The Best One Yet - 🎱 “Party with yo’ family” — Las Vegas’ epic pivot. First Republic’s 99% plummet. Wendy’s grocery store.

Episode Date: May 1, 2023

Las Vegas has pulled off an epic pivot: From sin city to family fiestas. First Republic Bank’s stock has plummeted 99%, and all the options to handle the crisis are bad. And Wendy’s is bringing its chili to aisle 6 because grocery stores have become the Garden of Eden of American Capitalism.$FRB $LVS $WENWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, May 1st, and today's pod is the best one yet. It's a T-boy. Wall Street just had its best day last week since January. Wall Street just had its best month since January. Think about January.

That's not that long ago, actually. Yeah, we'll take what we can get over here. What's our first story for the show, man? Las Vegas, the city, has pulled off one of the most epic pivots in all of business. It's gone from Sin City to Finghampton. family fiesta, and Jack and I are going to tell you how they did it. For our second story, First Republic Bank stock has plummeted by 99% in just a couple months. And someone has got a really big IOU that's got to be paid.

And our third and final story is Wendy's. Wendy's is going to start selling their fast food in grocery store aisles. Because the grocery store is the Garden of Eden of American capitalism. But Yeties, before we hit that wonderful mix, What a way to kick off the show. I love this mix man. Great mix. Nick and I, we know our audience. We know the Yeties. We know the besties. Some of you are dinkwads. Yeah, you're dinkwads. Double income no kid with a dog. Many of you, though, may be dinkwad acid. Yes, that stands for double income, no kid with a dog and some succulence. But it all started with the dink. With the dink. The dink. It's when you're double income no kid. That's it.

Now, I haven't been a dink for a while, but Nick, you've been a dink for years. Yeah, Molly and I have been double-income, no kid dinking around for like a decade now, man. Every weekend, Nick is dinking to a new city. I don't even know where this guy is. We've been dinking around our frequent flyer miles aggressively. Until now. Full disclosure, Yeties, this is Nick and Molly and I have our first baby coming soon. Tea Boy is having another tea baby. We are having another. IBO, initial baby offer. An IBO, an initial baby offering.

Jack, our baby is due in June. It is the end of the dink era. We have two months until this baby goes public yetis. Jack, I got to put a chassis on that bassinet ASAP man. Nick, I'm sorry, but you're going to need a task rabbit for that one. Yes, I already hired one. But Nick, can you sprinkle on some context for the Yeties and the besties? Yeties, this baby?

It's kind of a mystery. That's right. You and Molly haven't figured out the gender, have you? No, we don't. We actually don't know. the gender of this baby. It is a total mystery seven months into this thing. It could be a baby boy. It could be a baby girl.

And we're whipping up a surprise in the delivery room. That's the takeaway. So Nick's baby, it could be the next slamming Sam. Or our baby, it could be the next darling from Duncan. This baby could be Jamie. Or this baby could be Carol from accounting. Either way, Yeties, we

are so excited to announce that Nick's baby is due in June. Either way, besties, we've got two more months of Dink Life left. So Yeties, Go out there and dink it up one more time for Nick and Molly. Casties go live every day like you're a dink. Nick, this is a huge win. We are so excited for you and Molly, man.

Thank you for being there for the whole thing, Jack. Couldn't have done it without you. Well, I think you got an excellent. I think you did it without me. Let's whip up some onesies, Jack. And let's hit our three stories. Fifteen years before this song, two boys from the Northeast met in a cultural song.

That's a fat tip. T-Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more. So just start the show. Start the show. For our first story, Las Vegas, they are getting the Oakland A's baseball team,

and they're getting a brand new theme park too. Because Las Vegas has pulled off the hardest pivot in all of business. Before we jump into this story, Yeties, we're just going to put this out here. Jack, Brad Pitt, two best movies he's ever done. What are they, man? What's in the box? I'm just kidding.

It's Moneyball and Oceans 11, and both are relevant to this story. Brad, we know you're listening. Those are your two favorite movies. Yet he's Moneyball. It is the story of the Oakland Athletics Baseball team, isn't it, Jack? And how Billy Bean, the general manager, used analytics and data to win ball games. But there's one problem going on with the Oakland A's baseball team right now. They have the worst stadium, the worst attendance, and the worst record in all of Major League Baseball.

Jack and I jumped in T-Boy style. We went to a Yankees game there a couple years ago. There was a hot dog in my cracker jacks. That's why we love it. It was charming. We'd love it. I found the concrete stadium very endearing, and I'm very sad that they're leaving. Which is the next bit of news here.

