Morning Brew Daily - Americans $17 Trillion in Debt, Free TVs... Kinda & Martha's Still Got It

Episode Date: May 16, 2023

Episode 60: The prodigal son returns...Toby is back! Neal and Toby reunite to talk about the record-high consumer debt hurting Americans. Plus, this company wants to give you a free TV in exchange for constant ads. The question is: would you take the deal? Then, the IRS is testing out its own e-filing system. Finally, Martha Stewart gracing the cover of Sports Illustrated at 81 years old and Netflix's biggest flop to-date. Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Freyman. And I am not, not Toby. He's back. Which means it's me, the real Toby, back in the flesh. Let's go. On today's pod, the return of Toby, we will discuss whether filing your taxes could get a lot simpler. And Martha Stewart makes magazine history.

Then we'll talk about Sam Altman's crypto company WorldCoin, which is somehow more dystopian than his AI ambitions, as well as introduce you to a new smart TV that costs zero dollars, but. comes with a catch. Neil, it's Tuesday, May 16th. I'm back. Let's ride. All right, happy Tuesday, everyone. One more final shout out to Kelsey and not Toby for filling in beautifully for Toby while he was in Spain becoming just one big topa. Honestly, I wanted to give the shout out to you guys because it was so fun being just a listener of the podcast. Like, I loved waking up every morning in Spain on a little different time schedule and hearing you guys break down the news. So it was very cool to be on the other side of it. You guys did so well. Thank you. I know. Thank you. I want to hear a little bit about Spain. Obviously not. We have like 60 seconds here, but give me the

most overrated thing and the most underrated thing about Spain. Okay. The most overrated thing, unfortunately, was the paella for me, which I came in with like really, really high expectations. And I think it was just because I didn't go to like the best, but I tried three different paellaes and none of them quite hit the spot. And then the most underrated thing is the Hamon I queso. Okay. which is also a food thing. The ham and cheese there, just so, so elite. And the lifestyle, just like the waking up late, the siesta, the going to bed really late. I really loved that part of it. All right. We'll have to go to Spain. And I think the paella is fine. Like, you just may not like it. I know. I know. Like that particular day. It was a me thing. But Spain, I love you. All right. Let's move on to the news. So we're all worried about the government's debt ceiling crisis. But there appears to be no.

dealing for how much Americans are racking up in debt on their own. U.S. household debt levels hit a new record in the first quarter, topping $17 trillion for the first time, according to a report yesterday from the New York Fed. Credit card balances held flat at $986 billion. That is still concerning the fact that they held flat, because in Q1, when there's no holiday spending and many people get a tax refund, credit card debt is supposed to decline. This is the first time in 20 years that credit card debt did not fall in the first quarter and a sign that Americans may be under more financial stress. Just every major category of consumer debt rose last quarter from mortgage, student debt, auto debt, credit card debt. So, yeah, I honestly love when these huge data reports

come out because I love looking at just like the macro picture and especially over 20 years, you get to see how like consumers behave. And I never knew the thing about the post holidays that credit card debt always goes down because, yeah, you're a bunch of, buying all the Hanukkah candles, all the wrapping paper. And then you're like, all right, I got to settle down here, pay off all my debt. So that was super interesting to me. I also couldn't help but think, because we've been talking about the debt ceiling and potentially the one trillion dollar platinum coin. All we have to do is mint $17, $1 trillion platinum coins, and all of us are debt-free all of a sudden.

Not wait. One of the, there is some good news in this report, and that was about mortgage refinancing. I thought that was super interesting. So it saved tens of billions of dollars. during the pandemic. Remember when interest rates were low, everyone decided to refinance their mortgages. Actually, 14 million mortgages were refinanced during the pandemic. Sixty-four percent of those to a lower rate. And people who did refinance saved about $220 per month on payments. So the Fed wrote this whole separate report about mortgage refinancing and said, like, this is going to be with us for a long time, the ramifications of the fact that everyone got a lower rate and locked it in for who knows how long. Honestly, that was the thing that they kind of mentioned in the report is that even though these credit card balances are the highest they've ever been at this time of year, people are actually in a decent place from a personal finance perspective because of the refy boom that happened in 2020, 2020, 2021.

Yeah, and I do think it will be, this is long lasting. Like these mortgages are 10 years. They're 30 years. 30 year mortgages. So, yeah, it is interesting that people may be in a better place financially, even though like we're seeing this consumer debt. The one area of concern was auto loans that they flagged, auto loan delinquencies for borrowers under the age of 40 topped pre-pandemic levels, and that is just because cars are ridiculously expensive now. Do you know how much than average price of a new vehicle is? Oh boy. This is so bad because I live

in New York. I'm young. I'm not buying a car, so. Well, did you just read the article on this? I apparently not. Tell us. Tell us. Okay. It was $48,000 for a new vehicle. The average, that is up 24% since the pandemic began three years ago. And we all know used vehicle prices have also climbed and skyrocketed. They're up 40% to almost $29,000. When you add this, you get the typical loan rate on a new car is 7% now. The average payment of a new car is $729 a month. So you need to be making well over $100,000 in gross to be able to afford a new car these days.

