Shipping Industry's Warning on Supply Chains & ‘60 Minutes’ vs. Paramount

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, sailing across the Pacific, you're probably going to beat Google Maps' ETA because there's no traffic. Then 60 Minutes spent a few of its minutes calling out its corporate owner as tensions rise ahead of a multi-billion dollar merger. It's Tuesday, April 29th. Let's ride.

0:53Toby, welcome back. We need to hear all about London and running the marathon. First of all, how sore are you? I will tell you what, a seven-hour transatlantic flight post-marathon leads to soreness levels I have never experienced, but the experience itself, awesome. I ran the New York Marathon last year, and the fans in London might be even rowdier, maybe because they are a couple pints deep by that point, more so than their American counterparts. Also, way more costumed runners. I saw a guy dressed as Big Ben, Wonder Woman, a shark, the king, the queen, and I was in a corral with a guy wearing a full three-piece Peaky Blinders-esque suit, and all he said to me was going to be a hot one out there.

1:36He beat me, by the way. He passed me at like mile 22. I was like, oh no. But yes, great time. Loved every step, even if I didn't run it as fast as I wanted to. On that note of competition, though, I do hear that MBD is up for a little award. We are, which is pretty cool. We are a finalist in the business podcast category of the Shorty Awards, which is like the Oscars, but a little more prestigious. Neil is right. They are kind of like the Oscars, but for digital and social media content and brands. I didn't win a medal over in London, but you can help us and our whole team win some hardware by heading to vote at the link in the podcast description.

2:14Voting closes tomorrow night at 8 p.m. Eastern Standard Time, not London Time, Eastern Standard. So send this to your friends, your family, to your shorty, and let's go win MBD a shorty award. And now a word from our sponsor, Planet Oat. Neil, you ever use one of those pens that just glides across the page. Smoothing, perfect weight, writes like room temperature butter, oh yeah. But I lost it back in college and have been chasing that high ever since. Well, I can't find that pen, but that feeling, that's what Planet Oat does for your kitchen. It's a smooth, satisfying go-to, the kind of breakfast addition that makes everything better.

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3:25Over. Roger. Wait, is that an enterprise sails 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. Remember during the early days of COVID when you'd go to a store and find pretty much nothing you needed on the shelves? A number of prominent economists and freight experts have come out in recent days saying we're headed for a similar scenario in a matter of weeks if the U.S.'s 145 % tariffs on Chinese goods remain in effect.

4:09That's because traffic across the Pacific has become quiet, too quiet. Since President Trump slapped massive tariffs on China in early April, cargo shipments have plunged by 60 % according to logistics company Flexport. Meanwhile, the number of so-called blank sailings or canceled voyages has surged. In April, there were about 80 canceled sailings from China to the U.S., which is 60 percent more than any month during the COVID pandemic, logistics exec John McCown said. Speaking of COVID, some experts say we could see a supply shock on the same order as the pandemic. In an ominous and viral research note, you don't really say viral next to a research note a lot, but Apollo's chief economist Torsten Slock wrote that, quote, container traffic from China to the U.S.

4:55is collapsing. The consequence will be empty shelves in U.S. stores in a few weeks and COVID-like shortages for consumers and for firms using Chinese products as intermediate goods. and the effects could spill into the broader economy. Slock warned of major layoffs in trucking, logistics, and retail, meaning the downside risks to the economy are significant. Toby, for many Americans, the trade war feels pretty abstract for now, but if you listen to the people who work in freight and logistics, it could become real in just a few weeks. Yeah, it's getting real quiet on the port front, on ships coming in from China to the U.S.

5:30And the reason why these effects aren't going to be manifested necessarily is a lot of companies have been stocking up. They kind of saw this coming. So they've been building up inventories. But when you really might start to feel it is when they start needing to restock ahead of the busy holiday shopping season. But empty shelves is something that, you know, Americans are not necessarily used to seeing outside of COVID, outside of these supply chain snarls. So it is definitely why this research note caused so many alarm bells to go off because the words American empty shelves just don't even really jive with each other.

6:02And the issue is, is that there's not necessarily a non-Rocky path forward, because if you start to relieve these tariffs and if all these goods start to pour into the U.S., the ports can't sustain that either. So it's not necessarily like as soon as the tariffs are off, suddenly these supply chain issues are sorted out. It's going to be it's going to get worse before it gets better. They're built to handle more stable flows rather than this dramatic up and down, which we're seeing now. Now, and the timing of this could not be any worse because we are coming up on the peak shipping season for back to school and the holidays.

6:40I mean, Gary Cohn went on the Sunday shows on Saturday on Sunday morning. He is the former Trump trade advice, Trump economic advisor from the first term. And he explained that this whole thing of getting goods from China to the U.S. is a very long process. It takes something like eight weeks to go from a factory in Shenzhen onto a ship in Shanghai. And then you go to the port of Long Beach and then it goes into a truck and then it goes to another warehouse and then it goes finally to the retail store. That is a very long process and companies have built these very long lead times. And so they're ordering holiday goods in the next few weeks and months.

