Fed Rolls Out Instant Payment System & The Battle for Aretha's $18M Estate

0:01This message is brought to you by AppleCard. Apple Card members can earn unlimited daily cash back on everyday purchases, wherever they shop. This means you could be earning daily cash on just about anything, like a slice of pizza from your local pizza place or a latte from the corner coffee shop. Apply for Apple Card in the Wallet app to see your credit limit offer in minutes. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch. Terms and more at AppleCard.com. Good Morning Brew Daily Show. I am Neil Freiman. And I'm Toby Howell. On today's pod, the surprising reason why you can't find any salt at South Korean supermarkets these days, and the one thing you can no longer do when visiting the gorilla enclosure at the Toronto Zoo.

0:45Then we'll talk about a new program the Federal Reserve is rolling out that is kind of like Venmo for banks, before checking in on Disney World where wait times are low and vibes are lower. Neil, it's Tuesday, July 11th. Let's ride.

1:04Neil, today is Tuesday, July 11th, but it's also our 100th episode. Let's get a little cheer for the people in the back. Neil, give me 100 takeaways from our first 100 episodes. Oh, God. JK, give me one takeaway from our first 100 episodes. One takeaway. I've learned that people have very specific habits in the morning. Interesting. And that they sort of listen to Morning Brew daily while they do these very, you know, daily rituals, like walking the dog or going to the gym or have their 20-minute commute. And so if you can put out a podcast that's early enough where you can be part of someone's morning ritual, then they kind of feel bad about not listening or doing it as part of their ritual.

1:48It's the way they wake up. So it's been pretty interesting to hear stories of people being like, you're a part of my morning ritual, which consists of brushing my teeth. Yeah, I was going to say, we have a brushing my teeth gang who listens to us while brushing their teeth. How fast, how long are they taking a brush there? I know. I do want to know like how many like morning walking, how many morning workout, how many brush teeth. So sound off in the comments. Yeah. And what's your takeaway? My takeaway is that I cannot say Hyundai. I nailed it right there. I nailed it right there. But in all seriousness, this has truly been an amazing first century of shows.

2:26the support we felt from you guys and it's been amazing and the love for the show that you show us has been just truly sensational it makes me so proud to sit next to neil every morning and bring you guys the news with that said we do have a little something up our sleeve for the next 100 episodes that has to do with rewarding you guys for spreading the good word of mbd that's all we'll say on it for now but it rhymes with to furl program that's all i'll say all right neil let's jump into our first story. Our first story of the day comes from Wall Street, where big banking is finally getting hip with the Venmo crowd and letting us access our money in real time.

3:08Later this month, the Fed plans to roll out a new service called FedNow, which gives banks a way to make customer funds available 24-7. That means you don't have to wait till business hours or for the bank to open on Mondays to access your cash. This has been a long time coming, Neil. Other countries like India and Nigeria have had this feature for years now, so the U.S. is actually playing catch-up, but the Fed felt the time was finally right to get on the immediate access strain. Let's quickly run through some of the pros and cons of this move. A pro is that it's huge for customers, especially for those with the lowest incomes who will have faster access to their paychecks, which helps reduce the need for some of those predatory loan services that you see in those like random script malls but there are cons too and they are sizable remember the bank runs that took down svb and first republic earlier this year well now those can potentially happen in real time anytime neil what do you think do you think the pros outweigh the cons or what do we got going on here i think it's now i think it's time i mean you've seen like over 50 other countries uh adopt this i remember hanging out with people from canada and we went to a bar And we were like, hey, do you have Venmo?

4:21Because like you owe me money. And they were like, no, I actually just have direct money payments linked to my bank account. So that's all I use. I don't need a third party service to send money. And so it is time. I think there's just regulations that you need to put in place to sort of mitigate some of the cons, which is, like you said, could be to accelerate some of the bank runs that we saw in the spring with SVB. SVB. Yeah. But but but part of the reason that SVB also collapsed was because of this antiquated system that we have where they were looking for billions of dollars to save them.

