Heating Inflation Worries Wall Street & Is AMC Going Bankrupt?

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0:27Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, states are cracking down on lab-grown meat, but is this like Blockbuster trying to stamp out Netflix? Ben, inflation is like your friend at a party who can't take a hint. It's sticking around for a lot longer than anyone wants it to. It's Thursday, April 11th. Let's ride.

0:53Big news for board game fans who find traditional Scrabble too intimidating. Mattel is launching a new version of Scrabble that is designed to be more collaborative and accessible for the Gen Z crowd. Called Scrabble Together, it'll allow you to compete in teams. It utilizes a simpler scoring system and is generally quicker to play. It marks the first time in Scrabble's 75-year history that it's made such a significant change to its board. Toby, are you in? Sounds like a neat bit of Quixotry to me. Oh my gosh. Which is the highest scoring word ever. Yeah, that's like 25 plus points right there.

1:27So I have lots of thoughts on this. To no one's surprise, I am a big Scrabble truther. I love to play the game. So I don't really want it to change, but also I took a step back there and realized that change is inevitable. And we're definitely seeing this as a trend where your mother and your father's board games aren't the same anymore. Monopoly has turned into Monopoly Deal. There's a lot faster and quicker versions of this. So this to me isn't really Scrabble. Yes, you're making words, but the rules are all different. So it's using the Scrabble branding to create a new game that probably is very fun to play.

2:01Yeah. And if you do enjoy the traditional Scrabble, the board will have it on the other side. So you just kind of have to flip it over and over if you want the traditional game or if you want the new, more collaborative, easier to play game, which I think I'm into a little bit more. Then you just flip it over. We should do our pre-show game of this new Scrabble game and see who wins. Now let's hear from our friends over at Robin Hood. It's Thursday and I'm feeling pretty good. I'd even say I'm feeling golden. You are a segue master, Toby. So let's talk about Robinhood Gold a little. It's Robinhood's premium membership, and it has so many features.

2:35We're talking 5 % APY on uninvested cash, access to the gold card, which gives you 3 % cash back across the board, pro trading tools, higher instant deposits. I could go on. Well, keep on going. This is an app. You also get access to Morningstar stock reports that usually cost$35 a month, so you can do your own research. You get that and all the other features of Robinhood Gold for one monthly low subscription fee. You done? Yeah, I'm done now. All right. Well, the only thing I have to add is that Monday is tax day. So check out Robinhood Retirement and learn more about the Robinhood app in the App Store or Google Play Store.

3:11You can find all of the terms and conditions in the description of this podcast. Race the runners. Race the sails. Race the sails. Captain, an unidentified ship is approaching. Over. Roger. Wait. Is that an enterprise sales solution? Reach sales professionals, not professional sailors. With LinkedIn ads, you can target the right people by industry, job title, and more. Start converting your B2B audience today. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started today at linkedin.com slash campaign. Terms and conditions apply. March's inflation report dropped yesterday, and rather than getting closer to the Fed's goal of 2%, inflation is looking like a stubborn toddler who refuses to comply with Jerome Powell's wishes.

3:56The consumer price index, which is a closely watched basket of goods and services, rose 0.4 % month over month and three and a half percent over the last year. The core inflation index, which strips out volatile food and energy costs also rose more than expected. Compare that to the previous month and inflation actually accelerated in March, which the stock market really did not like all major indexes finished in the read yesterday as the prospect of multiple rate cuts this year becomes bleaker by the month. Part of the reason for the market's glumness is that the Fed has been willing to write off hotter than normal January and February readings, saying there are probably just seasonal quirks coming out of the holidays.

4:35But March ain't Christmas anymore, which has officials a little more nervy. Neil, last month, a majority of Fed officials thought three rate cuts could be in the cards this year. Is that dream dead now? It does seem like it's dead because inflation has, the inflation reduction has stopped in its tracks. In 2023, inflation was coming down really hard, down from 9 % peak. We're at around 3%. And then all of a sudden, this last mile problem, getting from 3 % to 2 % has been so difficult. So it does appear like January and February's readings, which came in hotter expected, were not a fluke because March made the third straight month where inflation has come in much faster than expected, and it put the brakes on all of the rate hike forecasts.

