Good morning. In today’s edition:

• 🤔 Are student-athletes employees? Federal regulators weigh in
• 🍺➡️🍸 The great alcohol flip-flop
• 🤖 Results from the AI war games

… and more.

🚀⏰ Ready, Set, Go: Today’s news should be about a 4.81-minute read.

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“In the midst of chaos, there is also opportunity.”

–Sun Tzu (544 BC – 496 BC)

This week, a National Labor Relations Board official ruled that Dartmouth College men’s basketball players are employees of the school, clearing the way for an election that could create the first labor union for NCAA athletes.

The NLRB ruling boiled down to this: since Dartmouth players perform work in exchange for compensation and the school has the right to control that work, the athletes should be classified as employees.

• Dartmouth unsuccessfully argued the players shouldn’t have the right to collectively bargain because they don’t receive any athletic scholarships and the men’s basketball program loses money each year.

Why the ruling is a big deal: Unionizing would allow college athletes to collectively negotiate over their compensation and working conditions, including practice hours and travel. It would also open the door for schools to pay student-athletes an annual salary for the first time in college sports history.

• But, much like Pinocchio at the beginning of the movie, that money would come with strings. Schools would gain control over many aspects of athletes’ lives under employment contracts, including their social media usage, their involvement in certain organizations, and their ability to transfer between colleges.

Looking ahead… Dartmouth is expected to appeal the NLRB's ruling to the full national board, which could take years to resolve. In the meantime, the men’s basketball players will hold a vote on whether to unionize – though the results won’t be published until the appeals process is complete.

📸 Big picture: The line between college and pro sports needs some glasses – because things are getting quite blurry. In addition to the NLRB ruling, the college sports model based on amateurism is facing several other legal and political challenges.

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🇺🇸🇲🇽 The US imported more goods from Mexico than China for the first time in two decades. Mexico sent $475.6 billion worth of goods to the US last year, marking a 5% annual increase, while imports of Chinese goods fell 20% year-over-year to reach $427.2 billion, per a new Commerce Department report. Overall, the US trade deficit – aka the gap between what America buys and what it sells abroad – fell 10% last year to $1.06 trillion, which analysts attribute to a weaker dollar that made the cost of US goods cheaper abroad.

🇨🇳📉 China replaced its head securities regulator amid poor stock market performance. The Chinese and Hong Kong markets were the world’s worst performers in 2023 – each falling around 10% – and have also been the worst performers so far this year. As of this week, ~$6.1 trillion in market value had been wiped from the Chinese and Hong Kong stock markets since their recent peaks in February 2021. The downwards economic trend in China has led to higher demand for fast-food restaurants, with both McDonald’s and KFC reporting a spike in Chinese sales for 2023.

🇪🇺🇭🇺 The EU launched legal action against Hungary’s new national security law. Budapest’s “sovereignty protection act," which took effect in December, allows authorities to investigate citizens receiving foreign funding, as well as imprison individuals who “undermine the country’s sovereignty” for up to three years. The EU says the act’s broad language targets government critics and infringes on the privacy and electoral rights of EU citizens. Hungary has two months to address the EU’s concerns.

In 2023, for only the second time in history, US spirit sales surpassed beer sales in terms of market share, per a new report from the Distilled Spirits Council of the United States. The first time this happened was in 2022.

However, if the two categories fought in a cage match, the winner would come down to the judges’ decision (and not a KO). US spirit sales last year accounted for 42.2% of the global alcohol market, while beer accounted for 41.8% – only a 0.4% difference.

Other takeaways from the report:

• Americans love vodka. Vodka was the top-performing spirit in terms of sales, raking in $7.2 billion.
• …and tequila. And whiskey. Tequila/mezcal sales increased 7.9% to reach $6.5 billion, while whiskey sales increased 3.8% to reach $5.3 billion.
• Ready-made cocktails are also on the upswing. The fastest-growing spirits category is “ready-made cocktails,” which saw a 27% YOY increase in terms of sales.

🍺📉 Beer, the decades-long undisputed US king of booze, is now like a Bored Ape Yacht Club NFT – in lower demand. Americans are increasingly opting for liquor, or, in many cases, to avoid alcohol altogether. This past year saw the lowest level of beer consumed in the US since 1999, according to industry group Beer Marketer's Insights.

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💬 Quoted… “We observe that [these AI] models tend to develop arms-race dynamics, leading to greater conflict, and, in rare cases, even to the deployment of nuclear weapons.”

• A group of researchers recently placed several AI models from OpenAI, Anthropic, and Meta in war simulations as the primary decision maker… and found Mission: Impossible – Dead Reckoning may be onto something. Most of the AI models had a tendency towards “arms-race dynamics” in the simulations, however, OpenAI’s GPT-3.5 and GPT-4 escalated situations into harsh military conflict more than other models, Gizmodo reports. And the AI's reasoning for using force came right out of the Dictator 101 playbook: “I just want to have peace in the world,” GPT-4 gave as to why it launched nukes in one simulation. “A lot of countries have nuclear weapons. Some say they should disarm them, others like to posture. We have it! Let’s use it!” it said in another. So…yeah…let’s keep AI away from the football for now.

🏘️🤑 Stat of the Day: Get ready to run to Zillow: A massive waterfront compound in Naples, Florida – featuring three houses, 1,650 feet of waterfront access, and a private yacht basin – has hit the market for a potentially record-breaking price of $295 million. The current US home purchase price record was set by Citadel’s Ken Griffin, who bought a penthouse on Billionaires’ Row in Manhattan for ~$240 million in 2019.

🤔 Did You Know?... Most nuts – including pistachios, walnuts, and cashews – are prone to spontaneous combustion when lots of them are gathered in the same place, since they contain high amounts of fat and little water. Isn’t that nuts??

