Facebook's $20 Million Algorithm Study & Why Some Credit Card Companies Hate Marijuana

0:28The best B2B marketing gets wasted on the wrong people. LinkedIn.com slash MBD. Terms and conditions apply only on LinkedIn ads. Good morning, Brew Daily Show. I am Neil Freiman. And I'm still not Toby. On today's pod, new research suggests that maybe social media isn't the reason we all hate each other. And I'll tell you just how much Trump's campaign has spent on legal fees this year. Hint, it is more than we'll make in our lifetimes. That's right. We have a fantastic episode. We're also talking about why you might want to check your pantry for some Trader Joe's products and a new real estate feature in San Francisco, courtesy of Elon Musk, is causing all sorts of drama.

1:05Today is July 31st. Neil, let's ride.

1:11All right, I've got the pleasure to have Kyle, a.k.a. Not Toby, as my co-host for one more day while Toby travels back from Utah. He's probably going to complain about the elevation again. So good to have you, Kyle. Also, it is July 31st, so we have to wish a very happy birthday to Harry Potter. Wow. Happy birthday, HP. How old do you think Harry Potter is? I'm 30. I want to say Harry Potter's like 25. Really? Yeah. He's 43. He's 43. He was born in 1980, which makes him 43 years old. Yes, the boy who lived is now a jaded Gen Xer, spending his days mowing the lawn at his suburban subdivision and listening to Prince while his kids are at Quidditch practice.

1:53Let me say he's aged tremendously well. I thought he was 25. He's 43. When was the last time you saw him? I have an embarrassing confession. I have not seen all the movies. I've seen maybe two or three of the movies, and I've only read three of the books. So you think he just stayed at his age from the Prisoner of Azkaban? Well, he knows magic. I mean, couldn't he do a spell where he keeps young, keeps spry? They still haven't figured that out yet. Even the Harry Potter books, we all get older. All right, let's get into our first story. Mark Zuckerberg is keeping his 2023 comeback for the ages rolling because maybe he hasn't destroyed American democracy by putting us all into echo chambers on Facebook and feeding us algorithmically driven content that outrages us and makes us see the other side as evil people hellbent on destruction.

2:35Four papers released late last week examined whether Facebook and Instagram's algorithms drive political polarization. And everyone was super curious to hear these findings because, after all, Facebook driving political division is one of the biggest critiques you hear about social media from officials, lawmakers, CNBC talking heads. It's one of the major reasons why elected officials want to regulate Meta and other social media platforms. But these papers really challenge that narrative. Taken together, they show that while we do exist in political silos on Facebook and Instagram and that these silos are very powerful, there's no evidence that these algorithmic driven feeds widen political divisions.

3:14Here's the conclusion from the researchers themselves. And I quote, these findings challenge popular narratives, blaming social media echo chambers for the problems of contemporary American democracy. Zuck is probably taking a victory lap after this. Did this surprise you, Kyle? Yeah, Zuck is on fire. Let me just say, I think it did surprise me. And I think we all kind of wanted to blame Facebook for all of our problems. And this gets into like, this is a complex issue and it's not just Facebook. I also wanted to blame my estranged uncle on Facebook for sharing all sorts of weird news. But turns out the death of democracy is not his fault.

3:50I do think the real problem here is people are still using Facebook, which I haven't been on in like 20 years. But this study was really interesting. Meta actually spent$20 million to collaborate with researchers. Which is a little controversial. Yeah, some people are questioning the integrity, but the researchers had kind of the last right to put out, obviously, what they wanted to do. And these studies are the first in a series of 16, so maybe some more information will come out. But some of the kind of common things people thought were contributing to polarization, as you said, were shown. They're not having as big of effects as we thought they were.

4:23So they actually turned off their ability to reshare posts. And that showed that people's knowledge of political news actually did decline, which was the opposite of what people thought. And then the big thing was having chronological feeds. So they switched them to reverse chronological feeds. And it showed that this didn't really increase or decrease polarization or political knowledge, which did not change. So a lot of things we thought would help didn't. Although they did say Facebook pages and groups were a very powerful curation and dissemination machine. obviously there's been tons of talk of how Facebook groups can be kind of a huge tool in radicalization of individuals so another quote I loved was it says quote quite complex social issues we're dealing with and there's no silver bullet for social media's effects I thought that reverse chronological experiment was very interesting because the concept was that you know these algorithms are pushing outrage and division and when you shut that off this is the test right it's like when we take that off do we observe any measurable difference in political behavior like signing up for rallies or signing petitions those were sort of the deliverables at the end that they uh that they measured and when you go to a reverse chronological feed there's no algorithm driving it's just who posted last who posted last so i thought that was really like the key to kind of understanding this yeah it kind of went against a lot of our priors And it turns out just changing Facebook won't save our democracy.