5:20Coming into 2024, there was expectations that we could have six or seven rate hikes. Now, those expectations have dropped to below three, possibly two, possibly one, possibly even zero. Right. Six or seven rate cuts, that is. Fed officials have also been very optimistic about achieving a soft landing, which is when inflation slows without sending the economy into this economic nosedive. But to do that, officials wanted to cut rates before the economy shows those signs of weakening. This latest report has absolutely thrown a wrench in those plans. There's no real credible data they can point to to justify cutting rates at this point.

5:56And it's paradoxically because there just aren't that many cracks showing in certain parts of the economy. The labor market is still very strong. So again, it is this damned if you do, damned if you don't sort of thing right now where the Fed really can't say, hey, it's time to toss a little rate cut your way because the economy is still running very hot. No. And then you have Larry Summers. I know I mistakenly said rate hike, but I may that may have been a Freudian slip a little bit because Larry Summers, who's the former Treasury Secretary and has been warning about inflation for the past couple of years, he said the next likely move from the Fed would not be a rate cut, but in fact, a rate hike because this economy still keeps chugging along.

6:34The jobs reports keep coming in super strong. Inflation is still elevated. So take that with a grain of salt, because that is a very radical view. A lot of people do not agree with what Larry Summers has to say there. But it shows that the Fed's calculus for what they expected going into this year has been completely thrown a curveball by continued rise or stagnation in inflation coming down. Yeah. If we dig into the details, the details of this report were even more concerning. Overall, core index climbed 0.4 % month over month. And that is despite a decline in stuff like used cars and trucks, which have been a primary driver of inflation in the past.

7:12The big problem this time was services. That's the category that includes everything from car insurance to medical care. If you consider the fact that over 90 % of U.S. households own a car and vehicle insurance is up 22.2 % over the past year, which is the biggest jump since 1976, you start to see where most of this inflation is driving from. And it is the stuff that everyone has to pay. That's car insurance, health insurance, that services basket. And home costs. All right. Well, yeah, inflation is still with us and it's not going away anytime soon, it seems. The most literal culture war ever has broken out over lab grown meat, a nascent technology that aims to make edible protein cultivated from animal cells.

7:55Some Republican-led states want to stamp out this industry before it can even start propagating. Since the beginning of the year, GOP lawmakers in at least seven states have introduced bills that would ban the sale or distribution of lab-grown meat, saying it presents an existential threat to ranchers and the health risks aren't clear. Supporters of lab-grown meat, which includes Bill Gates and Jeff Bezos, say this antagonism is extremely short-sighted. The industry says their innovations will be crucial to reduce the immense greenhouse gas output of livestock, which account for about 3 % of the U.S.'s total greenhouse gas emissions.

8:31Plus, why not leave it up to the market to choose winners and losers? This is America, a free country after all. Right now, lab-grown meat is a tiny sector. Just two startups have received government approval to sell cultivated chicken on restaurant menus. And if these states become law, if these state bills become law, it'll have an even harder time growing out of the Petri dish. Right. These bills want to protect industry within their states, which is understandable. That's what politicians want to do. They want to protect their constituents. But at the same time, they're almost infringing on consumer rights by making a decision about what they can and cannot eat.

9:08And then also there's an innovation argument to be made here where China has this five-year agricultural plan that includes developing these lab growing meats. You're right when you say this is a culture war, but it also is just a war for the future of food. Yeah, let's talk about why they're doing it. And they're very transparent about it. Some of these lawmakers, Representative David Marshall of Arizona, he's got up before the state legislature there and he goes, let me start by explaining why I drafted this bill. It's because of organizations like the FDA and the World Economic Forum, also Bill Gates and others who have openly declared war on our ranching.

