Morning Brew Daily - The Missing Titanic Sub Latest, Homebuilding Soars, Student Loan Payments Resume

Episode Date: June 21, 2023

Episode 86: Toby is back! The guys dive into the search for the missing submersible en route to explore the Titanic shipwreck. They have the latest on 'banging' heard in the ocean and discuss a 2018 lawsuit against the company OceanGate Expeditions. Plus, why there is a boom in homebuilding and how it has impacted the housing nation-wide shortage. Oh, and if you haven't heard - student loan payments are officially set to restart in the fall. Also the Paris Olympic headquarters were searched in a corruption probe and Toby shares his top trend of the week. And finally why trucking companies are trying to hire through... video games? Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAQ plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morning brewdaily. That's aflack.com slash morning brewdaily. Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell.

On today's show, there might be signs of life detected in the search for the missing submersible in the Atlantic Ocean, and a trucking company is trying a creative recruiting tactic to find new workers during a major trucking shortage. Then, Neil, the golden age of student loan forgiveness is officially coming to a close. We'll tell you all about what you might owe come October. Plus, the Paris 2024 Olympics are under investigation for corruption. Faster, high, or stronger? more like fraudsters, grifters, and bribers. Neil, it's Wednesday, June 21st.

Let's ride. All right, Toby, you are back from Montana, and let me just say, it is very clear that you were in Montana. I know. You are wearing a fly fishing hat, and you're just talking nonstop about Montana. I know, Neil, I love doing this podcast with you. I love New York City, but boy, after visiting Big Sky, Montana, a little part of me wants to just drop everything, become a fly fishing guy. and just fish my life away. It is beautiful out there.

Yeah, what was your favorite part? What are some highlights? I think just the sheer immensity of, like, the landscape makes you feel much smaller, which is almost freeing in a way. So I had a great time. Get out to big sky if you can. But it is hard to get to. It is hard to get to.

Which is what, yeah, I missed the podcast. United Airlines. I got a bone to pick with you. I've been a very big proponent of expanding the Bozeman Airport for a long time from now because it is very small and it's not supporting the population growth there. So that is my pet project. I'm going to work with the Bozeman's Council on that. Okay, let's go to our first story.

Overnight, there was a glimmer of hope in the frantic search to find the Titan submersible that went missing in the North Atlantic on Sunday on its way to view the Titanic wreckage. A Canadian plane using sonar picked up underwater noises in the search area, the U.S. Coast Guard wrote on Twitter around midnight. And separately, an internal U.S. government memo said that searchers detected banging sounds, every 30 minutes for about four hours. Search crews said they haven't found the source of the binging yet, but experts see this as a positive sign that the five-person crew is still alive. There's this guy, Chris Brown, who is an explorer and a friend of the British businessman on board

the submersible. He told the BBC that if you make a continuous noise, that's not going to get picked up by sonar, but doing it every 30 minutes, that suggests humans. Still, time is running out fast. The Coast Guard said that oxygen supply is expected to be depleted by 6 a.m. tomorrow, so about 24 hours from the time we were recording this right now. We kind of woke up to this news. We got it late last night. It is crazy how the world is just focused on this submersible. And it's crazy how global this searches to me. I was just going through everybody involved. So the U.S. Coast Guard is leading the search because it's off the coast of Boston.

A Bahamian research vessel vessel was also conducting remote operations nearby. French president, Emmanuel Macron, has ordered the dispatch of a research ship. There's a deep sea mapping company called Magellan, who actually mapped the imagery of the Titanic.

They're trying to get involved out of the UK. And then, of course, there's the Canadian P3 aircraft that kind of discovered these underwater noises. So it's just an all-hands-on-deck, pardon-the-pun, search for this summer style right now. Yeah, I mean, so what could have happened? There are these experts sort of explaining what there are potential explanations about why this thing went missing. There are three

likely scenarios and they range from, you know, most optimistic to most pessimistic. The best case scenario is that Titan is floating on the ocean surface after suffering a communication outage. So it is not, they don't have to extract it from the depths of the sea. The second is that it got tangled in the Titanic wreckage on its way down. That's kind of a medium case scenario because they still have to drag it back up. And then the worst case scenario is that it suffered a disastrous hole breach, in which case it would have imploded instantly. I mean, the best case scenario being that they're floating at the top of the surface

is still kind of a worst case scenario in my mind because they're deadbolted in by 17 dead bolts. And so potentially they're on the surface. they can see the light, and yet they can't be freed because they can only be freed from the outside. So even though that is the best case scenario in terms of finding them, oh my gosh, just I cannot believe what it would be like to be inside this crap. I think every single discussion at work or you're having with your friends today is kind of like, what would you be doing? And like, what are they thinking? And it is just very stressful. And then we're getting more like spicy details about Ocean Gate, which is.