5:50So it is kind of funny how much people were convinced that this was the case. Our good friend Scott Galloway, you know, has been beating this drum for however many years. He's this NYU professor, this big tech critic. I went through his old tweets just to see what he was saying about this. And there's so much. He said that Facebook intentionally drives our society apart by deepening users' beliefs and magnifying outrage. So I think these papers show that at some level maybe this is not happening But like you said, there's so much more research to be done On this on this topic and we can't let social media off the hook for everything You know, there are a lot of other ways that may harm us Maybe it makes teenage girls more depressed Maybe it drives ethnic, you know conflict in countries like Myanmar and there, you know, isn't enough research out yet For to determine that but at least when it comes to American political division there is now a small body of evidence that it doesn't actually lead to that.

6:48Yes. Well, we'll have to have Scott on the podcast. We'll try to get him on. Oh, I'm sure he has. I'm sure he has an explanation for this. So let's move on to our next story. And Neil, I have some bad news for you. People are going to have to go back to buying weed the old school way, scrounging together$20 from loose bills and meeting their cousin's ex-girlfriend's friend in the parking lot of a gas station. I wish it still cost$20. Now, why do I say this? It's because MasterCard has actually instructed financial institutions to stop allowing marijuana transactions on its debit card. This is a major blow to the cannabis industry, which, as we know, already has a rocky relationship with the financial system in the U.S.

7:27Anyone selling THC or even CBD products understands this quite well because most banks in the country won't service cannabis companies. We have this very odd system where it's illegal at the federal level, but it is legal at some state levels. Now, there is a bill going through Congress called SAFE. I feel like they missed a big opportunity to call this like the dank bill or something. So that's on Chuck Schumer, which would allow marijuana companies to access banking services. But senators have basically said, like, this is not going to pass. It's a long shot. The last thing I'll say is a cannabis consumer study asked people, would they purchase marijuana with cash, debit card or credit card?

8:06And 63.5 percent of consumers say they would choose cash for probably obvious reasons. Neil, I did see you throw out your debit card this morning and get a bunch of cash together. Is that related to this news at all? I can't I can't confirm or deny that. It is crazy to me that this is a over a 30 billion dollar industry right now that in legal sales, 30 billion. And the overwhelming majority of those transactions are happening in cash. I mean, you have dispensaries that are paying their taxes by bringing duffel bags of cash. And this is the main criticism of not allowing having a relationship with banks or one of them from the cannabis industry is that it creates a lot of safety concerns for dispensaries.

8:47There's been an uptick in theft at various dispensaries last summer. There were a bunch of articles about how Washington state was experienced a big surge in violence and theft at dispensaries. And so because, you know, I'm walking around Brooklyn, I see all of these signs that say no cash here, no cash here at retail stores because, you know, they want to ward off potential thieves. We don't have cash. You can't rob anything. Meanwhile, a dispensary now, because after this or in all of that's happened and there's no relationship with banks. They're literally putting a huge sign on their door being like, we have so much cash, especially when they're making deposits or whatever.

9:25They're bringing huge duffel bags of cash. They're huge targets. So that has been the main criticism of the cannabis industry saying, how are we still a pariah right now? 23 states have legalized it for recreational use for adults. Yeah, national sales could exceed$57 billion annually by 2030 just from states where such sales are permitted. So exactly your point. It's legal in some states. And the deputy director of normal has said, hey, no industry can operate safely, transparently or effectively without access to banks. There's also some other weed news that you were telling me about. There is.

9:59I was reading an article over the weekend and the headline went something like weak weed is going is threatening to wipe out billions from cannabis companies. And there is a pathogen that's contaminating cannabis crops going around. It's called hop latent viroid or HLVD. And it's basically reducing every cannabis crop to mids. Yes. And actually, it's a serious problem. A bunch of cannabis companies warned on their earnings calls over the past few weeks that this, you know, making weak weed would bite into their revenues. And it's already a very, you know, this industry is already going through a lot.

