Student Debt Relief for 30M People? & Fiber is Bringing Sexy Back

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0:29Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Biden's launching another attempt to wipe out student debt. Can this plan get through the courts? Then Jamie Dimon dropped his annual letter yesterday, and the CEO of the biggest bank in America has AI and geopolitics on his mind. It's Monday, April 9th. Let's ride.

0:55Well, that was cool. Yesterday, everyone in North America came together to watch the total solar eclipse. Toby, you've had time to process the event. Give us your review. First of all, my eyeballs hurt, and I still have a bit of a headache, I think, because turns out looking at the sun, even if you're using the protective glasses like I was, it kind of makes your eyeballs hurt. So that was my first takeaway. My second takeaway is the coolest part of the whole experience, because we weren't in the path of totality, was just being outside of New York City with everyone else around that time. I was shocked about how many people left their offices, came outside, found a good vantage point.

1:33It was just staring up in the sky. So the camaraderie of the situation is what stuck with me rather than the actual celestial. Yeah, it did make me jealous of the people in the path of totality. And as you mentioned earlier yesterday, you were like, it's a complete night and day, literally, if you're in the path of totality. And if you're not, all these pictures of people in the path of totality, the sky completely plunging into darkness. And here in New York, we had 90%. It was kind of cool, but you're right. The best part about it was being with everyone else. Again, this is not happening in the United States till 2044.

2:07And even then, it's only going to be visible over North Dakota and Montana. The next time we're going to have a wider swath of totality will be in 2045. So start making your Airbnb plans right now. Get those glasses. Whatever you learn from this event, definitely take that in mind for 2045. It's going to be the West Coast and the South this time. This was more Midwest, Northeast, but it's going to go over California, Nevada, Utah, Colorado, Kansas, Oklahoma, Arkansas, Mississippi, Alabama, and Florida. So make your plans now. Make them now. Now let's hear a word from our friends over at Robin Hood.

2:44Like the shark and jaws tax day is lurking just beyond the horizon. But with Robin Hood retirement, it doesn't have to be this big, scary, bad thing. Anybody filing on tax day will have until this upcoming Monday to make your maximum prior year contribution to your Robinhood IRA. Tax time always makes me wish for a bigger boat like police chief Martin Brody was asking for. Jaws scared me so much growing up. I can't believe I'm talking about it in a Robinhood ad right now. So let's get into the nitty gritty numbers so I can stop thinking about it. The maximum annual contribution limit for 2023 is$6 ,500 or$7 ,500 if you're age 50 or older.

3:20So if you plan on filing Monday, your deadline to contribute wasn't at the end of the year, like many assume, but on the most memorable day of the year, April 15th. Dun-na. Dun-na. Just kidding. Tax day doesn't have to be a scary thing. Learn more about the free Robinhood app in the App Store or Google Play Store. Disclosers, terms apply to the match and limitations apply to IRAs. The annual tax filing deadline is typically April 15th, but may vary. All investing involves risk and returns are not guaranteed. Visit Robinhood.com slash retirement for more information. Robinhood Financial LLC member SIPC.

3:56This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. Michael Scott once said that Wayne Gretzky once said, you miss 100 % of the shots you don't take. And when it comes to student loan forgiveness, Joe Biden is taking that advice to heart.

4:33Yesterday, the Biden administration proposed a major initiative that would slash student debt for nearly 30 million Americans. It's a second big attempt to wipe out student debt after his previous, more ambitious plan was blocked by the Supreme Court last year. After that loss, Biden's team went back to the locker room and drew up a new student loan play that it hopes will have firmer legal standing. The centerpiece of this proposal is to cancel debt for borrowers whose student debt has grown larger than their initial principal because of interest that has accrued. Still, Republican states are already saying it's a matter of when, not if.

5:08They sue to block it from going into effect, arguing that the program is unfair, too costly and would increase inflation. Toby, it's not exactly a mystery what's going on here. Biden wants to shore up support from young Democrats ahead of the election in November, and student loan debt is one of their top issues. Right, obviously student loan relief has been a cornerstone of Biden's economic plan. In the summer of 2022, he put together that original plan to wipe out$400 billion in student debt for 43 million borrowers. That was blocked by the Supreme Court, which said he was overstepping his authority.

5:41The original plan relied on what was called the HEROES Act, which allowed the government to waive student debt during a national emergency like COVID. That was always a little bit of a long shot. But as you said, this new plan is a little different. Its education department's been developing it. It's trying to use the Higher Education Act, and it's targeting these really five distinct groups of borrowers, a lot of older borrowers, a lot who've accrued interest over time, people who have experienced economic hardship. So he went back to the drawing board, as you said, and thinks he's got a much more legally sound plan.

