Morning Brew Daily - Meta Glasses a Privacy Risk? & Levi’s-Beyoncé Collab is Match Made in Denim

Episode Date: October 4, 2024

Episode 424: Toby and Kyle discuss the ADP payroll report and the jobs report coming from the government to see what’s the latest with the labor market. Then, a couple of Harvard students are able to use the Meta smart glasses to easily and quickly reveal personal information of strangers from just a quick look. Next, a former Jacksonville Jaguar employee convicted of $22M in embezzlement is suing FanDuel for enabling his gambling addiction. Also, Joby Aviation is the stock of the week while Tesla is the Dog of the Week. Lastly, Levi’s is looking for some extra help to boost their women sales and have brought in the big guns: Beyoncé Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. To learn more about how Wise could work for your business, visit https://wise.com/business/  Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Port Strike is Over  02:50 - Jobs Report Projections  07:00 - Meta Glasses Data  11:05 - FanDuel NFL Scandal  15:15 - Stock of the week  21:55 - Dog of the week  23:30 Levi’s and Beyonce  Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Toby Howell. And I'm Kyle Hagey. Today, why September's jobs report might be the last normal one we get for months. And how two college students hacked the new meta glasses. It's Friday, October 4th. Let's ride.

Well, that was quick. Just as soon as it began, the longshoremen strike that shut down ports from Texas to Maine is now over. The International Longshoremen's Association and the U.S. Maritime Alliance reached a tentative deal to raise wages by 62% over the next six years of a new contract. The union's president, Harold Daggett, had been making the rounds on social media with a clip of him saying that he and his workers will cripple the economy if they didn't get what they wanted. Looks like they got what they wanted. Yeah, we got to get this guy inside Morning Brew. He is a master negotiator. I'm trying to get a 62% race as well.

I have to say, too, the longshore men, probably the greatest union name in the history of the world. But I'm glad that the strike is over so we can get those ports opened back up. And also what was most interesting is the big fear was around AI and automation. And they haven't really addressed that yet. They're still negotiating that element of the contract. Right. That was a central part to this conflict. Port automation is still under negotiation.

So this is a tentative deal. They extended their current contract until January 15th to hammer out. out the details. But as of today, the Longshoremen have agreed to go back to work and have agreed to open the ports. Now, a quick word from our sponsor, Wise Business, the app for doing things in other currencies. Kyle, I don't think most listeners know this, but you're a big plane guy. I am indeed a plane guy. I'm the guy who will go to the airport early just to watch the plane's take off and land. It kind of makes you the perfect spokesperson for Wise too. I mean, planes are a much bigger and slower version of what Wise does for business owners, which

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While supplies last, ends June 30th, terms at AKA.ms.m.m.S. College PC. We used to hang on the edge of our seats for the new inflation readings, but now the star of the government data show is the jobs report. It drops today at 8.30 a.m. and promises to be one of the last quote-unquote normal ones, which I'll explain in a moment. Right now, forecasts have the economy adding around 150,000 jobs up from 142,000 the month before, while the unemployment rate is expected to be unchanged from August at 4.2%, which would be right in the sweet spot for the Federal Reserve. It would allow them to stick to their current rate cutting cycle without having to rush things along to prevent a recession should the numbers come in way worse. So why is this the last quote unquote normal jobs report? Well, if we jump ahead to October's reading, it will likely be heavily distorted by three big disruptions. One, the ongoing Boeing strike. Two, the now

solved U.S. port strike. And three, the devastation from Hurricane Helene. So analysts are forecasting September to be the last clean report we'll have for a while. And the last report that Jerome Powell and Co can parse through to make their next rate cut decision. You know, ADP releases this like appetizer report that analyzes private payroll. And they had some interesting findings. I think you noted some. But in September, hiring at U.S. companies actually picked up. It snapped a five-month stretch of slower payroll growth, wage growth in September. However, cooled for workers who changed job earnings rose. 6.6% from a year earlier, which was the slowest since April 2021.

And Jerome Powell had a quote on Monday where he talked about, he doesn't think we need to see further cooling in like the labor market conditions and that things are going according to plan. But yeah, there is this possibility that, again, looking ahead to October jobs and numbers, that employment could drop or even decline, even though it would be rather temporary because of these disruptions when you have a natural disaster like Kulner. come through. A lot of people end up out of work. Same thing goes for the Boeing strike right now. A lot of people are, quote, unquote, out of work right now, even though they are on strike.

