Microsoft-Activision Deal Complete & Bank of America Opens Fake Accounts

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'm Neil Freiman. And I'm Toby Howell. On today's pod, how a humble lake in suburban Ontario might mark a new chapter of Earth's history.

0:39And we'll head to a resort town in Idaho where billionaires in vests are cooking up the next big corporate takeover. Then, like the Undertaker rising from his grave, the Microsoft-Activision-Blizzard merger looks to be back on. Plus, regulators have been rummaging under the hood of Bank of America. And oh boy, do they not like what they've found. It's Wednesday, July 12th. Let's ride.

1:06All right, Toby, the new Mission Impossible comes out in theaters today, kicking off the summer blockbuster slate that also includes Barbie and Oppenheimer being released nine days from now. Frankly, we do not do enough wagering on this show at all compared to what we do in our daily lives. So I want you to give your rankings for the box office hall for each of these movies for their opening weekend. Mission Impossible, Barbie, and Oppenheimer. Give me your one through three. And I want our listeners to sound off in the YouTube comments about what you need to do if you get this order wrong. And it probably will be due with your hair.

1:41Oh, no. Okay, I'm going pink hair for sure. All right. In the number one slot, definitely got to go Mission Impossible. Agreed. I mean, just the Tom Cruise stunt alone is going to get the people out there. And then here's my controversial. This is where you make it or break it. I think Barbie's coming in at number two. wider commercial appeal appeal Oppenheimer probably is going to end up being a better movie but like I just think the sheer uh global appeal of Barbie is gonna it honestly might challenge Mission Impossible and then yeah I got Oppenheimer number three I think that is probably correct the question will be whether Barbie can touch Tom Cruise but it'll it'll see whether people uh actually like see all the marketing from them this movie and say I actually want to go see Barbie.

2:27A lot of people are saying they don't want the movie to ever come out because the marketing has just been so fun and that once you actually see it, then it might be bad. So yeah. And you have tickets to see Mission Impossible? Yes, next Friday. During a Barbenheimer day, I'm seeing Mission Impossible, but I'm excited. There you go, big Tom Cruise guy. All right, let's jump into our top story. It's a story that I can't believe we haven't really talked about on the pod yet, but we finally have some movement on this behemoth Activision Blizzard Microsoft deal. Yesterday, a judge ruled that Microsoft can close its$69 billion deal with Activision Blizzard, which is something that until this news broke, looked anything but certain.

3:09The deal has always been a tasty one for Microsoft because it gives them the chance to combine its Xbox console business with Activision's mega popular video game titles like Call of Duty. It's this sort of vertical integration that would make a Rockefeller proud, which is why the Biden administration and the Federal Trade Commission have repeatedly tried to block it. The FTC is super jittery about the idea that Microsoft could make Call of Duty, for instance, which has made over$30 billion in its lifetime exclusive to Xbox only, leaving PlayStation and other consoles out to dry. But those antitrust fears were dealt a major blow yesterday from this ruling.

3:48And it looks like Microsoft, I'm knocking on wood here, might get this thing across the finish line. Neil, over the years, this is over since 2020, it's looked like maybe this thing was going to happen, wasn't going to happen. But now this was a big win for the merger. This was pretty definitive by the judge because the FTC was arguing that this deal would lead to less competition and higher prices. And what the judge said was pretty damning against the FTC. The judge wrote the court finds the FTC has not shown a likelihood it will prevail on its claim. This particular vertical merger in this specific industry may substantially lessen competition.

4:26To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. And that's because Microsoft has been very public about saying we are not going to keep Call of Duty. We already struck a deal with Nintendo to give them Call of Duty and the same with PlayStation and Sony. So this is just kind of like a kind of a little embarrassing for the FTC. for the judge to not only say, we didn't find that your argument isn't working. We actually found the total opposite of what your argument says. Right, because they, yeah, they struck a deal that to give PlayStation access to Call of Duty for at least 10 years.

