made by a company called yarbo. It costs $5,000, and it's 230 pounds.

[B]

I mean, this poppy can handle 12 inches of snow at a time. And then here's the key. It recharges itself.

[A]

So you turn it on, it blows the snow out of your driveway, and when the battery's low, it returns to its charging station in your garage.

[B]

When it pops back out to finish the job a few hours later while you're roasting marshmallows by the fire. So here's the deal. Yarbo's having its viral moment right now

[A]

because one owner was sitting inside by the fire watching TV while the robot was eating up all the snow.

[B]

Jack, could you whip out the whiteboard and do some snow math for us?

[A]

I mean, it's expensive. Yeah, I pay to plow my driveway. Sorry, Dad. I know you think I'm soft. I've had to pay for 10 plows so far this year. They're 50 bucks each, so that's $500 a year you'd save. It'd take 10 winters to pay for itself.

[B]

So add it all up, and it would take 10 winters for this Robo snowblower to pay for itself.

[A]

In other words, you don't do this because it's economically viable. You do this for the neighborhood. Flex.

[B]

And yes, Yarbo has a Robo lawnmower and robo leaf blower and Robo aerator.

[A]

But the fastest way to get your neighbors to hate you is to get a new $5,000 robo snow blower.

[B]

Oh, what's that gonna sound like?

[A]

Jack, when you're done, you wanna come inside? I'll be sitting by the fire.

[B]

I got six mores waiting for you. Jack, let's hit our three stories. Fifteen years before this song, Two boys from the northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet. But the best is the norm, Jack. That's it. I don't even think they need to practice.

[A]

50%.

[B]

That's a fat tip. T boy city on your at Liz. If you know, you know. Cause we ready to go. We can't wait no more so just start the show. Start the show. First, a quick word from our sponsor, Manus AI Yetis. So when are we using AI when we're jumping in T boy style to some research.

[A]

Why crunch numbers in that earnings report when a bot will do it for you don't worry.

[B]

Jack's love language is fact checking. So everything gets a double check. Fact check before it makes the pod.

[A]

You know it. No AI slop or app?

[B]

No. So Jack and I are pumped to tell you about Manus AI, the hot new AI agent that does more than just answer your questions.

[A]

It does tasks for you that you don't want to do to get your work done faster and better.

[B]

Manus is the most powerful AI agent for people who don't code.

[A]

We just asked Manus where the CEOs of the 100 most profitable companies went to college. Boom. It created it for us.

[B]

Or you could ask Manus to launch an e commerce shop for you. Boom. You're Anna Wintour.

[A]

Manus connects the most advanced LLMs with a set of tools to deliver real world tasks.

[B]

Oh, by the way, Manus means hands in Latin. Because like hands, Manus is pretty darn useful to humans.

[A]

And you can get your hands on Manus AI for free.

[B]

Visit manus im/tboy to get started with Manus and some T boy special credits.

[A]

That's manis im tby

[B]

yeties. Jack had a lifelong dream of owning a ski house. But then he married a skier who's better at skiing than him, which put

[A]

the pressure on to really own a ski house.

[B]

Okay, but still, ski house is very expensive. So what helped make Jack's dream doable? Airbnb.

[A]

I bought the chalet in 2024 and I use it very often with my own family. But when we're not using it, I host it on Airbnb. Especially those three day weekends when ski houses are in most demand.

[B]

The additional income Jack earns from hosting his home on Airbnb, it helps make owning the secondary proper possible.

[A]

President's Day weekend coming up.

[B]

Nick, A lot of people want to go skiing. Jack.

[A]

I've done a ton of skiing this season already. I want to go to Florida with my family. The extra income I earned from hosting on Airbnb helps offset those travel costs.

[B]

Four adults, four children from just outside Boston. Boom. They just booked a stay on Jack Chalet.

[A]

Primary home or secondary home? If you've got space, you've got opportunity. Hosting on Airbnb helped make my dream possible.

[B]

Besties, your home might be worth more than you think. Find out how [e-mail] host for our first story. It's the Substack Sell Off. A viral essay written from the future reveals how AI has decimated the economy in a fully science fictiony way.

[A]

Because sometimes it takes science fiction to change real life.

[B]

All right, Jack, if we're gonna tell a story, we gotta go like literary review style.

[A]

Right? So let's summarize all the efforts people have made to try to scare us into action on artificial intelligence.

