Americans Finally Have Money in the Bank & Promising New Alzheimer's Drug

0:00What should you invest in? And how often? Making investing decisions is easier with Fidelity. With their step-by-step experience, you can find investments based on your goals and comfort level. And if you'd like, you can decide how much and how often to invest with recurring investments that happen automatically. Ready to make your next investing decision? Head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, Americans are getting richer and Europeans are definitely not.

0:38And we will daydream about what we do after winning the$1 billion Powerball jackpot. Then a ton of youth have been forced to confront their youth thanks to a viral TikTok aging filter. Plus, I learned a new word for today's show, skip lagging. It's Tuesday, July 18th. Let's ride.

1:02All right, Neil, I just want to take a minute at the top of our show to tell everyone about a new show that Morning Brew just launched called the Our Future Pod. It comes courtesy of Michael and Simi, two fellas fresh out of college that make me seem old. They sold their media company to Morning Brew earlier this year and have generally just been crushing it. while MBD brings you the news their podcast takes a more entrepreneurial focus and brings you stories from the next generation of business builders like a 16 year old who takes meetings with VCs from a bathroom at his high school or two Gen Z women who raised $20 million to change how you plan parties so if you've got that entrepreneurial streak in you or have ever thought about starting a company I definitely recommend you check out the Our Future pod and hey if you listen and enjoy it.

1:52Leave them a review and tell them that MBD sent you. Yeah, those guys are super impressive. And obviously the people they profile, I'm like crazy. I was like, what was I doing? Certainly not pitching in school and not doing anything particularly productive, but now we are. Let's get to the news. So every leadership book will tell you that you got to celebrate the wins as much as learn from the losses. So I want to start off today by handing the game ball to Americans who somehow are still more flush with cash than before the pandemic. Americans have about 10 to 15 percent more in their bank accounts now than pre-COVID in 2019, according to a new JPMorgan Chase Institute analysis.

2:34That's despite spending five dollars for a gallon of gas and ten dollars for a dozen eggs last year when inflation soared to its highest level in decades. Speaking of inflation, American paychecks have been rising faster than inflation for four straight months ending a long run of declining purchasing power. Average hourly wages are up 4.4 % in the past year compared to 3 % inflation. Overall, these new data points help us understand one of the economy's biggest mysteries, which is why hasn't the U.S. gone into a recession even as inflation soared and the Fed hiked up interest rates for 10 straight times?

3:10It's because households are still feeling pretty good when they check their bank account balance and they keep on spending. I know. It is the great mystery of the last three years. We keep saying like, how is this happening? But I think the big number in there too is that people are still shopping and people still want to shop. So consumer sentiment is at an almost two year high this past month. So people are spending their money. So you do see those median account balances dropping a little bit. So they're down more than 41 % since their peak in April, 2021. But again, it's all about perspective.

3:41They're still up from 2019. So it has been interesting. Like we were looking at all these graphs And you see it. A huge spike. Yeah, a huge spike from the stimulus checks, from all the money that was infused into our personal bank accounts. And then we have been spending it, but it still remains elevated and looks like it's like leveling off a little bit. Yeah, I think people forget just how big this stimulus package was. It was, I think the U.S. government spent$5 trillion on government and individuals and making us, you know, flush with cash during the worst of the pandemic. And we've just kind of rode that for many years now.

4:17We still haven't depleted it. And it's keeping the economy going, even as inflation soared and the Fed hiked interest rates. So, you know, I think economists are still pretty surprised that we haven't completely depleted those stimmies yet or gone below. And so it's just a testament to the American consumer feeling pretty good. Yeah. And then actually a great kind of thing to compare it to is Europe, which another article came out just kind of roasting Europe. and one of the major differences is that annual wages have fallen in Germany, Spain, France, Italy, UK since 2019. So that's like a big difference that you see between the US and Europe.

4:56And then also if we go back to those STEMI checks, the US took the approach of we're going to infuse our consumers and the average citizen with money while Europe kind of directed most of their stimulus efforts at employers. And so normal people were left with no money in their bank account. So we're seeing like this tale of two approaches. And really, you're seeing the second order effects a couple years later. And it looks like the US took a better approach. It definitely seems like the US COVID response was better than than Europe's. But this article from the Wall Street Journal was roasting Europe.

