Private Equity Weasels Into Your 401(k)? & Coal is Making a Comeback

- Good morning, birthdayily show. I'm Neil Freiman, and I'm Toby Howell.

“Today, don't look now, but Cole is having a renaissance.”

Then, private equity is sneaking its way into your 401(k). It's Tuesday, March 31st. Let's ride. (upbeat music) Good morning.

Remember, all birds, how could you not? Pack in 2018, those eco-friendly wool shoes are during the feet of every tech worker in Silicon Valley and gain traction with many yuppies of the era. Well, much like the other signature products

of that time, like HQ trivia and we work, it's all come crashing down. Yesterday, Allbirds agreed to sell all of its assets

and IP for $39 million, which is essentially pennies

considering this mighty brand was once worth $4 billion. Toby fashion is fickle, but Allbirds offers the perfect example of how to strike gold and scroll it all away. Here's the deal, if both Neil Fryman and Toby Howell rolled around the leaders in a fashion expertise,

owned a pair of your shoes. That was probably the top for a brand, but I do feel for Allbirds. They're how I built this episode was awesome. I loved listening about how marina wool was a

actually new technology that they brought to the shoe market,

“but I think they were just a victim of overexpansion.”

They strayed way too far away from their comfy lifestyles sneakers. At one point, they were selling leggings. They were selling a puffer jackets, and they just got a little bit of a negative stigma

because of the massive amount of tech pros that ended up wearing them, but I thought it was a good product. We rocked them both.

It is a little bit sad to see them so far from their peak.

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that'll knock your sauce off. And not too long, your 401k could end up being a mix of stocks, bonds and private equity. Yes, you soon could introduce yourself at weddings as a PE guy or a gal after the Labor Department

proposed new regulations yesterday that would open up 401k's to private investments like private equity and private credit. While still not finalized, it'd be a huge win for these fun managers that have been foaming at the mouth

to snag a piece of the 14.2 trillion dollar market for retirement plans. They've argued for years that regular folks like you or us should have access to the investments that have long been reserved for the pros

like start-up companies real estate or infrastructure projects. But the push into your retirement accounts couldn't have come at a more awkward time for the private credit industry. These shadowy institutions, which work like banks

to connect companies with capital, have seen a massive boom since a global financial crisis, a boom that recently seems on the verge of going bust. In recent months, investors in private credit have been trying to pull their funds.

Only to be told that those revisions would be limited, which is caused a minor panic on Wall Street. Some of finance's biggest names, including JP Morgan CEO Jamie Diamond and former Goldman Sachs CEO Lloyd Blankfine,

have compared the current private credit environment to the one that preceded the crash of 2008, which means Toby, there's gonna be plenty of security on whether these types of riskier alternative investments should be plunked into American's piggy banks.

- Let's just assume out from the current moment of private credit and the fact that it could be a very shaky market right now, is this something that investors actually won the portfolio, even in the good times?

And Josh Brown, the CEO of Ritzel's wealth management, says absolutely not, he says there's absolutely no chance for one can investors would get access to the best alt managers of the best funds,

basically saying that you're gonna get the bottom of the barrel

when it comes to these private credit deals. So you're not getting the top of it. He goes on to say, you are not the sovereign wealth one of Norway, you will not be treated that way. So even if this was the best of times for private credit,

which it isn't, then you still wouldn't be getting the best deals. Senator Elizabeth Warren is also someone who has railed against this. She says as cracks emerge in the private credit market,

private equity returns fail to 16 year lows in crypto, keep stumbling. Trump has decided now is the time to stick all of these risky assets in Americans 401Ks. That is the general consensus of people

who don't want this is that this is too risky of assets to be putting in retirement nest eggs for the majority of average investors. We don't need this. You can just easily get a good return

with a diversified portfolio of stocks and bonds. And it's not just that these are riskier investments. It's the higher fees that come with that. So that's another big pushback on private equity and private credit into these retirement accounts

have just pushed lower and lower and lower.