[B]

Okay, let's start three years ago, 2023, an open letter from 33,000 scientists demanding a pause on AI because AI is like a nuclear bomb.

[A]

Well, that didn't work.

[B]

All right, so let's go back last year, 2025, Anthropic CEO said that half of all entry level white collar jobs will be soon wiped out.

[A]

Okay, so neither of those scary alarm bells registered with policymakers.

[B]

How would you describe our government's AI policy, Jack?

[A]

To have no AI policy.

[B]

Exactly.

[A]

To get out of the way of the tech.

[B]

Which leads to 2026, our new approach. What is it?

[A]

Scaring people into action by painting a picture of complete economic doom. Yeah, worthy of a Jerry Bruckheimer action film.

[B]

Oh boy. Which leads to Wall Street's Citrini research. The news of the week.

[A]

It was an article published on Sunday called the 2028 global intelligence crisis Bessies.

[B]

This is a fictional article written after AI has destroyed the stock market, the economy and society. Two years from now, this viral article

[A]

is over all Wall street is talking about. And it's all Wall street is selling about too.

[B]

So Jack and I read all 4040 words of this fiction that felt like nonfiction.

[A]

It felt like Orson Welles. What's it called, Nick? War of the Worlds. Yeah, it's like, is this real? Because I'm peeing my pants.

[B]

I thought this was the plot of Endgame, but applied to the economy.

[A]

All right, so this blog post posted on Substack, it's written as if it's June 2028.

[B]

Right.

[A]

The S&P 500 at the time of the writing is down 38% and the unemployment rate has spike.

[B]

But in the article, the downfall actually begins in the moment we are living in today. Early 2026.

[A]

The article describes Claude Code and OpenAI's Codex making software that replaces software companies. Exactly.

[B]

And that triggers a negative feedback loop of replacing jobs with AI. And there just is no bottom to this thing.

[A]

It actually describes big chunks of our economy as just being friction. Yeah, like that AI is going to

[B]

eliminate humans talking to other humans. You're ordered to the barista. That's apparently a problem that's going to go away with AI baristas.

[A]

So the 2000 word essay shows AI agents doing all of our commerce in this economy. And the result is that One industry of white collar workers after another is just decimated.

[B]

Now we should point out this essay shows that some parts of AI are pretty good for the consumer.

[A]

Yeah. In this article, everyone has their own AI agent who ruthlessly negotiates prices with the hotel on your behalf.

[B]

An AI agent who cancels the subscriptions from your subscripturation that you never use.

[A]

An AI agent that knows you so well they book your own honeymoon for you and save you like $5,000 on that Cabo trip.

[B]

Hey ChatGPT, thanks for the trip to Cabo. Much appreciated.

[A]

In the article, Doordash and Uber Eats are specifically referenced. They get disrupted by AI because somebody vibe coded a food delivery clone that's the same as Uber eats but gives 95% of the revenue to the drivers.

[B]

But then DoorDash and Uber Eats have to lay off all their workers and no one can afford food delivery anymore.

[A]

A vibe coded AI app replaces a 20,000 person tech company.

[B]

And that's not all. A GPU cluster in North Dakota replaces 10,000 kale collared workers on Madison Avenue.

[A]

And then to save their master's money, all the AI agents cut out the credit card companies completely by doing commerce

[B]

through stablecoins in this AI future. Visa, Amex, MasterCard, boom. They're all gone.

[A]

But these AI agents, Nick, they might be doing great work for their masters, but they don't drink coffee, they don't buy furniture, they don't go on vacations, they don't spend.

[B]

Yeah, this sci fi essay basically paints a picture where AI is doing all the work. Humans have no income. And the ripple effects, they're more like waves.

[A]

The current crisis in 2028 in the article is the mortgage market.

[B]

Oh yeah. At the 2028 timeframe, they're talking about like white collar workers are tapping their 401ks just to pay for the mortgages for their houses. It's that bad.

[A]

It's a really scary article. And it finishes with Occupy Silicon Valley being a thing.

[B]

Yeah, like workers blocking the entrance to anthropic OpenAI headquarters because nobody's happy about the situation.

[A]

It's a full on national crisis caused by AI and it feels like it's actually happening.

[B]

When you read that AI has a branding problem. This is that. But with Hollywood level special effects.

[A]

We've known AI is going to hurt some software companies, but this shows AI hurting every company.

[B]

I mean, you can't even order a burrito.

