Are Silicon Valley Elite Building a Utopia? & China's Deal-Making Card Game

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 pod, the mystery buyers spending$800 million on California farmland are revealed, and a previously obscured card game is sweeping China, revealing much about its roughed-up economy.

0:44Then we'll explain the controversy created by a non-consensual kiss in the aftermath of Spain's Women's World Cup victory. Plus, it turns out that we're all getting worse at the price is right, and the reasons may surprise you. It's Tuesday, August 29th. Let's ride.

1:05Okay, Neil, I want you to weigh in on this controversy that's been brewing. Noah Lyles, who is a star sprinter for the United States, kind of ruffled some feathers when he said, I hate when I see NBA players and other U.S. domestic sports leagues wearing hats saying that they are world champions when they win the NBA. He's saying they're not world champions because it's a very U.S.-centric sport and they're only playing teams for the United States. Where do you fall on this debate? Should NBA champions call themselves world champions? Maybe not, but I'm just confused why he thought that was the first thing to talk about after his win.

1:41Is that why people were upset? It's like, just focus on your victory. Like, why do you care about what NBA players are doing? When I first thought about this, I was like, yeah, the NBA is a very international league. It has some of its best players are not from the United States. So why wouldn't they call themselves world champions? On the other hand, I always felt it a little bit weird when, at least in baseball, because there are a lot of other really good leagues out there. MLB is the best. When they would put on the hats and they would say, like, yeah, we're world champions. I was like, well, you know, you are like a North American league.

2:15So while that may be the case, it was a little confusing why you would say world champions. You could just say MLB champions. I don't think anyone would bat an eye. Still, I'm going back and forth a million times on this. Still, I don't know why you felt the need to weigh in. And I'm totally on Noah Lyles' side. It's ridiculous that they call themselves world champions because Noah Lyles was basically just giving props to the performances of people at the world track and field championships. He's saying we are truly competing against people from around the world, whereas in the NBA, you're competing against other people from around the world.

2:48It's just semantics. I know. It's just semantics. All right. This is why it's a debate. They can say they're world champions, and you're probably like, yeah, you are world champions. but you also won a domestic league. Like it doesn't really, it doesn't really matter. We're the world champions of podcasting. But apparently a lot of NBA players were upset about it and went off on him. All right, let's begin today's show with a long simmering California mystery that was just solved. So for the past five years, a secret company called Flannery Associates has been buying up thousands of acres of farmland in an agricultural area about 60 miles northeast of San Francisco, known mainly for an Anheuser-Busch brewery, a factory that makes Jelly Bellies, and Travis Air Force Base.

3:29No one knew who they were, but they were calling up farmers and offering several times the market rate for land, eventually becoming one of the largest landowners in Solano County. Rumors swirled about the mystery buyers. Was it Chinese developers? Was it the ghost of Walt Disney building another theme park? Then on Friday, we found out who was behind Flannery Associates. It's a who's who of Silicon Valley elites aiming to build a utopian city from scratch. The investors include former Goldman trader Jan Sramek, LinkedIn co-founder Reid Hoffman, the Collison brothers of Stripe, Marc Andreessen of Andreessen Horowitz, Lorene Powell Jobs, and other tech investors who collectively committed more than$800 million to build this new city.

4:12A long road remains for them to realize their dream. This is California after all, and building anything there is pretty impossible, but they're going to try to do what a lot of rich people have tried and failed to do in the past by creating a model city that solves a lot of the problems afflicting urban America. This is the pipe dream of rich people from the beginning of time. I mean, you have Peter Thiel who invested in this thing called the Seasteading Institute, where they attempted to build a new society on lily pad structures in the middle of the ocean because it was tax-free and law and tax-free.

4:46And then you also, this immediately made me think of the line in Saudi Arabia, which is this huge multi-billion dollar project that Saudi Arabia is trying to pull off. 170 kilometer long city, 200 meters wide, 500 meters tall in the middle of the desert. This idea of creating utopia from scratch is just something that, I mean, humanity has been obsessed with literally since, I mean, the Garden of Eden days, basically. Utopia has been on our minds forever. And so here's another attempt at it. Yeah, we, we, in my classes in urban planning school, I went for masters. We studied a lot of the transcendentalists in the 19th century who want, who looked at what was happening in cities and wanted to create their own little, you know, garden cities on the outskirts that were self-sufficient.