5:03And then they also brought it to the Switch, which didn't previously, it was just Nintendo's console. So you're totally right on that front. Honestly, though, I do want to talk a little bit about Activision and why Microsoft has had its eye on Activision for so long. Obviously you have the AAA titles like Call of Duty, but the is that a video game triple a yeah it's just the what you like quality yeah label like when big studios make like these big blow games like grand theft auto but that's not even the biggest jewel in activision blizzard's crown it's actually candy crush which we've talked about on the show before and that microsoft is really licking its chops because it doesn't have any presence really in mobile games at all right and candy crush is just ripped it's one of the highest grossing mobile video games of all time so it's how i get hyped for the show by just ripping some candy crush before yeah and this is also just kind of like a hallmark of the nadella era of just these big swings like he bought uh linkedin and then you also have the open ai deal for 30 billion dollars so this is nadella has nadella is a big big uh acquirer i mean but but this one it would be the biggest by far right 69 billion dollars is the biggest uh deal in microsoft's history it's also the biggest deal in video game history.

6:17I think Microsoft's second biggest acquisition is LinkedIn for over 20 billion. It's the biggest just tech merger of all time, second only to Time Warner back in the day. So it's definitely AOL Time Warner back in the day. So it's a big, chonky one. And again, that's kind of why the FTC has been really, really scrutinizing this thing and trying to take it behind the woodshed. So Lena Khan, who's the chair of the FTC, this is another loss for her. She's waged this war against big tech acquisitions and it has not been going well. This is the second biggest loss after she tried to block Meta from buying this virtual reality company called Within and they had to abandon that blocking attempt after a judge ruled against the FTC.

7:05So I mean, they're probably not going to stop trying, but this war against big tech acquisitions uh this much more aggressive tack is uh failing so far yeah and then the one final note i'll put on this is that there is a looming deadline approaching so july 18th was the deadline originally set in the deal for in microsoft acquisition and if uh they go beyond that deal then activision has a chance to like renegotiate the terms of the deal and it actually it's in a much better financial place than it was then when the deal was signed and so a lot of people are saying that the price would probably end up going up if they can't get this deal closed by July 18th.

7:45So that's definitely one. I mean, that's in six days. So again, there's a lot of moving parts, but that July 18th deadline is something Microsoft's keeping an eye on. All right. When this deal closes, the video game industry will never be the same. It's a huge deal. Let's move on. Vermont and other parts of the Northeast are surveying the damage after two months of rain fell in two days, resulting in catastrophic flooding that left entire town submerged in chest-high water. Officials said almost 120 trapped people had been rescued by emergency boats. Crazy videos. The flooding closed the downtown of Vermont's capital, Montpelier, yesterday and already caused tens of millions of damages to homes and businesses.

8:24One estimate projects that the flooding across the entire Northeast this week will amount to$5 billion in losses. I was reading about a bunch of business owners who lost their inventory to flooding that isn't covered by insurance. One owner of an Ace hardware store in Bar, Vermont, which is a beautiful town, said that 300 ,000 worth of goods were lost. What is the takeaway here? Well, I think it's extreme weather events and flooding aren't just confined to Florida or the coast. It's happening here in inland New York and New England that thought they were somewhat insulated to the effects of climate change.

8:58Yeah. I mean, yeah, you typically associate it with like the Palm beaches the miamis the coastal towns uh around the country but you never associate it with like inland vermont but i think it also exposes how ill-prepared local governments are to handle like climate disasters because governments make flood maps and that they they use flood maps in order to figure out how much to charge for insurance premiums and stuff like that but a lot of these maps are kind of out out of date at this point a lot of them just center around the banks of a river and say, hey, if you're living within this flood zone, but flood zones are way, way bigger now, taking into account these heavy rains, taking into account the fact that this is one of, this is the warmest summer ever on record.

9:44And that warmth is hanging in the air. And it gives the chance of these massive, massive rain storms to happen. And people are just saying like, governments are not prepared and have not mapped out the risk factors correctly. Because the government maps decide which homes are required to buy flood insurance. And you have estimates in Vermont that say that the number of homes that are truly at risk of flooding is three times as much as what the federal flood maps show. Right. So these homes are getting inundated from – this is like – I love this name of the river, the Winooski River. But that's the one that goes through Montpelier that flooded.

10:22And basically these maps don't accurately show what is at risk. Meanwhile, in the other extreme, I mean, in related extreme weather news, another insurer is pulling out of Florida, citing, you know, bad weather there. And it's just the cost of doing business in places like Florida and California is not worth it. That's farmer insurance. And it's joining State Farm and Allstate, which have recently also pulled homeowner policies in California. And so what that does is it drives the price of insurance way up. And now in Florida, Floridians, your dad is paying an average home insurance premium of$6 ,000, which is the highest in the U.S.

