
Disney is not a fan of AI & broker fees be gone
Loading summary
Advertiser
Power, poise and performance. Morning Brew Daily's had some strong leaders on the show who embody these ideals. For those leaders, there's the Range Rover Sport. Distinctly British in design, it has the capability to take on roads anywhere with the latest innovation in comfort and convenience, like the cabin air purification system and active noise cancellation. Build your Range Rover Sport@range Rover.com USSport that's range Rover.com US Sport. Sport.
Neal Freyman
Good morning Brew Daily Show. I'm Neal Freyman.
Toby Howell
And I'm Toby Howell.
Neal Freyman
Today, inflation is coming on down Bob Barker style. But will the prices stay right then?
Toby Howell
Hollywood has finally had it with AI image generators copying their homework. It's Thursday, June 12th. Let's ride.
Neal Freyman
The countdown has begun. One year from today. Exactly. The U.S. men's National Team will play their first game of the World cup, which the country is hosting alongside Mexico and Canada. I'm sorry to say, but I do not believe that we will win. The USMNT has lost four straight games for the first time since 2007, including a four nil thrashing at the hands of Switzerland on Tuesday night. New coach Mauricio Pochettino, whose $6 million a year salary was partially bankrolled by Ken Griffin, is under increasing pressure to get the squad in respectable form before their World cup debut. Toby, is it time to panic?
Toby Howell
Neal, you know that feeling when you haven't prepared for a test and it's slowly creeping up, just this horrible pit in your stomach because you're so far away from being ready, but you're going to have to take it anyways? That is how I feel about this World Cup. Our boys in red, white and blue are not prepared. Let's just. Let's just face it. We lost four. Nothing. To Switzerland. To Switzerland. Neal, no disrespect to the Swiss, but I can't believe that this kind of amorphous concept, this circle far off on the sporting calendar, is very close to becoming a reality now. I just really hope we can get our act together.
Neal Freyman
Me too. And now a word from our sponsor, Domain Money. Toby, do you have an expert on Toby that knows you? I mean, really knows you?
Toby Howell
I mean, my mom does, but is.
Neal Freyman
She a certified financial planner who understands your financial goals?
Toby Howell
No.
Neal Freyman
Then it's time for you to grow up and get Domain Money. They're certified financial planners. Don't just give advice. They can give you an actionable plan forward to build wealth, save for tomorrow and navigate financial independence.
Toby Howell
All that for a flat, predictable fee. They can even improve your annual returns.
Neal Freyman
By 3% so Mrs. Howell, you got nothing on Domain Money?
Toby Howell
Mom, I'm sorry, but he's right. Check out domain money.com/mb daily and start building your financial plan today. That's domain money.com/mb daily. Quick disclaimer we are current clients of Domain Money Advisors llc. Through domain sponsorship of Morning Brew Daily, we received compensation that included a free plan and and thus have an incentive to promote Domain Money. We got inflation data yesterday and like Addison Ray's budding discography, it was pretty good. Prices rose less than expected in May as yet another month went by without major impacts from elevated tariffs. The CPI reading a broad based measure of goods and services increased just 0.1% from the month before, putting the annual inflation rate at 2.4%, still above the Fed's preferred 2% mark. But in line with economists expectations, shelter prices were a standout with their 3.9% annual increase, the smallest rate of increase since late 2021. Egg prices seem to have finally cracked too, with an 11% drop from last month to their lowest level since December. So where are these tariff induced price increases? According to a Goldman Sachs analyst quote, these tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand. All eyes now look ahead to the Fed meeting next week. Although no change in interest rates are expected, with the labor market softening and inflation cooling, Jerome Powell and co now have a clearer path in front of them. Neil, Inflation isn't doing much of anything right now, which is a good thing.
Neal Freyman
It's rising less than forecast now for the fourth straight month. And you mentioned where are the tariffs? We're just not seeing even in the particular types of goods where you would expect to see price increases from tariffs. I'm talking apparel prices. We get virtually all of our apparel from overseas. We now have tariffs on those products. While apparel prices fell 0.4% in May. What about autos, new car prices? Those also have tariffs on them now? Well, new car prices fell by 0.3% last month. So whatever is going on, whether it's stockpiling or companies just kind of eating those extra costs and not passing them on to consumers yet it's happening.
Toby Howell
One subplot to this data collection is the fact that the agencies responsible for, you know, coming up with the CPI port, that's the Bureau of Labor Statistics, they are staring down some major staffing shortages as well, creating some concerns about the quality of data that it is actually ingesting. The way that the CPI report is generated is pretty much by going out and doing the dirty work. Hundreds of enumerators, as they're called, go out to brick and mortar stores across the country and they actually document the prices of specific products that then is converted into the CPI reading. But if you have fewer enumerators, that means more educated guessing is going on. So even though this was a pretty solid report overall, there exists some growing concerns about this gradual erosion of the trustworthiness of some of this federal data that markets the Fed all rely on. So that's just if 1A is the headline that inflation is mellowing out a little bit, 1B is that there are some fears that the data we're actually collecting isn't as high quality as it could be.