5:29And that's exactly what a lot of these utopian cities want to do. Uh, they're, you know, they always say public transit, everything's going to be renewable energy. There will be trees everywhere. Everything will be walkable. So there's a lot of the words that you have to hit when you're trying to build a new city. Some people say this is a good idea, but because like, look, why aren't we building new cities? It's a sign of stagnation in American innovation and entrepreneurialism that we're not building new cities. So why not try this out? So some people are like, hey, give it a shot. Yeah, I'm totally on board of give it a shot.

6:02The whole thing falls apart, though, if you can't rezone this land, that's what it's all hinging on. Yeah, it's like utopia, utopia. Okay, what do we need to actually make this happen? Rezoning. Yeah, zoning laws. It all comes back to zoning. Because it's literally, they're buying up farmland. And so, but that's also the big pitch to investors that's saying, basically, if we can rezone even some of this land, your investment will be returned tenfold because as soon as it goes from farmland to residential, it instantly becomes more valuable. So that's kind of the pitch. But the big hurdle is you're going to have to get residents of the county on board.

6:38And it's not off to a great start because already Flannery has sued the county for saying that landowners were conspiring to drive up prices. So it's on a little bit of rocky footing already, but yeah, I mean, team 15-minute city right here. Okay, Neil, let's move on. It's been a little over a week since Spain won the Women's World Cup over England, but the days following its victory have been filled with controversy rather than celebration. The country is still reeling after an incident where Spanish Soccer Federation President Luis Rubiales grabbed star forward Jenny Hermoso's face and kissed her on the lips during the victory ceremony.

7:18He went on to defend his actions, saying that she had given him consent, but Hermoso denies that claim. And despite massive backlash from the team, the federation, and the country itself, Rubiales refuses to resign. FIFA ended up suspending Rubiales for 90 days, but Spain's own soccer federation has taken matters into its own hands and has asked UEFA, which runs the European competitions like the Champions League, to suspend Spain if Rubiales doesn't step down. If that were to happen, megaclubs like Real Madrid and Barcelona would miss out on millions in shared TV revenue, crippling their already delicate financial situations.

7:54Plus, corporate sponsors of the Spanish national team have begun to distance themselves from the federation as long as Rubiales is still at the helm. So what started as a kiss, Neil, has spiraled into a huge national controversy with suddenly millions of dollars at stake as well. Yeah, and then yesterday things took even a weirder turn. It was on Sunday when Rubiales' mom went on a hunger strike. She locked herself in the church in their town and went on a hunger strike and claimed that the media and journalists and everyone else, all these politicians, were out to get her son. So there's this small cabal of people that are still defending him and his mom is going on a hunger strike.

8:32But to me, this reflects sort of the bargaining power and the increased prominence of women's soccer because after all of this happened, the Spanish women's soccer team and a bunch of other women's soccer players in Spain basically staged a boycott and said, we're not going to play until Rubiales is gone. And so that put a lot of pressure on the FIFA and other leaders to take action here. And you're starting to see women's soccer become more prominent. And then in the broader conversation, a lot of people are saying this is the Me Too movement in Spain and the hashtag is Se Acabo, which means it's over.

9:08And that has been spreading all over Spanish social media, been used by women's players, by politicians, by a bunch of the team sponsors, by saying like a lot of this behavior has been happening under the surface. But after the World Cup, it was the most public thing ever because this was on TV in the victory celebration. And so you're seeing like a lot of the mistreatment that's been happening for years play out right in front of everyone's eyes in front of millions of people. Yeah, it does feel very much like the Me Too movement in the sense that suddenly all these repressed stories are coming to light about how men in positions of power have been treating women for a long time.