the company who runs these tours. And in 2018, actually, a former employee kind of sued Ocean Gate saying that their craft was subjecting passengers to potentially extreme danger and that this was an experimental craft. And then Ocean Gate kind of sued back saying that the employee was leaking company secrets. So this is not a company that has been free from scrutiny in the past. It's kind of emerging now that this thing may not have been particularly safe because submersibles are not particularly regulated, especially because you can go into international waters. International waters, whenever you get that, you're like, that is the wild west. I mean, it goes on a, you know, a U.S. bow, and then it gets dumped in the middle of the Atlantic Ocean where there's very little sort of oversight of anything.

And I just, in terms of the extreme tourism economy that this is a part of, you have to imagine that, you know, SpaceX, Blue, origin virgin galactic get their spacecrafts inspected to the wazoo by the f aaa and the what was concerned uh this a former employee and 38 other marine experts who wrote a letter saying they were extremely concerned was that the CEO who was on the on the vessel was not subjecting it to a third party inspection right because he thought it was too expensive and they're like you need to get this thing inspected bro he was like nah it's too pricey Yep. So we will see what happens. Obviously, there are 24 hours left. I know. We're going to be around the clock. We want to do the full pot on this because, yeah, the updates are coming in.

Hopefully we get a positive update coming forward. We'll see. It's like looking for a minivan in the middle of the Atlantic Ocean. All right, moving on, Toby, I love the smell of sawdust in the morning. And that's because the U.S. is actually building homes again. New home construction boomed 21.7% in May from the previous month to its highest level in more than a year. The number of new units that broke ground was the most since 1990, and that 21.7% jump was the biggest monthly gain since 2016. What's even crazier is that analysts were expecting housing starts to decline. So this is very welcome news for a housing market that is experiencing a major supply crunch, which in turn is creating an affordability crisis.

There are 39% fewer homes for sale now than five years ago, and Freddie Mac estimates that the U.S. is short 3.8 million homes of what it needs. So this is a good sign overall that the housing market is revving up again after it was hurt by the Fed's interest rate hikes and spiking mortgage costs. It's crazy. I was looking at the median home price right now in the U.S. It's $419,000, which is 40% higher than it was in January 2020. So we're just seeing kind of the end of the end of of a cascading effects from the pandemic, really, in terms of supply chain crunches, building materials cost so much money. So new homes just weren't being built.

And it led to, yes, this huge housing deficit with strova prices. So it is kind of crazy that in the year, 2023, we're still feeling the effects of kind of that, that shortage that came from the pandemic. And a big thing driving that shortage is that people are locked into very sweetheart mortgage deal. So 60% of mortgage holders bought their homes or refinanced in the last four years when interest rates were super low. So you can imagine why there is a housing shortage is because everyone is in their homes. They just refinanced at a 3% mortgage rate. They're watching the Fed jack up interest rates and watching mortgage rates go higher than 6%. And they're like, I would have to be

absolutely crazy to leave my mortgage right now, go on the housing market and pay home. hundreds of dollars more per month on mortgages when I have a very nice deal going. And the fact that they're not leaving leaves a lot fewer homes available. Yeah, absolutely. Yeah, you call it the golden handcuffs where most mortgage holders, they want to stay put because they got these record low rates. And I also was just digging into some of the new home data real quick. And the Midwest is kind of putting the team on its back right now. Housing, new housing starts rose by 67% from the previous month. A lot of that is actually due because the weather gets warmer and people can start building again. So if you're looking for a house, the Midwest might be the place to get. And some

