Good morning, Bertaylee Show, I'm Neil Freeman. And I'm Toby Howell. Today, why the US made the shocking decision to defend the yen. Then, move over, Apparel Spritzes a new drink of the summer has emerged. It's Tuesday, August 4th. Let's ride. [MUSIC PLAYING] Anyone solve the password yet? Yesterday, we rolled out a puzzle that asked you to guess a word from a series of clues. Each day this week, we'll share one new clue to get you closer to the password, and you can submit an answer once you have that aha moment. The earlier you submit in the week, the more raffle tickets you get to win the prize of MBD swag, and you can only submit an answer once. The first clue yesterday was this password has to do with one of the five senses. Probably not enough to go off of, though. That didn't stop some of you from yolowing some guesses. Maybe today's clue will help you get on the right track. The password begins with a chemical symbol. So far, the password has to do with one of the five senses, and it begins with a chemical symbol. Toby, I see the gears turning in your brain. OK, so we got taste, touch, smell, hearing, and seeing. Those are the five senses. And how many chemical symbols do I know? Helium, hydrogen. Hearing starts with HE, which is the chemical symbol for helium. But that seems to on the nose. Feeling starts with FE, which is a chemical symbol for iron. Again, hard to know. And as I'm saying this, I just remembered oxygen and carbon exists. So that narrows it down to anything that starts with O or C. Old factory seems like a good guess. All right, the gears are turning too fast right now. Maybe I did just nail it there, but I think I'm going to wait until I get more clues before I lock in my answer. So finally, answer Neil, I'm holding out for more hints. All right, so how can people submit their answer? Go to the link in the show description. Remember, you only get one guess, but I do admire brave souls who guessed early. So go for it if you're feeling confident. I think we got a couple of answers yesterday that were smells like team spirit, team spirit, multiple ones like that, which I appreciate, but just to emphasize, this is just one word, not a phrase. OK, the US and Japan just made it more expensive for you to travel to Tokyo. The two countries linked up to buy Japanese yen and stabilize the flag and currency in what Bloomberg called one of the most dramatic interventions in global currency markets in decades. President Trump framed the surprise move as supporting a key ally that's going through some market turbulence, telling reporters, Japan's been very good to us with the exception of course of Pearl Harbor. The yen has been in a deep slump over the past year, falling at 1.2, 164 against the dollar, its lowest level in four decades. A number of forces have contributed to the decline, including Japan's super low interest rates, heavy government spending and high debt levels. It's alarm Japanese policymakers because a falling currency makes imports more expensive and boost inflation, lowering people's living standards, especially now that energy has gone so expensive from the war in Iran. Still, seems like a Japan problem, right? Why is America stepping in? Because just to put a point on it, this type of thing is extremely rare. Typically, the US only gets involved in other countries' currencies if things get to impending crisis levels, which they aren't here. The answer is, we don't actually know the motivations. Wall Street is full of gossip as to why the US deemed it necessary to scoop up yen. Toby, what's the T? One of the biggest reasons is that the US is always looking out for the US and they want to protect the bond market here. So Japan is one of the largest foreign holders of US treasuries. If Japan tried to boost up the yen by selling treasuries, treasury prices would fall and the US bond yields would go up because the prices are inversely correlated. Trump does not want that. So the Fed has this thing called the foreign international monetary authorities, FEMA, repo, and that allows Japanese authorities to borrow dollars against treasury securities that they own without actually selling the treasuries themselves. So this helps the yen get strengthened when it comes to global currency markets without the Japanese government being forced to sell US treasuries. So that's one idea. The other thing too is that the carry trade, you can't talk about the yen without talking about the carry trade. This is a very popular trade amongst hedge funds globally. The yen is one of the best funding currencies. And what that means is that you can borrow yen very cheaply because interslates have been low for so long and invest it in higher yielding assets elsewhere. And if all of a sudden you mess with the carry trade, that is part of the plumbing of the global financial system. If you mess with that, then you run the risk of contagion spreading and global financial markets panicking. So