“So Americans really aren't paying these fund managers”

much of a fee at all. But if you introduce private credit and private equity into these fund accounts, they're going to be higher fees. Let's talk about the supporters because there are plenty of supporters of this plan.

They say, well, look at the professional investors. They have access to a suite of investments. Like real estate that don't fluctuate like stocks and bonds do. So they say, yeah, why won't we want to give American people greater diversification

into their retirement accounts? It could lead to better returns overall. And Scott presented the Treasury Secretary. Did take this into account, he was working with a labor department on these rules and said that they actually

must meet six different criteria to take investors considerations into account. I mean, the timing is awkward, though. I mean, you mentioned that it is a very shaky time for the credit, private credit market in general.

Just some of those cracks that I want to highlight. In addition, the ones you already did is the fact that Moody's downgraded a private credit

“front run by KKR to junk status last week.”

They are saying that the funds outstanding loans are not being repaid. There's all this anxiety around the fact that a lot of these private credit funds invested heavily into software businesses

and software is being disrupted by AI. So those are the bare case in addition to the fact that maybe these assets shouldn't go in at all into your 401(k). The fact that right now is not the right time to do it

because of just how not good the market feels to a lot of people. And what's interesting about all of this

is that it's actually not illegal in the first place

for plan sponsors, which are your employers, to put private credit, private equity, or alternative investments into your 401(k) plans. They just don't do it because they could be sued to a living and that's been happening

over the past few years. Is that a bunch of shareholders are suing these plan sponsors saying that you're not actually protecting our investment. So it is completely legal, but there has been a lot of legal liability going around.

“And what this Labor Department proposal does”

is give them what they're calling a safe harbor to shield them from a ton of litigation. Moving on, the historic energy disruption caused by the war in Iran is driving many countries back into the warm city embrace of coal.

Japan is out the area of already lifted curves on coal burning power plans to keep the lights on. Thailand has restarted coal units and Indonesia, the world's largest coal exporter, is now allowing miners to increase production,

reversing a previous policy that aimed to dramatically shrink output. As a result, coal stocks are moaning with Australian coal producer, young coal jumping 40% and Pennsylvania's core natural resources

up 30% since the war began according to Bloomberg. Coal's resurgence was not on anyone's big oh-guard heading into this year. In fact, 2026 was supposed to be the peak of global coal demand which was projected to start declining

by the end of the decade. But then the war happened and everything changed. Lickified natural gas is now trapped in the Middle East and the world's largest gas fields in Qatar are severely damaged and will take years to rebuild.

So the countries that rely on Middle Eastern gas to generate electricity to power factories to basically keep their economies functioning are faced with a choice. Either pay sky high prices for whatever remaining gas

is sloshing around the world, or fire up the higher polluting but dependable coal plants you already have.

And when it comes to something as critical

as meeting your basic energy needs, it's an easy choice. - It feels like a lot of emerging economies are saying, man, we got the short end of the stick here because we were sold this promise that gas was going to be sort of this bridge fuel to take us from a emerging economy

into a developed one where we can then invest more heavily in renewable fuel sources. But now that there's been this massive war - Second time in two years. - Right, and for you. They are saying like, we got the short end of this deal.

Like it's being challenged again this promise of this being a bridge fuel. So they're going back to the other side of the bridge and saying, all right, well we have coal, we know it's a dirt of your fuel source, but at least we can rely on it.

So that is why you're seeing them kind of dusting off these mothballed coal plants and saying, we just want fuel and this is the way we know we can get it. - And most of the impact is going to be in Asia, which buys about 90% of the liquefied natural gas,

that the Middle East produces South Korea imports almost one fifth of its liquefied natural gas from the Middle East. Also South Korea and Japan at the same time have huge coal bases that they can easily fire back up

and offset all of the gas shortages that are coming from the Middle East. So the biggest coal renaissance is coming to come from places like Taiwan, South Korea, Japan and India, which already have large coal bases

and are able to easily tap into that fuel source. - Meanwhile, China is the world's largest coal consumer but they have had a very long-standing campaign where they've been diversifying their energies supply. So they have the coal if they wanted it,

but they also have a ton of renewables. The US is actually pretty insulated as well, but Trump's administration has recently given coal

