Apple Wants to be Your Bank, $776M for Angry Birds?!, Hamburglar Returns

0:00Stocks? ETFs? Or what about mutual funds? Choosing your investments is easier with Fidelity. Our step-by-step experience can help you pick out the right investments for you. Plus, with recurring investments, you can decide how much and how often to invest. Lastly, there's 24-7 help if and when you need it. To find your next investment, head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSC SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's program, so official, program. We're going to talk about Apple joining the battle for your cash with a high-yield savings account.

0:41And on tax day, we'll talk facts that you need to know about taxes and things you don't need to know at all, but they're fun to drop in conversation. Then we'll talk about a potential Hollywood writer strike that could kill your favorite late-night talk show. Not James Corden. Protect him. And take a trip down memory lane with some news about an OG iPhone app, Angry Birds. It's Tuesday, April 18th. Let's ride.

1:20Neil I was probably in the one percent yesterday I was watching the Boston Marathon on my computer all day long I love Boston Marathon day I know you were just talking about it non-stop and I was just nodding my head along I know like uh-huh I love all the cast of characters although So Kipchoge, who broke the two-hour marathon, who is the world record holder, one of the best athletes of all time, lost. Just didn't have it yesterday. Damn. It was kind of sad. So you're definitely running next year. Were you extra motivated or less motivated by watching? I don't know how you can be less motivated.

1:51It's so fun. It's so fun to watch. So, yeah, hopefully I'm out there next year. All right, and you've got a triathlon coming up. We're all pulling for you. We'll talk about that in two weeks' time. All right. Let's start with Apple. So I feel like yesterday we successfully read the tea leaves because remember how we were talking about how Charles Schwab was losing depositors who were pulling their money and putting it in higher yield savings account? Well, literally just after we recorded that, the pod, another company entered the ring for your savings, and it's not one that many expected, and that is Apple.

2:22So in partnership with Goldman Sachs, Apple launched a savings account that has a meaty 4.15 % annual yield. The average savings account rate in the country is 0.37%. So this could be attractive for a number of reasons, including because everyone has an iPhone in their pocket. Yeah. I mean, Apple calls it like the all-out war to be at the top of your wallet. So they already have the Apple card, which is issued by Goldman Sachs. Now they have this savings account that I'm not going to lie. After I heard the news, I opened one because I'm like 4.1%, 4.2%. It's so good. Right. And it's pretty easy to access.

2:59I mean, but you didn't have, so here's the scope of what you need. You can go into your wallet app on your iPhone. That's where you can find it, right? And then you can carry a balance of up to$250 ,000, all of which is insured by the FDIC. And that's because they park it in Goldman. Apple is just kind of the conduit. Goldman's actually doing a lot of the heavy work on the back end as an actual bank. You do need to have Apple's credit card, which is called the Apple Card. So you - I did all that. I did all that last night as I was going to sleep. It's very, very easy. I mean, it's the Apple design philosophy.

3:34Like, it was beautiful, easy to do. I used it to pay for my Subway this morning, so I already broke in the Apple card. But yeah, and we were also talking about the relationship between Goldman and Apple. And we were like, what is Goldman really getting out of this? And it turns out not a whole lot because so far, Goldman Sachs has lost over a billion dollars through its partnership with Apple. and the whole reason behind it was they wanted to get into the consumer space, which they actually reported earnings this morning, and we learned another tidbit about their consumer business that Marcus, their consumer banking division, lost a lot of money again, kind of dragged down their earnings.

4:14So it's all tied together right now. We should talk about the big picture here, and that's because Apple is by far from the only online financial institution. I can't believe I just called Apple a financial institution. That's another story that are offering higher yield savings accounts or money market accounts or CDs as the Fed has raised interest rates. So I wrote I said that stat at the top that the savings, the average on a savings account was 0.37 percent. But there are a lot of options where you can get at least 4 percent out there. There's Goldman's Marcus, where we're just talking about, is offering 3.9 percent.

4:49You have Ally Bank, which is an online bank offering 4%. UFB Direct, 5.02%. And then something called CFG Community Bank is up there also at 5.02%. Wow. So, yeah, if you just Google, you know, savings accounts, money market accounts, they're all, you know, up there in the 5 % range as the Fed has raised interest rates. So while the Fed's interest rates have definitely rocked your stock portfolio, it's actually made it a more attractive time to be a saver. Yeah, it's a good time to shop around to find the best interest rates because where you park your money right now can have some lasting effects.