10:36A lot of investors had hoped that the federal government would legalize it by now, but that hasn't happened. That's been stalled. So you have companies like Tilray, which is maybe the biggest cannabis company stock that everyone was looking at over the past few years. stock is down 90 % because these these you know ways to streamline and normalize and integrate the cannabis industry into You know broader financial system has not panned out. We're buying weak weed with cash again 2009 is so back Neil Alright, we have to move on a mighty American trucking giant has fallen. No, it's not Tonka, but it is yellow Like that's actually the company's name yellow shut down operations yesterday after a remarkable 99-year run handling shipments for customers like Walmart, Home Depot, and legions of other smaller American businesses.

11:25It is the biggest trucking collapse in the U.S. ever in terms of revenue and jobs. So why didn't Yellow reach its 100th birthday? Well, it went on this acquisition spree buying up rivals, but did a terrible job of integrating those companies into its own systems. It also had a crappy relationship with the Teamsters Union that led to a lot of labor strife and expenses over there. And it never fully recovered from when the 2008 recession crushed its business. Speaking of labor, Yellow employs almost 30 ,000 people. So their jobs can very well be eliminated as the company prepares to file for bankruptcy and sell some or all of its assets.

12:01It's quite sad. I was going to go to their 100th birthday party and now that has been canceled. So the Chuck E. Cheese reservation was given to someone else. All right, so you can go to mine. Yeah, well, I'll go to Neil's birthday. This also was interesting because the shutdown gave kind of new scrutiny. They received$700 million COVID rescue loan in 2020. And the U.S. Treasury also now holds about 30 % of yellow shares. So we were kind of stuck holding the bag here. And in one of the quotes that did not age well at all, of all time, their chief financial officer said when they got this COVID loan, it's a new day.

12:35We've just got to not blow it up. Here they are. They've blown it up. Yeah, that was a very controversial loan because the members of the Trump administration and people in that orbit had relationships with Yellow's executives. And so when people looked at what Yellow's finances, which were already in the dumps, and they saw$700 million in loans, which is one of the largest packages given to any individual or business as part of COVID relief, they said maybe this doesn't add up. There might have been some shady things going on behind. And a congressional report in June 2023, just last month, found that the Treasury Department skirted its own rules by giving out the loan.

13:13So this is a very controversial thing to begin with. And to no one's surprise, yellow kind of went belly up. Good thing is everyone in the shipping and retail industry saw this coming. So it's not going to disrupt supply chains the way a stuck ship in the Suez Canal will. So they've already all diverted their businesses away from Yellow over the past few weeks as they saw the warning signs. So we've had two, you know, two interesting supply chain news recently. We had the UPS Teamsters coming to terms with that company to avert a supply chain crisis. Yellow did go belly up, but it is it seems like it's going to be OK in terms of getting things where they need to be.

13:54Look, they had a hell of a run. They said they started in 1924. They were a tiny taxi and bus operation in Oklahoma City. So they made it 99. It would have been nice to get to 100. That is so hard to do. I mean, Morning Brews is at this for almost 10 years now, and it feels like a lifetime. Imagine doing that 10 times. 90 more to go. 90 more years of podcasts. I think I could do it. All right. We'll have to leave it there and get back to more stories after this quick break. This episode is brought to you by State Farm. Listening to this podcast? Smart move. Being financially savvy? Smart move.

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15:11Tell Washington to end middlemen markups and put American patients first. Visit phrma.org slash middlemen. All right, we are back with our winners of the weekend, the segment where Kyle and I highlight people or things that definitely didn't have the Sunday scaries yesterday. Today, instead of two winners, we're going to showcase one winner and one loser since there was a clear loser. But we're going to start with the winner, and that is any lawyer working on former President Trump's legal defense. Trump's political action committee is expected to report today that it spent$40.2 million in legal costs defending Trump and people in his orbit from mounting legal troubles.

15:52That's the group's top expense by far and more money than the Trump campaign brought in last quarter. Just to recap, Trump has already been indicted twice, one over hush money payments in New York and the other in Florida over classified documents. He's also probably going to be indicted over January 6th and potentially over election overturning efforts in Georgia. Meanwhile, he remains by far and away the leader for the Republican nomination for president. But man, these bills are adding up and they're only going to get bigger. Look, we talked about how student debt is such a problem in this country.

16:23It looks like the simplest way to pay off your student debt is to get on Trump's legal team. Like they are raking in the money. And it's funny because these PACs, they raise most of their money from like small dollar donations. So it's basically like individuals just like Venmo-ing Trump's lawyers at this point. It's going straight to their bank account. I might need to get a super PAC for my life. Like, can I get some PAC that then like pays my grocery bills, my utility bills. This might be a hack. You can try. I mean, you can do all sorts of shady things with campaign finance these days because corporations are people, according to the Supreme Court.