It's crazy. And then to bring it back to Tesla and everything, Elon, like he's been. dropping these prices and now undercutting like the the average car price for a Tesla. So it is interesting to see those things happening in tandem. All right, Neil, that was consumer debt. Hope you guys are not part of the 17 trillion. But if you are, it's all right. Let's move on to Sam Altman. The guy is everywhere these days. So most of you probably know him as the co-founder of Open AI, the company that kind of kicked off the AI boom with its release of ChatGBT. But today, I want to talk about one of his other ventures, WorldCoyne. It's in the news because Sam and WorldCoyne are

close to closing $100 million in funding. So a lot of you probably haven't heard of WorldCoyne, because it's kind of been a little quieter than OpenAI. But this company is nuts, Neil. So it's basically, it uses these basketball-sized orbs that can scan people's eyeballs. Yes, you heard that right. Scan people's eyesballs and create this unique identifier associated with that, person and the goal is to eventually send them money people who have been scanned as kind of this universal form of universal basic income it's as dystopian as it sounds or it's as as as brilliant as it sounds what do you think about world coin new uh i don't know where are they getting the money from because their goal is to get to alleviate global they have two twin goals here they have

they want you to distinguish be able to be able to distinguish between humans and bots which is becoming increasingly hard thanks to Sam Alvin and AI. And then they want to solve global poverty by handing out these basic income payments to all 7.9 billion people on this earth. I just don't quite understand where the revenue is, like who's paying the people. So basically you get your eyeball scanned. You get entered into this database and then you get a check. You get a token.

You actually get world tokens. So it is kind of creating value at a thing. air, but if you, if everyone agrees that world tokens are certainly worse something. So again, yeah, it's a little, you're kind of printing it money out of thin air. But I also think it's so funny how you mentioned that determining between humans and bots is a problem that Sam Altman's causing. The other problem Sam Altman's causing is the AI boom is kind of putting people out of work. And so he's saying that like, hey, world tokens can kind of make up for the people who get put out of work because of my other company. And they're just not going to work and they'll just get

WorldCoin tokens from sacrificing their biometric data. And this and WorldCoin has come under a lot of backlash, obviously, for accumulating data, accumulating very sensitive data with all these privacy risk. MIT Tech Review did this investigation of WorldCoin when it was recruiting users in countries like Sudan, Ghana, Kenya, Indonesia, found that he used deceptive marketing practices, collected a lot more personal data than it was letting on and did not get meaningful consent from people. So this is a little invasive. Yeah, it's scanning your eyeballs. It's the most invasive thing we've seen.

And also just to zoom out on Sam Altman, because I said the guys everywhere, he truly is. He has Open AI, which is obviously the biggest company that everyone's talking about. They need ChatGVT. Chat CBT. He's meeting with Congress today to talk about the dangerous of Open AI. He had like a dinner last night with him. And then also he's got this nuclear fusion company that's called Helion Energy. and they actually promised to deliver Microsoft at least 50 megawatts of clean fusion power by 2028.

And if they don't do that, they pay Microsoft. Well, they're not going to, probably, because most experts say that fusion energy is decades away. And he's promising to do it in five years. But he said, yeah, I think we'll probably figure it out. Very Elon-like. Very, what do you think about the comparisons between Sam Altman and Elon? I think it's crazy. I think he is the heir apparent to Elon.

like he's operating in many of the same circles. They technically co-founded Open AI together back in the day. So I think he is the next Elon, if not already supplanting Elon. They don't like each other, though, right? I know. Yeah, well, because of the Open AI thing. Okay, that was Sam Altman. Let's move on to Smart TVs.

So a new Smart TV just dropped. It's not curved. It's not 3D. It's actually just free. But obviously, it comes with a catch. So this company called Tele is offering ad-supported. an ad-supported TV model where the customer gets the TV for free in exchange for willing to have kind of a steady stream of advertisements flashing across the TV at all times.

But then you're probably saying, how the heck can advertisements constantly flash on the screen if you're watching TV? They added another screen. So they have this separate screen that kind of hangs beneath the main TV where ads can run 24-7. You can also put widgets there like the weather and stock news. But are you on board with this idea? Kind of. I know. I think everyone wants a free TV, and we all watch ads all the time anyway.

