Big Retail is FINALLY Slashing Prices & US Workers are Lonelier Than Ever

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0:27Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why Babe Ruth is no longer the top slugger in baseball history. Then your orange juice might be tasting a little differently soon. It's Thursday, May 30th. Let's ride.

0:46All right, you filthy animals. Do I have a real estate listing for you? Kevin McAllister's Child at Home from Home Alone hit the market this week with an asking price of$5.25 million. For that price, you get a 9 ,000-square-foot Georgian-style house in the Chicago Burbs, five beds and six baths, and according to the team selling the property, a chance to own one of the most iconic movie residences in American pop culture. Toby, would you like to pay all cash, or should I put you down for a 20 % down payment? I am out on buying this home, but I did dive into the internet lore that comes around the question of what do the McAllister's do for work, because you see them taking these vacations to Paris.

1:28You see their beautiful home. So what did they do and what was their income? No one really knows what their actual jobs were. They never say in the show. Some theories think that his mom was a fashion designer because there's mannequins in the house. But working on the assumption that McAllister's did not spend more than 30 % of their income on housing, economists have been able to determine that they probably could have afforded that home back in 1990 on an income of$305 ,000. So maybe not stratospherically wealthy, but these days, given home prices, it does seem like they would have to make a little bit more cash.

2:01Yeah, the value of this actual home has jumped over the past decade when it was last sold. So in 2012 was the last time it changed hands, and it went for$1.5 million, according to Zillow. And now it's around 5x that. So, wow, good for the people who actually own this home. Now let's hear a word from our sponsor, Sage. not the herb, but a tool that saves finance professionals a lot of time and money. If you're a finance pro, you're always walking a tightrope of sorts. Data from Sage's recent CFO report found that 81 % of finance leaders believe manual processes inhibit strategic work. So doing something like bill pay is important, but it doesn't help you steer your business in the direction you are capable of pushing it toward.

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4:27To set the stage, two small activist investors urged ExxonMobil to speed up their carbon emission goals back in January, but Exxon turned right around and sued them. The investors dropped the proposal, but Exxon continued with the suit. And some big institutional investors, including Norway's Central Bank and the U.S.'s largest pension fund, didn't like Exxon beating up on the little guy. So they prepared to move against the company's board of directors at their annual meeting yesterday. But the status quo was maintained. 95 % of voters backed the existing 12 Exxon directors, while other proposals for reports on gender and race, plastics and social impact were also rejected.

5:06Semifor's Liz Hoffman recently wrote that Exxon is on an epic corporate winning streak, and that was before yesterday's meeting. Neil, this vote, as well as the impending lawsuit, could represent a real turning point in shareholders' ability to hold corporations accountable. Yeah, this is a sign of the rise and fall of the ESG movement, which stands for Environmental, Social, and Governance, and it picked up in pace around 2020 when shareholders were pushing companies to do more around social goals and environmental goals. And back then, Exxon lost a proxy battle to this tiny hedge fund called Engine No.

5:431, which shocked the world. They got three board seats on Exxon's board. And now, three years later, the political winds have completely shifted and Exxon railroaded over these other small activist investors and won with 95 % of the vote. Yeah, that's looking like the peak of the ESG movement rather than just the start of something bigger. It also kind of signifies, it very neatly signifies how big oil companies are only getting bigger these days. If we just go through the list of acquisitions that have happened recently, it's pretty remarkable. Chevron acquired Hess for$53 billion, which allowed them to get access to the extremely productive Guyana oil fields.

6:24Shareholders actually voted earlier this week to approve that deal. ExxonMobil bought Pioneer Natural Resources for$59.5 billion. That doubled their production in the Permian Basin. Occidental Petroleum, which Warren Buffett has a big stake in, they acquired Crown Rock Minerals for$12 billion. And then yesterday, even, Canoco Phillips announced it was buying Marathon Oil for$17.1 billion. So when we talk about big oil and we talk about epic win streaks, it is amazing how many of these oil mergers and deals have happened just in the last 18 months. Yeah, and Exxon's stock is up 250 % since the depths of COVID.

7:00That has largely been helped by oil prices rising over the course of the war in Ukraine. Energy prices got higher, which only helps energy companies. And now, yeah, their stock is booming. So it's good times to be an oil company. And you see that they are all doing this land grab for very lucrative spots around the world, including Guyana and also in the Permian Basin, Texas. It's also just surprising in the current regulatory climate that these deals are happening because this is probably the least, the most merger hostile regulation in a generation at the FTC right now. And yet these deals are sliding through.

