How Billionaires and Ford Saved Detroit & Texas Stock Exchange Coming for the NYSE?

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howe. Today, Texas wants to create a rival stock exchange to New York. Can cowboy hats replace Patagonia vests on the trading floor? Then third time was indeed the charm for Boeing's Starliner spaceship. What its successful launch means for NASA's ambitions to return to the moon. It's Thursday, June 6th. Let's ride.

0:54Today is the 80th anniversary of D-Day when 156 ,000 Allied forces landed on the beaches of Normandy to drive the Nazis out of France. It remains the largest seaborne invasion in history and marked a crucial turning point in World War II. This year's anniversary is going to be especially poignant. It will likely be the last major D-Day commemoration that involves living veterans. People who were 20 years old on D-Day are now 100. Given this reality, organizers are putting on the biggest D-Day commemoration in history, holding concerts, parachute drops, ceremonies, parades, and convoys. some vets, fewer than 200 of them, have traveled to France to participate in a last hurrah.

1:36And President Biden is one of roughly 25 world leaders that will be in Normandy to mark the occasion and give speeches. Yeah, probably a lot of people are thinking, wow, this D-Day is a huge deal, but I don't really know a lot about it. So besides Wikipedia, I definitely recommend reading D-Day, this book by Stephen Ambrose, who's a historian of World War II and other eras of American history. and he goes into insane detail about what happened on that day and the weeks later. And it's just incredible military history. Or if you're in New Orleans, there is a National World War II History Museum that I definitely recommend checking out while you do all your other stuff in New Orleans.

2:13So big day. There's going to be so much going on. The last hurrah. Now let's hear a word from our friends over at Yahoo Finance. Yahoo Finance has an ecosystem of tools that help you achieve your financial goals. But what does that really mean? An ecosystem is made up of interconnected structures that all work together to create a bubble of life. And in Yahoo Finance's case, that bubble of life is an understanding of the financial world. Trusted news, in-depth analysis, comprehensive market data. These are the plants, animals, and other organisms of the Yahoo Finance ecosystem. And there is nothing better than stepping inside that comforting purple ecosystem so you can make informed decisions with confidence.

2:52It can be intimidating outside the Yahoo Finance bubble, so make sure to arm yourself with the tools to succeed in today's market. Download the Yahoo Finance app on the Play or App Store for real-time alerts on news and insights tailored to your portfolio. Race the runners! Raise the sails! Raise the sails! Captain, an unidentified ship is approaching. Over. Roger. Wait, is that an enterprise sails solution? Reach sails 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.

3:30Get started today at linkedin.com slash campaign. Terms and conditions apply. For decades, Detroit's Michigan Central Station, once the state's marquee transit building, has sat vacant. It's decay, a symbol of the once great American city's descent and depopulation. But that all changes today. Ford is opening a gleaming$950 million technology campus inside the renovated station in an event Detroit considers the capstone of its revitalization. Want to know how big a deal this is for Detroit? To accompany the opening, Eminem is executive producing a celebration of Detroit music showcasing Diana Ross, Jack White, Big Sean, and a bunch of other all-star local musicians in a celebration that will be streamed on Peacock.

4:16Detroit has been waiting years to celebrate something. Back in 2013, it filed for the largest municipal bankruptcy in U.S. history. Once home to 1.8 million residents in the 1950s, when it was the car-making capital of the world, it currently has just 633 ,000 people, about one-third of its peak. But things have been looking up. Detroit's population grew last year for the first time since 1957. Last fall, home prices rose the most among major metro areas. This spring, it hosted the NFL draft and set an attendance record. More companies are leasing office space downtown. And this Ford project is the biggest of them all.

4:54The company that's synonymous with Detroit restoring glory to a once glorious building. If there weren't already a city named Phoenix, I'd suggest that. It's just doing very well right now. The city is adding jobs. It's generating revenue for the first time in a little bit. It's adding population, as you mentioned. It's unemployment rate, which has usually been well above the national average. It's actually a tick below the national average right now. And then just anecdotally, if you look at the skyline, there's cranes everywhere. It just shows that progress is happening. And you're right. This Michigan Central Station, which has for so long just stood vacant with barbed wire around it, has just been a reminder of the city's rise and then fall.

