Jerome Powell Fights DOJ Criminal Investigation & Are Retailers Watching You Shop?

0:28The best B2B marketing gets wasted on the wrong people.

0:35good morning brew daily show i'm neil freiman and i'm toby howell today lawmakers and meme stock traders rally around jerome powell then alphabet just joined the four trillion dollar market cap club it's tuesday january 13th let's ride

0:55Good morning. It's time to start getting excited for the Winter Olympics, which begins in just a few weeks from Northern Italy. And for any skating fans out there, you're going to be in for a treat. On Sunday, Team USA announced one of the strongest American figure skating teams in history, anchored by four-time national champ Ilya Malinan, a.k.a. the Quad God, and the ice dance duo of Madison Chalk and Evan Bates. Toby, you think you can land a triple Saucow? Neil, yes, I think I can. Now, can I? No. I'm a little bit more concerned about a different ice sport, though, because the venue that houses the Olympic hockey rink is still unfinished.

1:34A reporter from The Athletic visited and described it as being in a state of construction chaos with workers literally walking around with hard hat and vests on. The refs at one point had to stop an exhibition match to fix a hole in the ice, And the scoreboard inside the arena was so small that during this test this past week, the players could not see how much time was left when they were playing. So in addition to the quad god, I hope Italian officials can land the trick of getting the dang hockey arena ready for the NHLers that are coming over. Yeah, it seems to be the big drama coming into the winter games is will this ice hockey arena be ready in time?

2:11The race is on until February. And now a word from our sponsor, Indeed. Toby, how do you feel growth? So much protein. And that's why our studio smells like that. Anyway, we'll be at the World Economic Forum's annual meeting in Davos next week. Indeed will be there too, giving business leaders the inside scoop on all things hiring. With real-time insight into the global labor market and more than 20 years of hiring expertise, Indeed is bringing a data-driven perspective to the conversation shaping the future of work. Those insights come together in reports from Indeed's hiring lab, like the newly released 2026 Jobs and Hiring Trends Report, which offers a forward-looking view of the U.S.

2:49labor market, what's shifting, what's stabilizing, and what business leaders need to prepare for in the year ahead. Explore Indeed's full report at indeed.com slash 2026hiringtrends. That's indeed.com slash 2026hiringtrends. I'm not sure what Jerome Powell expected when he posted a two-minute video Sunday night, but it's landed like an asteroid and the fallout is just beginning. politicians, analysts, and probably even your family group chat have all been weighing in after the central bank boss ripped into President Trump in a video two evenings ago. In that shocking clip, which now has more than 60 million views on X, Powell said that he's been criminally investigated by the DOJ over his comments on a Fed renovation project that's gone over budget.

3:34He claimed the construction story was a pretext for Trump, not a Powell fan, to weaponize the legal system against him over interest rate disagreements. Here's Jay. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. The video has set off a titanic clash over the future of Fed independence, what economists consider the bedrock of America's world-class financial markets. Many prominent Republicans rallied to Powell's side, criticizing the DOJ's probe as flimsy.

4:08as did those who previously had his job. Janet Yellen, Ben Bernanke and Alan Greenspan, the three living past Fed chairs, released a note condemning the DOJ for going after Powell. In a statement, they wrote, this is how monetary policy is made in emerging markets with weak institutions with highly negative consequences for inflation and the functioning of their economies more broadly. It is no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success. The statement cut across ideological lines. It was signed by former Treasury Secretary's from both parties, as well as a bipartisan group of former White House economists.

4:45Toby, what were some other reactions to this remarkable video? Well, we thought that when this video came out that we were going to do a story about how sell America was back. You know, the sell America trade where people are nervous about Fed independence and start rotating into other assets around the world, not American stocks. Stock futures were down. Everyone seemed a little nervous. And then we woke up and everything seemed hunky-dory. Stocks initially dipped, but then actually recovered their losses in the Dow closed at a record high. The S &P 500 closed at a record high. Despite this assault on Fed independence, I am surprised that there wasn't a bigger reaction.