11:04And that's more than three times the U.S. average, which is$1 ,700. Yeah. I mean, I looked up the stats. Home insurance premiums in places like Florida and Texas. In Florida, they're up 57%. And then in Texas, they're up 40%. So, again, I mean, we mentioned Vermont. This is what the FTC should be worried about. Right. Those premiums go. Creating more competition in the insurance market. This week is going to be super bad for weather in general. Out in the Southwest, they're going to have this heat dome and the grids are going to be strained. Meanwhile, have you been looking at the Keys in Florida?

11:39It's bathwater down there. It's bathwater. I think the temperature is 92 to 96 degrees. The water temperature. That is crazy. Off the Florida Keys. And what that does is obviously it makes swimming. You can't refresh off in the water. It sounds kind of nice to me, though. No, too hot. But the problem is it makes the nighttime temperatures that much hotter because it doesn't cool off at night thanks to the warm, the super hot water. And so you're just running your AC, running your bill up all night. I think Phoenix is not going to go below 90 degrees at night this week. Oh, boy. I'm taking cold showers for the rest of the week.

12:19All right, Neil, talking about the weather is fun, but we've got to move on. We've had a couple of banking crises already this year, and our banking bingo card is almost full. So let's add one more name to the card, the nation's second largest bank, Bank of America. Yesterday, federal regulators found that B of A has been up to all sorts of nonsense, from double charging customers on overdraft fees and withholding credit card points to just making up customers altogether. The feds took them behind a woodshed yesterday. In total, the Consumer Financial Protection Bureau ordered Bank of America to pay more than$100 million to customers and$90 million in penalties, while the Office of Comptroller of the Currency— You're just making these up at this point.

13:02I am not. That's the best name of any office in the government, by the way. Also ordered B of A to pay$60 million in fines. So let's dig into some of this duplicitousness from Bank of America. Which one of these charges was the most egregious to you, Neil? I think the one I want to focus on first was this thing called double dipping, which is charging overdraft fees twice. So Bank of America had this policy of charging customers$35 after you declined a transaction because the customer didn't have enough funds in their account. I don't know if that's happened to you. It's definitely happened to me.

13:36But the double dipping part is that it charged the fee again if the merchant tried one more time to charge the transaction. so this practice is known as double dipping and so uh the consumer financial protection bureau said this said bank of america made hundreds of millions of dollars charging that extra 35 dollars over four years and now it has to pay them back that's i know it's it's literally adding insult to industry and and yes i have been there where they go like the the uh cashier is always like well let me let me just try it one more time because like right so if they do that then boom you're you owe another right so it it really is like uh preying on like human nature almost and They know they're going to swipe it twice.

14:15But to their credit, they say they fixed those overdraft fees and that they're down 90 % cents. They got rid of them two years ago, and they're down 90 % cents. So a little credit to Bank of America there. But then there's also some other stuff that they got in trouble for. I think the most egregious one is they withheld credit card points. So Bank of America, like all credit card issuers, would make these special offers of cash and points when you sign up for a new credit card. and then once they would, customer would hit those bonus levels, they wouldn't give them whatever they promised. I can't think of anything worse.

14:49Like we've all got a new credit card. You swipe really hard to get that, like whatever$2 ,000 spent to get those extra bonus points and then they withhold them. That's pretty agreeable. Yeah, you work really hard for that. I think that was because they weren't very clear about where you opened your credit card. You had to do it online and if you did it over the phone or in person, then you wouldn't be eligible for these cards. So the regulators are cracking down. This is part of Biden's war against junk fees, which we've talked about for a long time. He's going after hotels. He's going after Airbnb.

15:23He's going after Ticketmaster and airlines and saying, you know, consumers are being harmed by these little ticky tacky things that you're doing and we're cracking down. Yeah, and here's the good news though, I guess the silver lining is that it's not like a Facebook lawsuit type thing where you have to go on and fill out a form. if you have been affected by one of these things. The onus is on Bank of America to just put funds back in your account. So if you bank with Bank of America, look for a little sugar in the coming days. All right, Neil, let's take a quick break before we jump into our next story.