9:44So they're very transparent and very clear that they feel like lab grown meat or fake meat is an existential crisis for their cattle ranching constituents and they wanna block it on its tracks. They also cite health risks. And the pushback to that is just because something isn't healthy doesn't mean we don't block it from shelves. I mean, have you seen Snickers or whatever? Like it's not super healthy, but we let consumers make a choice. Right, absolutely. But we are reaching a point in the agriculture industry where you absolutely have to start confronting just how polluting it is and how much emissions that it produces.

10:17agriculture accounts for about 11 % of the U.S. greenhouse gas emissions. Livestock make up a quarter of those emissions, predominantly from their burps, which always blows my mind. But the amount of burps that cows are producing produces just a lot of methane. And globally, agriculture accounts for 37 % of methane emissions. So, there certainly is an environmental argument behind this thrust. I've always been relatively bullish on lab-grown meat. The consistency is something that I'm always curious about, but overall, I'm much more bullish on lab-grown meat than the alternative of the impossible.

10:51Plant-based meat. Yeah, there's no inevitability to this, though, at all. People just might always opt for meat. I mean, these vegetarian stats really kind of blow my mind. You'd assume that vegans and vegetarians are growing in number in the United States, but that's just not true. 4 % of Americans say they're vegetarian and 1 % say they're vegan, which is the same as in 2018 and 2012. So when presented this choice, they still might opt for meat. And these overall popular, these consumer behaviors might just not change as much as we expect them to. There is a big convention for movie nerds going down in Las Vegas this week called CinemaCon.

11:28And there is an appropriate amount of drama swirling for a conference dedicated to movies. The big existential meaty question dominating people's minds is the future of movie theaters. According to the most recent count from the National Association of Theater Owners, there's about 38 ,000 active screens in the country. Feels like a lot for a world where streaming allows us to have a buffet of entertainment options from the comfort of our homes. Smack dab in the middle of the too many theaters discourse is the world's largest theater chain, AMC. There's been widespread talk at the event of AMC's apparent financial woes, but CEO Adam Iran attempted to set the record straight, telling The Hollywood Reporter that the answer to will the chain declare bankruptcy is an emphatic no.

12:12He thinks that the next few years will be smooth sailing for the struggling industry, still trying to bounce back to pre-COVID highs. Neil, are theaters out of the woods yet? We've had this conversation so many times before, whether it was streaming, piracy, VHS, TV, COVID. There's been so many times where you look and say, movie theaters are dead and they just still stick around. They're amazingly resilient. 2023, let's look at that for movie theaters. The overall box office was up 20 % from the previous year. A lot of that had to do with Barbenheimer. Those two movies brought in$2.5 billion, but still that's$2 billion shy of their annual sales during pre-pandemic.

12:54And this year looks to be a down year. And it just looks like going forward, this industry is going to bring in around $8 billion a year, which is$4 billion short of the 12 billion pre-pandemic levels. There's not a lot of innovation going on. Superheroes, which were so bankable, those Marvel MCU movies just aren't performing as well as they used to. So the movie theater chains are looking to studios and saying, you need to give us better products because without that, people aren't going to come. Movie theaters in general, though, are a very unique business from a real estate perspective, because a lot of landlords, especially at shopping malls, which are where most movie theaters are located or about half of AMC's theaters are located in malls, landlords are usually willing to reduce rent rather than let an anchor tenant like a movie theater close.

13:45So they occupy this very unique niche where rather than kicking out an underperforming tenant, since they are just such big anchor tenants, they bring a lot of people into shopping malls, landlords are a lot more lenient. So that is part of the reason why movie theaters have just been so hard to kill and why there's still so many of them, even though a lot of these forces have been working against the movie industry. Yeah, it's very similar to what we're seeing with empty offices. Trying to retrofit them is very hard just by how they're designed into apartments. It's very expensive. It just is untenable in a lot of circumstances.

14:19The way movie theaters are designed, there are just a lot of weird rooms that don't have windows. And so it's just very expensive and not practical. to say, oh, you're an AMC and no one's going. We can't really change it into anything. I don't know what to make into a pickleball, a really big podcast studio. Either way, yeah, you're right. The quirks of the design, the layout, the architecture, the real estate has allowed movie theaters to renegotiate their leases instead of getting kicked out. And that has been a saving grace over the past few years and may be the same way going forward. Up next, hold on to your podcast apps because we have Neil's numbers coming your way.