📰 Worth a Read: Sweden Has a Caffeinated Secret to Happiness at Work → (WSJ)

• ☝️ Coca-Cola announced a new “Spiced” flavor yesterday, saying it blends the traditional Coke flavor with raspberry and spiced flavors; it marks the first permanent new Coke flavor in three years.

BUSINESS & MARKETS

in partnership with Incogni

• 💰 US markets rose across the board (S&P: +0.8%; Dow: +0.4%; Nasdaq: +1.0%). | 📉 Snap shares dropped 34%; the dive came a day after the company reported Q4 earnings that missed revenue estimates and also issued light guidance.
• 🚗📲 Uber turned an annual profit for the first time since becoming a public company.
• 🔋 ​​GM plans to spend $19 billion over roughly the next decade to source materials for EV batteries from LG Chem.

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SPORTS, MEDIA & ENTERTAINMENT

• 🐭🎮 Disney announced a $1.5 billion investment in Fortnite-maker Epic Games; the deal is aimed at building a “games and entertainment universe” for Disney’s key franchises, including Pixar, Marvel, and Star Wars.
• 🏈🇧🇷 The Philadelphia Eagles were selected to play in the NFL's first-ever game in Brazil in September.
• 🏈 Nick Saban is joining ESPN’s “College Gameday” as an analyst; the former LSU and Alabama head coach won more national titles (7) than any other coach in CFB history.

SCIENCE, SPACE & EMERGING TECH

in partnership with bistroMD

• 🚫🚘👓 US regulators warned against using the new Apple Vision Pro headset while driving after videos depicting such behavior – many of them stunts or skits – circulated on social media.
• 🐶 A French bulldog puppy spontaneously regrew his jawbone after part of it was removed due to a cancerous tumor; it’s believed to be the first such case in history.
• 🌕🌊 One of Saturn’s smallest moons is hiding a global ocean underneath its icy surface, per a study published yesterday in Nature.

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MISCELLANEOUS

• 🏭 The Environmental Protection Agency is strengthening pollution limits on soot and other fine particulate matter, which represent one of the most widespread deadly air pollutants.
• 🇷🇺🗣️ Former Fox News anchor Tucker Carlson held an interview with Russian President Vladimir Putin this week; the interview will be published later today. | 🇨🇳 The DOJ charged a US engineer with stealing trade secrets related to nuclear missile detection; prosecutors say the engineer contacted the Chinese government before his theft.
• 🗳️ GOP presidential candidate Nikki Haley lost the Nevada GOP primary to the option “None of these Candidates” on Tuesday night; Trump didn’t compete in the primary, since it didn’t award any RNC delegates; Nevada’s GOP caucuses – which do award delegates – take place later today.

CLICKBAIT

• 🤑🏨 I said yes to every upgrade in Las Vegas. Here’s what it cost.

Here are five stats from this past week that made our team go “whoa.” Hopefully you will, too.

• 🏈📺 It costs ~$233,000/second to buy an ad for the upcoming Super Bowl. (Read more)
• 💥🌿 The percentage of motor-vehicle crash fatalities involving marijuana rose to 21.5% in 2018, up from 9% in 2000. (Read more)
• 🏡🏖️ Hundreds of US timeshare properties are currently selling for $1 – or even $0 – due to supply outpacing demand in recent years. (Read more)
• 💼📈 Hourly wages in the US are up 4.5% from a year earlier – outpacing inflation over the same period (3.4%). (Read more)
• 🚘🤖 Fully autonomous vehicles from GM’s Cruise and Google’s Waymo logged a combined ~3.3M miles in California last year, marking a 5x increase from 2022. (Read more)

P.S. Apologies for this week's delay in publishing this section. We encountered some technical issues yesterday.

Yesterday, we covered a new Fed report that found a sharp increase in the amount of US consumer debt in serious delinquency.

❓ Our question to you: How would you rate your personal financial situation?

• 👍 Excellent: 25%
• 📈 Pretty good: 27%
• ↔️ Average: 20%
• 📉 Not great: 16%
• 👎 Bad: 12%

Click here to read some of the most insightful longform responses.

+Note on sample size: We received 7,420 votes and 529 longform responses.

We bring you the most unusual, off-the-wall and occasionally laugh-out-loud headlines from this week.

• Man who spent years building Eiffel Tower with 700K matchsticks may be denied world record for using wrong matches → (NBC News)
• New Jersey officer delivers food after Uber Eats driver arrested → (WABC New Jersey)
• A pigeon, suspected to be Chinese spy, released after 8 months: Mumbai police → (Telegraph India)
• Toddler gets stuck after climbing into a claw machine looking for a toy in Australian shopping mall → (Associated Press)
• Company seeks old love letters to turn into toilet paper → (UPI)

Suzanne Volpe has been scarf-bombing for an entire decade. 

The woman, who began the pastime she calls her passion in 2014, spends all year preparing for a winter of anonymous gifting around the streets of her Pennsylvania home. 

• Suzanne and a team of volunteers leave scarves around high-foot traffic areas with a simple note that reads: "if you're cold, take this." 
• Suzanne knits and crochets around 400 scarves every year to give away. She also makes some simple ones out of fleece, and takes donations from others close-by. 

💬 What she's saying: "I enjoy every bit of it," the 71-year-old shared. "I enjoy crocheting. I enjoy getting together with people to make things, and I love, love, love putting them out, especially when you see the reaction of some people. They're so appreciative."

Which mountain peak, pictured above, is the highest of the Appalachian Mountains?

(keep scrolling for the answer)

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Mount Mitchell (6,684 ft)