5:24Why are things so normal right now? So I think maybe in the past, the Sell America trade made a lot of headlines back in the spring. But then that turned out to be more of a fad than a long-term realignment of capital. But it is showing that maybe there was a little bit of logic there to the original sell America trade that hedging your bets when it comes to America, given the events of this past few days, maybe was a smarter bet than people were expecting. Investors might be shrugging their shoulders because of the fact that they don't think this DOJ probe has legs because there's been a ton of pushback, especially from Republican lawmakers, on the Senate Banking Committee, which is going to approve the Trump's next Fed chair that's going to replace Powell in May.

6:09And they just don't believe that this pick will get through because there's been a lot of pushback to this probe. Lisa Murkowski, who's a senator from Alaska, who's on this bank committee, she's a Republican. She came out in support of Powell. She said, it's clear the administration's investigation is nothing more than attempt at coercion. If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns, which are not unusual, then Congress needs to investigate the Department of Justice. And she joined Senator Tillis, who came out on Monday morning and said, I'm not going to approve any Fed chair that Trump proposes to replace Powell until this investigation is wrapped up.

6:48Yeah, investors are probably just sitting here believing that any effort to undermine the Fed independence will actually fail because of some of these people who have come out and said, yeah, we're going to stymie any attempts to replace Powell. Also, Powell only has four months left as chair. And so if there's no immediate threat of removal, then maybe that's another reason why stocks kind of chilled out a little bit. Powell has also kind of hinted that he would stay on as a governor beyond his term, which, you know, is again, he is kind of seen as a buffer between the president and Fed independence.

7:23So there still is question marks, though, because Powell has taken a lot of heat. He has been kind of the shock absorber when it comes to Trump's attacks on the Fed. So there is some nervousness if Powell is gone. Is there going to still be that same sort of shock absorption that I described? So there is a little bit of wait and see right now. But right now, the stock market basically shrugged it off, which is kind of surprising, but not so surprising. It was pretty interesting what happened on the Internet yesterday. You saw a bunch of meme stock traders rally to Powell's defense. If you look at Wall Street bets, usually they're talking about random spots.

7:58Yesterday, they hailed Powell as a folk hero. The top voted comment yesterday was he is an American hero. We don't deserve him. that had thousands of upvotes and there were fan edits of Powell kind of, you know, treating him like an NBA or NFL star. So it's pretty interesting to see people rally to his side, even those who didn't who disagree with some of his policies. And a number of these Republican lawmakers said, look, I don't like what Powell has done in terms of he let, you know, there were certain decisions that he made at the beginning of covid that led to perhaps inflation going up to nine percent.

8:33He said, we disagree with his policies, but we also disagree with the DOJ's handling of this criminal investigation. Moving on, the third biggest company in the world is getting a little help from the second biggest company in the world to advance its AI ambitions. Apple announced yesterday that it's entering a multi-year deal with Google to make Siri suck a little less. The partnership will see Apple lean on Google's Gemini models to power certain Apple intelligence features, including a long-promise beefed-up Siri that is set to launch later this year. Apple has mostly stayed on the sidelines while its rivals have splashed billions of dollars out on developing their own models.

9:09But shareholders have begun to poke it with a stick to see if it even knew what the letters AI stood for. Meanwhile, Google is happy to lend a helping hand. After a rocky start, Alphabet and its Gemini models have emerged as a leader in the AI clubhouse. It officially entered the$4 trillion market cap club yesterday on the back of the Apple partnership, becoming one of only four companies to have ever crossed the threshold. This enemies to lovers deal is emblematic of the way that the AI winds have been blowing as of late, Apple outsourcing its core AI ambitions, and Google getting its credibility bolstered ever further.