7:20And if they don't order them, then that means shortages come at the time when everybody's shopping. And then this viral deck from Apollo economist Slock also pointed out other areas of weakness in the U.S. economy. He looked at earnings revisions, which have been coming in fast and hot, inbound tourism, which is decreasing, and then consumer confidence also tanking. So it wasn't just shipping, although he was looking very deeply into that. This guy put a lot of effort into this. He was looking at satellite images of U.S. trade in the South China Sea, just seeing what ships are leaving and what ships are coming in.

7:56And that's where you got a lot of data from as well. So, again, you framed this by saying what are the tangible impacts of the trade war? It's looking like they are finally being felt and then eventually will manifest in empty shelves, potentially if this isn't worked out before. The data is clear that trade between the U.S. and China is collapsing. Hatbag Lloyd, which is the world's largest container shipping line, fifth largest container shipping line, canceled 30 % of bookings out of China. The port of LA, which is one of the main gateways for Chinese goods coming into the United States, expects a 35 % drop in import volumes in the next two weeks.

8:31So everyone is looking for some detente between the US and China in order to stave off what could be a pretty catastrophic economic scenario coming in just the next few weeks. Things at Paramount are getting more awkward than Bill Belichick's Sunday morning interview. The media giant and pairing company of CBS is getting bashed by its own top talent, including Nathan Fielder, as it tries to complete a high-stakes merger and fend off a lawsuit by the Trump administration. The drama began earlier this month when longtime 60 Minutes executive producer Bill Owens left the show, saying his independence was being compromised by the top corporate brass.

9:07Then Sunday night, the first 60 Minutes episode since Owens left, things escalated, and a very unusual on-air flogging correspondent, Scott Pelley, closed the show by telling viewers, Paramount began to supervise our content in new ways. None of our stories has been blocked, but Bill felt he had lost the independence that honest journalism requires. No one here is happy about it. Pelley added, stories we pursued for 57 years are often controversial. Bill made sure they were accurate and fair, but our parent company, Paramount, is trying to complete a merger. The Trump administration must approve it.

9:42What Pelley is claiming here, if you read between the lines, is that Paramount leadership, specifically Chair Sherry Redstone, is worried that 60 Minutes' critical reporting of the Trump administration will jeopardize its sale to a company called Skydance Media, which is run by the son of Oracle's Larry Ellison. That$8 billion deal is still awaiting approval from the FCC. And another curveball to this saga is that CBS is also being sued by the Trump administration for$10 billion over an edited interview of Kamala Harris last year. There's widespread belief that the FCC won't bless Paramount's sale until it settles with Trump over that lawsuit.

10:17Toby, what a mess. Yeah, what drama. I mean, ostensibly on the surface, the FCC review should be completely unrelated to Trump's complaint. But a lot of people are reading between the lines and saying, yeah, the company believes the approval is contingent upon reaching this settlement. So, of course, Sherry Redstone, who stands to benefit monetarily, she would net$2.4 billion for this sale, is going like, guys, let's not screw this up. Tell me what you're going to say about Trump in your next stories. Her frustrations started growing over CBS's reports on Greenland and then the Ukraine war as well.

10:56So she tried to start to meddle with 60 Minutes's editorial authority, which caused all this tension within the newsroom. So Redstone has been trying to exit as her position as a media mogul. And yet these last few yards to get it to the finish line have just been wracked with controversy. Right. And the fact that 60 Minutes, that Scott Pelley would get up there and talk to viewers in this very candid way is extremely unusual. But 60 Minutes has kind of a lot of weight to throw around. It's been around for 57 years. It is the crown jewel of CBS News, of Paramount's portfolio. It is the most watched TV news program in the U.S., the third most watched non-sports broadcast on TV.

11:40It gets 8.4 million viewers a night during its latest season. So they have a lot of weight that they can bring to bear, a lot of influence that they've accrued over the last six decades. And then this is not the only drama going on at Paramount, the only talent that is criticizing the corporate owner. Nathan, this is a completely different field than 60 Minutes, but Nathan Fielder was this comedian who had the show Nathan for You and now has a show called The Rehearsal on HBO. his episode on Sunday night, he criticized Paramount Plus for removing one episode of Nathan For You from 2015. And he basically portrayed Paramount Plus' Germany Studios as, you know, a Nazi auditorium.