7:37So that's just another win and another notch in big oil's feather cap. After jacking up prices for the better part of three years, retailers are finally giving customers a break. Welcome one and all to Hot Discount Summer. Yesterday, Walgreens said it would slash prices immediately on about 1 ,300 items, ranging from gummy vitamins to facial cleanser to even squishmallows. It joins Walmart, Target, Amazon, and other chains that have recently announced sweeping price cuts ahead of the summer. The discounts are happening not because retailers feel bad for us. It's because consumers, who had been so resilient during the spike in inflation, are finally starting to crack.

8:17People aren't spending as much in stores anymore. So in response, companies are slashing prices to keep them from dropping off completely. Toby, some of these discounts are staying just for the summer. Others are going to be permanent. But either way, this is a major shift in strategy. Right. And you want the consumers to come in and buy the actual products that you're cutting prices on. But then you also want them to, once they're in the store, hopefully start spending on more discretionary items. Stuff like arts and crafts or new clothes. Not those essentials. but this is part of the strategy of why these price cuts are rolling out on all the retailers that you mentioned.

8:53And it's also been a game of chicken between stores and shoppers over the last few years where prices, consumers are only so resilient. Like at a certain point, they do stop shopping and the volume that these stores are doing goes down. It appears that in that game of chicken, stores have finally blinked first. So maybe it's just a nice little relief, a hot discount summer, as you so neatly put it. Yeah, so we're basically at the end of the earnings season. And one of the major themes that came out from retailers was that the lower income consumer is pulling back. You heard that from McDonald's, from Starbucks, from Home Depot, from Walmart.

9:33To a T, they all said this. And you can just look at where people are buying various, what kinds of items people are buying. So in the cheapest groceries, the market share of the cheapest groceries went from 38 % in April 2019 to 48 % last month. And then the share for the most expensive groceries went down from 22 % to 9 % over the same period. So that's why you're seeing all these brands or these stores like Walmart rollout store brands that are much cheaper around$5 price point to get people shopping who are going for those cheaper items. And then outside of retail, just specifically, McDonald's has also been doing some damage control recently on the price fund.

10:14Their USA president wrote an open letter that was published yesterday, basically saying that reports of McDonald's price rises faster than the national inflation average are greatly exaggerated. He called out viral social media posts, which we've talked about. We talked about the viral$18 Big Mac meal at a Connecticut rest station. So he was just trying to set the record straight. And you see McDonald's is playing offense, too. They plan to roll out a$5 value menu following kind of this heightened attention around their price increases. If you don't know the name Josh Gibson, that is about to change because he's about to be plastered all over major leagues baseball's record books.

10:53In a move that quite literally rewrites baseball history, the MLB announced plans to finally incorporate Negro League statistics into its record books. That means a player like Josh Gibson, who batted.372 in the Negro Leagues, is now sitting above Ty Cobb on the all-time batting average list. The man, called the Black Babe Ruth, now holds the all-time slugging percentage record, too, metric that factors in a hitter's power, leapfrogging none other than Babe Ruth himself. This was a project four years in the making that required diligent research from a team of historians and statisticians in order to incorporate the stats of more than 2 ,300 Negro League players from 1920 to 1948 into a new online database.

11:35But it has been more than worth it because anyone who knows the history of baseball knows it has been incomplete if you don't acknowledge the contributions of these athletes to the game. Yeah, this did seem to stem from the fallout from the George Floyd Black Lives Matter movement in 2020 when MLB Commissioner Rob Manfred designated seven Negro leagues that operated from 1920 to 1948 as major leagues, setting in motion this remarkable historical archival project to sift through newspapers and microfilms from the early 20th century, go through box scores, find out these people's stats, which weren't kept as well as MLB stats because they just did not know.

12:14have enough resources and then finally add them to mlb's record books which it's unlike any other sport where the actual record books are so significant it's it's really a historical record more than anything else and so this has been a long time coming and i think it is a really important move for mlb to recognize this part of baseball's history right part of the issue has been that one the records were incomplete but also a lot of the seasons were different lengths a lot of Negro League seasons tended to come in in a 60-game season, while baseball is 162 games. So how do you reconcile the difference between those two?

12:49But one of the things you mentioned at 2020, another thing about 2020 that set this process into motion was the fact that it was a 60-game season, a pandemic-shortened season. So it did kind of kick off that conversation again of saying, we've had different length seasons before, so that shouldn't be a limiting factor in including these statistics. So that was just another reason why the project got underway when it did. And I think you're going to start to see more Negro Leagues memorabilia, caps, jerseys going around and more recognition of this part of baseball history. You can already play as them in MLB, the show, the video game.