6:15If that's actually the case, we'll see. Yeah, legal experts are saying this is more defensible, especially for borrowers who haven't applied to existing loan programs. This makes them automatically eligible for student loan relief. And legal experts say whatever the legality of the other parts of the plan, it should be kosher to allow these people to automatically be eligible for plans, even if they haven't applied. College right now, the price tag on college is very much in the news. It's just been getting a lot more expensive. There's been a few articles that have come out saying that a lot of these universities have crossed that$90 ,000 a year threshold.

6:52Most of the, all of the Ivies have passed that as well as others like NYU, Boston, Tufts, Wellesley. They're all on the 90K plus list. Vanderbilt is almost$100 ,000,$98 ,000 a year to go to Vanderbilt right now. So it just clearly is one of those things that's top of mind for a lot of Americans. Totally. I mean, all these students are getting their letters of acceptance right now. And with letters of acceptance, come the sticker price of what you're going to pay for college, for tuition, room and board, books, all in. And we're nearing that 100 ,000 mark. College private, the cost of private college has increased 40 percent adjusted for inflation over the last 20 years.

7:31And when you're not adjusting for inflation, it's increased$132 ,000, of course. So the cost of college is definitely top of mind. The pushback on any student debt cancellation plans is that it's going to increase inflation. It's going to be way too costly. I mean, Biden, the cost of Biden's previous plan was expected to be upwards of$400 billion. That's going to, I mean, according to critics, that's going to increase inflation. Plus, it's unfair for people who do pay off their student loans or don't go to college, leaving the taxpayers with a bill for people who took on debt in college. So we'll see what happens.

8:09Biden probably wants this to happen before November. But with all the legal challenges incoming, it seems unlikely that it'll happen by the fall. It's annual letter season. And after hearing from BlackRock CEO Larry Fink and Warren Buffett earlier this year, we got treated to J.P. Morgan CEO Jamie Dimon's thoughts yesterday. Top of mind for the leader of the biggest bank in America, AI, of course. Diamond did not hold back when talking about the effects of AI on society at large, saying he thinks the impact will be possibly as transformational as the printing press, the steam engine, electricity, computing, and the internet.

8:43He put AI in the leadoff spot of his widely read letter, but also mentioned his ongoing concerns about the state of geopolitics, saying we're entering our riskiest era since World War II. He also remains concerned about the effects of inflationary pressure on the economy. But his focus was on AI, was the headline here. Neil, was it surprising to see one of the biggest voices in banking spill so much ink on artificial intelligence? No, I don't think so. I mean, it is surprising because in our greatest invention of all time bracket, AI barely advanced to the Elite Eight. And compared to the printing press, didn't even make the final four.

9:18So I don't know if Diamond's comparisons are correct here. But yes, I think AI fever is sweeping through not just tech, but also Wall Street. Diamond said that JP Morgan has 400 possible use cases for AI across its business. So that was one of his major points is that we're all in on AI and everyone should be paying attention to this as a transformational technology. He also essentially thinks that AI will remake pretty much his bank's entire workforce. He said that AI has the potential to augment virtually every job as well as impact our workforce composition. It may reduce certain job categories or roles, but it may create others as well.

9:57Right now, JPMorgan has more than 2 ,000 AI and machine learning experts, which I don't know. It felt like a lot at first, but then you consider the fact that it's just a fraction of its 300 ,000 plus employees. So this bank is clearly investing in this technology as well. One of the big things that I think AI is going to come into play with is that the amount of daily attempts that hackers make to infiltrate the big banks like JP Morgan is just staggering. He called out all the escalating cyber threats that banks are facing right now. And he said that JP Morgan invests$15 billion a year, employs 62 ,000 technologists or whatever you want to call them to help fortify its defense against cyber attacks.

10:39So I do think AI is going to play a role in both leaving it more exposed and also helping it defend against these cyber threats. Yeah, let's talk about Jamie Dimon as a politician here, because this letter was not just focused on his banks matters. He kind of waxed poetic about the economy and politics writ large. And Jamie Dimon's been at J.B. Morgan for more than 18 years. He's the longest tenured big bank CEO. And over time, he's taken this role of statesman and he's trying to influence policy in many ways. One of the things he focused on was whether it was the U.S. economy, how we're going to do.

11:15And in 2022, he sounded this very pessimistic note that made a lot of waves. He said an economic hurricane is coming when the Fed was raising interest rates and we had soaring inflation. That did not come to pass. But Diamond's still on his pessimistic train. He said that the markets are pricing in a 70 % to 80 % chance of a soft landing, which is bringing inflation back without inducing recession. And he says he believes the odds are a lot lower than that. As you mentioned, he warned of all of the geopolitical crises going on around the world. And he was just kind of a Debbie Downer here. No, he really was.