But they kind of want to put a digital billboard in your living room, which obviously I think a lot of people might balk at. It reminds me of when you're sitting in the back of a New York City taxi and those little screens, it's like, what did Jimmy Fallon say last night? And it just rotates between the same ads over and over again for whatever real estate company. So it kind of reminds me of that. But I think people are so used to getting hammered with ads on social media or TV or anywhere. that they're just like, hey, you're sending me a free TV. They're also making this, like, kind of functional, this bottom part, too, that has, you know, sports scores.

And they're saying this is way more than a TV, too. You can video game, you can work out on it, you can video chat. Yeah, it's got a camera on top. It's not disclosed yet if that's actually Sam Altman's World Coin at the top of the TV. But yeah, it has this camera up there that you can do, like, fitness classes and, yeah, take Zoom calls. Yeah, I think you're totally right. People are so used to ads at this point. feels kind of invasive on the surface to have ads constantly going in your room. But there's

things that pop up. Like, if you fill out this survey for Starbucks, you might get like Starbucks money. It's creating a more like personalized ad experience. So I actually think that people would kind of be on board with it. They'll be, they'll get better ads than just the normal TV ads you get. So I don't know. I could see people kind of loving this. So maybe it's it's the living room is a sacred space. That's true. For ads. And to be putting like a. New York City taxi streaming thing. But there's all there's definitely this backlash to streaming right now. Like I don't want to pay Netflix $14 a month and I'm I have streaming fatigue. So you see the guy who created this also created Pluto TV. And so that along with Tobey, which are these ad supported free

streaming services are growing much faster than the subscriber, the subscription services like Disney Plus and Netflix. So there may be this shift kind of back to a normal. ad-supported TV model back from our streaming force. No, I mean, I'm in. I want it. Free TV. Listen, I'm not sacrificing much for it. Okay, before we jump into our next story, let's take a quick break.

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$144 billion this year. Not that anyone would mind, I don't think, if they were disrupted. This is the craziest news story to drop because people are saying like, oh my gosh, like thank you IRS for providing us this other option because people hate TurboTax in like H&R block and these filing systems that they say they're free but there's always like these hidden fees. It's this huge, huge industry with like this ton of lobbying power to. So this is why we kind of haven't seen the IRS create its own like e-filing system, which makes a ton of logical sense. So it's a big, it seems like a big win on the service for consumers right now. It does. But the IRS also offers free tax filing now, it partners with a bunch of companies called IRS free file. There's this program.

And so 70% of taxpayers qualify for this private public partnership that you can file for free through these companies, but only 3% of taxpayers use them. So it's not particularly popular. Yeah. Well, the companies that you can use are H&R Block in TurboTax. Not in that. On the taxpayer first act, I thought it created its own systems for allowing these, like, offered like the free the free services but yeah also turbo taxes and kind of hot water too because they have to pay 141 million dollar fine because taxpayers who tried to use their free tax programs were actually directed to paid products instead so this is why people don't like these things because yeah you see the commercials like free filing of taxes but then there's always it ends up

not being something that gets you this isn't like a home run for uh lawmakers though it definitely is falling along partisan lines. You have Democrats like Elizabeth Warren saying, okay, it's about time. We need, you know, this needs to happen through the government channels. And then you have Republicans pushing back and saying, okay, actually the private sector can do this better. They point to facts that are like, the U.S. is actually pretty, the U.S. government is pretty successful at getting tax receipts. Like nine out of nine in 10 individual tax returns were filed digitally in 2002. And the U.S. voluntary tax compliance rate was at 85.1 percent, which puts near the top among all wealthy countries.

So people seem to be paying their taxes through this current system we have, even though it is just egregiously bad. Yeah. On the surface for consumers, and we're spending all of this time. And then you look at what happens in other countries, and that's the golden goose.

I don't know what the metaphor is. The government sends you an estimate of what you owe. You take a look. You spend five minutes taking a look and be like, yeah, I guess that checks out, or we need to make some changes. You check off a few boxes, and then that is it.

We spent all our time making like one-click checkout for Amazon and stuff like that. Why did we not spend our time making one-click checkout for tax? I mean, some people would say that is why private companies can do it better, but the ones we have now are very not trusted and our public enemy number one for the most part. All right, the Martha Stewart Redemption Tour reaches new heights every day. Really? Yesterday, Sports Illustrated announced that she will be one of the cover model. on the upcoming swimsuit issue.

And this is actually history making because at 81 years old, she becomes the oldest model ever to grace the swimsuit issue cover. Who did she be? I know. This is a gray one. May Musk, which is Elon's mom, who is 74.

What crazy, crazy world we live in. I know, truly. But Martha, I mean, we're looking at the picture now. If you're watching on YouTube, you can see it as well. She's looking great for 81. I mean, we have to say it. Absolutely.