13:25They're selling jerseys and caps. Last night at the Mets game, someone snapped a picture of somebody wearing a Josh Richards jersey, Josh Gibson's jersey. I'm sorry. So I think you're going to start to see this part of the game be more recognized. And also the reason they're doing this now, this record book thing, is that because in a few weeks they're going to be playing an MLB game at Rickwood Field in Alabama, which is home to the Birmingham team in the Negro Leagues. Up next, it is my favorite segment of the week, Toby's Trends. Just kidding. It's Neil's numbers.

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15:03Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will have you feeling like you're entering the renaissance from medieval times. First up, are any of you feeling isolated at work? You're not alone. Well, you are. But what I mean is many other people are feeling the same way. In an article called The Loneliness of the American Worker, the Wall Street Journal listed a bunch of recent studies that show how workplace shifts in the past four years are contributing to America's loneliness epidemic. Get a load of these. More than 40 % of fully remote workers who are working parents said they go days without leaving the house, according to a 2023 survey.

15:41People who work in office spend nearly one quarter of their time in virtual meetings, while face-to-face meetings account for just 8 % of their time. Speaking of meetings, Americans have tripled the time spent in meetings since 2020, according to Microsoft, which leaves less time for those casual coffee chats or other serendipitous interactions that lead to overall well-being. Finally, 68 % of workers surveyed by BetterUp said they knew their colleagues on a personal level, which is down from 79 % in 2019. Toby, people just don't have work friends anymore, let alone a work husband. Yeah, the entire default of how we interact has just shifted.

16:19It used to be you could catch five minutes with someone at the proverbial water cooler, just catching up. But now if you want to catch five minutes, you have to schedule that, which you just see from those meeting stats going through the roof. Every moment of our day has to be scheduled now. There's very little serendipity when you factor in remote work. And honestly, the stat that really stood out to me was the fact that people are not leaving their homes. That is not a good thing. That is not good for the loneliness epidemic. That's not just affecting workers, but just people in general. So a lot of eye-opening statistics in this report from Wall Street Journal.

16:51For my second number, tonight is the finals of the Scripps National Spelling Bee, and chances are an Indian American kid is going to win it. That's because they've won 28 of the last 34 national spelling bees going back to 1999. In 2019, when eight champions were declared, seven were Indian American. It's an incredible achievement for a group that accounts for just 1.3 % of the U.S. population. This utter domination has been a source of pride for South Asian immigrants and even those who remain in India. In his 2016 address to Congress, Indian Prime Minister Narendra Modi cited spelling bee champions as one of the country's contributions to the U.S.

17:29So how can we explain this? And there are a couple factors, experts say. One is that Indian immigrant parents put a heavy emphasis on the value of education because that was their pathway to success in the United States. Another is a role model in Balu Natarajan, who in 1985 became the first child of immigrants to win the spelling bee and became a household name in that community. And finally, a well-funded spelling bee infrastructure has sprouted up that produces indy-american spelling champions most notably the north south foundation that holds educational contests across the country toby can you spell dynasty i knew you're gonna tell me to spell a word i can't spell dynasty but i'll leave that to the spellers themselves there is just a lot of well-educated and tending to be wealthier indian americans in the country as well there are 3.1 million indian-born people living in the u.s right now.

18:21Their average median income, household median income is 147 ,000. That's more than twice the median income of other U.S. households. But it's not just the fact that it is a wealthy population living in the U.S. It is the fact that there's this very robust community around spelling as well. There's these organizations and then also a lot of the same families from the southern part of India. It's not just Indians in general. It is a specific part of India as well so you're seeing a lot of factors that contribute to this absolutely dominant run over the last 30 years dominant run and if you want to learn more there's a great documentary benary from 2020 called spelling the dream which follows four indian american children that go through the spelling bee uh it's a great movie and i just want to also talk about how the spelling bee has upped its game over the past few decades so in 1940 the winning word was therapy whoa i I think you can spell therapy, right?

19:17And last year, the winning word was samophile, which is a prefix. Just to help you out here, here's a hint. The prefix is derived from the Greek samos, meaning sand. Does that help you? It does not help me. But samophile, I feel like that's gettable, right? I'm not going to try. Don't try. It's not going to end up. Don't want to embarrass yourself on the podcast. Okay, for my final number, let's head to India proper, where scorching temps are shattering records. Yesterday, New Delhi recorded a temperature of 52.3 degrees Celsius or more than 126 degrees Fahrenheit. If confirmed, that'd be the hottest temperature ever recorded in India.