9:47Webbus analysts agreed, Neil, saying, We believe this is an incremental positive to both Apple and Google as a major validation moment for Google and for Apple as a stepping stone to accelerate its AI strategy into 2026 and beyond. This is not the first time that these two frenemies have linked up and done business together. You might think they are rivals, which they are, but they've also had these partnerships dating back a few decades. We know that Google pays Apple$20 billion a year to have Chrome be the default search engine in Apple's Safari browser. That we know is probably the biggest partnership that they had, but if you go back to the 2007 iPhone announcement, who was on stage with Steve Jobs.

10:26It was Google's then CEO, Eric Schmidt, and he was touting the fact that there was a native Google Maps and YouTube integration into that original iPhone. So Google and Apple have a history of working together. I did not know that fun fact, actually. That is a good fun fact. What is this beefed up Siri, though, that Gemini is going to power? Remember, this was promised to us back in 2024. They said that when talking with Siri, you're going to get a little bit more context of the information on your device. It's going to have on-screen awareness. It's going to be able to take action in apps. We haven't seen any of that.

11:02Siri is just good for, you know, asking. It's just a clock. Yeah, it's a kitchen timer. It's a kitchen timer. It's a really good kitchen timer. And sometimes it's good at telling me the weather, but none of this, you know, contextual conversational ability that Apple has promised has come to fruition because Apple hasn't, you know, gone down the rabbit hole of investing heavily in their own foundational models. They kind of had a deal with OpenAI to help power some features within the Apple Intelligence Suite. Now they're pivoting over to Gemini to say, all right, if we can't figure it out, hopefully your model can power what we envision for Siri.

11:37And everything is coming up at Google right now. I mentioned that they cross$4 trillion market cap club, but also they have released a new chip with its own architecture that could hypothetically compete with NVIDIA on the hardware front. Gemini 3 has vaulted to the top of every leaderboard when it comes to performance of these foundational models. Even Warren Buffett, who has historically been extremely tech averse, bought$4.3 billion worth of Alphabet stock during its third quarter. So everything is coming up Alphabet right now. And I just want to emphasize that according to reporting from Bloomberg, this is going to be a temporary solution for Apple.

12:14They don't want to rely on Google's tech for the foreseeable future or in the long term. But in the foreseeable future, they are going to tap Google because they just can't do it themselves. All right, moving on. On Sunday night, entertainment moguls sip champagne with each other at the Golden Globes. By Monday morning, they were back to beefing over the industry's crown jewel. Yesterday, Paramount ramped up its pursuit of Warner Brothers Discovery with a two part attack. One, it said it would launch a proxy fight to take control of the board, nominating directors that would favor a Paramount acquisition.

12:45Second, it sued Warner to force it to be more transparent in how it values certain parts of its business, making shareholders more informed. It's been a minute since we talked about this bidding war, so here's a 30-second debrief. Since the summer of last year, Paramount has been desperately trying to acquire Warner Brothers Discovery, the Hollywood giant home to the Warner Brothers movie studio, the streaming service HBO Max, and cable networks like CNN and TNT. But in December, Netflix came in from the top rope with an offer that Warner agreed to, snubbing Paramount. Paramount has not taken no for an answer, launching a hostile bid that takes its offer directly to shareholders, which is ongoing.

13:20After being rejected even more times by the Warner board, Paramount is now attempting even more drastic options like taking Warner to court and mounting a boardroom coup. Toby, this is all becoming more stressful than Marty Supreme. All right. I pushed back against that assertion because that's the most stressful movie I've ever watched, maybe Uncut Gems. But one name that I want to throw out to people that you may not have heard of when talking about this merger is Versant, which is the media organization that Comcast actually spun off a few weeks ago. That is their cable business. So it is, why is that important?