So if that happens, the U.S. hasn't had a negatives jobs report since December of 2020 when COVID was still in the full swing of things. But the labor market has been on a cooling trend for a while now. If we go back to the July report, that's when a lot of alarm bells started ringing and came in surprisingly low, 114,000. And then that was revised even lower to 89. thousand. And then came the big annual revision around the same time, which showed the economy, actually added 818 fewer jobs, 818,000 fewer jobs and originally reported. So everyone was like, what is going on? That's when the narrative fully shifted from, okay, inflation is the biggest thing we have to worry about to now the labor market is the biggest thing we have to worry about.

Maybe it's crashing. But then the August report came in, it showed better than expected wage or growth, drop in the unemployment ways. So I think the September, report could have kind of that same soothing effect as long as it comes in right around economist's expectations. Yeah, I'm excited to check it out. And layoffs are still been generally low, but there has been a few recent announcements. CVS announced that it was going to cut up just about 3,000 jobs. And Samsung also had a announcement about some layoffs coming as well. So that's something that the Federal Reserve is going to watch, you know, on a holistic basis to make sure that the economy doesn't go into a tailspin here. And then looking ahead, more rate cuts are expected for

later this year, but how big they are will depend on the health of the labor market. So that outlook could be murky. Again, like I've said, this is kind of the last real good crystallized data that Jerome Powell will be able to look like to inform his rate cut decisions because the October jobs report will be a little more murky and we'll get that rate cut announcement or the rate decision at the beginning of November. So that is why this particular report is kind of like the last big one before we see potentially our next rate cut.

Spot on. I'm excited to see J. Paul later. It's must see TV. Toby, I have some breaking news for you. Turns out hooking up and always on camera to unassuming glasses and feeding the camera directly into the internet would lead to some scary results. And that's exactly what two Harvard students have done building on top of META's RayBan Smart glasses. They are, these customized glasses, take in people's faces through this front-facing camera. and then these faces are fed through facial recognition technology, which pairs with other publicly available information about the subject on the internet, basically letting the wearer of these glasses know things such as home address,

phone number, family members, and the most embarrassing photos they could find on your old Facebook account. These students, they're not releasing this code. They're not doing this to make money. They're actually doing this as a bit of a warning signal about the dangers some of these new technologies, including smart glasses might pose for kind of society writ large. So Toby, two questions. What are your thoughts here?

And two, how is your house on one, two, three, Main Street doing? No, no, no, no. One, two, three, Main Street. That's my old address. Yeah, way long time ago. But yeah, this experiment really just shows how thin the line is now between moving around in what you think is just relative anonymity. When you go out on the street, you think no one's going to know who I am.

Although we're world famous podcasters now, though, so we can't even step outside. But yeah, you used to be able to move around with relative anonymity where and no one could learn your identity. But now there is just this, there is not a lot of space separating someone from figuring out who you are, where you used to live, your phone number, your family members, because of this technology embedded in these glasses. And again, this is an experiment. This is not something that they were showing off as a commercialization opportunity. But that's always been the fear, like the lack of privacy. controls that these glasses potentially have, and we are seeing it manifested in real time with this experiment. Right. And in defensive meta, they're not saying, like, this is the use of these glasses.

They actually have in their terms and conditions that what they're doing is breaking those terms and conditions. But it is very scary to realize the power this has. And there's, I didn't even know there's, there's so many websites that allow you for a fee to upload one photo and then find every photo that looks like that across the internet. And now that we have these like LLMs and advanced AI, it's making that quicker and more accurate. It's quite terrifying. Right. Yeah, there's these facial recognition sites like PIME's, but you are correct that LLMs was the big unlock here because it can draw the web, but then it can draw those relationships between photos and pictures of you on this site to pictures of you on that site and make these connections from these big data

sources. So that's the big unlock here. Remember, this was one of the key reasons why if we want to go back all the way to Google Glass, like Google Glass failed, people did not want to get recorded in public without their consent. But in the decade sense, people are a little bit more open to the idea. I mean, think about it. You walk down the street. You see vloggers, see TikTokers. Someone's usually filming something. So we have been a little bit more open to it, which is why I think meta's raybans glasses have succeeded where Google glasses failed. Although they just looked they failed because of a lot of reasons. But yeah, one of them was the privacy issue. But that is the reason why meta's glasses are succeeding is because they look.

look like normal raybans. But that's the chief fear here is that it's hard to see if someone's actually recording you in public. There's been reports that when you try the meta glasses on, you can't really see the indicator light in bright sunlight. So lots of privacy kind of Pandora's box is opened here. And this is like another layer of Pandora's box that they added on top of it. Yeah, I think the big thing is these glasses look cool.