analysts was saying this was a blip actually because of the Midwest. And he was saying that there were tornadoes in the Midwest that destroyed a lot of homes. And that so and that kind of factored into a big rebuilding boom. But, you know, if, and again, we're going to say this on Friday when we do our stock of the week and dog of the week. But we are not financial advisors. But home builder stocks are booming right now. They're among the best performers of the entire stock market this year. The Home Builders Select Industry Index is up 26% since the start of the year. The S&P is only up 15%. Toll Brothers, which is a big real estate residential real estate company, is up nearly 50% this year. Home Builder Confidence has risen for six months straight. So I guess we're back,

baby. Your housing shortage is their opportunity. And it's really necessary. for to alleviate some of the, you know, the pricing crunch to have home builders start, you know, doing their thing again. For sure. All right, Neil, our next story is not going to be a popular one for a lot of our listeners. Student loan payments will officially restart in October, according to the Education Department. It's the end of a roughly three-year hiatus that started all the way back in March of 2020 when Trump announced that he was pausing federal student loan bills in light of.

the pandemic, that pause has since been extended eight times. But that relief is coming to an end in October, which means a lot of people are in the final stretch of life without that monthly payment. So why now? Well, the Education Department has a little banner on its financial aid website that says Congress recently passed a law preventing further extensions of the payment pause. And that law refers to the agreement between Republicans and Democrats to raise the debt ceiling back in early June. One of the Republicans' demands was large cuts to federal spending. In terminating the pause on student loans was one of those bargaining chips that Biden and the Democrats played in order to get that deal done. So here we are, Neil. How is life going to be in America now that student loan

payments are going to be back? Well, apparently, uh, the economy is going to take a big hit because collectively these borrowers are expected to start paying anywhere from $5 billion to $10 billion each month. Just to compare that to the amount of spending that goes on, it's a big chunk because clothing and department stores get spending of $35 billion per month. So that's $10 billion of $35 billion. So experts are warning of a really big hurt on certain retailers because now that you've got to pay, you know, almost $400 a month again, you're probably not going to spend that on buying other things.

And they're saying the thing that will get hurt the most is apparel. Yeah. I mean, it hurts for sure because $40,000. roughly 40 million people have some sort of debt from their education, and the typically monthly bill comes in around $350. So that means that three-year pause for a lot of people saved the average borrower, $15,000. And yeah, you're right. That's money you could have been spending on a new, I don't know, unique lotee. Instead, it's going towards your student loan payment. So there are specific retailers that are going to be impacted, and that's because

the majority of holders of student debt are millennial and gen X. and they like particular retailers. So there have been a few that have been identified, and that's Wayfair. I guess they just bought homes. Dix, Alta Beauty, William Sonoma, Best Buy, and the one that's been singled out, can you guess?

I don't know. Hit me. Target. Targe. The millennials and the Gen Xses love their target. And so analysts are like, look out Target. You're going to be hit by this. But we should also mention that Biden has a student loan forgiveness plan

that is going to be decided on whether it's illegal or legal by the Supreme Court in the coming days. So that could maybe alleviate some of the pain that retailers and people might feel. But still, it seems as though like 55, even if this thing gets through, which is not expected to happen, the Supreme Court is expected to strike it down. Still, 55% of borrowers will still have student debt they need to repay. So this will still be an issue no matter what happens in the Supreme Court. Yeah.

even if that plan is to cancel up to $20,000 in student loan debt. So, yeah, that's definitely the thing hanging over all of this is will that be struck down by the Supreme Court or not. All right, Neil, before we jump into the next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill three burner gas grill. Or get $50 off a select Weber Spirit. grill and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together.

Shop spring backyard days for seven days at the Home Depot. Now through May 6th. Exclusion supplies to homedipo.com slash price match for details. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the unreal college deal, everything you need to study and play with Select Windows 11th.

P-C. Eligible students get a year of Microsoft 365 premium and a year of Xbox GamePass Ultimate with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last ends June 30th, terms at AKA.m.m.S. College PC. All right, Neil. Now let's head to the World of Sports where there is yet another scandal rocking the Olympic Games. So French investigators raided the headquarters of the Paris Olympic organizers yesterday as part of a probe into suspected corruption. That makes it the third Olympic Games in a row to be investigated for some sort of corruption, following accusations of vote buying that swirled around the 2016 Rio Games and the 2021 Tokyo Games.