16:59This might be the new move. So look out for PAC, Kyle PAC 2024. But Trump's also, there was reporting yesterday that Trump's setting up a legal defense fund, kind of acknowledging that his campaign can't shoulder this entire load of what could end up being like$100 million in legal bills. So they're setting up a fund that's separate to take some of the pressure, financial pressure off the pack. I'm glad they have fun. I can't imagine Trump paying all of his bills. Let's move on to loser of the weekend. And basically, this is every millennial in a major metro urban environment. And what do I mean by that is we all took a major L this weekend.

17:37Why? Because our Mecca, Trader Joe's, had to recall multiple products over potential contaminants in at least 30 states and Washington, D.C. The California-based grocery chain recalled two types of cookies, a soup and pre-made falafel. Now, the cookies and falafel had a possible extra ingredient, which was rocks. And the broccoli and cheddar soup may have had insects. Although I will say the soup is called unexpected broccoli cheddar soup. So I feel like they kind of covered their bases with the name there. What wasn't recalled was the two buck chuck, because if you purchase that, you basically waive your rights to whatever contaminants are in there.

18:18The funniest thing about the story is they had a doctor come on in the article I was reading. And the doctor said, quote, a rock can lead to physical harm, like breaking a tooth. I'm imagining like going to school for eight years and then having to tell people rocks are bad. Neil, did you have to return anything from Trader Joe's? I did not. I have not. I have never gotten cookies there. This was the dark chocolate chunk and almond cookies and the almond windmill cookies Never got there never got that and the unexpected broccoli cheddar soup I you knew something was gonna be in there with the title So I was I would never I would never get it But just for people so they can you know just news You can use if you want to check your pantry the unexpected broccoli cheddar soup has a used by dates ranging from July 18th to September 15th That's the one you should probably throw out unless you want a little surprise and then the chocolate The cookie varieties have sell-by dates ranging from October 17th to October 21st So you can go on the Trader Joe's website and see the exact Products that you should be looking for but if you have any of those products in your pantry You might want to give a second look.

19:20Oh my all I only get frozen stuff from Trader Joe's Yeah, so nothing's in the pantry everything's in the freezer. You're safe I actually feel like they missed an opportunity here to hop on the fad diet trend. If they would have came out strong and said rocks and insect are actually the new diet, I know like 50 % of the consumers at Trader Joe's would have gone with it. They would, but then this doctor came in and was like, rocks are bad for you, and I got to listen to that. I got to listen to the science. Shout out to that doctor keeping us all safe. So let's move on to one of the final stories for today.

19:50And for all of us over the weekend, the views on our iPhone changed when the Twitter bird app was replaced with the new X logo app. But for a select few people, the actual view changed outside of their window when X, the company, decided to put a giant X on the top of their building. Now, this giant X logo, it looks like a rave. It literally was flashing lights all night, and people across the HQ were not too happy to have their sleep disrupted. Unfortunately, in this case, they could not just retreat to Macedon or Threads to take cover. Since Elon bought Twitter, I will say, The most absurd outcome has been the most likely in this whole saga.

20:28This is no exception. Basically, no warning was given to San Francisco about them putting this up, about them taking down the Twitter sign. And city council person Matt Dorsey said, quote, I would like to sort of extend an olive branch. They're like, please work with us. We're happy to have you here, but you can't be doing stuff like this. Neil, does Mark Zuckerberg counter by putting a giant Threads logo that shoots fire on top of Meta HQ? You have to. I mean, this is I hope people go to our social media channels to look at this video because it's why it is ten times crazier than you expect. Because I, you know, I read stuff that was like, oh, yeah, exit.

21:05There's this new X sign and it's emitting light at night. And I was like, OK, that was a normal sign. Like I look at the New York City skyline every night. There's some glow. Right. And then you look at this and it looks like it's straight out of Brooklyn Mirage or Tomorrowland EDM festival, like actual strobe light. so bright. I have no idea what's going on. Like it's boggles the mind. Elon Musk is not a real person. He has to be an alien like this. He's got like you said, it's the most absurd outcome, but it's even more absurd than anything you could ever thought. Why is there a sign that's emitting a strobe light above a social media company's headquarters?