Like fuck went too hard and made these actually something that you'd want to wear. And I really think he did this just to be like, I didn't forget about those old Facebook photos. We're going to find them. Don't worry. Yeah, I have those Red Cup photos of you. Yeah, I know. Searching through someone's online info, it's a time-honored tradition at this point. Ever since Facebook invented poking. But yeah, with the right tools, these artificial intelligence tools, it's easier, faster, potentially even more invasive. A former Jacksonville Jaguar's employee, Amit Patel was sent to. prison earlier this year for stealing $22 million from the team and funneling that money towards his exorbitant sports betting. But Patel thinks that while his actions were wrong,

he's not the only one at fault for the stolen money. Earlier this week, he filed a new suit against Fandoul, claiming the betting site employed tactics that preyed on his gambling addiction. Having been identified as a high-value customer by Fandle, Patel says he was assigned a VIP host, Brett Krause, that he would text with up to 100. times a day to encourage, monitor, and inspire new and bigger bets. Patel also received hundreds of thousands of dollars worth of perks, like tickets to the Masters and an F-1 event, as well as over $1 million in credits, all to keep him coming back for more.

Kyle, this suit is shining light on some of the more shady methods that gambling sites employ to keep the money flowing. Yeah, this was a story that just was so nuts to me, and I had no idea that companies like Draft Kings or Fanduil were deploying these tactics to get people to bet more and more. I think, unfortunately, the main character is not the best person. Like, they went into his history. He was using, when he worked at Deloitte, he was using a corporate card to gamble as well. And then they were just like, he paid it off before someone realized.

I was like, that should have been red flag number one. Also, he had a degree in, he worked in financial planning, which seems very ironic. But he was spending on all this other stuff outside of gambling. So I think this lawsuit, in my opinion, is a bit frivolous. but it highlights a much bigger problem, which is we have basically been running this large-scale study about having gambling, sports gambling, immediately available in your pocket, and companies now have more information about when you're logging on, how much you're betting, how many times you're checking the app, and they're able to use that information to, I think, prey on people

that are very susceptible to gambling much more than they actually want to. Yeah, we're seeing more and more of these sports betting studies emerge showing just how damaging it can be in unexpected ways. I mean, researchers at Northwestern University found that legalized sports gambling led to increase credit card debt and reduced investments. Another study found that increased the risk of bankruptcy by around 25 to 30%. But yeah, you're right. Bloomberg put out this big piece about some of the methods that gambling sites are using

to attract big, specifically losing betters. So winning gamblers, people who do this for a living professional bettors, have taken to disguising themselves as gambling ads. on the site so they can keep on playing there. For instance, there's this guy who set up a bot who would log into his accounts every day between 2 a.m. and 4 a.m. to make it seem like he can't get through the night without checking his bets. Another one, another person set up a money withdrawal and then reverse those withdrawals

so it looks like he can't resist keeping the money flowing. So these are professional gamblers who have figured out that if they pretend to be gambling addicts and like they behave in patterns like gambling addicts might exhibit, they get more free stuff, they get more free bets, they get bigger boosts from these companies. So, yeah, I think this case, even though you're right, Amit Patel is not blameless in this whatsoever. I mean, he was using those stolen funds to fly on private jets, you know, use high-end hotel stays, spa services. He bought a $200,000 putter that tiger once used. So he is not blameless in this, but I think he is using this as a chance to kind of shine a light on some of the tactics that these sports books employ to keep the money.

Flown? Yeah, I mean, if I work for the Jacksonville Jaguars, I need a bit of a vacation as well. So I get it. I mean, it is very interesting when you look at the business model for these companies. The study you mentioned, about 80% of people that gamble online, they're like, they're gambling within their limits. It's the people on the end of the bell curve. And basically these companies want to stop very good gamblers, and they can basically ban them from using the platform. And then they want to prey on the gamblers that will go much above their limits. Right. That SMU study that you just mentioned and found that 3% of betterers who lost the most accounted for half of net revenue for sportsbooks.

So that is half of revenue coming from just 3% of the betters. Those are the type of the people that they want to appeal to the most. Up next, we got Stock of the Week, Dog of the Week, coming your way. We're the Hartford, with decades of experience ensuring millions of unique small businesses. When it comes to your small business insurance. Thank you. One size, absolutely does not fit all. Get a quote or find an agent today at the Hartford.