5:26And eventually, if rates do go down, we might see these numbers start to fall. But at least for right now, go get those savings. But this is why Apple sees an opening here because when I just read all of those things, did you recognize any? Yeah. CFG Community Bank, UFB Director, all these online-only banks that can offer this high interest rate because they don't have a brick-and-mortar location, not a lot of overhead. But Apple is kind of leaning on the fact that it's a super trustworthy brand. You've bought products from it for over a decade. So you, you know, Toby, you never had a financial product with Apple before, and you were just like, well, I know Apple, and I don't know, you know, Ally Bank or whatever.

6:05I'm actually excited, too, because just the UX is so exciting, where the card turns different color based off what purchase you last made. So my card's blue right now because I just purchased, I just used it on the subway. So I just love everything Apple. Just real quick before we move on, Bank of America also reported earnings, another big bank they were kind of looking at to see how's the health of the banking sector. Pretty good for them, honestly. The big thing that we're looking at is deposits because that's been the story of the last few earnings. So Charles Schwab deposits were down 30 % year over year.

6:43For Bank of America, they were down just 1 % from the previous quarter. So it's looking good. As we expected, they received an inflow of deposits during the Silicon Valley Bank kind of debacle. So big banks doing just fine. Okay, that's Apple. That's banking. But now let's go to Hollywood. So Neil, usually I have a pretty long and creative and loquacious intro to our stories, but today I'm keeping it succinct in solidarity with the writer's strike that is on the verge of potentially happening out in Hollywood, even though that wasn't that succinct. So the Writers Guild of America has a three-year contract with the Alliance of Motion Picture and Television Producers.

7:26A lot of words there. That's the trade association that represents the Hollywood studios, including some of the streamers, Disney and Netflix. So that contract is set to expire on May 1st, and the Writers Guild want some changes. The bulk of the negotiations surround streaming, with the writers accusing studios of basically using streaming as an excuse to consistently underpay them. So one of their main gripes is that streaming seasons are actually a lot shorter than traditional TV seasons. So they last around six to eight episodes, which is back in the day. Average television length was like 20 to 24 episodes.

8:02So they're just not getting paid for as much. And then plus there's no royalties from episode reruns. So when you see friends on constantly late night, people are getting paid for that with streaming kind of wipes that out. So those are some of the gripes that the writers guild has right now. Yeah. I mean, this has happened before they voted in 2017 to, they authorized a strike. I think there was 97 % of them voted in favor that was averted at the last minute. So we didn't have the strike, but I don't know if you remember 20 2007, seven were you of a tv watching age then i don't remember it but tell us what happened i mean yeah so they went on strike for a hundred days span um and i do kind of remember this uh it was kind of burned into my memory snl went off air so we didn't have a lonely island or whatever their name was um then late night hosts like jay leno conan and david letterman ended up paying out of pocket some right the non-striking workers to keep to keep working and then we also had shows like like Gossip Girl, Heroes, remember Heroes?

9:02Yes. Breaking Bad, 30 Rock, they all had to truncate their seasons because of this. So we've been here before, and what would happen this time is that late night shows, again, would bear the brunt of being, you know, just going off air because we know, we kind of work in the similar industry where you have to write the next day's thing. But in terms of like TV scripts and film scripts, what they've been doing is stockpiling because they know this might happen. So they're just like scrambling to get scripts ready so they can produce shows and not have any sort of stoppage in programming. Yeah, it's so interesting that the studios are sitting on a stockpile of scripts so they can keep operations.

9:40Maybe one of my pilots too. Right, yeah. Just get back to them, Neil. And then also just to give a sense of how widespread this strike is, they voted on if they wanted a strike or not, 98 % voted for guests. Yeah, a record high. And it actually is crazy. They are being extremely underpaid right now. So pay has actually declined. If you adjust for inflation, the median weekly writer slash producer pay has declined 23 % over the last decade. So they're not really – they are very valid in their complaints because they're just clearly not getting compensated as they feel like they should be. So we have a May 1st deadline for whether they're going to strike or not.

10:22And actually they said that the overwhelming majority, the fact that 98 % of writers are authorized a strike means that a strike is maybe less likely because they have so much bargaining power right now because they're all in solidarity. So the studios might have to come to the table and sort of give up some things that they may not want to because of just how united the writers are all together. I kind of hope we get a strike so then it would lead to some wacky ending to some shows where you're just like, oh, that clearly was not written into the show. Yeah, maybe that happened to Game of Thrones.