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16:24Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800 - LilyRx or 1-800-545-5979. Welcome to another edition of Neil's Numbers, the segment where I share three stats from the week's news that will help you win cash cab. Can't believe it's Thursday again already. Anywho, my first number is anywhere from 80 to 116 beats per minute, because that range is the only tempo of music that is now allowed in the Russian Republic of Chechnya. This week, the region's minister of culture announced a ban on music that is too fast or too slow in order to align with the quote Chechen mentality and musical rhythm and to preserve the cultural heritage of the people.

17:08The ban effectively criminalizes many genres of music like techno or pop that you'd typically find in a club. So what's in and what's out in Chechnya? You can play Texas Hold 'em by Beyonce, Fast Car by Luke Combs, Dancing Queen, and Passion Fruit by Drake. Those are all within the limit. But Taylor Swift, Shake It Off, and Cruel Summer are both too fast. So our Bad Romance, I Want to Dance with Somebody, Story of My Life by One Direction, and Girls Just Want to Have Fun. And theoretically, the Russian national anthem is too slow to be played. That is the funniest wrinkle to this whole thing is because that Russian national anthem is usually played at 76 beats per minute.

17:46Too slow for Chechnya. But yes, musical censorship is often a hallmark of oppressive regimes. The Taliban has long restricted people from playing and listening to music. Countries like Cuba and Russia have all canceled concerts. Usually it has something to do with the lyrics to the music. You don't often see it tied to an exact beats per minute, but Chechnya thinks that the Chechnya way of life has a more middle of the road music taste. So they don't really want people going on any ends of the extreme. So this one's definitely a first restricting the tempo of music. It's a little bizarre, but it is part of a series of Chechnya cracking down on civil liberties ever since 2007.

18:27They're very conservative there. They want people to conform to tradition and cultural norms. There's been a lot of crackdowns on gay people, and they've pushed women to wear modest clothing. So this region of the world has been accused long time of violating human rights. For my second number, last weekend's WrestleMania in Philly was a spectacle to behold and shattered all sorts of records. WWE's premier annual event was the most lucrative event in the company's history with gate attendance up 78 % from last year and merch sales up 20%. It was also the most streamed entertainment event ever on NBC streaming service Peacock night.

19:05One of the show jumped 26 % from last year while night two increased 30%. Race WrestleMania also took over social media. WWE's YouTube channel had its biggest day ever on Sunday with 67 million views in 24 hours. WrestleMania just seems to be getting bigger every single year, but this one was a different beast altogether. It featured a dramatic championship match between Roman Reigns and Cody Rhodes and a bunch of older stars like The Rock coming back inside the ropes. Toby, some compared this WrestleMania to WWE's version of Avengers Endgame. We were deep in the WrestleMania subplot lines because both of us, frankly, are not WrestleMania fans.

19:45So trying to dig into these long, years-long storylines was a little intimidating. So it has been fun. But yes, a lot of Avengers comparisons, a lot of Avengers Endgame comparisons. This did seem to be the culmination of a lot of different storylines at the same time. You mentioned social media. I am not a wrestling fan, and yet I cannot escape it. Everywhere I look on Twitter, I'm seeing The Undertaker appearing behind The Rock. So it truly is this cultural behemoth, and it looks to be stronger than ever. Yeah, I mean, one company who's really loving this is Netflix, which paid$5 billion to stream Raw for the next several years.

20:20And it's looking at these viewership numbers on Peacock and the gate attendants and saying, man, we might have just gotten a steal there. I know it's$5 billion, but this is really their biggest launch into live entertainment. And the fact that this is only growing in popularity has got to be exciting for them. For my third number, President Biden hosted the Japanese prime minister for a fancy state dinner last night. And I'm dying to know whether he asked them about this wild stat. A study released last week estimated that in around 500 years, every single person in Japan will have the last same last name of Sato.