4:56And they're in California. It's, you know, two or three p.m. They call up Bank of New York Mellon in New York. And they're like, listen, we need 20 billion dollars to save ourselves and we'll be OK if we just get this money. And Bank of New York Mellon is like, yeah, have you looked at the time? It's like five or 6 p.m. and we can't do anything because the Fed is closed. And so are you kidding me? We're in 2023. Yeah, that is interesting that it's like live by it and die by it a little bit. But the Fed is instituting some safeguards to make sure like a massive instantaneous bank rug doesn't happen.

5:30And the safeguards are they've built in a$500 ,000 transaction limit, although you can kind of get around it because you can make multiple$500 ,000 transfers from different accounts. So I guess you could do more than that at one point. But they also give significant leeway for the individual banks participating in this program to set withdrawal limits. So if you're a bank on the smaller side, maybe your transaction limit isn't 500 ,000, maybe it's closer to like 50 ,000, because it really is small banks that are at the most risk of these big bank runs. So yeah, they've thought it through to a certain extent.

6:05And you're right, It's more of them just entering like the modern area of banking. Money is moving faster. And we should people listening to this are probably thinking, how is this different than Venmo or Zelle? And it is different. It's supposed to be accompaniment to those products and services. Those are not those are called like non-bank loops where it's mostly peer to peer payments. So, you know, you owe me a lot of money, actually, for all our smoothies we get in the morning. You're going to use Venmo to send me that money. uh meanwhile the fed now stuff is not you can't download the fed now app it's going to be made available to banks and you will be able to tap into it through your bank and it's meant for business business things like payroll uh but also you know consumers can use it for things like paying utility bills or mortgage uh interest payments and so like bigger bigger ticket uh payments that you don't want to like pay on friday and it won't post until monday yeah this is big for businesses too, because now the traditional like payroll cycle has always been like two times every month or something.

7:11But now with FedNow, technically they can invoice their clients quicker. And then that transfers that money over to their employees quicker. So we might be seeing like the end of the traditional, like two times a month payroll cycle. And it could just be like a weekly thing or even a daily thing, depending on what the job is, which is big for the cash flow of a lot of people. And then just quickly to put a bow tie on this, in the background, the U.S. is undergoing some major banking regulations. So the Federal Reserve's top banking regulator, Michael Barr, has kind of laid out a post-SVB landscape for what the capital requirements of these big banks.

7:51So it looks like, especially with FedNow rolling out, banks are going to have to hold a little bit more extra cash. Rainy day fund. Yeah, rainy day fund. And as an extra safeguard, because we saw SVB and because we have this instantaneous cash availability thing going on right now. So that's chugging along in the background as well, which is a good you need that. I would I think big banks may disagree with that. But yes, this thing is going to come over the next couple of years. Don't expect it to happen right away when it rolls out. It's going to take many years for a bunch of banks to adopt it.

8:26but I think they have 57 financial institutions on board when they launch later this month. So we'll be keeping an eye on that. Let's go to South Korea for our next story, where prices of sea salt have soared more than 40 % since April and shelves on supermarkets are being stripped bare as people panic buy salt and other staples like anchovies and seaweed. The reason? Later this summer, Japan is planning to release treated radioactive water from its Fukushima nuclear plant, which melted down after the tsunami in 2011, into the Pacific Ocean, and there are concerns that this radioactive water will contaminate seafood products.

9:07Japan and the U.N.'s nuclear watchdog say it's safe to release the water into the ocean, arguing that it's in line with what other countries do, like the U.S., but there is growing alarm in neighboring countries like South Korea, China, and North Korea that there will be long-term impacts on the environment and the food they eat. It's a very charged political issue. People find this very upset, and they are protesting outside of various government buildings. So why release the water now? Well, Japan wants to fully decommission this plant, and one of the last steps it needs to take is to put this water that is used to cool the reactors somewhere because right now they are running out of space.