maybe the idea was we don't want to we don't want to screw with something that is just so important, like the carry trade. And so preventing a carry trade unwind is another reason. There are more reasons, but I'll pause there because those are two of the kind of the gossip that you've been hearing on lost. And I can't wait to whip out the carry trade at happy hour tonight and teach everyone. You can't look beyond who is spearheading this too because I think that is a key part of this story. The leader for the United States in making this deal happen is Treasury Secretary Scott Besen. And if you don't know Besen's background, it's literally as a currency trader. He made his name betting on currencies, specifically against currencies, working for George Saurz's investment firm. He made a fortune betting against the pound in 1982 and then made basically almost over one billion dollars in 2013 in the matter of months by betting against the yen. So maybe he just he's married to the game and he just wanted to get that kick again. So Besen has been the spearheading figure in the United States on making this deal happen. And he kind of telegraphed it in a very funny move back on Friday. He was at this cabinet meeting and he had this sheet of paper and it was photograph that it said to do list and then there was only one item and the that item was said by Japanese yen for about five to ten billion dollars. So we knew this was coming because he just had it read now on a piece of paper. The other thing too is that again, America is always looking out for America in Japan has pledged roughly $550 billion of investment into the US under a trade agreement signed last year. That was one of Trump's biggest trade deals that he was printing around saying like look at this foreign country is investing so much on US soil. But if the yen collapses as it has been doing, it makes overseas investment for Japanese firms a lot more expensive. And so again, it's killing two birds with one stone. If you can prop up the yen, then all of a sudden those investments remain attractive to Japanese firms. So if the dollar is too strong compared to the yen to it goes vice versa, it makes American exports more expensive overseas as well. So basically there's a lot of birds and a lot of stones at play here and hopefully it works out well for both the parties involved. The problem is people don't think it will and that's I think what was most perplexing to Wall Street to investors. They're saying, Scott, you know better. You know that FX interventions like this don't necessarily work over the long term. So we did see a pretty dramatic move in the yen yesterday after this intervention went from $164 against a dollar which was the lowest level since 1986 to about 157 but unless Japan fixes those underlying economic dynamics with huge debt levels with government spending with all those forces that cause the yen to depreciate against a dollar in the first place, then this is going to be temporary not solve the longstanding issues. So what it will do and I mentioned this at first is at least temporarily make it a little more expensive for you, Toby, and maybe to go on your honeymoon to Tokyo because right now it is, you know, for the past couple of years it has been very cheap for Americans to travel to Japan and spend money there because of this currency difference with the stronger yen it'll get a little more expensive. Let's move on. One of the biggest farm emerges of all time has been proposed and one set of shareholders loves it and the other paints it. The Zeneca with a market cap of around $260 billion is in merger talks with Bristol Myer Squibb worth 135 billion. The report that the two were chatting sent each stock in totally different directions with AstraZeneca falling 7% while BMS jumped nearly 5% on the news. Should it go through, not only would it be one of the biggest mergers of all time but it would also create the largest pharmaceutical company by revenue in the world. But AstraZeneca shareholders are looking at the deal like it's a moldy piece of cheese and diary of a wimpy kid. They see Bristol Myer Squibb as sort of a deadbeat boyfriend. Sure, it's got some redeeming characteristics like strong footprints in neuroscience, self-therapy, and cancer drugs as well as a larger US footprint than AZ. But it also has major red flags, namely key patents it owns are expiring soon. Endless are confused as to why AstraZeneca who has been one of the far most strongest performers over the last decade and a half sees in BMS. Given the strength of AZ's growth in innovation profile, we are a bit perplexed, Jeffrey Analysts said of the potential merger. Investors worried that the merger would slow innovation, lead to layoffs and bring unwanted antitrust scrutiny, arguing that AstraZeneca would be better off just staying in its single era. Neil, it's not often you get a merger of this size that is that this hated by industry watchers. Bristol Myer Squibb is like the two headed monster from Sesame Street and it has two drugs that bring in 50% of its revenue. One is the blood thinner, Ella Quiss and the other is the cancer drug, up Divo.