We're really sad. So here's the news yet. He's the last week, the Oakland Ays announced they are buying a $1.5 billion plot of land in Las Vegas. Yep. The owner of the Oakland A's made it official. They're moving the team from Northern California to Nevada. Now, full disclosure, this is the greatest fear of any fan. This is the worst thing that could happen, right, Jack?

When a city loses its team, it's incredibly sad. But here is the surprising thing. It is not just the athletics that are leaving Oakland right now. Oakland has also lost the Warriors in basketball and the Raiders in football in just the last few years. In fact, while Oakland has lost three, count them three professional sports teams, Las Vegas has gained three professional sports teams. Las Vegas has gone from zero to three professional sports teams in the four major sports in just the last. last five years. In just five years, Jack, can you read off the Las Vegas sports roster right now?

In hockey, they got the Golden Knights. In football, they have the Las Vegas Raiders, and in baseball, I can't believe I'm saying this, the Las Vegas athletics. But yet he's here's what Jack and I found fascinating about this story. We didn't just look at who is coming to Vegas. We also looked at who's leaving Vegas. Nick, let's stroll down to Wall Street where there's a corporation called Las Vegas Sands trading on the stock market. Vegas Sands. It is the $50 billion publicly traded casino company, Las Vegas Sands. Las Vegas is in the name. It's so Las Vegas, its ticker symbol is Viva. But get this yet. It is Las Vegas Sands. The casino company has zero count them as zero casinos in Las Vegas.

It has left Las Vegas except for its corporate offices. 100% of their gambling business is in Asia, not Las Vegas. Las Vegas Sands make zero money in Las Vegas. And it's not just that one company. Las Vegas has quietly transformed over the years from America's gambling mecca to a family-friendly Fiesta City. And the data shows that we've just hit a threshold on that. Before the pandemic, only 5% of visitors going to Las Vegas brought their kid with them. But Jack, what percentage of visitors to Las Vegas now bring their kids with them? In 2021, 21% of visitors brought their kid with them, and it's probably only grown from there. One out of five tours is bringing a long little Sally, little Johnny over for the fun in Vegas.

What happens in Vegas? Yeah. Happens in front of your kids too. Yeah, it is. Bring the Furbies. And it's not just the sports these days. Universal Studios said this year that they're adding a theme park in Las Vegas. We repeat, you're going to go on a ferris wheel in Las Vegas.

Less roulette, more roller coasters. When you leave Las Vegas, you leave them with a beanie baby. So, Jack, what's the takeaway for our. buddies over in Las Vegas. Las Vegas has pulled off the hardest pivot in all of business. Yet he's 50 years ago. Las Vegas, they had a pretty unique thing. A government

protected monopoly. For some reason, Nick and I can't explain. Nevada was the only state with a statewide green light for gambling, so its economy focused on casinos. But here's the problem. That huge asset was also a major liability, because you can thrive on one industry, but then

you can die by one industry. When states started legalizing gambling, After the 2018 Supreme Court decision, Las Vegas lost that unique superpower. But here's the key. Fortunately, Las Vegas had invested in diversifying its revenues away from just sin. The city didn't just pivot the product. They also pivoted to a new target customer. From single gamblers to full-on families.

And now that bet, it is paying off for Vegas. Las Vegas had a record number of tourists last year, but a record low number of them were focused on gambling. And now with the Oakland Athletics, moving on to Vegas, Vegas has pulled off the hardest pivot in business. For our second story, first Republic Bank. Oh, first Republic Bank. Its stock has plummeted 75% in the last week. Here's the deal. Someone is going to lose $50 billion. The question is who? Everyone was talking about Silicon Valley Bank's crisis. But honestly, this has kind of become the first Republic Bank crisis. Heading into last week, First Republic Bank's stock was already down 90%. Okay, but then Jack and I couldn't believe it.

Every day, it fell by more and more. In five days, First Republic stock fell another 75%. It's a painful reminder that even a really low stock can fall by another 75%. Yeah, we've been there. And it was all because of this shocking news. On Monday, we learned that customers yanked a shocking $100 billion worth of deposits from First Republic Bank just since March. That's a lot of money to pull out of bank

because you're scared your cash is going to disappear. It was a bank run. It was the other bank run. Not Silicon Valley Bank, but the same kind of story. You were so scared First Republic was going to go out of business. You grabbed your cash and you grabbed your mattress, mattress, mattress, and you put one under the other. And now here's the huge problem that nobody really knows

how to deal with. This is a big problem, Jack. First Republic Bank owes an estimated $50 billion more than it owns. Translation, Jack? It has more I'll used in assets by $50 billion. That's a problem. And yet he's, that is what has led us to the $50 billion $1st Republic question.