5:29It was it was a bloodbath. But it did provide some remarkable stats about how the US and Europe were kind of at the same level 1520 years ago. And then Europe's trajectory has been either stagnation or decline. And Americans have been kind of we've been doing OK. I mean, obviously, there have been some bumps in the road. We caused a huge economic crisis in 2008. But overall, like the U.S. is doing pretty well. I mean, there's this one stat where basically 15 years ago, the EU and the U.S. were tied at 25 percent for all global consumption spending. Now, America is up to 28 percent and Europe has declined to 18 percent.

6:05And this article from the Wall Street Journal basically argues that it's because Europe doesn't love to work and they're just kind of a older population that values their leisure time, values their free time. And Americans are maybe a little more industrious. And that's the argument they post. I know. Not mine. Also, they did say that the Eurozone relies on exports for 50 % of their GDP compared to just 10 % for America. And that's a problem because one of the major places that Europe exports to is China. And China has actually not reemerged from COVID, again, as strongly as the U.S. has. So, again, you're seeing like these second order effects of globalization and how, yeah, Europe relies a lot on exports.

6:49And if their main buyer isn't buying, then things are going to stagnate a little bit. Who needs a macroeconomic class when you just need MBD? But our victory lap might be coming to a close because a bunch of the pandemic stimulus measures that are still remaining. There are only a few of them, but they're about to expire kind of all at the same time in September and October. Obviously, the student loan payments, you're going to have to restart paying those. There's billions in child care funding that's going to disappear. Work requirements for food stamps are going to come back. So there's this kind of triple whammy of the final remnants of the COVID stimulus packages are going to go away in the fall.

7:29And that might be, I mean, we mentioned that there's still 10 to 15 % balances are still 10 to 15 % higher now than in 2019. Maybe that gap will close by the fall, which wouldn't be a terrible thing for the Fed, which wants to see inflation come back down to 2%. Yeah, student loans. That's the Jaws music that you're hearing in the background for sure. All right, Neil, our next story, you're going to get a big time science Toby roundup. So there's been a ton of movement on the battle against Alzheimer's this week. First and foremost, a new drug from Eli Lilly called Donanamab just wrapped up a global trial that found it slowed cognitive decline, sometimes by up to 40 % in some patients.

8:10Now, this isn't a cure for Alzheimer's, but slowing the progression of the disease is something scientists have been after for years, and it looks like we're making some progress. So how does this new class of drugs work? Well, one of the key markers of Alzheimer's in the brain is a protein called amyloid, which researchers often refer to as some sort of brain plaque. So just as plaque on your teeth leads to degradation, so does this amyloid protein. So donanamab is kind of like a dentist recommending a new powerful toothpaste that over time brings those levels of plaque down. And this new study shows that dononamab is really, really good at it.

8:48It slows the pace of the disease by around 20 to 30 % overall, and by 30 to 40 % in a set of patients who researchers thought were more likely to respond to it. So Eli Lilly, the maker of the drug, has filed an application for FDA approval. So Neil, again, not a cure, but this is pretty great progress. First of all, you get a lot of flack in the comments for certain pronunciations, and you absolutely nailed that drug. So I just want to give kudos to you. I wrote it out fanatically. Well, you killed it. No, this is a huge deal. Alzheimer's is the most common form of dementia. It affects more than six million Americans, just like a brutal disease.

9:25You know, maybe some people listening to it have grandparents with it, and it just wrecks your memory. And it's kind of this slow cliff, or really fast cliff, where your brain starts to go a little bit, and then it declines, declines precipitously. And it's forecast to nearly trip like the number of people with dementia is forecast to nearly triple to over 150 million globally by 2050. And experts are like, this is going to be one of the worst, you know, public health crises that we have with our aging population. So finding anything that can slow cognitive decline is, you know, just an amazing breakthrough.