13:55Basically, it is the cleanest public market proxy for what Warner Bros. cable business could be worth. And that is a big difference between the two bids currently that is facing at Warner Brothers Discovery. One, David Ellison's is for the entire package. It's for all of their entertainment assets, but also all of their cable assets. Netflix just wants their entertainment and streaming assets. They don't want their cable assets. So the difference between those two bids when it comes to the monetary value of them could come down to how much are those cable assets worth. We now have a proxy for what those cable assets are worth.

14:33And Versant has not done very well on the public markets so far. It's worth about$4 billion. It has kind of stumbled in its first trading days out there. It's fallen 20%. So if shareholders believe the cable networks are worth less, then they maybe should tender the offer to Paramount. If they believe the cable networks are worth more, then they should stick with the Netflix deal. And Warner Brothers Discovery is looking at Paramount and saying, why are you so obsessed with me? They launched bid after bid and they've rejected it every single time. And the answer is that Warner Brothers Discovery is a very successful company at producing movies and TV shows.

15:09It is a huge reward for either Netflix or Paramount, whoever gets it. Just go back to the Golden Globes Sunday night. It scored nine wins at the Golden Globes, the most of any company, including for the movies One Battle After Another and Sinners. It also, HBO, has the TV shows The Pit and Hacks, which also won awards. So, Warner Brothers Discovery is a very valuable asset that both these companies are trying to get. Netflix is certainly in the lead right now. What Warner Brothers Discovery's board has said is, Paramount, we'll consider your offer against Netflix's. Right now, we don't think it's worthy of our consideration because you just don't keep raising the price.

15:46You try all these different maneuvers, like trying a proxy battle or suing us. But what you really need to do is what will really get our attention is raise the price of your bid. It's still sitting at$30 a share. Maybe if David Ellison, the CEO of Paramount, goes up to 31, 32, 33. It might be more attractive, but right now they're still sticking with Netflix. All right, we're gonna take a quick break and come back with Toby's Trends. Pretty much everybody is using AI agents these days to automate just about everything. I even made one to respond to all your emails and texts. That explains the deleted files, unauthorized changes and nonsense messages I keep getting.

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17:41Paid for by public investing. Full disclosures in podcast description. Imagine you wake up one day and a huge solar flare adds an extra hour to each day. Or maybe your team will double in size overnight. Or there'll be a global paperclip shortage. The truth is, no one knows what's around the corner. Anything can change the world of work, and those changes can be due to factors that are internal, external, or global. From HR to payroll and benefits, ADP designs forward-thinking solutions to take on the next anything. That means businesses can prepare to tackle whatever transforms the world of work next.

18:17Because no matter how determined you are to thrive in a constantly changing landscape, it's impossible to prepare for everything on your own. ADP's HR solutions help businesses of all size manage recruiting, onboarding, payroll, and more so you can stay focused on the future. Learn more at ADP.com. That's ADP.com. Your grocery store is watching you. Not because the manager is concerned you've bought dried mangoes for the fifth time this week. It's literally watching you using facial recognition technology, and it's a trend I want to talk about on today's edition of Toby's Trends. Wegmans, the popular grocery chain, is in the middle of a media firestorm after it botched a reveal of some of the tech it uses in its stores.

19:02It disclosed via in-store signage that it uses biometric surveillance in New York City locations, a fact that was alarming to say the least for its patrons, who were previously unaware any scanning was occurring while they were browsing for rotisserie chickens. While this is a story about New York City, that's mainly because it's one of the only places in the country that requires businesses to disclose if they are collecting biometrics on customers. But this iceberg lettuce goes deeper than just Wegmans. Other big U.S. retailers like Walmart, Kroger, and Home Depot all employ similar technology, including Rite Aid, who in 2023 agreed to a five-year ban from using facial recognition technology after it was found to be falsely accusing customers of crimes, which is what retailers say they use the technology for.