5:35It is now a symbol of its rise once again. And the way they renovated this is absolutely insane. They actually left some graffiti on the walls to symbolize where it had been when the last train left the station in 1988 because it became a source of a lot of vandalism. So I guess they want to mark that chapter in history by keeping some of the graffiti. And they went to this quarry in Indiana where they got the original limestone for this building. They found out that this quarry was closed. So they went and said, hey, can you open back up because we want to really do the most perfect job restoring this building.

6:08So they reopened the quarry just to get the limestone back. I love the commitment to the history. Part of the reason why Detroit has had such a come up in the last decade or so is that there's this trio of billionaires that have just invested very hard in the paint. You obviously have the Ford family that's invested a lot into this particular project and the city, but also the owners of Rocket Mortgage and Little Caesars. Together, they have invested so much into downtown Detroit that they own 70 percent of its office space. They really did just want to see the city return to its former glory, and they're putting their money where their mouth is.

6:42Totally. I mean, it's crazy that three billionaires own 70 % of all office space. And there's another, Stephen Ross, whose name is on the University of Michigan business school that is also thinking about investing billions of dollars into the city. So there is a lot of momentum. Some challenges obviously remain. The poverty rate is three times the national average. And there's also just secular headwinds that they're building all of this office space going into because commercial real estate is not doing great. There's a, in fact, crisis on our hands with people working from home and not going into the office.

7:18And commercial real estate everywhere is in the dump. So the fact that you're building this much office space in a downtown area that's previously struggled, it's definitely just going into broader headwinds in the broader market. Plus, the reason Ford's doing this particular renovation on this building is to attract workers and talent. And that's the number one thing that Bill Ford, the chair of Ford, said is the reason for making this such a cool space. Because to get people from the coast to go to Detroit and work on electric vehicles and all of the other tech forward stuff that Ford is doing, you need to really have a cool space to work in.

7:53That's one of the top things that he mentioned. So it is really a talent and labor play. Yeah, and on another thing that may be a headwind as well is that whenever you invest this much money into a city, gentrification is something that is tossed around a lot. And you've already seen median rent in Detroit's metro area increased at five times the national average in April. So clearly prices are rising, which is a double-edged sword, of course. There's a New York Times article where someone owns a small taco restaurant near the newly renovated stadium, and someone called her up from out of town and offered$800 ,000.

8:27She said her home used to be worth$35 ,000. Now it's been appraised for$300 ,000. So you are seeing that gentrification happen, which can be concerning to some local population. All right, Toby, you said you had a good feeling about Starliner's launch yesterday. And gosh darn if you weren't spot on. After two failed attempts in the spring, Boeing's spaceship successfully blasted off from Cape Canaveral just before 11 a.m. and is on its way to the International Space Station. This is a landmark moment a decade in the making. It was the first time that Boeing's Starliner is carrying humans on board, NASA astronauts Butch Wilmore and Suni Williams, two very brave souls.

9:06The launch is a huge win for both Boeing and NASA. For Boeing, it's proof that it can send humans to space, even as it trudges through a safety crisis in its commercial jet business here on Earth. For NASA, the agency's bold plan to offload launches to private companies is bearing fruit. Ten years ago, after it retired the space shuttle, NASA awarded contracts to Boeing and SpaceX to take its astronauts into orbit. Only SpaceX has delivered the goods until yesterday when Boeing gave NASA the critical second option for space travel. As Buzz Lightyear would say, I'm proud of you, cowboy. Me too.

9:40So we have taken to started watching some of these launches in the Morning Brew office. And the previous launches we've watched have been SpaceX's Starliner. So we're kind of used. Starship. Starship, sorry. We're kind of used to it blowing up at some point. But this one, I legitimately had sweaty palms and was nervous because there are humans on board. There are two astronauts on board. The whole office cried around and watched. It was a very good moment. Like rocket launches are still cool. I don't know if it's just the little boy in me still. But it was very cool to see it go up and succeed after so many failures.