And so together they account for half of BMS's sales. The problem is that in the coming years, just like most drugs across the pharmaceutical spectrum, this is the big problem that you have to look out for, is you lose your patent protection, then other folks can make generics, and then you lose so many profits from having that protection that you have had for many years for developing the drug. Investors don't think that BMS has a pipeline that is worthy of AstraZeneca spending all this money to buy, to scoop up a BMS, because they just said, you don't need it. You have a very strong pipeline. You have one of the best pipelines in all of Pharma. BMS is losing the patent protection for two of its blockbuster drugs, so we don't quite understand this. And then you look at the forward projections, AZ is expected to grow earnings per share at 10% over the next five years. BMS earning per share is expected to grow, not even expected to grow. It's expected to shrink throughout the next decade. So that's one of the reasons why investors Wall Street are a little confused about this. So why did AstraZeneca even want this in the first place? The big thing here is a bigger US present. Right now, 42% of AstraZeneca sales in the first half of 2026 came from the US. 69% of Bristol Myers squibs revenue came from the US. So ostensibly, there's a little bit of a gap there in that they can close the gap there. The US is the largest pharma market in the world. But again, a lot of people are saying, that is not enough of a gap. You already are making almost half of your revenue from the US. I don't understand this geographical expansion argument. It's worked potentially in mergers in the pharma industry in the past, but that was when there was a Japanese firm that wanted to make inroads into the US that had no sales there. So that is confusing a lot of people because you also just invite so much anti-trust risk because when you combine these two very large oncology businesses, that is a warning sign for regulators as well. And also, the innovation piece is where a lot of people are scratching their heads because when you combine these giant research organizations, that takes a lot of time. And during that time, your development timelines are going too slow because you just can't be as nimble because you're doing a lot of administrative work of putting these two giant pharma organizations together. So yeah, lots of head scratching decisions here in the market did not like it. Still, it would be unwise to doubt Pasco Soryo, who is the CEO of AstraZeneca. And he has been probably, he's been a stud out of the past decade and a half. He has taken AstraZeneca from a struggling pharmaceutical company that was getting that Pfizer wanted to take over in 2014 to new heights where it's in the position to buy this American rival and it's become just an absolute cancer powerhouse. Everyone looked at him a little, we are back in 2014 when Pfizer wanted to take it over for 70 billion euros. And he was like, nah, we got this. And he's been just an absolute rock star in the pharmaceutical space. So maybe he's cooking up something that analysts don't realize and BMS is a prize that Wall Street is just sort of overlooking at this point. But yes, it is a perplexing deal. That's why you saw some of those pretty dramatic moves in the stock market yesterday about AstraZeneca shareholders essentially rejecting this concept. Moving on, firefighters are battling blazes in eastern Washington state that have forced the evacuation of 65,000 people in the Spokane area and destroyed 700 structures. They're among the 99 active large fires burning across the US and what is a busy wildfire season above the 10-year average in terms of acres burned and number of fires. On top of that, major cities across the United States have been periodically blanketed and smoked this summer from fires raging in Canada. So your first thought is probably, how can I bet on that? Prediction markets are coming under pressure for wildfire trading with at least one new app dedicated specifically to trading on fires. Wildfire spelled like wildfire, but with wise instead of us, recently launched as a play money only platform that encourages you to wager fake cash on the scope of California fires. They're tagline, you can't predict fire, but you can trade on it. While it's play money only for now, the site says that betting with real money is coming soon. Some lawmakers want to extinguish this flame before there's a spark. A group of Democratic senators send a letter to the CFTC which oversees prediction markets to crack down on wildfire trading, claiming it creates perverse incentives where someone could place a bet on a wildfire to take place, go and set that fire, then reap