11:50He brought the receipts and said, I know this is what the markets are saying, but I think those odds are far too optimistic. Come on, Jamie. Look around a little bit. Smile a little bit. We just had a global celestial event. There's good stuff happening. There's good stuff happening. Toby and I are always optimists. Also, I mean, JP Morgan is coming off an amazing year. They recorded the highest annual profit in the history of American banking last year, bringing in$50 billion in profits, which is just astounding. Now, JP Morgan is thinking about what happens after Diamond. They're planning succession plans because he's been there for almost two decades now.

12:25Okay, Elon Musk is beefing with Brazil's Supreme Court in an escalating battle over free speech in the largest country in South America. Here's what's going on. Brazil's top justice, a guy named Demarest, has been on a mission to stamp out hate speech and false information on social media. And he recently ordered X to remove several accounts that were in violation. X initially complied, but over the weekend, Elon had a change of opinion and said he was allowing those accounts back on the platform, consequences be damned. And those consequences, according to Elon, is X losing all of its revenue in Brazil, which is its fourth largest market in the world.

13:05Brazil's court was pretty angry that a foreign billionaire was defying its rules. So in response, it opened an investigation into Musk into possible obstruction of justice and added him to an ongoing investigation into people spreading fake news. This spat has become a major political flashpoint in Brazil. The right is cheering Elon on, calling him their champion against an overselless liberal judge. And the left, which is in power right now, called Musk's defiance an attack on Brazilian sovereignty. But here we are once again with Elon at the center of an international controversy. Right, this judge in Brazil really does not like social media companies.

13:42In March of 2022, He ordered the shutdown of the secure messaging app Telegram, which we've spoken about on this show before on the grounds that the platform was kind of doing the same thing that Twitter's doing right now or X is doing right now, which was ignoring requests from Brazilian authorities to look into and block certain profiles on the platform. Eventually, Telegram did acquiesce and rolled back what it was doing. But right now, it looks like Elon wants to stand firm. He wants to make an ideological point here because Elon considers himself this staunch defender of free speech. Now, whether his track record actually supports that is up for debate because there's definitely been some gray areas when it comes to his free speech above all approach.

14:23Yeah, let's let's talk about that maybe inconsistent approach, because before Turkey's elections a couple of years ago, Turkey asked Twitter X to take down some accounts or restrict some of some content. And Musk did. And a lot of his free speech defenders attacked him for that. But he said consistently in multiple interviews with Don Lemon recently and also on the BBC last year that he would comply with a local law if, you know, if it came down to Twitter employees going to jail for violating rules or this or this principle of free speech. He said, we're going to take it down. We're good. We have a responsibility to adhere to the local laws.

14:59So you see this is a little inconsistent here where he's adhering to certain rules that were made in Turkey certain years ago ahead of the election. But in Brazil, he's sort of standing up because I don't want to assume anything, but this is a very liberal judge here. And he clearly does not like this person. And I do think that he wouldn't do this without some sort of legal recourse. So they do feel like maybe the judge is overstepping his boundaries a little bit. So you're right, though, that there is definitely a politically charged undertones to this. But I do think X thinks it has some legal standing to stand.

15:33And this issue is especially sensitive in Brazil because they had their own January 6th thing in 2003 when supporters. 2023, 2023. I'm sorry. When supporters of Bolsonaro stormed government buildings in Brasilia, the capital. So the leftist government now really wants to crack down on social media, fake fake news, things like that. Up next, fiber is cool again, and be wary of the tax advice you hear on TikTok. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks.

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17:06When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Are you getting enough fiber in your diet? Probably not, and a new crop of trendy companies are looking to change that, which is what I'm talking about for today's edition of Toby's Trends, where I, an overactive Gen Zer, educate my wise millennial co-host, Neil, about a recent trend I've had my eye on.

17:51Today's trend is all about the flood of new, sexy, millennial-friendly fiber brands hitting the market right now, according to the Wall Street Journal. You can get drink mixes rich with fibrous capsules in bright pink bottles and supplements that hardly resemble the more modest Metamucil, Benefiber, and Fiber One your grandparents may have choked down. There is clearly a demand for these yassified fiber companies. A lot of Americans don't get enough fiber in their diets. which helps out with everything from mitigating blood sugar spikes to improving overall digestive health. Gut health has also become a decidedly more trendy trend these days as ultra processed foods have become a boogeyman in health conscious circles.