10:14Let's just run down the failures. On Saturday, they had to halt the countdown with four minutes left. There was an issue with the flight computers. It followed an attempt last month where it tried to launch, but there was a misbehaving valve. While fixing that issue, they discovered another issue, which was a helium leak. And I do want to talk about that helium leak because coming in this morning, there are reports that we are seeing some valves leak helium while it's currently in orbit right now. They still say it's fine. They factored in these leaks. Helium is just a notoriously fickle element to deal with.

10:46It's very small molecules. It's a very high-pressure system. So there are some reports of those leaks, but nothing too concerning at the current moment. That's good. And for the mission itself, the astronauts are set to dock on the ISS slightly after noon today. They're going to spend eight days on board conducting tests of Starliner to see how it performs in space. And they're delivering that all-important urine processing unit to be able to translate some of that liquid urine that they've been storing on board into drinkable water. I know that sounds yucky, but that's what you got to do in space.

11:17Meanwhile, we mentioned Starship, SpaceX. It's going off today potentially on its fourth mission. Last time it blew up or disintegrated, reentering the atmosphere. So I think the next step in their voyage for Starship, Starliner, I get them all confused, Starship is to make that reentry, and they're going to use Starship to get to the moon. So we'll keep an eye on that today. If we get back-to-back launches, that's pretty cool. It would be electric. And then, yeah, just to set the stage one more time, a lunar variant of the Starship is expected to be used as part of NASA's Artemis 3 mission to the moon, and that is expected to hopefully go off in 2026.

11:54So that was also what's at stake with this last launch. You probably know Texas more for livestock than stock markets, but an upstart venture is looking to change that. A group has raised$120 million to take on Wall Street and bring a stock exchange to Texas. According to a Wall Street Journal report, Citadel, BlackRock, and others are backing the so-called Texas Stock Exchange. In typical Lone Star State fashion, the main value prop of the exchange is to strip away some of the regulations and compliance costs associated with listing on the New York Stock Exchange or the NASDAQ. The founders of the TXSE pledged to make it more CEO-friendly than its more entrenched competitors.

12:34The confidence to take on the big boys in New York is no doubt buoyed by the fact that the corporate landscape is increasingly shifting towards Texas. It's home to more Fortune 500 companies than any other state outside of California, while everyone from Tesla to Goldman Sachs is breaking ground on campuses there. Neil, there are currently 16 equities exchanges in the U.S. market with varying levels of trading volumes. Do we think that the TXSE has a chance to grab any of that market share? I don't know if anyone's read Liars Poker by Michael Lewis, but there was a phrase that was in reference to the Salmon brothers.

13:10It's called equities in Dallas. And it was this pejorative phrase where if you were assigned to Dallas and you were a finance worker, it was back office. It was lowest of the low. You did not want to go there. It was the backwater of the finance world, Dallas, compared to New York. And now they're trying to change that. Goldman is building a 5 ,000-person office in Dallas. There are more JP Morgan employees in Texas than there are in New York. So this is a sign. I don't know if it's going to work or not. It may not be. It may not work at all. It may flop. But this is just sort of symbolic of the finance world migrating south, migrating to Florida, migrating to Texas, where there's just a lot of less red tape.

13:50Yeah, it's been cultivating this image for a long time now. Hey, corporations. Hey, financial firms. Come here. There's a more relaxed regulatory environment. They're also trying to build up their business court system because, remember, the more complex corporate litigation usually happens in Delaware's court system. But Texas is now saying, like, hey, we want to have that same robust system. Elon Musk has said never incorporate in Delaware because he's having some issues with his pay package there. But you're right. It is very not easy to get exchange off the ground. The New York Stock Exchange and NASDAQ essentially have a duopoly over the market.

14:25The New York Stock Exchange accounted for 20 % of the volume in equities trading in May. NASDAQ represented over 15%. The entire pie is made up of 16, but most of them just have crumbs. Like the Miami Stock Exchange was recently launched. That has around 1.7 % of equities trading volume. So if you can break even that 2 % threshold, it's kind of a success. And they do think that just because of the financial acumen and this financial power that they wield, they feel like they can grab some of it. Up next, your favorite Thursday alliterative numerical musings, Neal's Numbers. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL.