the profits. Toby, it's clear that this wildfire season in more than one way is highly unusual. So the difference between a hurricane or an earthquake on which there are actually prediction markets when it comes to those weather events and wildfires is that humans can directly influence a wildfires. Most California wildfires are actually human costs. A lot of them are accidental, but you are right. And lawmakers are right in that there is a meaningful financial incentive now to go set a wildfire, which is why they want to crack down on it. There's also just an ethical argument against this because it is part of the growing part of the financial system where you are turning disasters into entertainment and a lot of ethicists say that devalues human lives and you are creating psychological distance between the actual victims because people are dying when it comes to these wildfires. Homes are being destroyed and yet maybe the only thing you're thinking about is, oh, I can make a quick profit off of this. One psychologist says that it makes people begin viewing disasters like video games rather than real tragedies. So not only is there an argument against the fact that these markets can be manipulated, but there's also just a very big ethical component to this as well. - Put some respect on Storm's name. With a little mutation, you can create hurricanes and tornadoes. This really came to the fore in 2025 last January when Polly Market, one of the biggest prediction markets, did have about 20 questions, 20 markets related to the wildfires in Los Angeles, like how many acres will the Palisades fire burned by Friday? You know, will the Palisades fire reach Santa Monica by Sunday and people spent $1.2 million betting on those markets? And I think what these lawmakers want to do is get out ahead of this and say, well, we don't want that to happen anymore and then they're looking at this new platform called Wildfire and saying, we need to stop this and it's tracks right now, it's only play money, but they clearly have desires to add real money to the equation and to talk about things that you mentioned and saying, we can't really have this. - Prediction markets defend themselves by saying that actually by aggregating all this information and tapping into the wisdom of the crowds, you improve forecasting. And while they love putting that argument forth, if you look at what organizations that are in charge of tracking these fires actually do, they do not use prediction markets. Cal fire does not use prediction markets. US Forest Service also does not rely on them. Maybe it's just early innings and they haven't figured out how to integrate them into their systems, but if the very people in charge of who want to prevent these from spreading, don't see it as a useful tool then maybe that argument follows a little flat. - But maybe they should because recent studies out of academia and Wall Street show that these prediction markets, even for fires, are actually useful and change people's minds. So one analysis from Patrick Brown, who's the head of climate analytics at Interactive Brokers said that prediction markets may already be outperforming traditional weather forecast because they quote, "better incentivize human judgment "that wisdom of the crowds." And then there was this very fascinating research out of Columbia University that found that taking part in climate prediction markets, like hurricanes or wildfires actually increases concern about global warming. The head researcher there said that climate change is the perfect problem for the brain because the brain is very bad at thinking about its own future. Prediction markets are a mechanism that allows us to bring the future into the now by holding a stock in the future people became more aware of and worried about climate change. - Regardless, this debate is happening during one of the country's worst fire season. So I hope everyone stays safe out there. All right, we're gonna take a quick break and come back with Toby's trends right after this. Breaking news, a new drink of the summer has emerged. The Hugo Spritz is passing into vibrant apparel sibling like Jackson Storm passes Lightning McQueen and Cars 3. A trend I wanna talk about on today's edition of Toby's Trends. A Hugo Spritz shares the same Prosecco and soda water components that make up an apparel Spritz, but substitutes in elder flour liquor like St. Germain in place of the iconic apparel. It creates a paler, more translucent green gold look and when garnish with mint and lime gives off a more garden fresh vibe. And people are loving it. Bacardi, St. Germain's owner said that Americans discovered it after traveling to Europe post COVID, but sales have really taken off this summer. In the past three months, St. Germain sales in the US jumped 40% while apparel sales have fallen 4%. Google searches for how to make a Hugo Spritz at home spiked 2,200% this summer, according to data shared with