12:27And he said that they removed it over the sensitive Jewish content. He created this apparel brand called Summit Ice, which directs money towards Holocaust research. and he said that Paramount plus executives got a little skittish over that, especially in Germany. So Paramount is getting it from all angles right now as it tries to complete this merger and it's supposed to have happened by now, but it just can't get it done. Yeah, Nathan Fielder did it in the way only Nathan Fielder can. He did stop at the end of it and go, this is real, by the way, what is happening to him. So you are right that things just got so cloudy for Paramount as they're trying to complete this merger, which again, it is to Larry Ellison's son.

13:04So technically, Larry Ellison is a big Trump supporter that you would think that the blessing would get signed off. But, you know, all this editorial back and forth is leaving this$8 billion jail in jeopardy. The Washington Commanders are pulling an Uno reverse card and returning to their home from a bygone era. The NFL franchise is packing up its home for the last 27 years in Landover, Maryland and putting down roots in the nation's capital, unveiling plans for a new$3.7 billion development on the site of the old RFK Stadium, the place the franchise played its ball for more than three decades prior to 1997.

13:41The new stadium plans still need to be approved by the city council, but the way has been paved by a bipartisan bill that transferred the RFK Stadium land to D.C. after some lobbying on Capitol Hill by new owner Josh Harris and NFL Commissioner Roger Goodell late last year. The stadium itself hopes to be more than a stadium. The plans include a plaza district focused on entertainment, a riverfront district featuring housing, retail, and dining, as well as a new residential neighborhood. But maybe the biggest inclusion is that of a humble roof. Harris said that he was torn about including one because he grew up watching the commanders play outdoors, but a roof is a golden ticket towards hosting other big events like concerts or eventually a Super Bowl.

14:24Taylor Swift, pick an event, pick an act, Harris said at a press conference yesterday. Neil, this stadium-to-be still has some hurdles to navigate. While the commanders are pledging to shell out$2.7 billion for the new development, which would be the single largest private investment in D.C.'s history, taxpayers would still be on the hook for$1 billion. So there might be some pushback to directing that amount of public funds towards a new stadium. First of all, Josh Harris is on a winning streak. He bought this team for a little over$6 billion a few years ago, and he has sort of transformed the franchise from what was a very hapless situation under the former owner, Dan Snyder, who everyone hated.

15:05They made the playoffs the past year. They've kind of turned around the product on the field, and now he secures this stadium deal, which he had been long pursuing, as well as NFL commissioner Roger Goodell. Those two hail from the DMV area, so they really wanted to bring this Washington football team back to D.C. So he's kind of on a heater right now. You said there could be some hurdles due to that$1 billion in taxpayer funds. There have been pushback all around the country to new stadium deals that require public funding. It's happened in Kansas City, where the Chiefs are somewhat in limbo after voters in that county in Missouri rejected the extension of a sales tax that would fund the stadium.

15:45Now they don't know what they're going to do. So there will be and they're already opposition has already been created in D.C. overspending one billion dollars in public funds to a stadium that will ostensibly be open or be open eight days a year for NFL Sundays, which is why you see this as part of a broader plan to rejuvenate that area around RFK Stadium, which is not good now. That's definitely how Josh Harris and the mayor of D.C. is framing this project, is that it will bring jobs, will bring economic activity, which is usually the argument that most NFL owners bring when they're trying to make a new stadium.

16:20How are they going to fund the public portion of the deal, though? So officials want to finance that$1 billion by extending the ballpark fee, which was this tax on businesses earning more than$5 billion that they put in place to fund construction bonds for the Nationals Park, the MLB franchise in D.C. But now they're trying to rebrand that ballpark fee as a sports facilities fee and ask businesses to continue to pay that. That was supposed to expire in 2026. But now they're just saying, hey, we got a new stadium, guys. Like, you mind tossing us a few more of your tax dollars? So that is a sticking point here, though, because if you're a business and you expected this tax to go away, now they're saying that we want you to continue it.

17:03That might be something that the city council kind of pushes back on. Overall, I mean, this would be a win for fans of D.C. sports. The fact that they're all kind of coming back to the city itself. I mean, the commanders play in Landover, Maryland. It's very far away from the city. The Capitals and the Wizards were threatening to leave to Virginia, but the mayor stepped in and said, we're going to refurbish the stadium in downtown with 500 million dollars. So now they're staying. And now if the commanders come back, seems like there could be a renaissance in D.C. sports. Up next, I got a little Toby's Trends for you.

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18:21They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. A new side hustle just dropped, and it's got four walls, a low barrier of entry, and is particularly resilient to an economic downturn. It's podcasting. No, it's mobile home flipping, and it's the next Toby's Trend that I want to tell you about. Mobile home flipping has always been a slightly unsexy sector of the real estate market, but it works just like its sexier counterparts.