Someone is going to take a huge loss on First Republic Bank. But who's it going to be? Well, Jack and I found three options about who's going to pay this $50 billion. And honestly, they're all bad. If nothing happens, First Republic Bank will probably have to go bankrupt. And in that scenario, customers would lose money. Customers would lose money. But honestly, that is a terrible choice.

because then we'd end up with another bank crisis like we just had in March. If customers lose money with First Republic Bank, then you'd have regular everyday people worried again about whether the money in their bank account is safe, just like in March. Okay, so Jack, that's a bad outcome. But for customers to not lose money, then someone else is going to have to lose money here. Okay, let's look over at the big banks. I mean, they already put in $30 billion to First Republic Bank.

Maybe they'll just buy the whole thing in an effective bailout. But then here's the problem with that. The big banks, they don't have to save First Republic Bank. They've got no obligation. They don't have to do it. Okay, so let's say the banks don't take the hit on First Republic Bank. All right. Then what happens? And we don't want customers to lose money either. True. We don't want them to lose money either, Jack. Then the only one left is the only one that's always left, the government.

The government. The government would be the third and final option to save First Republic Bank. The government might have to make a very expensive rescue bailout, whatever you want to call it, of First Republic Bank. But here's the problem with that option. The government doesn't want to do a government bailout of First Republic Bank. No, that's very unpopular. So First Republic Bank owes an estimated $50 billion more than it has

than someone has to foot that bill. But as of this podcast recording, we don't know which of those three is going to do it. So Jack, what's the takeaway for our buddies over at First Republic Bank? The most powerful force in the economy, it's interest rates. Yeties, to repeat this again, we don't know who is going to pay this $50 billion tab that First Republic Bank manages to owe.

But we do know the force that caused this crisis in the first place. High interest rates. High interest rates. Bessie's high interest rates, that's what slowed down the economy to near a recession. High interest rates, that's what's caused the stock market to fall so much and layoffs to ensue. High interest rates, that's what's caused the housing market to drop. And high interest rates, that's what's caused the venture community to stop investing in stocks. High interest rates. That's the powerful force that's brought First Republic Bank to the brink.

Yeah, high interest rates. That's how we stop inflation. But man, has it caused a lot of damage to? A whole lot of damage. For our third and final story, Wendy's is expanding its fast food into your grocery store. Because grocery stores are the hallowed grounds of American capitalism. All right, Jack, let's whip out the whiteboard, my friend, third largest burger. In America, what do we got, man? Who is it? It's not McDonald's. It's not Burger King. It's the one with the square patties. The one with the triple quarter pounder with cheese. We jumped in T-Boys down. We can't figure out why they need right angles on these things. You're going to like hurt your chin. The answer is Wendy's. I also don't know how the right angles

remain after grilling the burger. That's for another takeaway. In the meantime, yet he's, one of the top sellers over at Wendy's. It's not just burgers. It's also the chili. Wendy's has been selling chili since 1969, like a cup of chili. In fact, this is This 54-year-old chili recipe at Wendy's is actually a case study on business efficiency. Because sometimes Wendy's makes a few, too many of those square patties, but they don't toss them into the trash. They turn them into chili. Yeah, it turns out Wendy's has managed to turn a cost, the extra burger meat, into a revenue source, a chili menu item. Wendy's doesn't waste an ounce of ground beef.

They are a leftovers legend by selling chili next to their burgers. Which leads to the news. For the first time ever, Wendy's is going to start selling that candy. and chili, but in grocery stores. And this is a rare thing. Fast food companies, they very rarely sell their food beyond their own stores. I mean, Jack and I went over and checked aisle six. We're not seeing any McDonald's special sauce over there, are we, man?

It should be there. Although I think it's just ketchup and mayonnaise, right? Don't give away the secret recipe. But funny timing here, besties, because also last week, Jack and I noticed a new study that happened to mention grocery stores. Axios and Harris did a poll of Americans, and they asked, What is your most beloved brand? And Jack, what was the surprise about America's most beloved brands?

Grocery stores were at the top of the list. For the first time ever, three grocery stores are in the top 10 of the most respected brands in America. Trader Joe's, H.E.B. and Wegmans were all in the top 10 most loved American brands. In addition to that, Kroger, Publix, and Costco, they're all in the top 20. Wendy's isn't just putting chili on grocery shelves because that's where the customer is. No, they are expanding to grocery stores because that's who Americans trust. But Jack, as a New Englander, are you going to say stop and shop? Is that your most beloved brand?