20:53Sato is the most common surname in Japan right now, accounting for 1.5 percent of the total population. And this study projects it'll reach 100 percent penetration by 2531. The study's lead author, economics professor Hiroshi Yoshida, blamed this on Japan's policy of requiring spouses to share a surname. The only country in the world that has this kind of law. Yoshida is part of a growing campaign to get this law revoked because in his words, if everyone becomes Sato, we have to be addressed by our first names or by numbers. I don't think that is a good world to live in. Right. This study certainly makes a lot of assumptions that the rate of Sato's will continue linearly for all time.

21:35But I think the point was that the researchers said a nation of Sato's will not only be inconvenient, but also undermine individual dignity. So there is a cultural argument to be made about what a nation of Sato's would be. I also looked into what the U.S. version of Sato is. Smith is the most common surname in the U.S. Johnson is second. Williams is third. So a nation of Smiths would feel like it would undermine our dignity as well. And no one wants everyone's last name to be Smith or Sato. So it is interesting to see kind of the dignity aspect to this as well. Japan might have some other priorities on its to-do list, which is a declining population, a growing boomer population that is really putting strain on its economy.

22:16More and more solar sites are deploying flocks of sheep to keep grass trimmed in and around their big photovoltaic panels, which make maneuvering a lawnmower difficult. It's a classic case of two birds with one sheep scenario. Companies get to keep their panels unobstructed from unruly grass while freeing up more acres of agricultural land for livestock grazing. The American Solar Grazing Association, which is a thing, estimates that 80 ,000 sheep now graze roughly 100 ,000 acres of land across 27 different states. And it's providing a lifeline for the struggling sheep industry, giving farmers another revenue stream as demand for lamb and wool drops in the United States.

22:56Neil, solar grazing, lambscaping, whatever you want to call it, it is definitely a win-win. They're calling this the biggest opportunity for the sheep industry in at least a generation or more. People just do not eat lamb like they used to. In 2022, the average person in the United States ate just a little over a pound of lamb. In the 70s, that was four pounds. They attribute this to actually soldiers in World War II. They were given mutton and they were like, I'm never eating this crap again. So please don't feed me lamb. So there's been a long, decades long decline in lamb consumption. And now that they're presented this wonderful opportunity where they can allow their, get paid to let their sheep go graze on some solar fields that are blooming all over.

23:39The solar panel industry is absolutely booming right now. And it was interesting too, because I was curious why specifically sheep. Sheep are much better caretakers of these solar sites than cows are, because cows, one, they're often too tall to walk under the panels. And then also they like to scratch themselves on the posts a lot. So cows are just a menace. Their burps are producing methane. They're too tall to, to graze these pastures. But yeah, you're, you're absolutely right. A lot of these local farmers stumble into this industry because they see a solar company setting up a site and they just walk over and say, what's up.

24:16And it's this very kind of not buttoned up process where it is very synergistic, where a lot of these are going into agriculture areas and it just happens through, I don't want to say the word, but it's very synergistic between these two industries. You can say the word. Thank you. Yeah. even though it's outside of a corporate setting. But yes, it's definitely a win-win for both these industries. Finally, the Masters tease off today, golf's first major of the year and one of the most legendary and bizarre sports events anywhere in the world. Georgia's Augusta National Golf Club, where it's hosted, is famously exclusive, whereby just getting into the grounds feels like you're entering sacred land.

24:53This year's edition offers so many storylines. You've got Live and PGA Tour golfers competing against one another while their merger hangs in limbo. Tiger Woods is playing in his first major since ending his longtime partnership with Nike and launching a new brand. And then there's the dirt cheap concession prices, which year after year defy inflation. At Augusta, the classic pimento cheese sandwich costs$1.50, a chicken sandwich costs$3, and a beer costs$6. Think about it this way. You can get two egg salad sandwiches, a coffee, a breakfast sandwich, a ham and cheese, a chicken biscuit, a blueberry muffin, and a beer for the same price,$22, as one honey deuce at the last year's US Open.