9:43But then finally, there is like this catalyst moment. And then also, so it has been interesting to see how the sponsors of the Spanish national team involved with the Spanish national team have been handling this. because, I mean, you have to remember that soccer and football in Spain is literally life, not to quote Ted Lasso, but it's such a core part of their identity. So the sponsors have kind of been distancing themselves, but they refuse to cut ties with the federation because, again, this is the main thing that Spanish people are most proud of and most involved in. So it hasn't been – you haven't seen that full financial pressure exerted that they're fully cutting ties, but they're releasing statements, trying to distance themselves from the team.

10:26So I thought that kind of threading the needle has been interesting to see on the sponsor side. So we'll see how this plays out. But I mean, the sad part about it is that it's overshadowed the win, which this is all anyone's talking about. Maybe the good part of it is that a lot of Spanish women are saying is that it's finally bringing to light a lot of these problems. And this has been plaguing soccer across the world. I mean, you know what happened in the National Women's Soccer League over the past few years, which is the U.S.'s top women's soccer league. There's been all of these investigations and revealing of mistreatment by leadership.

11:02Five of the 10 coaches in the NWSL were either stepped down or were fired over the past couple seasons over misconduct. So this has been something that has been bubbling under the surface and finally came to light. So a lot of people are saying, OK, it's finally like we need to seize the moment to create change here. All right, moving on to our next story. An obscure card game is taking off in China, and it speaks to the rough economic times the country is going through right now. The four-player team game Guangdan, which translates to throwing eggs, has become the de facto pregame activity business people do to get to know each other before talking shop.

11:39If you're in finance in China, you better know how to play Guangdan because you will inevitably be dealt cards during a business meeting so that dealmakers can size up your strategy and critical thinking skills. Some finance companies are even requiring their employees to learn how to play so they can get cozy with potential business partners. So what does this have to do with what's happening in the broader Chinese economy? Well, as growth has hit the skids, basically foreign investment has dried up to fund projects. Just speaking about the U.S., venture funding in China has fallen off a cliff.

12:10In China, total U.S.-based VC investment was$32.9 billion in 2021. Last year, it fell to just$9.7 billion. And with fewer international investors to turn to, Chinese business people hoping to get funding for their projects must become friends with powerful local government officials who hold the purse strings for tech investments like semiconductor manufacturing. And what impresses those government officials more than being a savvy Guangdong player? Toby, this card game reminds me a little of what golf used to be in America in the way you play it and it reveals your character to potential investors and definitely like Reese's the wheels of deal making.

12:46Yeah. And so I was kind of digging into why Guandan though, because there's so many games that you can play. It's not just the fact that it's a car game. And I actually think one of the key aspects to why Guandan has risen to prominence in business circles is the fact that you actually don't play it for money. Money isn't a part of integral part of the game like it is for poker or even for golf, honestly. And so I think it's kind of like this blank slate where they can see how people behave when there's no money involved. So then they can then commit money to them in a in a business setting. So I think that's partially an aspect.

13:20Also, the game is pretty team-based too, where you have to either set your teammate up or you can take all the glory yourself. So it does give you insights into the character. So, I mean, yeah, people have been using games in business settings for generations. So this is the latest one. It's kind of wild how integral, how like necessary this is. You have economists at particular investment groups being like, everyone is playing. I have no choice but to learn. Restaurants have decks of cars on hand so that when people come in, they know they're going to play like an hour before they order. So this is like a massive phenomenon that was once previously just in a few provinces that's grown to be like a really big deal in the networking circles of eastern China.

14:04Yeah, and Guangdong, Beijing is all in on Guangdong too. They're hosting a national competition, which hasn't always been the case because Mahjong, there's been a huge crackdown on that from the Chinese government because, again, there's money involved with that. And I think it's, I don't know, they're pushing Guangdong over Mahjong at this point. My one, before we take a quick break, my one gripe with Guangdong is the fact that it's played with two decks of cards, plus four jokers. So there's 108 total cards in the deck. And your hand, it starts with 27 cards. So how can you hold 27 cards easily in your hand?

14:44It doesn't seem like a very casual game for... Can you imagine somebody who hasn't played cards trying to hold 27 cards? It's like something you can learn. Yeah, you would definitely have to learn it. But that to me was the biggest negative is that you sit down at a table, you got 108 cards and you're like, okay, now deal 27 out. So each four players are dealt, you deal the whole deck out. So you're holding a half a deck of cards, and you kind of have to know what you're holding? You have to know what you're doing, and I got small hands, too. I would love to watch because that could be impressive to watch just from a tactile situation.