21:44We don't know. He's got SpaceX, Tesla, Starlink, Neuralink X. I think he's going for HGTV next. He's showing that he's got some design skills it's not going well i will say there has not been a day in the past three months honestly i've not thought about elon musk like i will pay eight dollars a month if i don't have to think about elon anymore well you don't live in san francisco so you're not constantly reminded it but there was this journalist who lives right across from it and that's how he took a lot of the videos and was talking about its impact and he said well first of all i shut the shades but at 11 p.m.

22:15It was still strobing and I couldn't sleep. And then I tried to watch a movie in my living room, but the X was too bright. That made watching a movie untenable. So I had to move to the other place in my apartment because of this X. Anyone who's a Seinfeld fan, of which I am, reminds you of the Kenny Rogers Roasters episode. You have to go watch it tonight. But basically Seinfeld predicted this 30 years ago. There was a new chicken place that had this red neon sign that comes next to Jerry and Kramer's apartment and it creates this red glow and Kramer does all these this amazing physical comedy around this red glow so go check out the episode I'm sure that's going to be a lot of memes related to this I don't know what to do about this okay yeah we should say that San Francisco is like going to take this down yes they're working on it's illegal or getting permits and all that jazz all right let's move to our final story which is a collection of stories that will give you a preview of what to watch for the week ahead.

23:17The first one is the U.S. women's team play their final group stage match tomorrow at 3 a.m. Eastern. So we'll be up for the end. Well, no, you'll be sleeping. Get back to your normal schedule. But everyone else, if you want to set your alarm clocks, it's a very pivotal game. They can advance to the knockout stage with a win or a tie. But if they lose, it does not look good, which would be a massive disappointment. And we've got to give a shout-out to our reggae girls from Jamaica, who is Morning Brew Daily's favorite team outside of the U.S., they won their first match ever in the World Cup. So shout out to the Vega girls.

23:50On Friday, we have the jobs report for July. And last week, Fed Chair Jerome Powell said that his next interest rate decision will be guided by upcoming economic data releases. So this is really the first big one that will show how the economy is doing after 16 months of interest rate increases. Everyone thinks Powell is going to kind of end it after the last one. But if, you know, this labor, if this jobs report comes in hot like they all have been, then maybe it's not over. So economists are expecting that the U.S. added 200 ,000 jobs last month, which is a strong number. But it would still would it would show that the economy is cooling a little bit.

24:28And that's kind of what we want. It is another busy week for earnings. We've got Apple, Amazon, Starbucks, Airbnb, Uber and hundreds more. I didn't mention because they don't matter. I'm very excited for Airbnb. I think maybe they should add a giant X to all of their properties. That seems to be all the rage these days. I think they have to, they have the little PR campaign they need to go on to make people come back to Airbnb is because all of my circle is switching to hotels because no one wants to mow the lawn or take out the trash or do all of the things. They basically have to take care of their house for them as you move out.

25:01I think there's been a negative connotation towards Airbnb recently. Brian Chesky has talked about this year is all about focus. getting back to their core focus of these short-term stays and making sure that people, yeah, don't spend$200 in cleaning fees. Which is insane. All right, what else do we got? MegaMillions jackpot has ballooned to$1.05 billion, which is the seventh largest U.S. lottery prize ever. The drawing is tomorrow, and of course, this comes right after a$1 billion Powerball jackpot that was won by someone. Are you taking the—I know I talked about this with Toby. Are you taking the annuity over 30 years or the lump sum?

25:37because I know you're going to win. Yeah, I have it locked up for sure. I think I would go annuity just because I think that's safer. If you get it all at once, you could blow it. So mature. That seems to be the smart move. Wow, you're almost as mature as Harry Potter. We have a super moon making its way into the sky Tuesday evening. Maybe a good omen for the lottery, actually. It's actually one of two super moons in August, which is kind of a special treat for us. Double super moon. And then the big thing, football is kind of back. which is crazy. I'm so excited. The NFL preseason will begin on Thursday with the Hall of Fame game.

26:13And I don't know if I can get into football in August, but it's just kind of that reset of your mind where you're like, all right, they're playing football now. I got to, like, my Sundays are about to be so much better. Fall's about to start. You got to get your scouting report for your fantasy football drive. Are you a fantasy football guy? Oh, yeah. We got to do a league together. I don't do it. Oh, Neil, we got to get you. I don't do it. I don't have time. I start it, and then I let it go off the rails, and everyone hates me for not paying attention. It would make you a biased reporter too.