So, for people don't know the backstory, This happened before maybe some listeners were born. Maybe it happened before you were born, but she was, she went to jail. She went to jail. She was accused of insider trading. First of all, Martha Stewart was a stock broker in the 1970s before launching her empire. She was accused of insider trading when she sold 4,000 shares of this biopharmac company, Mclone one day before its stock price punch.

Those insider trading charges were thrown out, but she was found guilty of four counts of obstruction. of justice and then went to jail for a few months, and then has come out and just rampage the world with entrepreneurial fervor. I know. She's actually a legend. And she's also the first, Forbes declared her first self-made female billionaire. This was back in 2000 when her company first went public. She was worth a billion dollars then, but I actually looked it up in today's dollars. That's $1.7 billion, thanks due to inflation. So she's been, yeah, on that entrepreneur grind for a long time. And then I also, so I also wanted to do some digging about the richest people to ever

grace the cover of the Sports Illustrated Swimsuit edition. And I, Beyonce comes in at number one, with a $500 million net worth. Tiber Banks is kind of close behind as well. So there's been some heavy hitters to grace the cover. So did Martha Stewart eclipse Beyonce, do you think? Or is she not worth this any? She's not worth $500 million right now? She's not worth $500 million right now. She actually sold her company for $225 million a few years ago to kind of a private equity group. But she still is a juggernaut. Her Stewart's brands are going to probably pull in around $900 million in combined retail sales per year. So she is still very much. And she's got her finger on the Zike guys, too. She's the OG lifestyle influencer. Yeah, truly. And her relationship with Snoop Dogg

just is the gift that keeps on giving. So, okay, let's finish off the show today with we have a new air to the throne for the worst Netflix show of all time. So Queen Cleopatra, which is this docu drama about the life of the Egyptian queen, is currently rocking a 2% audience score. I didn't know that was possible. I know. It was 1%. It actually got boosted up in the last 12 hours to 2%. So the score from critics also isn't far behind. It's sitting at around 10%. So kind of getting universally panned for not being very good. And at the center of it, why it's kind of in like the cultural meat grinder right now is because some people, including some Egyptians, are mad that the show casts a mixed race British actress as Cleopatra.

And so people are kind of review bombing it. It's part of the, it's this thing where if some, a certain group of people doesn't like what they see, they'll go and just absolutely tank the reviews of something. This happens in the video game industry. Like there's a long history of review bombing. So perhaps the show isn't as bad as a 1% audience score. it's just people are hammering it on Rotten Tomatoes to drive the score. Yeah, I didn't know you could review on Rotten Tomatoes.

I've never thought to do that, I guess. That's the difference. So the certified fresh number you see, that's from critics, but then there's also the audience score. And honestly, having the critical score being so close to zero as well shows that this is just not a great show. I was reading some reviews. It's basically, it's the docu-drama.

So it intersperses these really serious, like, storytelling from historians with these like very dramatic reenactments. And so people are like, it was just totally off and just wasn't a great watch. It's from Jada Pinkett Smith. It's the second in the series. Yeah. People in Egypt are, Netflix is not welcome in Egypt right now. One lawyer sued Netflix to try to, or sued Netflix to try to get Netflix taken out of the country

completely over this. So there's a lot of upset people. And there's been pushback on the other side as well. But we don't have time to get into all of the. that. I do want to just mention because obviously when you see worse Netflix show of all time, you do a little Googling. You say, all right, what are some of the other worst ones? And there's actually a survivor ripoff called Snowflake Mountain that has a 0% score from critics. It doesn't technically qualify because there hasn't been that many critical reviews, but literally not a single

critic said it was good. And it's supposed to be like this thing that shows young people, Snowflake Mountain, young people's survivor, like they can't handle anything to it. So literally the worst show of all time, though. So there's our Netflix wrap-up for you. There's Netflix wrap-up. Toby, I'm glad to say that you did not forget how to talk in Spain, nor did you forget what's happening in the business world. Thanks for staying clued in.

And thanks to you all for listening. You know, you can always email us with any questions or comments at morningbrewdaily at morningbrew.com. Big thanks to our entire crew who made the show possible in the back. Bryce Belloff is the ship's captain. Samantha Velas and Raymond Lou are the first mates. Our helmsman is Euchenawa Ogu. Billy Minino is the navigator Hair and makeup had to walk the plank

Devin Emery is our master gunner Our ship is a production of Morning Brew Great show today, what are we in this metaphor? We're just humble sailors, Neil. Regular sailors, rowing the oars. Yeah, doing the thing. All right, great show today, Neil. Let's run it back tomorrow. All pay off your home, travel for life, drive a Ferrari.

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