[A]

Well, helping them by boosting their profits. Hurting them by wiping out their work.

[B]

Again, a delivery burrito free world. So Jack, what's the takeaway for our buddies who are wondering about this AI Sci Fi essay?

[A]

This isn't fear mongering, it's action mongering. And that's a good thing.

[B]

Yetis, there's one sentence from this essay that stuck with us. Here it is. Each company's individual response was rational. The collective result though, was catastrophic.

[A]

That is the textbook definition of a market failure in Econ 101.

[B]

Classic.

[A]

And what needs to happen is that the government needs to intervene.

[B]

You see, Republicans, Democrats and Independents all overwhelmingly fear AI but the White House fears that China is beating the United States in AI.

[A]

Yes, it would be bad if China wins the AI race, but this essay shows it would also be very bad. Or it could be at least if we win, but have no policy to control it.

[B]

So the essay describes some solutions, like a transition economy act, where you tax AI to pay the workers who were displaced by it.

[A]

It also shares a proposed Shared AI Prosperity act, which treats AI like the Saudis treat oil, a source of our national income.

[B]

So it ends with hope. You know, right now it is not 2028, it is 2026.

[A]

All these bad things haven't happened.

[B]

Yeah, the s and P500 at an all time high. It's not down 38%.

[A]

So what should we do first? Agree on the problem and then act while we're still in a position of strength.

[B]

Nasty. Sometimes it takes superhero avengers level fiction to cause real world change. Not fear mongering, it's action mongering. For our second story. A lot different than our first story, by the way.

[A]

Crocs.

[B]

Crocs has a new strategy to save their slow in shoe sales. It's a Crocs microdrama.

[A]

Crocs, the shoe company launched a mini soap opera. So we need to talk about toxic competition.

[B]

All right, Jack, I'm checking the app store right now. Six of the top 200 apps. Oh, they are spicy, but they got nothing to do with food.

[A]

They're micro drama apps. Yep, six of the top 200 in the app store. Basically mini soap operas that makes Days of our Lives look like they deserve

[B]

an Oscar and an Emmy. We covered this innovative type of streaming network back in the fall. The Microdrama moment.

[A]

It's an app you download that's free. They're mostly Chinese owned and microdramas are short form vertical shows, but split up into 52 one minute long episodes.

[B]

It's basically airport fantasy novel meets TikTok algorithm. And fortunately, Jack cut out four minutes of his day to watch one for us. What was it called again?

[A]

I had a baby with you.

[B]

I had a baby with you.

[A]

It's a classic.

[B]

Instant classic, I should point out. What's the plot again?

[A]

Basically, Will the heroine's husband's brother have twins with her mom's step uncle on this spring break vacation?

[B]

Right. But it turns out he's a trillionaire and she's a mermaid. And actually they've both been sleeping with the same co worker.

[A]

The format. Yeah, it's predictable.

[B]

Uh huh. It's a replicable format. C list actors, D list scripts. But here's the key.

[A]

Their A level business model is making Hollywood jealous.

[B]

Because to keep watching the micro drama, you must make a micro payment $0.99

[A]

to watch that final episode and find out who the father is.

[B]

Spoiler. It's not the mermaid. But there is big money as a result in the microdrama.

[A]

You're not gonna believe this, but revenues of microdramas, which are in six of the top 200 apps, rose 35% last year to $26 billion.

[B]

Jack, could you sprinkle on some context for us, please?

[A]

We humans are spending more money on microdramas than we spend on Spotify.

[B]

Sit down, stand up and wait. Who's the F. This is a huge

[A]

and booming media industry.

[B]

But besties? Here's what Jack and I find fascinating. The biggest development in this micro drama movement is that brands have now entered

[A]

the chat, starting with Crocs. Yep, the adorable $5 billion shoe business has created their own racy micro drama.

[B]

I feel like we need a record scratch sound effect right now called Charmed

[A]

to Meet yout Great name a microdrama where clogs are the co star.

[B]

Now this Crocs microdrama is based on the true story of a Crocs employee, Lexi. She's single and she sees her neighbor's Crocs shoes his door.

[A]

But his Crocs have no Jibbitz. So one at a time, she mysteriously begins planting her Jibbitz into his shoes. Until he finds out.

[B]

A flirty dialogue ensues over the next five episodes, two minutes long each on Real Shorts, the Chinese microdrama app.

[A]

Well, why is Crocs doing this? Lately their business has had more holes than their shoes.