There are actually two probes going on when it comes to Paris, one that started all the way back in 2017 when Paris was awarded the games and one that was started more recently in 2022. So the Raiders in particular are looking into suspicions of misappropriation of public funds and favoritism regarding several of the public contracts awarded by the Paris Olympic Committee. Neil, three Olympic games in a row getting investigated for possible corruption. The Olympics and corruption go together like hair and makeup and not showing up. Yes, I mean, this is a tale as old as time.

I sort of agree with a lot of the critics of the Olympics. There's an anti-Olympics group that came out and said, for us, an event of Olympic proportions cannot be held without corruption. It's the size of the event that makes it necessary, whatever the country. So Francis tried to build itself as different than past major events. We had the World Cup in Qatar, which was very dogged by a lot of controversy and corruption. And before that, the World Cup was in Russia. And so Francis is like, hey, we're a democratic country.

We're going to be completely above board. But you just feel like the amount of money that goes into this thing, the amount of government funding that is poured into contractors. the amount of vendors that it needs to pay, just kind of obviously results in corruption. There's nothing you can do about it. It reminds me a lot of the COVID relief funds. Right. That was, you know, they just throw money. And a report came out about COVID that was 10% of all of the COVID relief was stolen or misspent.

And it just reminds me so much of what happens with the Olympics where they're like, here's $8 billion. Go build, you know, here to a construction company. It's like, go build, you know, 30 different projects. and there's just no way that, you know, people like Tony Soprano aren't going to get in on it. Yeah, and it's kind of crazy, too, because you compare and contrast how France is done, like, publicly on the field. And they've done really well. They've gone to two World Cup finals in a row.

But behind the scenes are a total mess. So last month, the president of the French Olympic Committee resigned. And then the president of the French Soccer Federation resigned in February. And then even the president of the French Rugby Federation resigned in January after he was convicted. corruption. And that's kind of a big deal because the Rugby World Cup is heading to Paris. And that event is supposed to be kind of like a test run for France hosting the Olympics. And so the fact that even that committee is being investigated for corruption just goes to show you that like France is totally being hit on all sides from these anti-corruption laws. Global sports is

rough. There's a lot of money. Yeah, you're right. Yeah, but like we know FIFA is, Most corrupt organizations on earth. But it's not just international. It's happened here before. And I don't know if you remember Salt Lake City in 2002. I do. I was 11. I was super plugged into the news.

I was just reading up all about this. But Salt Lake City, they hosted the Winter Olympics in 2002. And there was a major scandal of the event organizers, the boosters of Salt Lake City, sort of bribing the International Olympic Committee to host in Salt Lake City. paid him $1 million on various gifts and things like that. They were actually indicted on 15 counts. They were later acquitted, but it led to this major shakeup at the IOC, and they, a bunch of

the delegates of the IOC were kind of ousted after the Salt Lake City thing. So that's, I kind of remember it when I was a little kid, but this happens every single Olympics. Yeah, it's a tradition unlike any other. That's the masters. All right, Neil. We're back. Let's move on to our next.

story. We're back with another edition of Toby's trends. Usually this is our Tuesday segment, but due to United Airlines shenanigans, I missed yesterday, which means we're diving deep on a trend I have my eye on on Wednesday instead. So today's trend comes to us courtesy of an announcement from Spotify. It's rolling out a new pricing tier for its streaming service, code named Supremium, which is their most expensive tier yet. So what's so supremium about it? Well, it will offer high FI-Fi Audio, which is short for high-fidelity audio. Now, hi-fi audio, Neil, is one of those things that people who love music are obsessed with. Basically, what golf is to us, hi-fi audio is to audio files. So what's the difference between tossing T-Swift on just your normal Apple wired headphones

versus listening to her in hi-fi audio? Well, today's streaming music is pretty much universally lossy, which means you aren't getting all the sounds from the original recording. Hi-Fi audio, on the other hand, doesn't emit any of the little pieces from the recording. And if you pair a lossless stream with the right headphones or speaker set up, you'll get a better listening experience. So today's trend is all about how major streaming services are moving towards offering lossless hi-fi audio. Apple Music and Amazon Music actually both already offer it. Spotify is a little late to the game. They offer it in their normal tier.