9:46Japan has already built more than 1 ,000 stainless steel tanks on the site that store 1.32 million metric tons of wastewater, which is enough to fill 500 Olympic swimming pools. It's ruled out building any more tanks, so it's planning on stripping this water of its radioactive materials and slowly leaking it out into the Pacific Ocean, which it says will be diluted to the point where it's not unhealthy anymore. It is that thing that you read the headline, you're like, this feels very scary. But then, again, it's dripped out over the course of decades that they're planning. And it is super diluted.

10:21But still, when you hear the headline, of course, you're going to have some concerns about the environmental effect. I think the secondary effects are super interesting. The fact that salt prices are skyrocketing with this going on in the background. They're up 20. Let me find this. Twenty seven percent in the first week of June. That's that's a pretty crazy increase from just like this. People are a little nervous about their salt. They're also I mean, even if it's not bad for the environment, we can debate that later. I mean, experts seem divided whether it will actually contaminate seafood products.

10:57The fact that consumers are going to be hesitant is going to hurt businesses in general, Because I read an article about this South Korean fish market where the sellers have a radiative detector. And they're going and the customers are going up to the fish. And they're like, can you show me that this is clean? And so they are going to have to do that for the forthcoming years or decades. Who knows? To prove that this fish is fine. And so there's always going to be something in the back of a consumer's mind saying, like, is this seafood product OK to eat? Well, you know, South Korea is importing a lot from Japan.

11:35This fishing industry has been devastated already from the nuclear meltdown back in 2011. So there's just like increased consumer hesitation around these particular products that no matter what you do, no matter how many times you say it's safe, that everyone's going to be kind of peeved a little bit. I mean, South Korea is so against this, too. 85 % of the South Korean public oppose this plan. And yeah, I would oppose it too if it's not even your decision and that you are being affected by it potentially. So I can see that. One senator from the South Korean government is on a hunger strike right now.

12:10He hasn't eaten for the past 14 days because he's basically saying like, I wonder whether you'd be willing to drink it or use this as well. How come like you're doing this to us when like you probably wouldn't accept it in your own drinking water or something like that. So it's definitely like this hot button issue. That's only, only going to grow. Cause this is happening over decades. Yeah. It's going to happen over decades and they're going to, they say they can strip out most of the radioactive material, except one called tritum. And, uh, you know, their experts are kind of divided over whether tritum is bad for you or it could potentially be bad for you over the longterm.

12:48Uh, you have experts on both sides saying like, it's not a big deal. it's found naturally in humans. And then the other side is like, well, you know, we don't have enough research yet to figure out whether we can actually trust that. So yeah, it's definitely a spooky thing. Okay, let's move on. After hearing this story about Aretha Franklin's estate, I promise you will write your will tonight, no matter how old you are. I just wrote one last night. So here's what's going on. A trial began yesterday over control of the multimillion dollar estate of Aretha Franklin, the music icon who died in 2018 from pancreatic cancer.

13:25The reason there's this legal dispute is because she never created a formal will before she passed, and her four sons are battling about how to divide up her millions and future millions. Without a will, it seemed that each of her sons would split the estate evenly, which maybe wasn't exactly what she wanted, but that's how it would be handled since she didn't leave any other instructions. But then some juicy discoveries Two handwritten wills One dated 2010 Found in a cabinet in her house And the other dated 2014 Found under a couch cushion They contradicted each other in some aspects Like who would be the executor of the will And which sons she ordered to take business classes So some sons favor one of these wills While another prefers the second Now these kids have taken each other to court And the jury will have to decide which will better reflects Aretha's wishes or whether either of them should count as legitimate in the first place.

14:21We saw pictures of this 2014 will that was stuffed under a couch cushion and it does not look like it's gonna hold up in court because it's signed and I'm doing signed in quotation marks with a smiley face and like a crossed out Franklin. So it is interesting because I can see both ways where maybe the more recent one, 2014, which was closer to her eventual death, probably maybe reflected what she truly wanted in her will, but it was just done so off the books and like not officially that it's gonna be very hard for it to hold up in court. And then, yeah, you have the 2010 one, which is a little bit more buttoned up.