[B]

That's right. Crocs revenue shrank in 2025 for the first time in 10 years.

[A]

Maybe two minutes of sexual tension can revive sales growth.

[B]

But besties, Crocs is not. Not the only one, are they?

[A]

Jack JCPenney launched a Spanish mini micro drama with Telemundo.

[B]

Dios mio.

[A]

Procter and Gamble did a 55 episode Rom Com Micro drama starring their native deodorant.

[B]

I don't even know how you do that script, Jack.

[A]

And this is all part of a bigger trend that we saw after the success of the Barbie movie.

[B]

Exactly like we saw with Mattel. Brands are bringing Hollywood in house. So, Jack, what's the takeaway for our buddies?

[A]

Are you trying to get like sultry and steamy right now?

[B]

Over in the microdramas, there are toxic

[A]

relationships, but there's also toxic competition.

[B]

Yetis you know about the toxic relationship. It's when you stay in the relationship even though you know you shouldn't.

[A]

Well, toxic competition is the same idea. Getting customers to stay with your product against their best interests.

[B]

Like, do we really think microdramas are such good content? They deserve more willingness to pay than Spotify does?

[A]

I certainly don't.

[B]

No, they should be smaller than Spotify.

[A]

It looks like they're simply designed in a way that you just can't stop watching. Yeah, racy content every episode. Tease, but don't satisfy and have cliffhangers

[B]

every minute that you gotta pay for. Now, just to explain this further, positive competition is what you're used to. It's when one car company tries to make the best car possible. In that case, consumers win.

[A]

Or one podcast trying to make a podcast better than the other podcast.

[B]

That's positive competition.

[A]

Toxic competition isn't focusing on making the best product. It's focused on making the most addictive product that maximizes your time spent a lot like TikTok and Instagram.

[B]

Look, besties, no judgment here. Microdramas aren't bad, but they can credit their success on what we call the toxic competition.

[A]

Like a toxic relationship. You stay in a microdrama for way longer than you want to, you know

[B]

who you are, you know you knew,

[A]

and more than you know you should.

[B]

Now, a quick word from our sponsor, Monarch.

[A]

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[B]

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[B]

For our third and final story. The killing of a Mexican cartel leader has engulfed parts of Mexico in violence.

[A]

It also points the spotlight on the business of narcos.

[B]

Yes, it does.

[A]

And we just read a book all about the subject. So here's our book report.

[B]

Yeah, it's like the Fortune 500 of narcos, but besties to sprinkle on some context.

[A]

Just.

[B]

Just two weeks until spring break. But Puerto Vallarta, Mexico is looking less like a party zone, more like a war zone.

[A]

Americans are actually supposed to shelter in place right now.

[B]

And the reason? Because Nemisio El Mencho Azeguera Cervantes was killed on Sunday in a Mexican military operation.

[A]

This man was both America's most wanted and Mexico's because he was the head of the Jalisco new generation cartel.

[B]

Basically, US Intelligence helped Mexico with the attack. But gang members have staged six counterattacks since, killing at least 25 Mexican soldiers. That's the news.

[A]

Now how they tracked this guy down? They didn't follow money or drugs. They followed his lover.

[B]

Yeah, that's the wild plot tryst. They found this drug lord by tracking his girlfriend to a hideout house.

[A]

US had the intel. Mexico made the attack.

[B]

But besties. What Jack and I find fascinating is that this news makes us think of something we've been waiting to discuss for a while now.

[A]

We're students of business.

[B]

Yes, we are.

[A]

And we've been curious about the business

[B]

of illicit drug cartels, basically cocaine Incorporated.

[A]

So, over the holidays, I read a book written by a former FBI undercover agent named Martin Suarez.

[B]

Jack has been telling me about this, like, behind the scenes before the show starts.

[A]

My new Brooklyn Brit.

[B]

Okay. The book's called Inside the Cartel. How an Undercover FBI Agent Smuggled Cocaine, Laundered Cash, and Dismantled a Colombian Narco Empire.

[A]

Now, we should clarify. The Colombian cartel that this book is about is from the 80s and 90s. Not exactly the same as Mexico's cartels of today.

[B]

However, what this undercover agent revealed was wild and still relevant today because basically, different countries, different era, but same business model.

[A]

All right, the author is Martin Suarez. It's his memoir. He spent time in Puerto Rico and in Miami working undercover for the FBI,

[B]

and he lived a double life for years. Martin, the loving father, husband, and son.