15:10I'm not kidding when I say NFL by Abercrombie broke the internet last year, and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrival, Shop NFL by Abercrombie in the app, online, and in store.

15:53or milestone, all protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Welcome back to Neil's Numbers, the segment where I share three stats from the week's news that will turn your life from black and white into technicolor. My first number begins with a riddle. What has seven stomachs, gets a security detail, and is worth$4 million, that is the most expensive cow in the world. Her name is Viettina 19, and her native Brazil wants you to know about her and the rest of its cattle industry, which exports the most beef of any country in the world.

16:34According to the Associated Press, Viettina 19 was sold for$4 million at auction, the most ever for a cow, because she is a bovine beauty and an absolute unit, weighing in at more than 2 ,400 pounds of pure muscle. She's twice as heavy as an average adult of her breed. That makes her incredibly enticing to cattle breeders who view her the way a horse breeder might view a thoroughbred that won the Kentucky Derby. Her offspring are also likely to have these desirable traits. So Viettina 19's owners, yes, there are multiple because she's so expensive, have extracted eggs from her and are selling them for around$250 ,000 to others who want to level up their own livestock's genetics.

17:15Toby, I think we found the Secretariat of Cows. She is incredible to look at. The AP called Viettina 19 the embodiment of Brazil's cattle ambitions and the product of years of efforts to raise meatier cows. They are calling her a super cow because how could you not? She is twice as heavy as the average adult of her breed. And yeah, the price comes from her ability to put on muscle very quickly from her fertility. And then, yeah, most of all, the most important thing is her ability to pass those characteristics on to future generations. that's what makes her literally a cash cow. Wow. Even sitting on that one, I can't believe I didn't think of that.

17:50But yes, if you look at Brazil's cattle industry, it's only growing, it's accounting for a growing share of the economic, the economy there. It exported more beef, 2 million tons in 2023 than it ever had before. If you go to the interior of Brazil where cattle is sort of the superpower there, they listen to country music. It's basically like a little Texas out there, but even bigger. So Viettina 19, they put a billboard saying, hey, come check out our cattle because this is the embodiment of what they're trying to do there. Concerns are rampant about the cattle industry and what it means for the environment because they fart and they burp and it's terrible.

18:29They release a lot of methane, but it is really Brazil's growth engine right now. They even went to Japan, home of Wagyu beef, and are like, listen, we got some really good beef over here. You should import this. So they're trying to Lulu, Lula, who's the who's the president there, is trying to find new export markets for this cattle. My second number is 1000, which is about how many public toilets there are in New York City. And fortunately for those of us who've been stuck in Times Square having to pee really bad, it's about to get a lot easier to find them. New York City Mayor Eric Adams said the city is releasing a new Google Maps layer so people can easily find the locations of every public restroom operated by government agencies and institutions like libraries.

19:12Not only that, the city is going to build 46 new restrooms and renovate 36 existing ones in an effort dubbed You're in Luck. Haha, get it? But accessible public bathrooms are no laughing matter. Just take it from Teddy Siegel, a toilet influencer, that's a real thing, who created a map that showed all of the public bathrooms in the city. She was there for the mayor's announcement and she said that the lack of publicly accessible restrooms is not only a quality of life and public health issue, but it's an equity crisis because finding an available potty can be especially difficult for parents of young kids, pregnant women, seniors, and people with medical conditions.

19:47If anyone wants to DM me, I have a few secret public bathrooms up my sleeve, but for everyone else living in New York or visiting New York, this news must come as a relief. It's a relief, but you can't help but be a little angry and a little frustrated looking at this map. There's only 1 ,000 public bathrooms for 8 million New York City residents. It just seems a little understaffed, a little insufficient. So I know this problem very well because I'm a runner. I run around New York City a lot. So I do have my go-to spots. You have to because it is just very inaccessible, especially at early morning hours.