19:55And parts of India have been sweltering under a heat wave that shot temps above 110 degrees for weeks. But yesterday's spike was on a whole other level of danger and brought major changes to daily life. Hundreds of teams were sent out to crack down on people washing cars to conserve water. and construction workers have mostly paused working between noon and 4 p.m. Toby, a 50 spot on Celsius that's unfathomably hot, but it might be part of the new normal. Scientists say climate change has made extreme heat waves in India far more likely. Right. It really disrupts daily life. I mean, you had a judge at a court just stop hearing cases on Tuesday this week after he said it was just too hot to work without air conditioning.

20:34There's been calls to leave water pans at bus stops and bus stations. Power demands are at an all-time high in the city as well. So it really does throw a wrench in life. And you're right, like a 50 spot when it comes to Celsius. It's just never a number that you expect to see or want to see. Neil, I am honored once again to be invited into the exclusive club that is Neil's numbers and add my humble Toby tally to the fray. And my tally has to do with that cup of OJ you have at your Sunday brunch. Orange Juice Futures was to let traders hedge against big swings in prices. hit$4.92 this week. That is almost double the price from a year ago.

21:13And it's just been a really bad couple of years for oranges. There was a hurricane, then a cold snap in Florida that wiped out thousands of acres at the end of 2022. And now a really bad harvest out of Brazil has once again sent prices skyrocketing. It's gotten so bad that some companies are toying with the idea of making orange juice from mandarins, which are a little bit more resilient to swings in temperature. Other fruits like apples and pears are also getting the carton call up. Neil, it's hard to fathom life, especially as a Florida boy, without oranges and orange juice. But three consecutive bad years of harvest is pushing us towards that path.

21:48Yeah, the problem here is that the orange production is concentrated in just two places, basically, Florida and Sao Paulo, Brazil. They account for 85 percent of world production. We saw that with cocoa prices where it's just concentrated in a very specific place. and when there's disease or bad weather there, sends prices skyrocketing, and that's what's happening in oranges. But at the same time, people just aren't drinking as much orange juice as they used to. So this is not just a minor blip. This is a long decline in people drinking orange juice. Consumption has halved in a decade. People have looked at the label and seen how much sugar that is in there.

22:25So it could be the case that orange juice, your beloved, is just gonna become a niche luxury products. Yeah. One of the things that really has been happening over the past few decades was 20 years ago, citrus greening was first detected. That's this disease that makes the fruit bitter and kind of stunts it, killing it altogether. That was first detected in the US and farmers have been fighting against it for literally 20 years now. And there's, the problem is, is that it only affects some fruits on the trees. So the only way to really root it out is by uprooting the trees and getting rid of them.

22:58But farmers are always loathe to do that because they can save some of the fruits there. So it's just a rock and a hard place. And yeah, I am a Florida boy. What's your pulp level? I'm a no pulp guy, but I just grew up with that smell of burnt oranges because the Tropicana factory was literally right across the river from where I live. So this is a sad day for me. When you hear the words balloon fight, your first thought is probably a summer afternoon with some lighthearted water balloon tossing, but not when North Korea is involved. The country deployed about 260 balloons full of trash and potentially extramit into South Korea yesterday.

23:33The move triggered emergency protocols, brought out chemical and explosive teams, and prompted authorities to warn people to stay indoors. Aerial messages are actually quite a common source of tension between the two nations. During the Korean War, the U.S. military estimates that the country's distributed more than 2 billion propaganda leaflets and the drops have continued into present day these trash balloons are a more symbolic display of north korea's displeasure with their neighbor but still balloon aided psychological warfare neil it's a real part of life on the korean peninsula it really is and this specific balloon launch appears to be a response to another launch of leaflets and other materials by south korean activists who wanted to penetrate the that wall of north korea and say hey look life is a little bit better down here.

24:23So recently they sent a bunch of USB drives containing K-pop music and other anti-regime leaflets to try to permeate what's going on in North Korea, which is a complete foreign media blackout. They don't let people consume any other sort of culture from anywhere else. And the North Korean people said this was a direct response to that launch by activists south of the border. And then another kind of notch in the balloon saga is that in 2022, North Korea blamed balloons for starting its first COVID-19 outbreak. So these things go very, very deep. But you're right. The biggest threat to the current regime is just exposure to the outside world right now.