18:33Between 2019 and 2023, there was a 14 % increase in launches of fiber centric vitamin, mineral, or supplements. And even legacy brands like 90 year old P &G owned Metamucil have seen a big boost. sales of its products have doubled in the last five years. Neil, there has been a big vibe shift when it comes to fiber and plenty of companies are capitalizing. Yeah, I mean, you're making me hungry for lentils right now. No, this seems like a gold rush right now with demand for fiber, fiber supplements really skyrocketing as people paying attention to their gut health. Seems like you couldn't go a day during COVID times without people talking about how their gut health was doing, but it seems like these new companies are charging quite a pretty penny.

19:19There's a startup called Sakara Life that charges$420 for five days of high fiber meals. There's a new brand called Yay Day that is selling a$60 per month fiber supplement. So it seems a bit like the Wild West as people clamor for more fiber to help with their, you know what? I think the biggest shift here is in branding. Clearly wellness brands are doing their best to make taking a supplement feel like an act of self-care. That's a big buzzword right now. Fiber products have these colorful, these millennial friendly packaging. They're flooding the market and it definitely caters to younger fit people who want more aspirational products that fit into their perceived lifestyle.

20:05But the one thing that you cannot overlook is the fact that a lot of people do not get enough fiber. The average American gets just 16 grams per day. That's about half of what we should be eating. So it does feel like this white space right now. And even though in the past, I think that's why there is such white spaces because fiber one, these fiber brands that your grandparents, your parents, fiber brands, they were not sexy in any way. So slapping a little branding on it can make people a lot more receptive to this very important nutrient. Meanwhile, doctors in this Wall Street Journal were quote, our article were quoted as saying that honestly, you may not need a supplement if you're just having a high fiber diet and you're eating things like fruits, veggies, whole grains, legumes, and nuts.

20:47And if you just focus on that, you probably don't need these supplements. But I don't know if people are going to take that advice. Speaking of advice, tax season is wrapping up next week and your local accountant can't wait for it to be over, not only because they'll have their life back, but also because they can stop correcting all the bad tax advice people are getting from TikTok. TikTok and Instagram too have been bursting with tax advice over the past few months with real CPAs and amateur CPAs offering hacks for people to maximize their returns. Thing is, a lot of this information is flat out wrong or at best misleading.

21:21And by these tax influencers own admission, it's optimized for virality over accuracy. Here's one example. Many TikTok tax pros talk about Section 179, which lets you write off a vehicle weighing over 6 ,000 pounds in its first year. So they suggest you go out and buy a massive truck. What they don't tell you is that you have to use this truck at least half the time for business, and you can only deduct the business use percentage of your purchase. Not to mention, you just paid$70 ,000 for a truck. Toby, bad tax advice is nothing new, but it definitely has reached far more people than it used to thanks to social media.

21:56I think it's actually similar to the Fiverr conversation we were just having because this advice is packaged so convincingly. If you see these videos, even if you're level-headed, you can't help but listen to what they're saying. Think, oh, is this true? Am I missing out on some of these great tax hacks? And you're right. They are engineered for virality, not for the nuance that comes with the U.S. tax code, of which there is a lot of nuance. There was another instance where a tax lawyer visited a client's house recently. he was greeted by this little cute white dog and the owner asked him, hey, can I write this dog off because he is providing security?

22:33So it's those type of things where you hear one thing where, yes, maybe if you are running a ranch and you're actually using a dog to protect your herd or something, then yes, that is a business expense. You could write it off. But if you own just a cute little Bernadou or something like that, that is probably not going to be a tax write-off. Another popular tax hack is to hire your children and then write off their housing expenses. But they actually have to be gainfully employed. You can't just say that your four year old or five year old is working for you. They actually have to have a job and then only you can do that.

23:06Obviously, that is not mentioned in these videos, which are, you know, very convincing. There's no room for debate because they're just talking to you. That's the way TikTok is. That's the way TikTok is organized. Here's some rule of thumbs that we learned over the course of this article. researching this particular story. If it was that easy to reduce your taxable income to nothing, everyone would be doing it. So if it's too good to be true, it's probably too good to be true. Another rule of thumb is if it's suitable for everyday use, it's not a write-off. So keep those in mind. But is what these TikTok influencers doing illegal?

23:42Is it a crime? That's the question. They've talked to the IRS and they've said, eh, not really. A lot of it is because they get around it by saying it's financial education, not financial advice. And they are pretty precise in their wording where they say, take a look at our In My Opinion, which allows them to skirt some of that legal gray area that could leave them open to some legal action. Treasury Secretary Janet Yellen is something of an internet darling these days, but not just because she's got a sharp wit and she's very good at her job. No, ever since she accidentally ate a psychedelic mushroom in Beijing last July, People are kind of obsessed with the food she eats while abroad.