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price match for details. Welcome to Stock of the Week and Dog of the Week where we tell you one stock that is sitting in first class and one stock that has to board last and has a middle seat. I won the pregame, who can name the most cities in Minnesota competition, so I am up first. And as a reminder,

we are not financial advisors. I thought a hedge fund was when you start saving up for some landscaping. My stock of the week is Jobi and not just because it rhymes with Toby, Jobi, the Evitol or Electric Vertical takeoff and landing company, aka a quieter, greener, and smaller helicopter, announced Wednesday that Toyota will be investing another $500 million to support certification and commercial product of Jobi's electric air taxi.

Now, Joby went public in 2021 through a SPAC. There's a fun buzzword we're bringing back a SPAC. They also received $60 million from Delta Airlines in 2022 to help develop a system of air taxis to transport passengers to and from airports in major cities. Now, the goals for these companies, these Evital's, is to help develop or develop a UAM or an urban air mobility network and think like Uber for the skies, which is actually quite interesting because Uber had a project called Elevate, where they were helping build out the technology that could develop a UAM, and Joby actually acquired that technology in those employees in 2020. Toby, you know the saying like we wanted flying cars, but all we got was like a smart refrigerator. It seems like we wanted flying cars and we're actually pretty damn close.

I'll tell you who really wants flying cars and that is Toyota because they are clearly all in on this vision for commercializing an air taxi. I mean, they just plowed 500 million in this week. That brings their total invested in the company to just under $900 million. But yeah, it essentially, they want to launch this public service that its users of this app could call an air taxi. who knows if that's going to be the eventual vision. Actually, what I think is a more realistic use case for Jobi and one that they have been pursuing is faring supplies around actually military bases. They have a deal to deliver two of their next-gen aircrafts to the McDill Air Force Base in Florida by next year.

That makes more sense to me than operating a crowded city environment or trying to be just like the Uber for air taxis. Early tests have shown that they are very good at that because they do have low-maintenance costs. They are quieter. They are more green than helicopters, which makes them ideal for those military settings. But you're right. Joby, still early days, though. They have new funding. They're seeking to increase their manufacturing capacity. And yeah, it's as close to flying cars as we got right now. It's a great point you bring up, too, because Blade, which is the closest thing to Uber for the skies, actually makes most of its money doing Oregon transportation across the

U.S. So I think there'll be other use cases for Joby, too. Yeah, absolutely. Joby also has a pilot service in cities like New York, or they plan to be launching a pilot service in cities like New York or Los Angeles. So potentially we'll have a Joby-Tobie moment there, and I'll take to the skies. My dog of the week is Tesla. It has been a bumpy week for the EV maker. On Wednesday, it posted third quarter delivery numbers that missed expectations. And yesterday, it issued a recall for 27,000 cyber trucks, citing a glitchy backup camera. Its fifth recall for the truck. It's fifth recall for the truck in less than a year. Now, it's not all bad. Tesla still delivered nearly 463,000 vehicles in the third quarter, up 6% from a year ago and 4% from Q2, though the cyber truck recall is

definitely a headache. A filing from the National Highway Traffic Safety Administration said that sometimes the rearview display just goes blank for up to 8 seconds when the car is put in reverse. So the slight miss on deliveries, some spotty backup cams, and a 7% drop in the market this week, was enough to land it in our dog of the week category. Yeah, I mean, I think Elon Musk needs to go founder mode and lock in on Tesla a little more and get maybe off Twitter or X. And I will maybe make a controversial statement. I kind of like the cyber truck.

I like the look of it. It seems like nothing else out there. But a fifth recall is not a good sign for Tesla. I think you're right, too, about locking in on Tesla because if you zoom out, the big picture around Tesla vehicle delivers is that they've been essentially flat since 2023. If you look at the chart of their deliveries, things have just stalled out in their core business.

In order to hit their consensus figure for annual sales, Tesla now needs to deliver just shy of 500,000 vehicles in the final quarter of the year, which would mean setting a new record. And even then, annual sales would still be below the level of 2023. So to that, a lot of people see a flatlining company kind of in a holding pattern. but the one thing that is huge on Tesla's radar right now is October 10th.

That is the date that they are expected to unveil its robotaxy prototype, which is next week. So must is likely going to just spin a narrative that of self-driving vehicles, of artificial intelligence and robots, and how that is the future of the company? Because how else can you justify a stock trading at almost 99 times Ford earnings right now for a company that has essentially flatlined in recent years? So definitely the big date circled is October 10th. That is what all of kind of must energy is devoted towards. And that's what a lot of Tesla shareholders are also looking at as well. Yeah, the Tesla self-driving taxi is the technology that's been one year away for the past 20 years.