10:55We just don't know. Exactly. Okay, Neil, let's go to the gaming sector now. So Rovio, the Finnish game studio behind Angry Birds, has been acquired for$776 million by Sega, the Japanese game maker responsible for Sonic the Hedgehog. A lot of animals there. so this made news and it made me super nostalgic honestly because angry birds was really that first app i can remember playing on the iphone it was from that first generation fruit ninja temple run just good times i remember going to the apple store picking up the iphone's on display and like immediately opening angry birds i i'm seeing from your face no i'm just not a gamer but i can see you having a very precise thumbs that could maybe utilize themselves in that game thank you So I'm not alone in that because Rovio was one of the first game studios to ever amass a billion downloads.

11:48It calls itself the first ever. And by 2014, they had$2 billion. It's sitting at over$5 billion now. So this is really a cultural phenomenon. They've actually released two Angry Birds movies. So the first one grossed$347 million worldwide. It was a great video game adaptation that we're talking about. I know. No one was talking about it back then. And then there's an Angry Birds 2 movie. That was a flop, though. Yeah, a little less successful. But so Sega's kind of betting on the fact that this is their chance to snag kind of like a Mario-esque, Hello Kitty-esque character IP. And also, it's their foray into the mobile gaming world.

12:25But I also just want to quickly talk about how big the Finland game development community is. It's just an absolute juggernaut. they have not only Rovio who just sold, but they have class of clan or class of clans maker Supercell, which did 1.8 billion in revenue last year. It's actually the highest corporate taxpaying company in the entire country. Yeah, it's probably similar to Spotify in Sweden or other, you know, outsized tech companies. But you're saying it's all because of Nokia? Yeah, Nokia back in the day was founded in Finland and has kind of just created this tech hotbed there. And the government has been really, really kind to game studios in particular, kind of subsidizing them because they are such big taxpayers.

13:08I love that. When one company does really well and then it has a huge IPO or exit, creating a lot of millionaires and then they each all start their own companies and then create a particular ecosystem around a specific industry in a particular place. Right. That's literally how it works. Silicon Valley and then also there's Silicon Valley for game development in Finland. There's 260 studios right now, which is just crazy but we should talk about this is kind of disappointing how so for angry birds i mean rovio was ipo'd at 20 in 2017 at a billion dollar valuation which was that that was seen as underwhelming there was this fast company that i was reading in fast company article that i was reading back from 2012 and rovio's ceo and their execs were talking about being the disney of the 21st century building this ecosystem building this universe around these characters and these characters would just be one of many and they they quoted analysts valuing this company at nine billion dollars now it's worth 755 million so yeah it doesn't seem like it you know went to the potential that its backers initially thought it did yeah i think they shot a little too big because yeah it has been a relatively successful franchise like over five billion downloads but yeah you're right i did see this whenever someone calls themselves the disney of x red flag it's usually not going to work out.

14:31Okay. Before we jump into our next story, we're going to take a quick break.

14:38This message may be shocking to many millennials. If you are one, you might want to sit down right now. Loads of people are searching the following on Depop, low rise jeans, halter top, velour tracksuit, puka shell necklace, disc belt. You likely place these in the dark of your closet in 2004, never to be seen again. But if you can find it in yourself to dust them off, there are a lot of people who will give you money for them. Sell on Depop, where taste recognizes taste. 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.

15:23Bundling, 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. Coverage options are selected by the customer. Availability, amount of discounts and savings, and eligibility vary by state. Okay, Neil, we're back with yet another edition of Toby's Trends where I, a Gen Z-er, explain to you, a millennial, what the heck the youths are doing these days on the internet. I don't like this intro because you just always remind me of my age. I actually had you as a young and hip millennial, but then I actually took that part out because I don't know.

16:01I'm not. Yeah, no, you are. Okay, so today's trend originates on TikTok, as most of my trends do. So right now, the hot thing is to film a mundane event in your life, like going to the park or going for a walk, in the aesthetic of the film director, Wes Anderson. So all the videos creators are making start off with the same hook. And it's, I quote, you better not act like you're in a Wes Anderson film during blank, where the blank is some activity. And I also just like want to call out that it's a Wes Anderson film because he is a filmmaker. He's an auteur, an artist. And I love this trend because honestly, Wes Anderson has such a super recognizable aesthetic.