[A]

But he was also, Manny, the opposite person. A man working for the Medellin cartel. He smuggled, sold, smurfed, and laundered.

[B]

Now, those are the four verbs you got to keep in mind for running a drug business.

[A]

And, yes, I said smurf, and we're gonna get into that in a sec.

[B]

So, Jack, could you please define each of these key terms?

[A]

Well, everyone knows what smuggling is, but Manny, this is what he did. One time, he brought a boat into the Caribbean Sea as an airplane, dropped barrels of drugs into the water, and he had to go fetch all those barrels. It was backbreaking work. That's how the drugs got into the country.

[B]

But what is smurfing? Cause I thought you made up that term.

[A]

Well, after the drugs get sold and you have tons and tons of money, you need to divide the cash into piles, just under $10,000, and deposit them to different. So none of those deposits get reported.

[B]

Yeah, the smuggling doesn't go anywhere unless you get the smurfing down. And all of it is very dangerous.

[A]

Smuggling and selling drugs requires evading the Coast Guard, the FBI, the dea Sharks.

[B]

You have to evade real physical sharks

[A]

that swim and smurfing. The other drug dealers know you have a lot of cash in the back of your trunk so they could attack you.

[B]

But most dangerous of all is just being undercover in the first place.

[A]

Reading this book, you see, undercover agents are the epitome of bravery.

[B]

Yep.

[A]

Martin's work led to to 50 drug members getting busted by the FBI.

[B]

But this led to Jackson. My key question here, why is it so hard to crush the cartels?

[A]

Well, they operate like corporations, efficient ones

[B]

with lawyers, Fortune 500 ones. They are vertically integrated supply chains. They have a franchise model of local gangs. They have diversified portfolios of drugs, gambling and farming.

[A]

And instead of lobbying, they just get in the pockets of some local politicians.

[B]

Yeah, they dish out free hamburgers, even branding. Like, think about those drug gang tattoos you've seen. Brand equity. Exactly the definition.

[A]

But for this business podcast, we are most interested in the laundering.

[B]

We're not romanticizing it, we're just curious. How do you turn dirty money clean?

[A]

How do the drug cartels do it for so long and get away with it?

[B]

So, Jack, what's the takeaway for all our buddies named Marty Byrd?

[A]

The most important person in a drug cartel is the guy who went to business school and wears a suit now.

[B]

Yetis the reach of the US Government, it is wide. The government can stop and seize international wires to cartels anytime.

[A]

To prevent that, the Colombian cartel in this book got into the cigarette business.

[B]

Yeah, wild true story. The proceeds of the drug sales would be used to buy legitimate cigarette sales from major tobacco companies.

[A]

The tobacco company would send the cigarettes to Colombia to the cartel who would then sell them legitimately. And that's how they made money.

[B]

So the business model here, the cartel sends illegal cocaine to the United States and eventually receives legal cigarettes in return to sell for cash.

[A]

It's like a three part business to evade law enforcement.

[B]

It's like throwing money in the laundry. It gets clean. Launderers devised the scheme to ensure that $30 million wires don't get noticed by the US Treasury.

[A]

They make what's dirty look clean.

[B]

Drug cartels, whether in Mexico, Colombia or New Mexico Breaking bad, they must have a front.

[A]

And that front is the money laundering. It's critical to the drug business and surprisingly, they often wear suits.

[B]

Jack, could you whip up the takeaways for us for saviche Wednesday, it was

[A]

the substack sell off. A doomsday essay fictionalized How AI got could decimate the economy.

[B]

It wasn't fear mongering though. This was action mongering.

[A]

For our second story, Crocs launched a micro drama highlighting Hollywood's newest media format.

[B]

It's packaged for maximum engagement and time spent. Just like TikTok. This is toxic competition.

[A]

And our third and final story is Martin Suarez. His memoir revealed the business of drug cartels.

[B]

The most important part, the laundering. The guy who's wearing the suit but besties.

[A]

This pod's not over yet. Here's what else you need to know today.

[B]

First, a final winner of the Milan Olympics. Fashion. Specifically Moncler, the puffy vest brand.

[A]

Sounds French, but it's based in Milan

[B]

and they just announced. Sales rose again. And so did Moncler stock.

[A]

It's part of the broader ski style surge.

[B]

Yeah, despite global warming, everyone's into winter wear, especially Tom Wambsgan.