15:17It goes up instead of out. That's what I've been seeing. People are, like, stacking the cards. So, yeah, I went down a guandong rabbit hole, so we should set up a game, Neil. All right, before we jump into our next story, we're going to take a quick break. Tito's Handmade Vodka is America's favorite vodka for a reason. From the first legal distillery in Texas, Tito's is six times distilled till it's just right. And naturally gluten-free, making it a high-quality spirit that mixes with just about anything. From the smoothest martinis to the best Bloody Marys, Tito's is known for giving back, teaming up with non-profits to serve its communities and do good for dogs.

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16:44And this week's trend is all about G-rated movies, more specifically, the lack of them. This year, there is expected to be zero full-length G-rated movies released. Even the Paw Patrol sequel has a PG rating for mild action in peril. Now, the lack of good old fashion family fun at the movies is definitely a recent thing. Less than a decade ago, 18 G-rated movies came out in one year, and in 2003, there were 30 plus. Now, apparently, one of the crossing the Rubicon moments for Pixar, which is a prolific G-rated film studio, was the release of The Incredibles. That was the first non-G-rated movie it ever released, and of course, it brought in$630 million, and the rest was history.

17:29So Neil, G-rated movies are out. PG movies are in. What do you make of it? It's a money-making thing. It's a signal to parents that this will have maybe some adult themes that you will be able to enjoy yourself. Because when I look at a G-rated movie, I'm like, I'm getting like Blue's Clues, right? Like at this point, I'm getting like a really young kid show that I will just have to sit through. And I'm putting myself in the perspective of a parent right now. Now, PG, I'm thinking like, okay, we have a Pixar movie that will have like a bunch of little jokes thrown in for me that my kids won't understand.

18:04They'll enjoy, but like it'll be a nice little wink and a nod to me. But overall, this is just ratings inflation to appease parents, to make them come with their kids and see a movie and spend money as well. That's my take. I think you're dead on, but I mentioned The Incredibles, but also one of the big catalysts for this non-G rated to PG rated movement. was Shrek because Shrek came out and that was a kid's movie that really was for the adults. Like a lot of the themes, a lot of the references were for the adults. So ever since studios saw the success of Shrek, they're like, all right, we can put some jokes in these movies.

18:41It might take us out of G territory, but the parents will still bring their kids because you're totally right. They're going to enjoy it. But also you said you think of Blue's Clues. G-rated movies still bring in the big bucks. Toy Story 4 grossed$1 billion. dollars so there still is this kind of huge appetite for these family-friendly movies i mean toy story was definitely carry like the the majority of that load but i still think that there is room even paw patrol like people love paw patrol but you're that's not a g-rated movie right anymore yeah you're right going back in time going back in time and seeing all the g-rated movies before there was like a mature ratings industry is very funny like willie wonka and the chocolate factory was rated G that scared the bejesus out of me 2001 a space odyssey was rated G gone with the wind was rated G in 1939 so uh you know I think the G rated movies of years past was not uh was a little different than now and I was looking into this there wasn't a PG-13 rating until 1984 because guess who pushed for it moms Steven Spielberg oh yeah after the gremlins and Indiana Jones and the Temple of Doom, which were PG and kind of freaked out a lot of people.

19:55He was like, look, we need some sort of bridging of the gap between PG and R. And because of those movies and kind of the shock value that they delivered to younger audiences led to the creation of a PG-13 rating. Steven Spielberg. Steven Spielberg. I should have known. Okay, Toby, pumpkin spice season is back. And I don't know about you. As soon as that PSL hits my lips, the first thing I think about is, okay, where the heck am I going for Christmas vacation? Google knows that because they know everything. And yesterday it revealed a new feature on Google Flights to help you get the cheapest airfare for your winter vacation.