Axios. And it has now been searched more than apparel sprites in 15 states across the country. One bar owner in New York City compared the Hugo to a sizzling plate of fajitas. When it's carried through the dining room, everyone sees it and they're like, oh, I want that. See, let's go in to be a minute before it becomes the true king of the summer spritzes. Compari sold 8.8 million cases of apparel globally in 2025. While Bacardi sold just 435,000 cases of St. Germain. Now, what is it about this drink that has caught people's imagination? Why do they love it so much? - Bitter is out floral is in. So if you go back a bunch of years, bitter was all the rage. Negronies, everyone's getting negronies. Remember those hoppy IPAs that my friends used to drink and college and that I pretend.
kind of to like, those were the big trends in flavor profiles and what people wanted to drink and consume. Now we're seeing more floral favors come to the four vanilla things like that. And I can't think of a more floral flavor. Good job, me, that was a tongue twister. Then elder flower, it gets rid of some of that syrupy texture of the apparel that people may, and the bitterness of the apparel that people may bulk at, even though it's a little crisp and refreshing, and more toward these floral flowery flavors, like elder flower, which really gives you that. It transports you to like a meadow in the alps is exactly what it's trying to do. - Yeah, one bartender said, it's a cognitive thing. The association of mint with better weather, people underestimate the power of a garnish. So again, an apparel you might get in orange, a Hugo, you're gonna get mint and a lime. So it is just a different vibe and people are digging that vibe right now. The other thing too, it's just not that strong. You can drink and Hugo spritz and not be put on your butt for the rest of the day, you can still go enjoy your day. And it does seem like not only is it maybe stealing some market share from apparel spritz, but it's also taking market share from beer. About two thirds of new spritz drinkers are switching from beer. So again, beer might be out as we have actually spoken about on this podcast before, and spritzes are just in in general. So maybe it's a rising tide floats all spritz boats right now. And the origins are very interesting. First of all, I just assume every cocktail was invented like a hundred years ago or 200 years ago or during prohibition or things like that. No, you know, people invent new cocktails. Of course they do, but this was invented very recently in the early 2000s by a bartender in the Italian Alps. And he really drew on this tradition of mixing homemade elixirs from local botanicals, from native botanicals in the area and creating these elixirs and then putting it into various drinks. So that's exactly what this guy did, Roland Gruber, to develop the Hugo spritz is by taking elderflower from that particular area. And then, you know, I'm throwing in some soda water, throwing in some persecco. And there you go, you have a Hugo spritz. But it's interesting that the apparel spritz actually has an uprand name attached to it where the Hugo spritz is just named after Hugo, which I don't quite understand. But Saint Germain is probably like, yeah, maybe we can change this to the Saint Germain spritz because they have to do the extra legwork and marketing and saying, okay, you use our, our team, you use our looker to make this thing. It's Hugo in name only, but actually the key ingredient is Saint Germain. - Yeah, that was the CEO of Compari, kind of downplaying the thread of Hugo. And he also cited kind of those sales statistics of apparel is still outselling Saint Germain by a wide margin. So even though my trend is that the Hugo is taking over, they still, you gotta come out the king, you can't miss Compari and apparel are still the kings of the summer. - All right, let's bring to the finish with some final headlines. Has any company ever hyped itself up more than Palantir? The AI software giant and military contractor reported earnings yesterday that it described as otherworldly. It's true, Palantir is crushing it. Revenue climbed 93% from last year while commercial sales to other companies more than doubled. Plus, it jacked up its projections for the rest of 2026. Chairs had slid about 29% year to date on concerns AI startups would eat away at its business, but the stock clawed back 15% after the impressive report. CEO Alex Carp was pretty proud of himself. In a statement, he said such an achievement would be caused for astonishment in any business for one of our size scale and consequence. It is simply staggering. I want whatever he's smoking. - Yeah, Palantir CEO Alex Carp really says stuff. That's just kind of like the general vibe of all of these earnings report. And another kind of tangent he launched into on his quarterly shareholder letter was a tack on frontier AI labs. He argues that if you are a business, you