16:45you have the color grading the iconic color grading you have the iconic symmetrical shots that you see in all of his movies and then you also have just this soundtrack that everyone's using too so it really captures the aesthetic of a Wes Anderson movie and I guess my big takeaway is I just love creators and how creative they are in the sense that they're taking one of the premier artists of like the last generation of filmmaking and making it on their iPhone making it via the the editing apps that we have at our disposal it really is just like this amazing if you really take a zoom out and think that these people can make the same kind of aesthetic as this filmmaker it's an awesome well maybe my thought initially here was maybe what he's doing is not that difficult potentially people are doing it you know it's just kind of setting up the shot um and the fact that he pioneered the this type of aesthetic is impressive um but maybe actually executing it and I could be completely wrong and we're going to get a bunch of people yelling at me but you're saying that like the fact that they can do it is amazing but maybe the fact that they can do it is normal yeah it's not you know a high level or not not high level but not a high level of difficulty technically wise yeah well I think you kind of hit the nail on the head is that it's art because he's the one who created it yeah I mean it's an ingenious thing to create this particular world that you know it's a wes anderson movie i i kind of want to wes anderson nice our show we should do like a little clip hop on the trend our little social team if we can get i'll be edward norton neil and i just very symmetrical in here just like standing there looking at it so that go ahead no well wes anderson has a new movie coming out about uh the southwest and this and space which i think is a really cool setting for him to do his stuff in yeah so maybe this is crazy that our minds always go to this but is this an undercover marketing tactic for wes anderson that he's seeding tiktok with with his aesthetic so then when his movie comes out people go watch it it could have been spurred by a trailer you know i think the trailer was released two weeks ago and it kind of got him top of mind again and then people started doing it but i would not be surprised yeah if there was some marketing agency behind this because they always seem to be behind everything yeah speaking of marketing fast food chicken sandwich wars are out and hamburger wars are back mcdonald's and burger king have launched new strategies to boost sales of their core beef patties let's start with burger king which calls it which calls its recent 400 million dollar rejuvenation strategy reclaim the flame it updated its kitchen tech and released new marketing campaigns like the viral whopper whopper jingle now i gave you time to start singing it.

19:30Now that that's passed, it's over. Now it says it's selling more Whoppers than ever before. Meanwhile, McDonald's is focusing on improving the product itself. It says it's making its cheese gooier, its buns more pillowy soft, its onions more caramelized, and its Big Mac sauce more plentiful. Senior Director of Culinary Innovation, that's a great job, said that they're adjusting their grill settings for a better sear. I'm obsessed with all this. I love the fact that these really small tweaks on the margin, meltier cheese can just make this huge difference. And that sounds like a huge difference.

20:05No, I know exactly. But if we're really thinking about what's happening, like how much more melty versus non-melty. Have you not changed your grilled settings to get a better sear? It changes the game. Right. No, I'm, listen, I'm on board with this and I love whenever you hear about these tech companies trying to like innovate and do thing when you're in the food space you can innovate as well like there are these and you can use tech as well to innovate but i do love that this is like kind of a back to the basics let's just make a better burger thing and i love that we're seeing competition happen too like burger king went on this big upgrade so mcdonald's like we got to step our game up now and i do think it's funny that in the post chicken wars era it's it's all about beef baby it's we're back i know i was looking it up to see whether beef still reigns supreme i mean it does still reigns supreme.

20:51And it's because that the prices are very competitive. So compared to pork and poultry, beef prices are currently at their most competitive since 2017. So while pork and poultry prices have skyrocketed during the inflation, beef has not increased as much. So people are really jumping back into that comfort food core thing. And also in terms of like the general vibe around McDonald's and Burger King, I feel like it's cool again to say that not, I don't know if it's cool, but it's okay to say that you like it and want to go. There was a time from maybe 2015 to 2019 where, you know, for ethical reasons or health reasons or wherever you could not, you kind of had to like eat.

21:33It was the post super size me era. Yeah. Right. So you couldn't go to McDonald's or you couldn't do it in public without being kind of shamed by your, your vegan friends and now i feel like you know we walk into we walk into work today and everyone's like oh i can't wait to get some mcdonald's right it sounds good honestly uh yeah i'm hungry now honestly and i think i might go partake in their new cheesier beef uh patties um anything anything else i think that's it all righty um okay let's move on to our final story of the day which today is tax day, which I hope everyone listening knew before listening to the show, honestly, because if you didn't, well, go get to filing right now.