10:00And now we have kind of two drugs here that could potentially do it. The earlier one that you were talking about from LSI, I forgot. There's one called Lekanemax, Biogen, which came out in 2022. And a Japanese company that worked on it. But this one has seemed to be more effective than that. So they already applied for FDA approval. Right. And these guys are, or they already got FDA approval. And this new one is applying for it. So there's been a lot of movement. Ton of movement. And then that wasn't it. As we were doing research for this story, I found another drug that was also just went through the preliminary studies, and that's from Acumen Pharmaceuticals, which, again, it targets the exact same amyloid protein, and it just passed a safety test and will advance to a larger trial.

10:47That was on Sunday. And so we are kind of seeing like this Wagovi and Ozempic. We've talked a lot about that all out, like drug war for the weight loss category. But this Alzheimer's category, too, is heating up for sure, and it's great to see. And then we also, a study came out yesterday as well that found that Alzheimer's is more common in the Southeast and Eastern parts of the country. And this was a big deal because it looked at the individual county level when it comes to Alzheimer's because, and it found that one in six seniors in Miami, Baltimore, in the Bronx have the disease. So it's clustered in these kind of hot pockets of Alzheimer's.

11:24And they found that doing things like leading a not healthy lifestyle and not having a healthy diet definitely contribute to an increased rate of Alzheimer's. So this study, taking a county-level look rather than just a broader look, hopes to unlock a couple of the reasons why some areas of the country have just a much higher rate of Alzheimer's than others. I think ethnic minorities, like black and Latino people, are more prone to getting Alzheimer's, which is one of the big knocks on this particular study from Eli Lilly because 90 % of the patients were white. So we don't know whether this thing is going to work on other populations.

11:58There's just a lot of controversy around Alzheimer's drugs, too, because it can cause brain swelling and bleeding. And three people died in this study related to the treatment. And I don't know if you remember back in 2021, there was this massive cluster bleep over Aduhelm from Biogen, which the FDA approved. And they weren't even sure if it was going to work. And three experts on the panel that approved this drug resigned. and Biogen basically, no one's basically prescribing this now because it's not certain that it's going to work and it might cause these serious side effects like brain swelling.

12:37So we've been down this road before and there's been a lot of bumps in getting, you know, these Alzheimer's drugs across the finish line. So I think everyone's going to be a little more cautious this time around because back in 2021, that was a really terrible thing that happened. All right, moving on. A little more. It's dark, funny. This story is kind of like if it was been written by the Coen brothers. So here's what happened. The U.S. military has been sending millions of emails filled with sensitive information to a Russian ally because of a typo in the email address. For at least a decade, the government of Mali, a West African country that's tight with Moscow, has been receiving pages of U.S.

13:20military communications because people keep typing.ml instead of.mil in the email form. And the country identifier domain for Mali is.ml, while the U.S. military has the.mil for its email addresses. It's super cringy, but also a major national security risk. The emails contain information like maps of military installations, photo of bases, tax returns, medical data for top military officers. And the craziest part about this is the U.S. has been warned for 10 years. A Dutch internet entrepreneur, Johannes Zerbier, manages Mali's country domain. And he's been collecting these misdirected emails, showing them to U.S.

14:03officials and being like, yo, you guys have to do something about this because it could be exploited by your enemies. Yeah, it's crazy. He holds close to 117 ,000 misdirected messages. And he actually said almost 1 ,000 arrived last Wednesday alone. So this is a problem that's happening actively and it's been ongoing. And yeah, if it wasn't a guy named Johannes Zerbier who actually he said he pursued legal advice because he's like, I'm getting all these not classified but very sensitive emails from the U.S. military. What do I do? And he said he gave a copy of that legal advice he received to his wife.

14:41And this is a quote, just in case the black helicopters landed in my backyard. So, yeah, whenever you're getting sensitive military information, you've got to cover all your bases. Because even if you have the best intentions, like if that ends up in the wrong hands, then you are the person where the black helicopters lead back to. The reason that the story is kind of in the news now is because the Mali government is taking over the domain from this Dutch entrepreneur yesterday. So now the Mali government is now in charge of this. And while you said, yes, it's not classified information, but national security experts said you can kind of build a dossier of top diplomats and intelligence officials from the emails that they've been getting.