20:24It's hard to find. My hack or my trip is to just walk into hotels and look extremely confident like you are staying there and then go use the restrooms. But yeah, I do think that it is a little insufficient when you see just a thousand. They are adding more, but only a thousand public restrooms for 8 million residents. That's just not enough. Totally. And so many of them are just ones you don't want to go into. If you want to see a city that's doing this well, the city with the most public toilets per square kilometer is Paris with 6.72. And then Tokyo is also famous for its public restrooms. It actually in its Shibuya district it actually has a tour that it launched in march where you can tour these 17 public bathrooms that were that are just look that are just really cool they were designed by an artist all right my final number is one dollar and 50 cents which is how much a hot dog and soda has cost at costco for four decades and will cost for the foreseeable future on the company's earnings call last week costco's new cfo said reassuringly to clear up some recent media speculation i also want to confirm the$1.50 hot dog price is safe.

21:29That media speculation he was referring to noted that many legendary deals were succumbing to inflation. Think Trader Joe's 19-cent bananas and Planet Fitness$10 monthly membership, both of which have gone up in price. There was concern that Costco would do the same, particularly because this new CFO, Gary Miller Chip, is new and took over for longtime CFO Richard Galanti. But Costco seems to realize that its$1.50 hot dog is a useful marketing tactic and symbolic of its low prices across the board, which has given it a competitive advantage during this period of high inflation. It's just a PR slam dunk for them, and I'm glad that they recognize this as well.

22:07It is what brings that intense loyalty to the Costco brand. The dog is obviously a loss leader. They are not making money on this. It is in order to get consumers through the door, hopefully fill their baskets with more profitable items. But yeah, people say Costco essentially buys loyalty every single, the price difference between what they sell the dog for and what the dog actually costs is their essentially a tax on customer loyalty. And I think it's worth absolutely every penny. It's a PR masterpiece doing this thing. Ever had a Zoom meeting that you really wish you didn't have to be on? Well, Zoom's CEO, Eric Yuan, feels you and has a solution.

22:48Send your AI clone. He told The Verge in an interview that Zoom, like half of corporate America, wants to become an AI-first company. And his vision for getting there involves providing everyone with an AI twin that can help automate tasks and reduce the need for humans' everyday work. In the not-so-distant future, Yuan thinks people will have their own custom large language models that they can train to simulate themselves. So if Neil has a podcast meeting about the new merch we're about to drop, hint, hint, at the same time he has a newsletter meeting, he could send his Neil LLM to one meeting to represent him.

23:22Can't be in two places at once. To be clear, Yuan thinks we're still four or five years out from digital twins becoming the norm, but it was very interesting to hear him speak so frankly about his vision for the future of work. It reminds me exactly of what Whitney Wolfherd was saying about Bumble, where you can have your own AI avatar, start dating with everyone else's AI avatar. That was widely panned and seen as non-realistic. I don't know what the exact reaction to this was, but I imagine it was similar because critics say that large language models are basically random number generators and you should never offload decision making tasks that humans have to reason with.

24:04If this guy is saying the CEO of Zoom, which is tens of billions of dollar company, saying that he's going to send a large language model in his place to go to a meeting and make consequential decisions is kind of alarming. It's alarming too, because a lot of people, the interviewer pushed back and said, so you're telling me that you think people are going to be in less meetings essentially? And he said, yeah, there is no reason why we have to potentially work five days a week. It could bring our work week down to four days a week. He said it could facilitate more in-person meetings because if your AI clone is off chatting with other AI clones in a Zoom meeting, then it frees up more time for you.

24:41So he was very frank about the fact that this is a paradigm shifting look at technology that kind of undermines his business as well. But he put it, he was very open about that. Yeah, and AI experts did jump on social media to bash the Zoom CEO. One of the criticisms is safety and security. If you're sending a digital avatar of yourself to make consequential decisions, it could easily, not easily, but it could get hacked and you end up tanking your company. Another reason, another criticism they had is these people are watching too much sci-fi. And they're saying that people like Sam Altman, who modeled the AI voice assistant after her, and this and the Zoom situation that's going on right now.