And agency called the Terra Energy Center

announced a $1 billion investment

“and what would be the first new coal power project”

and more than a decade in the US. So coal is seeing a little bit of a resurgence in the US as well. One other way you could diversify away from natural gas or oil or coal is biofuels in a general Brazil

has been kind of held up as this standard of a country that invested a lot in this making their bio fuel industry pretty sophisticated. There are second largest producer of ethanol, third largest producer of biodiesel.

So they've been weathering this storm without having to turn on coal pants without having to rely on natural gas by the fact that they can put plants into their fuel and to make their gas stretch a little bit further.

So they are weathering the storm a little bit better than other countries are without having to turn on these coal power plants. - And quickly, a few more war updates US gasoline prices have now hit as of today,

$4 an average for the first time since 20, 22, they were below $3 from before the war and last night the Wall Street Journal also reported

“that President Trump has been telling AIDS”

that he's willing to end the war against Iran, even if the state of Hormuz remains largely closed, so they would end the bombing campaign and hopefully work diplomatic channels or rely on the Europe or the Gulf to open the state of Hormuz.

So that's something that could affect the markets today. - Moving on, Harry Styles is posted up at MSG. Bruno Mars has been in Vegas for what feels like forever. Blackpings, Alisa announced yesterday, she'd join him with her own Las Vegas residency.

Back in the day, musicians packed up to her buses and came to your city, now they're asking fans to come to them. This is part of a growing trend of stars choosing to play at fewer venues,

essentially passing on their travel costs to fans instead. The list of sedentary stars is a whos who of music right now. Bad Bunny played 31 shows in San Juan Puerto Rico last summer. Adela has planted herself in Vegas and Amunic. Some stars are insisting they are using the additional savings

to enhance the experience for fans when Desding Company did some shows at the sphere. The manager of the band said, "They recreated grateful dead's famous wall of sound "and opened the exhibit up for free."

Bad Bunny famously reserved his first nine shows exclusively for locals to attend, but the general way the industry is going is away from Taylor Swift's sprawling globe-trotting eras viewer in towards a much more localized show schedule.

Harry Styles defended his decision in a recent interview with San Lo saying, that he thinks performing a residency in one location leads to a better show than touring in a multiple cities, but fans would disagree.

Here he is singing, "We belong together when Styles die hard "to hold the Wall Street Journal. "Lyrics from his new song, Aperture, "but getting together feels unaffordable and unattainable "to a lot of folks.

"Neil, there is a concentrated effort "to concentrate concerts." First of all, Propsa Lisa, Lisa's the first K-pop artist to stage a Las Vegas residency. We got this news yesterday.

She's probably the biggest individual artist to come out of the K-pop boom of the last decade. At least on Instagram, she is the largest following

of all K-pop stars with more than 107 million followers.

She was on a white lotus. She is an abandoned ambassador for Bulgaria and Nike. She's just a larger than life personality now. She gets her own Las Vegas stage. But you're right, this speaks to the larger Vegasification

of concerts. And it's not surprising when you do it in Vegas, but it is surprising when someone like Harry Styles does it at Madison Square Garden and it makes everybody around the country

come to Madison Square Garden. And I'm blaming Harry Styles, actually, because he actually inaugurated, perhaps, this more sedentary trend of making people come to him in 2022 with his tour, his global tour,

that barely, you know, that just went to a few cities. - Yeah, he is going to Amsterdam, London, South Hollywood, Mexico City, New York City, and Melbourne. But that doesn't necessarily feel like a globe spanning tour for a lot of people, especially 'cause he's doing 30 nights

at Madison Square Garden. The issue is the demand is absolutely there. Well, over 11 million people registered for tickets for his 30 shows at MSG, that is way more than the capacity of 30 Madison Square Garden.