15:25A lot of them are spam, but some of them are very useful to foreign governments or people that might want to attack the United States or our infrastructure. You know what's funny, too, though, is that the Dutch army uses the domain army.nl, which is close to army.ml, which is what the U.S. uses. So the U.S. has been receiving Dutch military info a little bit. And so this seems like a startup idea, by the way. How has no one ensured that these emails can't be fraudulently sent back and forth or just mistakenly sent back and forth between military domains? Let's launch it, Neil. Humans make so many errors.

16:02I know. We're all like, oh, TrapGPT makes so many mistakes and self-driving cars get stuck at intersections. We're still the worst. We're worse. Yeah, absolutely. Okay, Neil, before we jump into the next story, we're going to take a quick break. This episode is brought to you by State Farm. Listening to this podcast, smart move. Being financially savvy, smart move. Another smart move, having State Farm help you create a competitive price when you choose to bundle home and auto. Bundling, just another way to save with a personal price plan. Like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state.

16:41Coverage options are selected by the customer. Availability, amount of discounts and savings, and eligibility vary by state. Close your eyes, exhale, feel your body relax, and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-CONTACTS. Oh my gosh, they're so fast. And breathe. Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste. Visit 1-800-CONTACTS.COM today to save on your first order. 1-800-CONTACTS. All right, Neil, we are back with another edition of Toby's Trends, where I, a young and vivacious Gen Zer, educate you, a wise and erudite millennial, on what the youths are up to these days.

17:31And age plays an especially important role in today's trend because there's a new filter that is taking the internet by storm, one that turns you into a much older version of yourself. The so-called age filter on TikTok is, for lack of a better word, freaking people the heck out. The filter shows your current self, besides an AI-generated version of yourself, looking way older. And honestly, the reactions from people have been split into two groups. One group actually finds it kind of comforting because sometimes they see themselves or their grandparents or their parents in some way, especially if that person had passed away.

18:09So there's like this very wholesome version of it. But the majority of people are having this very intense confrontation with the fact that they will age and they're not taking it very well. I've seen people immediately bust out new skincare routines after seeing themselves in order to stave off the wrinkles. And if there's one thing my generation is obsessed with, it's anti-aging. The age filter has 288 million views so far on TikTok, but the anti-aging hashtag, which is mostly filled with skincare tips, Botox routines, and like microneedling, has 5.6 billion views. Neil, we are very scared of aging.

18:46We are, but I did this once, I think a couple months ago, and I was like, eh, let's go. I kind of liked it. I like knowing what maybe I'll look like, but also it's the question of, am I actually going to look like that or am I not? And it is, I do think like the senior relatives in your, or your parents or your uncles or your grandparents in yourself is, it just gives you a fuzzy feeling a little bit. But I mean, I did it and I were tossing it up on the monitor right now. I don't look like anyone. It's actually a rough, I didn't do myself any favors with the angle or anything like that. But again, yeah, if you guys want to see what I look like with the aging filter on, tune into the YouTube channel today.

19:27But I do just want to zoom out a little bit because there is this level of hyper awareness around how we look these days. I mean, if you think about it, we're constantly looking at ourselves online on Zoom calls to taking selfies to making TikToks. And so like the prevalence of this filters just leads to us hyper analyzing ourselves. I think, you know, the idea of like the panopticon, which is a type of prison where the guards can see your every movement, but you can't see the guards. So it is like there are these lights that are constantly on us. We're in a panopticon of our own making. So we're trapped in like this hyper analyzing of ourselves.

20:04And these filters, I mean, they're not new by any stretch. Like one of the first apps on the iPhone that came out was making yourself look old, but they're only getting better. And I mean, as - It's also inherently viral because you do it and you can send it to your friends and then they do it. So it's kind of - And the funny part is, is someone put it on the Friends cast and Jennifer Aniston. It's unbelievable. Like even the aging filter is like, nah, she doesn't age. So I guess it is scarily accurate. Okay, Neil, let's move on to our next story. And as I mentioned on the top of the show, I did learn a new word for this one and it's skip lagging.