So Spotify is doing this as kind of their entry into the high-fi. hi-fi audio game. What do you think about hi-fi, Neil? Sounds a little scummy. I know. Well, okay, here's what I'll say on top of all that. One, it does take a very trained ear in a very good setup to actually hear the difference. And I did take a little quiz. MPR has this hi-fi audio quiz. I got every single one of them wrong. So to me, it's a little bit like wine tasting where if you are a connoisseur, you kind of get it.

But if you're not, then it's not for you. I'm sure people don't do it to listen to, no offense, Taylor Swift. I'm sure there may be other types of music that lend itself more towards, you know, a high fidelity listening experience than just regular pop music. Like some things that you can maybe tease out of the music a little better. For sure, yeah. And I actually do want to just toss one more trend on top of the existing trend. You know how we've talked about the resurgence of vinyl in recent years? Well, vinyl is one of the only formats that truly is lossless because every single part of like the analog wave is captured in those little grooves of a vinyl.

record. So vinyl are outselling CDs for the first time in 30 years. And part of the reason is because high-fi audio is just such a trend right now and people love listening to it on vinyl. All right. Well, let us know if you're listening whether you are, first of all, listening on hi-fi audio to us because that is a very important use case. We should produce a vinyl record for every episode and send it to a listener. What do you think of that, Emily? There you go. Okay. Our final story, it was super fun. Toby, I want you to imagine that you're really good at Madden. And all of a sudden, Bill Belichick calls you up and is like, Toby, son, I'm very impressed with your Madden skills. It's the dream.

I want you to play for the New England Patriots. Something kind of similar is happening in the trucking industry. So the trucking company Schneider National has started to place ads in the trucking game American truck simulator to recruit new drivers in real life. The game is ultra realistic, penalizing you for breaking road rules and offering a different types of transmission and brakes. So Schneider thinks that, hey, if you're a good truck driver in the virtual world, you could be one in the physical world too. Also, you probably don't mind staring at a road for hours on end. So this creative recruitment drive shows also how trucking companies are very desperate to find workers right now. There is a severe shortage. In 2021, the shortage of truck drivers in the U.S. reached a record high of around 80,000, and that could double by 160,000 by 2030. What do you think of this? I love every part of this story. And you know what my mind immediately went to is that this was the Metaverse we were promised in the sense that, remember, McKinsey issued that report that the Metaverse was a $5 trillion

business opportunity. And one of the biggest things in that report was that people are going to advertise within the Metaverse where people spend time in these virtual worlds. Well, this is hilarious because it turns out that the world that people want to spend time in is just a trucking simulator. And the advertiser is a trucking company. But, Neil, you're a big flight simulator. Oh, my God.

Simulator guy. This is a very genius ad campaign. I am huge flight simulator guy. It certainly made me want to be a pilot. Yeah. And I'm sure I would be amazing at it because I'm very good at taking off and landing in flight simulator. But these games are so popular. There is trucking simulator, which I watched, you know, three hours of footage on YouTube last night. Oh my God, I was in Montana hauling logs from, you know, from a lumber company down to a population. Center was absolutely thrilling. Then there's train, train simulator is super popular. You didn't know there was train simulator? No, I did not. And then there's huge, these are big in Europe, farming simulators. Yeah, I have seen farming simulators. Oh my God, we were, I just watched a harvest of a sunflower crop last night. It was absolutely thrilling. All right, Neil, new business idea,

podcast simulator. Let's get people in our chairs. I think this is smart. And it's been used by a bunch of other industries, too, specifically the U.S. Army, which launched its own video game and used it as a recruiting drive for more than 20 years. And a 2008 study by MIT said that this game, which is called America's Army, had more impact on recruits than all other forms of Army advertising combined. So if you're looking to hire people, I would say, look to the simulators. Launch a video game, yeah. All right, that is our show. It was packed. Toby, it's great to have you back. Please, listeners, you can send your thoughts on the podcast early anything else you want, hi-fi audio, simulators, or if you just want to chat, our email address is Morningbrewdaily

at Morningbrew.com. What a crew who helps us put MBD together. Emily Milliron is our editor and producer. Samantha Velez and Raymond Liu are the associate producers. Uchenawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup made a career change to trucking. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. All. Pay off your home, travel for life, drive a Ferrari. In celebration of the world premiere of the Monopoly Big Board Buckslot machine by Aristocrat Gaming, Yamava Resort and Casino at San Manuel is giving one person a $1.6 million dream package.

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