So if you are a star, you're sitting down and doing the math and saying, well, clearly, people will come see me if I'm Harry Styles, because I'm Harry Styles at Madison Square Garden. It's a lot easier on me.

It's a lot easier on my body to, you know, not have to travel around the world constantly. Why wouldn't I just post up here? Because I'll make more money travel less and fans still want to come see me.

That math is hard to ignore if you are an artist. Right, and it's very hard to ignore if you're also a fan, because in addition to sky high concert tickets, which are you have been booming over the past few years,

“you have to pay for additional travel and lodging as well.”

But it seems like we're just never going to see anything

like the Aeros Tour anymore. I mean, Taylor Swift went to 51 cities, 21 countries, over five continents. It seems like that particular era is over when it comes to touring. All right, we're going to take a quick break

and come back with Toby's trends, right, after this.

I should not have to say no to this every day, Toby.

“But how else will you know about all the goodness”

from slave cities all in one protein smoothies? Because I can read Toby, and I can see they're made with real whole food ingredients. 25 grams of protein, 10 grams of collagen, and functional mushrooms.

Well, can reading tell you they taste as good as any milk shake? Yes, I'm the one who will originally tell do that. And you can read all about it too at shopflavecity.com. That's shopflavecity.com.

Toby, what do you think of these new tax laws? Why are they making new ones? I don't even know the old ones. And that's why there's Turbo Tax because being tax compliant is among small business owners,

top concerns, but it's often time consuming and research intensive to figure out taxes on your own. Turbo Tax experts for business can match you with a tax expert with expertise and knowledge for your specific industry. To ensure you have confidence,

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That's ads.instacarp.com. One thing to know about this podcast is that Neil is a baseball fan and I am less so, but despite my general shunning of America's pastime, my social media feeds have been taken over by baseball recently,

specifically highlights of the sports new automated ball strike system that allows players to use cameras to challenge calls from empires. I've seen so many clips, in fact. I'm gonna go ahead and declare it a Toby's trend

because of the sheer amount of attention baseball is getting right now. The ABS system in particular has been the star of the young season so far. We've already seen a better win consecutive challenges

on two straight miss calls from Empire CB Buckner, leading to 40,000 home fans and cheering in his face. We've seen the Mariners Randy Arros Arena pulled the ABS equivalent of a bat flip, walking well down the first baseline

after challenging a third strike call. His confidence was ultimately rewarded after the cameras confirmed his suspicions that the pitch had been a ball. To get deep with it, so much of the current side guys

is reflected in the introduction of the new ABS technology into a very old game. Sam Adler, Bell, the co-host of the Know Your Enemy Podcasts, summed it up better than I can, so I will paraphrase this words here.

The ABS system sits at the Vex Crossroads of several highly charged dynamics in our collective life, he wrote on X.

Successful challenges by your team feel amazing,

like a long-awaited blow against authority, but the overall existence of ABS inevitably ignites anxieties about human judgment and yet the challenges from allies on human hubris, intuition, boldness, and risk.

It's a very compelling encounter between populism and the machine, anxiety about robots replacing humans. Yep, it's there, cathartic protests against authority figures. Baseball's got it. On a more elemental level, Bloomberg columnist Connor Send noted,

this might be the first time in the history of pro sports that players have the opportunity to humiliate the Empire/referies with home fans getting to cheer it on. They'll even for a non baseball fan.

This is tremendous content. I am all in on ABS and baseball right now. Yeah, you can get absolutely deep with it, which I encourage, it's very interesting to think about how humans interact with each other

in the human and human's and robots. And the incoming robot takeover, but at the same time, at a more basic level, it's just great entertainment, as you mentioned. It's just great content.

It adds a new element to watching a baseball game, which for years had been a chore.