[A]

Second, so much going on in AI. Here's the rundown.

[B]

Oh, we gotta get more.

[A]

First, Zuckerberg announced a huge deal with AMD, sending AMD stock up about 11%.

[B]

Yeah, Zuck's Meta is using Nvidia's Rock for AI chips, signing a $100 billion deal and even buying AMD stock.

[A]

Also, Anthropic is under heat from the Department of Defense. Major beef with the Pentagon.

[B]

Yeah, the Defense Secretary says Anthropic must drop all guardrails around. How the army can use AI or

[A]

else they'll use Grok instead.

[B]

And finally, the vintage tech trend that we told you about just hit a whole new level. Google searches for ipods are booming and they're coming from Gen Z.

[A]

Did you realize the ipod was made until 2022?

[B]

I had no idea until you told me that.

[A]

I thought they were done like a decade before.

[B]

Apparently they've been around for a while. So the second hand ipods are becoming a hot item.

[A]

Check your parents attic because you probably have an ipod that's probably worth a

[B]

lot of money and you can resell that thing on ebay for like a grand. Quickly now, time for the best fact yet. This one sent in by legendary yeti David Lees, who shot us an email.

[A]

So we created some controversy by accident in Monday show when we talked about ice cream.

[B]

Yeah, yeah, we were dissing about rum raisin ice cream and how we said they shouldn't go together. Kind of like the ice cream business.

[A]

Yeah, David's a huge rum raisin fan.

[B]

He's a Wegmans rum raisin fan, I should point out.

[A]

And it turns out rum raisin isn't some arbitrary American abomination.

[B]

Yeah, it's not like pineapple on pizza. Basically, rum raisin ice cream has its origins in Italian history. The first rum raisin combo was actually

[A]

in Sicily where they soaked raisins in rum and then mixed that into vanilla gelato.

[B]

Bellissimo. The first reference in the United States, it was in an Oklahoma newspaper.

[A]

Rum raisins, a flavored ice cream entirely new in 1932.

[B]

Oh, and according to recent Instacart Data, the flavor rum raisin is way more popular than you realize.

[A]

It's number one in Florida and Georgia when it comes to ice cream. Just always doing the Florida thing. Always doing the rum.

[B]

Yetis, you're looking fantastic right now. Jack, you are glowing. And we're not even in hair and makeup yet, man.

[A]

So Yetis, if you didn't get tickets to tonight's show cause we did sell out. You could maybe meet us at the after party.

[B]

That's. That's right. We're doing our live show at the State Theater in Austin. But the after party is right down

[A]

the street at Maggie Mays. We'll be there around 10 o'. Clock. We'll hang out until Nick gets too tired and has to go to bed.

[B]

So besties, we will see you at the live show tonight. And the rest of you, see you at the afternoon.

[A]

And I get to tuck Nick into bed.

[B]

Celebrate the wins. Jack and I will see you live. And before we go, a happy birthday to legendary yeti Athena Morris from Alexandria, Virginia. She turned her mom into a bestie as well.

[A]

Happy birthday to Navdeet Sood, the golfer, Bears fan and psychiatrist to the stars in Grand Island, New England. Check that. Grand Island, Nebraska.

[B]

Didn't know there were islands in Nebraska,

[A]

but I'll take it, Jack.

[B]

Maureen Stier is a food scientist at Kraft Heinz who just engineered the year 26 her birthday doing Chiga in Chicago.

[A]

Happy 11th birthday to William Slade in Geneva, Illinois.

[B]

And Hudson Harris. Get some lobster for your ninth birthday up in.

[A]

And happy birthday to Derek Borelski in Denver, Colorado.

[B]

And Jenny Cordell over in Austin. Is coming to our live show tonight and celebrating the best birthday yet.

[A]

And finally, a big shout out to Ross Alexander and the Kerlaches for the epic Austin recommendation.

[B]

Thank you guys. Went to Suarete last night. Fantastic.

[A]

This is Jack. I own stock of Crocs. Nick and I both own stock of Spotify and Apple as well. Well as ETFs of the S&P 500.

[C]

At Vrbo, we understand that even the best of plans sometimes need a little support. So we plan for the plot twists. Every booking is automatically backed by our VRBO Care guarantee, giving you confidence from the very start. Whenever you need help, it's ready before your stay, through the moments in between and after your trip. Because a great trip starts with peace of mind and maybe a good playlist. But we've got the peace of mind part covered.