20:29Basically, it uses historical trend data to tell you when prices for a specific route have typically been their lowest on selected dates. So here are the broad trends you should know. For flights within the U.S. timed around Christmas 2023, you're going to want to book about 71 days before departure or early October. If you want to go to Europe for, let's say, a tour of all the Premier League stadiums around Boxing Day, you can book in a similar time frame about 72 days or more in advance. So just some news you can use from Google on this Tuesday as you daydream about your winter vacation. I know Google gets heat for hoovering up so much data, but this is pretty helpful and turns Google Flights into an even more compelling travel product.

21:09Yeah, this is exactly what I want people to do with my data. I'm on the team. Yes, take my data, but at least give me something for it. And this is extremely helpful. Although I will say sometimes it works in the opposite way where I get buyers remorse where I'm like, oh my God, if I just booked this three days ago, the price would have been$40 lower. So it does go both ways, especially for me who's a chronic flight procrastinator. But it's also, this is not necessarily a just Google flight feature. Other places like Kayak have similar features. You do have to pay extra for it. So this is kind of like Google undercutting the market for that feature.

21:47And, yeah, it is good to know that 72 days out. I don't think I've ever booked a flight 72 days out, though. Are you an early flight booker or a late flight booker? Definitely late. Yeah. See, this is why it's a bad feature for people like us because we know that it's going to tell us when we should have booked and we're not going to book it. But here's the thing. Google also has this other feature called a guarantee flight pricing. So that could help because you can basically what this does is on select routes, you can book something. And then if the price dips below where you booked it at, they will refund you.

22:21I don't understand how that makes sense for Google. Is this just trying to get people to just going for volume? Yeah, just volume. OK, that's because that was an interesting feature that they'll literally refund you the difference. So that was cool. What I want to know, though, is will they add a skip lagging feature as a callback, which is where you book a flight, but you get off at the connection instead of going to your ultimate destination because it's cheaper. So definitely not because airlines hate it. But that would be interesting. I would encourage people to look at various Google flight hacks because it is a really cool tool.

22:55You can get this calendar view. And what a lot of people use and I've used is if you're not really sure about your destination or when you want to take off, you can literally press where you're taking off from and then press enter. and it'll show you a huge map of the world and flight prices for any city in the world. And so you can kind of peruse around and say like, oh, actually Chicago looks pretty cheap when I want over this date range that I want to go or like Bangkok, wow, I didn't know it's only$800 at this point. So that's really for anyone who is kind of like us who's like, I don't know where I want to go.

23:27You can open up this beautiful map that shows prices all around the world. So I definitely encourage people to look into that. All right, Neil, let's move on to our final story of the day. For anyone who listened to the show yesterday, they'll know we started by honoring the life of the longtime Price is Right host Bob Barker, who passed away over the weekend. But we dug a little deeper into his famous show and found some stuff worth sharing. The main takeaway, Americans are way worse at the Price is Right than they used to be. Remember, on the show, four contestants are asked to guess the price of different products, stuff like washing machines, paper towels, shovels, etc.

24:04The person who gets the closest to the actual price without going over gets to keep on playing. So in the 1970s, when the show first debuted, the typical guess was 8 % below the actual price. But in the 2010s, people underestimated the price by more than 20%. So why the heck are we getting worse? Well, inflation in the 2010s was, believe it or not, more stable than in the 70s. So people might have stopped being so attentive to price changes. plus e-commerce could have desensitized people to the price of goods or it could just be the fact that there are simply more products than ever and it's hard to keep track of everything these days so neil what does your gut say why do you think we're getting worse yeah i think e-commerce is the biggest thing honestly because i don't know what the heck anything costs on walmart.com or amazon.com because there's so many different products and i think they have all this they have this dynamic pricing situation where you go on you go to buy paper towels one time of the day it's one price.

25:01You go on the next time of the day, it's another price. There's always fluctuations based on demand and algorithms are constantly changing the price. So I couldn't tell you, I don't know. I feel like when our grandparents went to go shop, they're like, we know that, you know, in October, 1955, paper towels or napkins or silverware costs, you know,$4.99 or whatever it is. And now I could not tell you anything because it fluctuates over the course of the day. So I think really dynamic pricing and e-commerce is the reason that people have kind of stopped paying attention to, you know, to really, to price changes and the reason people suck at, uh, at prices right now.