20:41No, it's not playing hopscotch on bad Wi-Fi. It's the practice of booking a flight with a layover with no intention of actually flying to your destination. Instead, you hop off at the layover spot because flights with layovers are usually cheaper than direct flights. This is a cost-cutting exercise that airlines are well aware of and are starting to crack down on. Just recently, a teenager had his flight canceled and was detained for a bit after a gate agent noticed he had a North Carolina license, but had a flight whose final destination was New York via a layover in Charlotte. She called him out.

21:19He confessed because he's a teenager and his family had to book him a new flight. But, Neil, airlines hate this because it's costing them money. But, dang, I low-key wish I had been working with this travel hack a little more often. Can we talk about this kid? I know. He folded so hard. He crumpled. I know. How do you get caught doing this? This is so easy. You just lie. You're like, I'm going to New York. Right. Okay, I feel for him because his family went on the news and said this was his first time ever traveling by himself. So I do know the pit in his stomach he must have felt. But yeah, lie, my dude.

21:56Just make something up. Say, yes, I'm going to New York. What do you mean I'm not? So it is a tough, tough moment for our boy. You can save a lot of money from this on certain international flights. I mean, you can save$659 going to Amsterdam by booking through to London as your final destination. So if you go to Amsterdam and then to London and just get off at Amsterdam, you can save almost$700. So domestic flights will probably be less than that. We're not advocating doing it, but it's not illegal. Right. And then there's this website called skiplagged.com, which is what the family said they've been using for the last five to eight years.

22:39So they've been really using and abusing this get around. But I was curious. And so I went on skiplagged.com. It is a legit travel site. It functions just like an Expedia or whatever. I looked up, I'm traveling for weddings, didn't find anything that I could have skiplagged on. But, yeah, it's definitely like this legit travel hack that I truly had never heard of. Oh, I've heard of this. Okay. Maybe you're just more plugged into the travel scene. I've heard of this. I've never done it, but, yeah, people do it. Yeah. Airlines are ethically questionable. They're cracking down for sure. They are cracking down.

23:12All right. Our final story. Are any lottery players listening? You might know that the Powerball jackpot has climbed to more than$1 billion now, the third largest prize in history, after no one won the drawing last night. The next drawing is tomorrow night. And as you daydream about what you're going to do with your winnings, you should know ahead of time that winners can choose two different ways to claim their prize, a lump sum and an annuity. So if you win the jackpot of$1 billion and choose the lump sum, you'd get$516 million in one fell swoop before paying up the butt in taxes. But if you opt for the annuity, you'd get the$1 billion also before taxes, paid out in increments over 30 years.

23:54The lump sum versus annuity debate is always a fun one to have. And Toby and I have different opinions on this. So Toby, let's say you beat the one in 292 million odds and win the jackpot. Which are you taking, the lump sum or the annuity? Okay, I'm going lump sum. And I know that's unpopular because a lot of people think annuity is the safer option. But if you die before the annuity is finished paying out, you can leave those future payments to your estate, to your heirs, but the IRS will want to collect estate tax right away on those payments' future value. So if you die shortly after getting the prize, I don't know, maybe you walk under a ladder and you have a bad Friday the 13th, your estate won't have nearly enough cash on hand to satisfy that big tax bill that's coming due.

24:41And the Powerball website does say there's a solution to this. If you die, Powerball can convert your annuity into a lump sum of cash so you can pay that estate tax. However, it's only legal in certain states. So if we potentially won the lottery in New York, then died and passed on that bill to our future heirs, they would have no way to pay it. So with that tax implication - You're taking a lump sum because you think you're going to die right after? I'm just saying it's a real consideration, especially if you have to go public and you won the lottery. People come after lottery winners. And then, of course, I fancy myself a savvy investor, so I think I could make a more savvy, like a 7 % return on that lump sum and grow it to a bigger piece of pie over time.

25:24But every Friday, you say on this show that we are not financial advisors. We are just humble podcasters. So what the hell would we do with$400 million? What terrible financial decisions would we make? So many. There's a good chance if we cast this check. We might see a guy, maybe his name is Sam Bankman Freed or something. And he's touting the future of finance with this crypto company. And we say, Sam, take, you know, here's a$50 million check. No worries. I feel like that could happen many times. So that's why to protect you from yourself, you should always take the annuity. You get guaranteed millions coming in every single year.