should not trust them. His argument is that these labs are positioning themselves to eventually own their customers intellectual property rather than serving them. This is a argument that a lot of people in the industry actually echo, but he took it a step further. He went ideological with it, writing that many of the AI labs intended knowingly or otherwise to capture the means of production of their purported partners. If that sounds like a reference to Karl Marx, it is. He said there are Marxist overtones and undertones to our business, but then he also noted that the company generated more profit in one quarter than a year earlier. So typical Palantir Accorder, you get some inflationary stuff or inflammatory stuff, you get some great results, and then you'll see us all again next quarter. Moving on, after crashing out of the round of 16 at the World Cup, US Soccer is sticking with its coach, Mauricio Pocetino, or rather Mauricio Pocetino, is sticking with US Soccer. Pocetino has signed a new contract to remain manager of the US men's national team through the 2030 men's World Cup, giving one of the sports the most accomplished coaches a full four year cycle to build on this summer's electrifying and disappointing World Cup run. The extension comes after speculation that Pocetino would jump ship to sign for a big European club like AC Milan, but the former Tottenham and Chelsea manager is committed to the US and will also help oversee youth development, coaching education and the broader national team pipeline. Neil, put on your Navy Hugo Boss overshoot, we got our guy for the long haul. - And you'll never guess who's underwriting his salary. Okay, maybe you will, because his name is seemingly attached to everything these days. Yes, when he's not bailing out 25 year old investors named Leopold, none other than Ken Griffin is helping pay for a large chunk of Pocetino's salary. He shelled out previously for the two year deal. That was the main catalyst for bringing Pocetino over to the United States to coach the men's national team. And now he's doing it this again for the next four years. Ken Griffin, footy guy. - I'm pumped because the signs, the signs we saw in the Paraguay game, I'll never forget. I'm just gonna forget Belgium ever happened. I trust in Pots, I'm glad that he wants to have a larger, you know, influence over American soccer because I think he's our guy. - Finally, many Americans are suffering through a devastating breakup with their Danon coffee yogurt. Earlier this year, Danon discontinued its coffee yogurt known to its cult-like fan base as DCY, and people are distraught. One lawyer told the Wall Street Journal, it's what I got out of bed for after starting his day with the creamy treat for nearly 40 years. It just sounded pretty decadent. Danon's 5.3 ounce coffee yogurt cup contained about 32 milligrams of caffeine, a third of what you'd get in a cup of coffee, plus 11 grams of added sugar. Despite a petition signed by hundreds of fans and complaints littering Facebook and Reddit, Danon said that the coffee yogurt in its original form would never reappear on shelves. The company wrote, "Danon coffee yogurt will come back in ways that reflect the taste preferences, flavor, profile, and nutritional benefits, many consumers seek in the yogurt aisle today." - I don't know, Neil. It doesn't sound that good. I've never tried it, so I can't knock something I've never tried, but coffee in yogurt, it's just not doing it for me. The only thing I can think about is like, people put milk in their coffee, cream or in their coffee, so I guess it's just another version of that. And the one thing that made me open my mind a little bit more is one person interviewed by the Wall Street Journal said that they put crust pretzels or ritz crackers in their yogurt, too. And now we're getting a little bit of a sensory play right there, and I do kind of like that, but it has opened my eyes to this category, and I do want to go try it now. - Okay, that is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Tuesday. It was great to see so many of you at our trivia show with Maxonomics last week. If you missed it or just want to hang out again, we're running back our standard free trivia night at a regular old bar one week from today, Tuesday the 11th, you can secure your spot at the link in the show notes. To share your thoughts on the episode or anything else, then email to
[email protected] or DM us on Instagram @ambidaleyShow. Let's roll the credits. Emily Millarne is our supervising producer. Raymond Lue is our senior producer. Our producer is Olivia Graham. And our associate producer is Olivia Lake, technical direction by Nina Miller, hair and makeup had one too many Hugo Spritz' last night. Devon Emory is our president and our shows are production of Morning Brew. - Great show day, Neil. Let's run it back tomorrow. (upbeat music) [BLANK_AUDIO]
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