“You have to sit down there for three and a half hours,”

watch a nine-inning slog, but thanks to diff

that, like, thanks to critical product changes

that MLBS made over the past few years, like adding the pitch clock to make games more like two and a half hours. And then adding ABS, which adds this whole new element to the game, it's creating a more compelling content product. And eyeballs are everything these days,

and baseball is winning the attention we're right now. I think it's good to this introduction in the technology, because it is not human versus robot. It is still human versus human, 'cause there is the element of having two challenges.

You have to tap your head and say, "Hey, I think that pitch was a ball. I think that pitch was a strike, which is why people like it. It's much better than the NFL, too, because the NFL still has all this human judgment

and it comes to replay. ABS has a definitive, yes or no answer, so I think that is great. I love that it's so cathartic for fans too, because how many times have you seen a referee,

or an Empire steal a game away from your team?

“And all you wish you could do is just say,”

"Why doesn't anyone hold them accountable? "Now they are accountable when it happens at a home game. "When the reds challenge two consecutive pitches, "they had already hit two homers that day. "The cheers in the stadium were louder

"than any cheers that they had seen thus far. "So it really is a drama-inducing element. "It's cathartic for fans. "It's so fun, it goes viral on social media. "It just has all the makings of making baseball

"just a very zeitgeisty sport right now." - Yeah, so baseball, it has a lot of momentum. There's a lot of talk of it, leapfrogging NBA

as America's second favorite sport.

There are a few problems that it still needs to address. And one of them is the fragmentation of where fans can watch games. According to the athletic, if you are a Yankees fan in New York to watch every single game this season,

it would require navigating 10 networks, five or more subscriptions, and would cost almost $800 for the season with minimum subscription costs. A Mariners fans laid out, a Mariners fan also laid out.

What it would take to watch the first five games for the Mariners, and it was Mariners TV Game One, Apple TV Game Two, Mariners TV Game Three, Peacock Game Four, TBS for Game Five, and in the first game of the entire season of the MLB,

was on Netflix. So this is a problem that I think Rob Manferon, the commissioner, and everyone involved in baseball, including entertainment execs. Need to figure out, this is not just a baseball thing.

This is a sports everywhere, problem. The jokes are that you can watch, there are jokes that you can watch every single ending on a different streaming service, and it was almost too true.

Here's the thing, Neil, I'm not gonna watch the actual games.

Let me see the clips that they filtered through to social media, that might be a you thing, but like again, part of my point is that this is uniquely crafted for social media. They have all these micro moments within a very long season

that filter its way to social media.

“So again, I think that's what baseball is doing right,”

the fact that it has become a lot more clipable. Lately, go ahead and watch all the games if you want, but I'm probably not gonna navigate that maze of subscriptions, maybe that is why I'm not one of them. - That's a big problem, yeah.

- Okay, let's run to the finish with some final headlines. Insider trading questions within the Trump administration are only escalating. Yesterday, the financial times reported that a broker for US defense secretary, Pete Heggseth,

inquired about a multi-million dollar investment in major defense contractors in the weeks before the US is really strike on Iran citing people close to the situation.

Ultimately, the deal didn't go through,

but it allegedly raised enough questions that black rock, which was offering this defense investment, flagged it internally. It's also unclear whether Heggseth knew what his broker was doing or how much latitude

he had given his broker and opposed on X, Pentagon chief spokesperson Sean Parnell called the report entirely false and fabricated. Still, it adds to growing pressure on the administration to explain strangely

well-time bets on stocks in the oil market that have occurred ahead of big Trump-induced market moves during the war. - What many pointed out that it probably wasn't even going to be a good trade if it was place.

IDEF, which was the fund that his broker was looking at, has risen 28% over the past year, but it's down about 14% over the past month right around the time when the war broke out. Also, apparently IDF is a very illiquid fund

that doesn't get a ton of volume per day, which is probably why it made it easier for black rock to flag. Again, all of these reports are being denied by those close to Heggseth,

but it was funny that people pointed out that it probably wouldn't even be made money on the trade had it gone through. Moving on, the CEO of Air Canada is stepping down after botting the response

to the deadly crash at LaGuardia involving the deaths of two company pilots. Michael Russo announced he's retiring by the end of Q3 after receiving backlash for a video he put out expressing his condolences for the accident.