I know. We'll see if it actually delivers. Hey, maybe he'll go flying taxi on us and just take on Jovey as well. When Beyonce dropped her Cowboy Carter album earlier this year, one song caught the eyes of executives of a certain iconic jeans. brand. I'll let you guess the brand in a second, but the song's name was Levi's jeans with two eyes. So yeah, the brand that it caught the eye of was Levi's. Knowing they had been handed a gift of Beyonce proportions, the brand immediately changed their name on Instagram to add an extra

eye to try an appeal to the Beehive, but they took it further than just a social media stunt. Six months after the song dropped, Beyonce is now featured in an ad campaign from the company that was stretched into 2025. It's led to some serious momentum for the iconic brand. which saw gene sales grow 5% in its last quarter, the biggest jump in two years. Unfortunately, though, another brand under the Levi's umbrella is not benefiting from the Beyonce effect. Dockers. Dockers, which focuses on khakis instead of denim, had a dismal quarter with sales down 15%, prompting Levi's to consider selling off the slacks maker. Interesting times at Levi's, Kyle. Yes, I mean, I genuinely love this story, and I find it so funny that

like they're trying to get rid of dockers because denim is just so much superior than khaki's right now. And I know they're talking to Beyonce and they're like, you got to make a song about dockers. What rhymes with dockers? What rhymes with khakis? Please help us out. But I do really love this collaboration. And in the story I was reading about when they found out that Beyonce was going to release a song, like they didn't have any idea. She released this before any collaboration was available.

And it was like their CMO was like, oh my gosh, this is such a cool moment. And then they were able to actually make this collaboration happen. the first commercial with Beyonce featuring the Levi's jeans just came out and she's in a laundromat and it's actually a really, I think, cool commercial. The song is playing in the background. And the big goal for Levi's is to increase the share of women

that buy jeans from them up to 50% from around 35 right now. So I think this is a really cool partnership. It's a cultural moment. It's an iconic American brand and I think this is a match made in heaven. Yeah, Beyonce and Levi's actually go way back too. I mean, in 2001 when she was still part of Destiny's Child, She wore Levi's super low jeans on the red carpet at the MTV Music Awards.

I can't imagine seeing like jeans being worn on the, or super low jeans being worn on the red carpet these days because Levi's did go through kind of like this rise and fall. They were very culturally relevant in the 2000s, but then they kind of missed the cool factor. They missed as the market shifted towards more athleisure brand. So Levi's kind of had a little bit of a down swell, but now it's on the up and up.

One thing that it's been focusing on, too, is DTC. It is investing very heavily in it. It's been driving most of Levi's profitability. And then if you actually just get rid of Dockers, they had a fantastic quarter, which is why they are literally trying to get rid of Dockers because it's dragging the entire business down right now. Docker sales were down 15% to just $70 million.

So I do think Levi's is on the come-up, very smart to just attach your wagon. to anything Beyonce is doing. And I think we're going to see this campaign unfold over like the next few years and hopefully drive those gains with female shoppers that they were looking for. Yeah, they expect by the end of the year with a boost from Beyonce, its women's business will bring in $2 billion in sales, which is remarkable. And I think from Levi's perspective,

Docker's being an independent company, Levi's being an independent company, will actually help both. We've got to get Beyonce some morning brew merch, like ASAP. She got to make a song that says Morning Brew with two. I guess. Yeah, I mean, if anyone's got a line to Beyonce, hit us up. All right, let's wrap it up there. As always, wonderful show, Kyle. If you want to get in touch with us, send us an email. If you want to chat about something you heard today, our email address is Morning Brew Daily at Morningbrew.com. Also, if you enjoyed the show today, feel free to share it with someone. Play a game of

Contact Roulette. So open your phone, open your context. Just scroll with your eyes closed until you land on someone, then you have to send this episode to them. Those are the rules. Should be interesting. Kyle, hit the people with those credits. Emily Milliron is our executive producer. Raymond Lou is our producer. Olivia Graham is our associate producer. Drew Magner is our technical director. Billy Minino is on audio. Hair and makeup just got docks by some smart glasses. Devin Emery is our chief content officer. And this show is a production of Morning Brew. Great show today, Kyle. I wish you all well. Have a great weekend. Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars.

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