14:58But even that was like kind of tucked away in a cabinet somewhere. So I feel you, Aretha, because it would be scary to have to go down, do estate planning, like set out your will. I know you have to do it, but like - All of these state planning lawyers right now are just like so angry at you. I know. Yeah. No, you should do it. I mean, her estate is very large, obviously. Right. Super successful. It was valued at about 18 million after she died. She has four homes, cars, furs, jewelry, gold records. But I think the most important part is the future royalties because her music is still going to be played a lot.

15:32And there's a Jennifer Hudson biopic of her coming out. And, you know, she's getting paid. Aretha Franklin's getting paid a lot of money for all the music she produced, you know, that it will be continued to be played in the future. So this is pretty high stakes. But there is a tax bill looming, too. Apparently she owed the IRS around eight million dollars. And so there the estate will go towards paying that off as well. So, again, it's a very succession, very. I didn't watch success. I haven't seen anyone who hasn't seen succession. For people who have watched succession, you're probably like, I recognize this.

16:05This is very similar because the kids found their handwritten note about their dad's succession plans for the company, and they couldn't figure out whether a name was underlined or crossed out. Life imitates art, baby. That's the big takeaway from this story. All right, Neil, before we jump into the next story, we're going to take a quick break.

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17:38orders over$75 and free returns. Have a great day. All right, Neil. Our next story brings us to my home state of Florida, where the lines at Disney World are at historic lows. Yes, Neil, Disney is borderline desolate. Data from a travel company that tracks line waiting times show that the Independence Day weekend was one of the slowest in nearly a decade. And while that's good for park goers, it is bad for business. Disney execs already said that they expected weaker earnings from its parks division this year, but it's not looking good so far. So what's behind the empty rides and zippy wait times?

18:15Well, it's a whole bunch of things. To rattle off a few, there is the adverse political climate Disney is facing as Ron DeSantis continues to wage a war against the mouse. Then there's the adverse actual climate too. Florida is experiencing record temps and thunderstorms in the summer months, which is bad for going to a theme park. Plus, there's the sirens call of other travel, like going to Europe or going on cruises, that is cannibalizing some of Disney's business. Neil, all this to say that Disney is fighting a huge uphill battle to get people in through those turnstiles these days. I went to Disney World in the summer once.

18:51It's a workout. You are sweating. No, I am not surprised by this. You know those fans that have, they blow and they also have the water spritz? That is a lifesaver. Game changer. I mean, it always pours at 4 p.m. every day. And it gets nice out afterwards. But I can't imagine anything worse than going to Disney World right now in July during Independence Day. Sticky. But also, it is part of the strategy that Disney is employing. They have staked out this plan to minimize the amount of visitors that are coming into Disney World. and jacking up prices to kind of squeeze out more juice or revenue from these people.

19:31So they've gotten a lot of complaints because they're starting to charge for things like parking and shuttle buses and things that they didn't used to charge for that they are now asking people to pay for. And then they have all of these upcharges for skipping lines. I mean, I've never seen anything like this. For certain particular, there's a Genie Plus subscription. Oh, yeah. where I, you're like, yeah, I know. That's on my, you're like, I have that on my front page of my phone. But no, I think it's a combination of the summer and the fact that prices have gotten really, really high at Disney World and people are just thinking, well, if I'm gonna pay a lot, might as well go to Cinque Terre or something.

20:09Right, and I mean, Disney's framing it as it's a better park going experience because yeah, when it's too crowded, no one's really having fun. So they're trying to charge like wealthier people more money to have a better experience. I can see it. But then also, yeah, the looming bear of the travel season is definitely Europe this year. I think we've talked about it on the show a bunch of times, but there are so many people going to Europe right now. Allianz Partners, which is a travel insurance provider, calculated that the number of Americans traveling to Europe this summer is expected to be up by 55 % over last year, which was already up 600 % from the year prior.