I'm not a stop-it-chop guy. I'm not a stop-it-chop guy. I'm going to round up. I'm a shaw's guy. I'm just kidding. I'm a co-op guy. Just outside Boston. So, Jack, what's the takeaway for our buddies over in the grocery industry?

Grocery stores are the hallowed grounds of American capitalism. Interesting detail in the data yetis. Turns out grocery stores are not just the most beloved brosery. brands in America, they're also the most unifying. The country right now, it can feel so divided, so polarized, so amped up and stressed. And yet grocery stores have transcended political divides and have avoided the culture wars. Republicans and Democrats, rich people and poor people, black people and white people, grocery stores are a place that they all come together. Yeah, because grocery stores have built up goodwill during the pandemic, they became your refuge.

And grocery shopping is still an in-person habit, so you see your neighbors, face-to-face. Honestly, respondents, they even said groceries reflect community values more than any other industry. Paper or plastic, doesn't matter. Grocery stores, they are the hallowed ground of American capitalism. Jack, and you'll whip up the takeaways for us to kick off the week. Oakland is sadly losing their last pro sports team because the A's are moving to Vegas. Las Vegas. It's pulled off the hardest pivot in business. And our second story is First Republic Bank. They're short $50 billion. And we don't know who's going to pay for that. But we do know what caused it.

The most powerful force in the economy, interest rates. And our third and final story is Wendy's. They're now selling cans of their chili in grocery stores. Loftover, leftovers, because grocery stores are the hallowed ground of American capitalism. Now, time for the best fact. Yet, this one sent in by Jason Erman from lovely Baltimore, Maryland playing some wallball. Nick, if somebody asks you if you have any cash money, like paper cash, they're actually not correct. Yeah, that wouldn't be correct because it turns out there actually isn't really any paper in your paper cash money.

No, your paper cash money, that $5 bill, it doesn't come from trees. Money doesn't grow on trees. That U.S. dollar bill, it is made out of cotton and it is made out of linen. Yep, it's a blend. 75% cotton, 25% linen. Like the pants you might wear out memorial bag. Yeah, your money has more in common with your bed sheets than it does with your paper. I mean, think about it.

Paper, that wouldn't last long in your pocket at all. It would shrivel down like a receipt. You get all cruddy, a man. And that is why you should never eat a dollar bill. The more you know. Yetis, you look fantastic for Monday, the new Wednesday. Jack, you're looking great over there. Really legendary.

Thank you for underwriting this IBO initial baby offering. Nick, you look terrific. I'm so excited for this June IBO and I'm very pumped for your family. We don't know what it is. Honestly, it could be a baby. I'm kind of hoping it's a dinosaur. That would just be fantastic, Jack. Maybe not for Molly, but I'd be excited.

We'll see you tomorrow, Yetis. Can't wait. And before we go, congratulations to Yeti Bailey MacLynn, who is quitting her awful job over in Utah. And congratulations to Austin Wadding, who got a new role at J.M. Smucker Company. Ooh, hope it's in the peanut butter department. And Bree and Brandon, congratulations on that six-month anniversary.

Keep on celebrating over in Maui. Congratulations to Martha and Todd, who are celebrating 41 years together in Ohio. And Catherine Ripstein is heading off to Colgate University to become a raider. Happy birthday to Aaron Hendry, who's got medical exams today. Good luck in Rochester. Oh, Jack, get this. Monica and Shiva in Atlanta, they're a married couple with the same birthday.

Not too shabby. Happy double birthday. And happy birthday to Aubrey Kempin in Shreveport, Louisiana. And Brian and Patrick Bowers, congratulations on the double birthday as twins turn in 25 down in Bellevue, Washington. And a big shout out to the dinkwad ass Andrew Dolphins. Happy birthday in Hickory, North Carolina. And a happy birthday to Kate Hines over in North Carolina. And a final shout out to Benito Maxwell Miranda, the fourth, who just turned six months down in South Carolina.

This is Jack. Nick and I don't own stock of any of the companies, we mentioned. Amazon. Oh, shoot. This is Jack. I own stock of Amazon. Exactly. Just something about a Furby now.

I got a Google it. What the stupid thing looks like. Don't Google it. Don't Google it. Furbys are so scary, man. Don't Google. It's related to a grandma, that's for sure. Yeah, it's like a soft, nice grandma.

Right, it's like a soft nice grandma. Don't kill you.