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16:34While middlemen like PBMs and 340B hospitals drive up costs, Biopharma is investing$500 billion in new infrastructure and manufacturing here at home and helping patients buy medicines directly at lower prices. Tell Washington to end middlemen markups and put American patients first. Visit phrma.org slash middlemen. Toby, I have a feeling we're not in the Holocene anymore. Humans have had such a profound impact on Earth geology in our short time here, from burning fossil fuels to dumping fertilizers and plastics to detonating atomic bombs, that some scientists say we brought about a new epoch in world history, the Anthropocene, an epoch marked by human activity.

17:23Yesterday, these scientists pushed their claims forward in a big way by selecting the one place on Earth that best exemplifies the emergence of the Anthropocene. They chose Crawford Lake, a humble lake in suburban Ontario, Canada. This lake is known as the Golden Spike, the site that shows the clearest transformation of the earth from the Holocene, the previous epoch, to the Anthropocene as reflected in the rock record. So what's up with this lake? Its sentiment shows major changes in plutonium and radiocarbon from nuclear detonations And its mud shows heightened levels of ash and nitrogen Reflecting pollution from human-made fossil fuels Scientists still haven't made the official decision that we're in the Anthropocene yet And they'll debate it over the next few years before saying definitively Yup, new epoch just dropped Toby, are you feeling Anthropocene-y?

18:15Are you buying that we have moved on from the Holocene? Okay. First of all, I think this is just such a fun story just because I never knew that this was how new epochs were defined. And I never knew that we were actively looking for signs across the globe for this. Yeah, it was the epochs tour. Yeah. Oh my gosh. Well played. Sorry. Thank you, Cassandra, for that one. That was very funny. Scientists have looked at coral reefs in Australia, peatlands in Poland, and then even the floor of the Baltic Sea before landing on this lake in Canada. And this lake is so cool because it is deep enough that the top layer doesn't really affect the bottom layers.

18:50So basically, a human fingerprint has just been building over since humans have existed. And you can go through the layers and see everything we've done to affect change. All that being said, I think it's way too early to declare this a new epoch. And you've thought about this very entirely for decades. Well, I looked at how long previous epochs have lasted. literally 2 billion of years. Like the protozoic epoch was 2 billion years long. And so it's absolutely ridiculous that we are 11 ,000 years into this new epoch, which is like seconds when you consider geological timeline, even though we have affected such great change.

19:27It just feels like it's too early to declare this a new epoch. All right, you're on the record. Yeah, I mean, it's true. There are scientists who are pushing back saying this is a bunch of recency bias and we're maybe huffing ourselves up a little too much. After all, Earth has been around for 4.5 billion years. Farming has been around for just 12 ,000 years. And atomic bombs were created in the 1940s. And atomic bombs are sort of cited as one of the reasons that we've moved into the Holocene. The counter to that is, like, did anything like humans ever exist on this planet before? And they're saying the Anthropocene isn't starting now.

20:03It already started in the 1950s, what they're calling the Great Acceleration, when there was a ton more pollution, a ton more fertilizer being dumped onto the Earth, more microplastic production, and obviously this atomic bomb testing, which is releasing all kinds of radioactive material into the Earth's rock, like plutonium, which has a half-life of, let me see, I wrote it down, like 24 ,000 years. So if that has a half-life of 24 ,000 years, then plutonium, human, this is like a definitive symbol of human activity on the planet will be in the rock formations for at least another 100 000 years which is a long time it is so i can understand why people are like i'm on humans are making profound changes to this earth and we need to record this because the goal is to spur you know action and say look at what we're doing we need to figure out you know ways to mitigate that i'm on team let's categorize this as an event not an epoch though that's that's my final say on it.

21:04This feels like we're having a goat debate, like LeBron or Jordan, Epoch or Ero. Yeah. All right. That's very fun to talk about, but we got to move on. Our next story centers on two ingredients that would make for the world's worst beverage, sriracha and milk. So how are these two related? There's way too much of one and way too little of the other. So right now, if you were trying to make a sriracha shake, you'd basically just be having a really big glass of milk. That's because America's dairy farmers are absolutely swimming in product. There is so much milk that there's no room to process it.