20:46What are we doing? I don't know. Well, you went to Europe. I did. Yeah, I went to a spot. I mean, I scrolled on like Facebook and Instagram before this show, and I saw at least four or five pictures of people at Lake Como. Everyone's there. And Portugal. And people are going on cruises, too. That's another thing that this Wall Street Journal article cited as potentially cannibalizing some of Disney's business. So cruises in Europe, baby. We've already talked about doing a cruise pod, right? Yeah. Let's do a Europe pod. All right, Neil, let's move on. We're back with another edition of Toby's Trends, where I, a studly Gen Z, educate you, a stately millennial, on a new trend I have my eye on.

21:26Neil, today's trend is not exactly in my wheelhouse, actually, because it has to do with homeowners, whereas I'm a proud five-by-five-foot box, I mean apartment renter in New York. But the latest trend in home ownership is succumbing to the siren's call of boringness. According to research from an assistant professor at Bucknell University, home renovation has devolved into an overwhelming sea of sameness. The professor calls it market reflected gaze. People are so afraid to take a risk when remodeling for fear of dropping their home's resale value that they end up creating a home that looks like everything else on the market.

22:05And here's the kicker. The researchers specifically called out HGTV as one of the main influences that has created this bland cookie cutter aesthetic. Blame Chip and Joanna, Neil, right? Yeah. I mean, when you see these numbers that housing companies are putting out, it kind of spooks you and you cannot kind of see what's going on. They say that if you have a white kitchen, this is Zillow saying this, it could hurt your home's price by$612. And then if you leave a charcoal gray kitchen, which I guess is the kind, I don't watch the HGTV, but I guess that color is kind of in style in these shows.

22:46then your home price gets a boost of$2 ,500. And so you were just conditioned to think about what is the next seller going to like? What is the next buyer going to like? I want to maximize the value of this property. But it's super sad because then you don't make it for yourself. Right. Which is why renting is great. I know. Well, maybe. I can see why there's this anxiety around it though because yeah, your home is probably the biggest possession, your biggest store of wealth that you have. And if painting your kitchen one car or the other can mean the difference of$3 ,000, then I could totally see how you are getting so nervous about doing anything.

23:22But then, yeah, you see the article went into and talked to a lot of people that had these regrets about how they're like, oh, I just turned my house into a hotel. I was so afraid. Like my realtor kept saying, resale, resale, resale. And then I realized that I didn't like anything in my own home. So I know it is, it's like a very sad thing. And so hopefully, you know what trend this also pairs nicely with is Barbie core, which is, we, we spoke about it on a previous show where people are just painting everything hot pink. They're like, screw it. Like I've hated the last 10 years of millennial home ownership.

23:56And like, we're going hot pink. We're going maximal. Yeah. So, so maybe, you know, the value will be ascribed to, you know, personalization and differentiation going forward. And the pendulum with these things always swings, never go with like whatever the hot trend is because that will always change. Yeah, exactly. All right. We got to move on to our last story. Humans and gorillas share 98 % of our DNA. And it seems that part of the genetic material we have in common is the urge to stare at our phones for hours. The Toronto Zoo is warning visitors against holding their phones up for Nasser, a teenage gorilla at the zoo.

24:32Nasser, like most teens, is obsessed with looking at smartphones and has been coming up to the glass of his enclosure to check out what Selena Gomez just posted on Instagram. But zookeepers say visitors showing Nasser their phones is encouraging anti-social behavior. We've heard that before. And Nasser needs to spend more time with his fellow gorillas learning how to be a gorilla instead of devolving into a lesser species of ape like humans. So they put up a sign on Nasser's habitat that tells visitors not to show the gorillas any voters or videos on their phone. He just like me for real, for real.

25:07That's the first thing I thought about when he saw this. This is like a very well-documented trend where there's also another gorilla in Louisville who is obsessed with looking at pictures of female gorillas on people's phones. And he even does this swiping motion. So gorillas understand phones. They understand 2D spaces and can recognize themselves. So this just makes me like gorillas even more. I love gorillas. Right. They're so smart. And to be fair, I think our boy Nassar got put on blast a little bit because they went on in the article to say that he's grown out of his phone phase a little bit.