It wasn't what he said, but the language that he said it in that struck the wrong accord. He delivered the entire thing in English. This did not go over well in Quebec

where Air Canada is headquartered, where French is the majority language, and where one of the two pilots killed was from. The only French he spoke was Bonjour at the beginning in mercy at the end.

Quebec's National Assembly voted 92 to 0 calling for Rousseau to step down. Canadian Prime Minister Mark Carney piled on, reminding everyone that Air Canada is legally required to communicate in both official languages.

Neil Russo apologized saying he was very sorry that his inability to speak French had diverted attention away from the grief of the families, but by then it had spiraled into a very large controversy.

“- I think it was a bit flabbergasting for us”

in the United States to see why this was such a big deal that he said in English and not French, but French is a big deal to the people of Quebec about 80% of people in that province are French speaking, and this was not the first time

that he got into hot water around using English instead of French, he spoke to back in 2021. Russo spoke to a bunch of Montreal business leaders, gave a speech, almost entirely in English

So he pledged to learn French and he took 300 hours of French classes, and the fact that by 2026, he could only deliver this statement in English.

“I think just added more fuel to the fire under,”

and he was already under the microscope, so he has decided to retire as a fascinating story. Early on this month, WNBA player secured a historic new labor deal that will result in almost 400% pay raise.

Turns out they had a secret ace in their hand helping out negotiations. Nobel Prize winning economist Claudia Golden.

In 2023, Golden became the first woman

to win a solo Nobel Prize in economics, then according to the Wall Street Journal, she was flooded by requests, but only accepted a handful. One of those requests was from WNBA players, asking her to help them get the pay boost,

they've long felt they deserved. Golden said yes, perhaps because she's the most qualified person in the world for the job.

“For decades, Golden has painstakingly researched women's roles”

in the workplace and their pay discrepancy with men. When the ink was dry, the player scored not just a massive salary bump, but what Golden told the journal is the biggest pay increase any union has ever negotiated. Golden, kind of crushed this thing.

That was the general revive from players and reporters. She did two things. She framed the question very well. She kept bringing negotiations back to this very central issue of what fraction of the league

revenue is going to go to player salary and benefit. So everyone was just saying from a negotiation perspective, that clarified everything. We just want a bigger piece of the pie, and that helped them win a bigger piece of the pie.

And then she also did something where she built a life table for players. This is something actuaries do in insurance. She found that the average length of player stays in league is just two to three years.

So any benefits that they negotiated needed to kick in before two to three years in order for the current crop of players to benefit from them. So it was those two things that sound relatively simple on the surface, but in terms of very, very complex CBA,

negotiation process ended up just making things a lot more straight forward and a lot more simple and won them this biggest deal. One thing I have to point out too is that she was inundated with requests about what she would do after

she won this noble pre-spries. She not peace, but this Nobel Award. She accepted only three invitations. One was advising the WMBA players. I mean, two was appearing on MBR's wait wait, don't tell me.

And three was throwing out the ceremonial first pitch

at a red socks game.

“That is what you should do after you win a Nobel Prize.”

- Everything's coming up, baseball. Okay, that is all the time we have. Thanks for starting your morning with us. Have a wonderful Tuesday. We've reached the end of the first quarter,

March 31st, the final day of Q1. If you liked to reach us, send an email to [email protected] or DM us on Instagram at MBDailyShow. Let's roll the credits.

Emily Miller is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham, and our associate producer is Olivia Lake. Her makeup is desperately looking for Harry Styles tickets.

Devon Emery is our president and our show is a production of Morningbrud. Great show day meal. Let's run it back tomorrow. - You're amazing.

Every day. On the other side. And I. And on my own house.

You're amazing when it comes to work.

And if you can, you can, like us in the world, that you're out there. Because the credits are just like that. Or you're still at your credit to get your credit. Also my credit is just online.