21:38And since milk is highly perishable, farmers have just been forced to dump it in some cases. Then on the other side of this disgusting drink metaphor we're going with, you have the Asian hot sauce sriracha, which is getting hit hard by a drought in Mexico that has caused a shortage in chili peppers. Neil, we have a tale of two different supply chains here. Where do you want to head to first? We can talk about milk. I mean, the production of milk is really idiosyncratic because you can't turn off a cow's udder. They're just going to keep producing milk. And if demand wanes, then you're going to have a huge oversupply.

22:12The last time that farmers in Wisconsin, the upper Midwest had to dump out milk was in the early days of COVID when schools and everything else closed. And that's kind of what's happening now. School's out for summer. and then you have the dairy processors that take all of the milk and turn it into cheese and other products. They're at capacity. So the farmers have literally nothing else to do, but the dumb milk, it's pretty sad. It's the most delicate supply chain by far because it's so perishable. You're right, like you can't turn off udders. I just want to say my one fact on dairy production before we move into Sriracha.

22:4890 % of Wisconsin's milk is made into cheese, which is a crazy stat to me doesn't it feel like 10 is going into actual milk maybe some of our listeners are in the dairy industry and they're like yeah obviously because you know i mean it's used in a wide wider variety of food products and it's much easier to store much easier to store yeah but sriracha so there's been this shortage going on for a very long time over a year but now it's kind of gaining news again because people are reselling it on amazon and ebay for an egregious amount of money. Some, some bottles are going for$120. That's, that's ridiculous.

23:24Right. And somebody bought a 12 pack of 28, 28 ounce bottles for$415, which equates to$34 and 58 cents per bottle. Uh, someone's seeing if they can get$80 for a bottle. Uh, but I wouldn't do this. Sriracha is not even one of my top five. I love Sriracha. Apparently it is the top hot sauce in 31 States based on Instacart data. People love it. Also go, if we're looking for a little extra of sugar, go through your fridge. I don't know. Maybe toss, if you have a bottle in there, maybe toss it up on eBay. Yeah, you might get 50 bucks for it. All right. Our final story, Tove, another year, another summer, we didn't get the invite to the annual Sun Valley Conference in Idaho, also known as the Summer Camp for Billionaires.

24:05Do they even know we released 101 podcast episodes? Come on, man. It got caught in the mail. Anyway, we don't have FU money, so it's understandable we were left off the guest list. That list typically includes media and tech moguls. This year's attendees include Bob Iger of Disney, Reed Hastings of Netflix, Apple's Tim Cook, Microsoft's Satya Nadella, and Zuck, who needs no introduction. What goes on at Sun Valley? We don't know. They typically keep the media shut out. It's historically been a hotbed for deal making, and over the past few decades, a number of mega media deals have their origins at Sun Valley, including Bezos buying the Washington Post and Comcast buying NBCUniversal.

24:44This year, Hugh knows, but we know that media is in a tough spot. All these companies that jumped into streaming are finding out that simply adding a plus to your name doesn't make you profitable. And collectively, they're trying to cut$10 billion in cost to finally make some money from all their investments. Then you have AI swirling. The writers strike. The actors are about to strike. So it might be a little more tense this year than years past. Yeah, it's been a slow summer for dealmaking, but this conference might kick off a couple things. And then some other storylines is you have Disney's succession plans because Bob Iger, his contract runs up in 2024.

25:17And then also on the Disney train, Hulu might get bought out too. That's a name that's been floated around because Comcast still owns a third of Hulu, even though it's under the Disney umbrella. So that's a name that you might see some action on after this. And then also Live Golf has a presence there. PGA Tour Jay Monaghan, the commissioner, was on the list. He's had some health issues, so he's not going. But that was rumored as something where we might see some more action around that. Then also, yeah, the fate of CNN because they've lost their next CEO. And then there's great vibes for Zuck right now because he's coming in riding high on the red train.

25:53So even though it's been a slow summer, like there's a lot of storylines where the rich and powerful come together that look for headlines on some of those things we just mentioned because this is where. And look for the photos of the power vest because this is where the famous photo of Zuck or no, of Bezos wearing that vest. It was kind of like coming out like I'm jacked for the first time. And Zuck yesterday posted this picture of him being ripped on Instagram. We're in the era of thirst trap pics from millionaires. I don't know if it's a good era. That's the true. I think Zuck is going to like get try to get photographed here because he's clearly on this PR campaign to say like I'm a UFC fighter.