19:47Wegmans released a statement saying that cameras are in operation in a small fraction of our stores located in communities that exhibit an elevated risk, and they are looking for people previously flagged for misconduct. But Neil, we're talking about privacy concerns in New York City and Wegmans in this story, but it could easily apply to a different retailer in a different city too. Yeah, people, if you don't live in New York City or one of the few other cities that have particular laws on the books about facial recognition, You probably don't even know this exists. There's a 2021 city law that's that requires businesses that collect biometric data to post signs announcing the practice.

20:21And people started seeing these signs at Wegmans and the paper Gotham has started calling them up and started asking Wegmans what was going on here. And they did botch the response. They issued two different statements, one on Monday and then a couple of the and then another one a couple of days later trying to explain themselves. but privacy advocates are very much against this. They say if there is a hack or a breach of biometric data, that is a much bigger issue than something like a credit card or another thing that might be hacked because you can swap out your credit card. You can get a new password or something like that, but you can't change your face.

20:54And when your face is out there, that's the only one you got. Let me explain to you the, the beauties and horrors of plastic surgery. You know, there is something you can do a little Botox here and there, But I think what you're seeing too is the public's tolerance to facial recognition varies by location a lot because facial recognition, whether you like it or not, is very much a part of our society these days. It is very common in places like airports and places like stadiums, and that the public is okay with. You understand the reason why you might need facial recognition in a place like the airport.

21:26There is a much lower tolerance in a place like a grocery store in retail locations in general, which is why we every once in a while see a firestorm appear around chains because you don't think you're being watched while you're shopping for your groceries. Like that is not a place where facial recognition technology is expected to be. It reminds me of our conversations around dynamic pricing and surge pricing, where you kind of have accepted it in terms of airline tickets or Ubers and Lyft. But when it comes to something like a fast food chain changing the changing the prices every single second or minute, then well, as Wendy's tried to do.

22:03And then there was huge backlash to that. The public does does seem to be outraged by these particular technologies that are accepted in one industry getting ported over into the other. This is also not the first time that we're talking about facial recognition in New York City as well. Back in 2023, remember this, Madison Square Garden CEO James Dolan uses facial recognition to identify attorneys for law firms that have active litigation against him. And he actually booted two from sports games at Madison Square Garden using facial recognition. So if you're walking around New York City, just know that this law exists and look at the storefront to see whether they are facially recognitioning you as you walk in.

22:42Or don't look at the storefront. Keep your head down and your eyes closed or something like that. Protect your face. All right, let's sprint to the finish with some final headlines. President Trump's plan to have American companies cash in on Venezuela's energy is running into an oil patch. ExxonMobil is not in the president's good graces after its CEO Darren Woods called Venezuela, quote, uninvestable. Speaking at a meeting on Friday with other oil executives at the White House, Woods said, if we look at the legal and commercial constructs, frameworks in place today in Venezuela, today it's uninvestable, reminding everyone that they've been kicked out of the country twice.

23:16Trump responded on Sunday saying, I don't like Exxon's response. I'd probably be inclined to keep Exxon out. They're playing too cute. The president will have to use the sum of his persuasion powers to compel oil giants to even consider going back to Venezuela. Analysts say an investment of$100 billion over a decade is necessary to return the country's oil fields back to peak output. Yeah, this is a game of double chicken because on the one hand, Trump thinks that yes, these oil execs should want to come back into Venezuela because there's all this oil that they can pump. But then on the other hand, oil execs are, I don't know if I trust you.

23:52I don't know if it's a stable enough place for me to invest all this time and all this money into. So maybe Exxon is playing 3D chess here, 4D chess here and saying, trying to rile up Trump and say, have him literally say, you can't come drill there, which is what they wanted to begin with. They didn't want to mess with it in general. So there's a lot of kind of subtext to what's going on right now with the Venezuela situation and the oil companies that are supposed to be eager to go back in a drill there. Moving on, Liv Golf started to challenge the PGA Tour and backed by the Saudi Sovereign Wealth Fund, just lost one of its biggest names to their chief rival.