19:05parts. Investors shop around looking for a slightly rundown structure that they can buy for a good deal, then put a little work into, and then turn around to sell them, hopefully for a profit. It's far more approachable than flipping more traditional homes, mainly because of the price. Mobile homes are cheap, largely because the price doesn't include the land itself, just the structure. Plus, they are typically factory built, which means that mass production in economies of scale can keep prices reasonable. Then you factor in demand that is through the roof and supply that can't keep up, and you have a recipe for high occupancy and accelerating rents, aka exactly what home flippers are looking for.

19:43Neil, over the last decade, the number of new manufactured homes shipped across the country increased by over 60%, according to U.S. census data reviewed by Business Insider, and mobile homes are now the country's biggest source of unsubsidized low-income housing. So these are a critical part of the housing market that is clogged by limited supply and skyrocketing prices. It was only a matter of time before it also became a lucrative part of the real estate sector as well. And it was only a matter of time before institutional investors like private equity saw what the mom and pop house flippers were doing and saying, you know what, that sounds like a good idea.

20:18In 2020 and 2021, institutional investors accounted for 23 % of all manufactured home purchases, up from 13 % in 2017 to 2019 mobile home parks, according to Blackstone, has a 22 % annual compounded return, which is the highest in the real estate field. A lot of people who were working in this industry kind of knew that this was a diamond in the rough, and now institutional investors are circling like vultures. So if you want to do this, get in now. One other quirk of mobile home real estate is that they're typically classified as personal property. So that's something like a car, not necessarily a house.

20:56So you get lower property taxes, lower insurance costs. But that also usually meant that they depreciated like cars. When you drive a car off a lot, it loses a lot of its value. So that doesn't necessarily seem like a good asset to own if it's depreciating. But now that has been changing because of the current housing market in the United States. The price of mobile homes has jumped by almost 60 % from 2018 to 2023. So that is actually appreciating exactly like a home now. So that's what's brought these new investors in, what's brought institutional investors in as well, because they are being valued like homes, even though they are not necessarily, you know, fully baked out homes.

21:34We haven't really touched on this aspect, but what does the growth in this market say about the broader housing challenges that Americans are facing, that this sector of really cheap mobile homes is, you know, increasing like crazy is because people can't afford anything else. And they also kind of exist in sort of this alternate reality where you can go and close on them in a day. You don't need to bring in an attorney. You don't need to bring in an appraiser. You can just, you know, get the home, buy it much more cheaply and much more quickly than another home. So it fills a very important niche.

22:05And now you're seeing other, you know, bigger investors look at it as a money-making operation, not just a way to provide affordable housing for a big chunk of the population. Okay, let's sprint to the finish with some final headlines. in one of Canada's most important elections in decades yesterday, former central banker Mark Carney was elected prime minister in a stunning comeback for the liberals after they were down the equivalent of 28 to three only a few months ago to the conservatives. But then President Trump happened, slapping tariffs on Canada and repeatedly vowing to make it the 51st state.

22:39Carney, who had previously ran the Bank of Canada and the Bank of England, leaned into the fight and made standing up to Trump the central motif of his campaign, which clearly resonated with voters who despise the U.S. president. Even Trump acknowledged his impact on Canada's election in an interview with The Atlantic published before the election. He said, you know, until I came along, remember that the conservative was leading by 25 points. Then I was disliked by enough of the Canadians that I've thrown the election into a close call. Right now, Carney will have to use all his economic wily to chart a stagnating Canada's future.

23:12Yeah, if you go back to the polymarket chart of this election, it is insane. In January, Polivare, which was the conservative candidate, was in the mid to high 90 % to win. Carney wasn't even a name that voters knew, but a lot changed over that period. Yes, clearly the anti-Trump push, as well as his reputation as this good financial steward. I mean, this dude has the highest financial bona fides you can have, ran the Bank of Canada, ran the Bank of England. So those two together just kind of turned this election on its head so quickly. And I encourage you to go look at those prediction markets charts because it is just this massive jump for a guy, Carney, who some people didn't even recognize his face as recently as January.

23:54Now he is the PM of Canada. Citizens of Portugal and Spain got a longer siesta than they bargained for on Monday after huge power outages plunged large parts of the two countries into blackouts. There's still no official explanation for what caused the massive outages, but the results were acutely felt. Traffic lights were out in Lisbon, planes were stuck, trains weren't moving, and even American tennis player Coco Gauff got swept up in the outages, with an IG story of hers showing the moment the lights went dark in the locker room of the Madrid Open, the tennis tournament where she was playing.

24:27Neil, some officials are floating the possibility that the outage was caused by a massive cyber attack. But right now, there is still no official explanation. Power is slowly coming back online, but restoring Spain's power network could take up to 10 hours, the grid operator has warned. Wild scenes out there. Yeah, and it's still lingering until this morning with certain transportation networks still reporting outages, and they're still coming online. This is going to shine a pretty harsh spotlight on Spain's renewables sector. Spain has really leaned in to renewables, generating 43 percent of its power from wind, solar, wind and solar.