22:15So in honor of tax day, Neil and I did a little digging and came up with some fun tax facts, some not so fun tax facts to end the show. So Neil, want to take us home? I'll take it away. Well, first of all, just at a high level, why is April 18th tax day? Tell me. It's not. April 15th is tax day. April 15th. But today is April 18th because the 15th was on a Saturday and then DC had this holiday called Emancipation Day yesterday. So we got delayed for three days. So that's the first stat. And then as of April 7th, how much can you expect to get on your refund is always the biggest question that people have.

22:50The average refund in the U.S. to taxpayers was 20, I never know how to say numbers,$2 ,878. dollars so that's pretty good but it is actually down from 3 100 last year because a bunch of the tax credits or tax breaks that were offered through covid policies like the child tax credit have kind of expired now so you can expect maybe a little smaller uh return and this comes at a time when the irs is been flushed with 80 billion dollars in cash from the government to step up enforcement and hire more people so the there's a thread running through tax day is that next year the IRS is about to crack down.

23:30Yellen has instructed IRS agents to not go after anybody who makes less than$400 ,000. But the government thinks that they're leaving$600 billion a year on the table by not going after rich tax cheats. So that's the whole point of this IRS revamp. Go get them. Go get them, IRS. All right. So let's get into some history of taxes and really interesting how taxes can shape behavior in very, very powerful ways. So Amsterdam's houses are so narrow because of a 16th century law that taxed the width of a property's facade. Oh my gosh. See? The unintended consequences of taxes are incredible. And then I mentioned this in the newsletter this morning, but England imposed a tax on the number of windows you had as a way of taxing the wealthy, right?

24:12It was this progressive tax. The wealthier you are, the more windows you have in your house. But all that did was cause builders and constructors to not, or everyone to close up the windows they had, leading to poor ventilation, no sunlight, and then everyone got sick and died. It's ridiculous. Final one is, or maybe not the final one, 24 states have this streamlined sales tax, which taxes non-grocery items like candy. But Twix, do you know what it's made out of? Flour. Right. So it's not considered a candy. Yeah, it's a food, right? Yeah, it's like a grocery product. So it's not taxed as candy in 24 states.

24:48So it'll appear in the same aisle, right next to a Hershey's candy bar. But it might be cheaper because it doesn't have an added tax in half of states. Oh, I see why Twix. Oh, it's considered a cookie. It has a little, yeah, it has a little cookie in it. The wafer thingy. Interesting. Yeah. Good for Twix. Do you have any tax facts? I got some tax facts. I have a little more modern one, actually, which was during the 2022 filing season, only 10 % of calls received live assistance if you called the IRS, and the average hold time averaged 29 minutes. Oh, my God. So if you ever felt like the IRS is impossible to get in contact with, you're not imagining it.

25:23Yeah. Literally 10 % of calls reach someone? That's ridiculous. And then my tax fact number two is from Ireland and Denmark and a few other EU nations have begun taxing cattle owners on cow flatulence. Yeah. So given that cow farts account for approximately 18 percent of greenhouse gases in the atmosphere, those governments started taxing cow owners. In Ireland, it's$18 per cow, while Danish farmers pay$110 per cow in cow tax. Yeah. I mean, this all leads to this is my entrepreneurial mind going. But all of these taxes lead to business opportunities, because if you can create a cow feed or a fertilizer that lead that cows can eat and they don't fart as much.

26:05And this is actually happening. Yeah. Then you will make a lot of money. Is it out of sargassum? I don't know if it's out of sargassum, but it's happening in New Zealand, too. If you can get some cow feed that doesn't cause flatulence, you will make a lot of money. Give me some of that cow feed. I've never had this business mind before. and I started podcasting and I'm just popping out Gary V ideas. There you go. All right, that is our show for today. Good luck filing your taxes. If you haven't already, please reach us at Morning Brew Daily at morningbrew.com. We love hearing from you and always got to shout out our amazing crew in the back.

26:36Our producer and editor is Emily Milliron. Our technical director is Uchenna Waogu. Our supervising producer, Bryce Beloff. Nala Nduga and Raymond Liu, our associate producers. James Atamian is our sound guy. Hair and makeup was arrested for tax evasion. 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.