Neal Freyman
And that's because there's been a hiring freeze across the federal government. But overall, you said, look, we're looking to the Fed meeting. I think Fed chair Jerome Powell has been in wait and see mode for the better part of a year because the economic forecast is just too cloudy to make any decisions. Well, maybe the clouds are parting just a bit from this report because based on the jobs report we got last week, we saw that the labor market is cooling. Now with inflation here, it also looks like inflation is cooling. And there's still a lot of question marks around that. But the overall trend line does seem to be that way. Perhaps Jerome Powell can maybe peer through the fog right now and say, okay, I think maybe it's time that we can cut because there's been so many question marks about whether these tariffs would spark inflation and then an interest rate cut would even pour more gasoline on that fire. So we got a cooling labor market, we got cooling inflation. We got in various surveys people in America saying we expect less inflation because of these sort of the trade detente that's going on. They you might see an increased bet on the Fed to cut rates not at this particular meeting, but when they meet in September.
Toby Howell
Yeah, the base case right now that the market is pricing in two rate cuts probably in the back half of 2025. Right now there's still no signs that the the latest the next meeting is going to bring a rate cut. It still looks like it's going to be in the back half of the year. Disney and Universal are done Mickey Mouse and about when it comes to AI dropping the hammer yesterday by suing the image generation startup Midjourney for copyright infringement. The lawsuit contends that Midjourney helped itself to a bunch of copyrighted materials from Disney and Universal's stable of characters to train its software. Quote, Midjourney is the quintessential copyright free writer and and a bottomless pit of plagiarism, the lawsuit says, which sounds a lot like my academic career in high school. Midjourney is not the first and won't be the last AI company sued for scraping the Internet without compensating creators. The New York Times, for instance, has sued OpenAI on similar grounds. But Disney and Universal are the first major Hollywood studios to get in on the act. The framing of the case is that Mid Journey violated copyright in two ways. One, by training its AI model on intellectual property and two, by generating images that display that protected ip. It's that freeloading that quote threatens to upend the bedrock of incentives of US copyright law that drive American leadership in movies, television, other creative arts. It's a bedrock that holds up a film and TV business that supports over $229 billion in annual wages for midjourney. It's a threat to one of the more popular text to image generators on the Internet as it now has to go toe to toe kneel with one angry mouse and a bunch of minions.
Neal Freyman
Disney was not going to sit this out. They are the most litigious company maybe in history. So we were kind of waiting for them to sue an AI company for stealing their ip. And when you combine Disney and Universal their IP libraries, it's pretty, it's pretty much something to behold in their lawsuit. So these were Disney and Universal included dozens of images from their popular characters that they alle Mid Journey was stealing. I mean, here's the list. Yoda, Wally, Deadpool, Iron Man, Lightning McQueen, Aladdin, Spider Man, Groot, Elsa from Frozen, Guardians of the Galaxy and a ton of Star wars characters. Chewbacca, Stormtroopers. And they even called out specifically. There was an entire section on Darth Vader specifically saying that when you prompt Mid Journey, say show me a picture of Darth Vader, it shows you a picture of Darth Vader and that is copyright infringement according to Disney.
Toby Howell
Yeah, I think why Mid Journey specifically was targeted here is that it it with such little friction it just immediately obliges. You want to see Darth Vader? Here's Darth Vader. I was playing around with chat CBT this morning and its image generation tool and if you ask it to generate Darth Vader goes no, can't do it. It violates copyright features. It has this filter over some of that ip. I mean you can get around a little bit. I started pushing the boundaries a Little bit. And if you say give me a sith like character surfing for some reason, it will then generate that image. So not a perfect system, but certainly midjourney was the low hanging fruit here because it clearly trained its library on these characters because the image generation outputs that it creates look exactly like Darth Vader.
Neal Freyman
So the big picture here is that a bunch of these publishers, and now Hollywood companies, giants are suing these AI companies, accusing them of copyright infringement. New York Times With OpenAI, that's probably the biggest lawsuit going on. But Universal and Disney, their size, their half, their influence, what these new AI tools mean for the movie and TV industry will certainly be up there like 1A, 1B in terms of the significance of the lawsuit.
Toby Howell
And one thing that they definitely want to stop is Mid Journey is coming out with a new video tool this month. So of course image Generations are bad, but they are a Hollywood movie studio. Both of these are Hollywood movie studios. So you if they start infringing on that territory, that's where they really want to stop this in the tracks before it gains even more popularity.
Neal Freyman
Moving on. Yesterday was essentially a religious holiday for the people of New York City because a law went into effect that means renters no longer have to pay a broker fee before they move into an apartment. For decades, New York City tenants were on the hook to pay a broker a one time fee once a contract was signed on a new place. But the Fair act for Fairness in Apartment Rental Expenses alleviates them of that burden and instead shifts the broker payment to the landlord. New York City was just one of two major North American cities that had the tenant pay the broker fee. With this change, Boston is the final holdout because of course, it is for renters. The law could eliminate a huge component of the upfront costs required to move into a new home. The broker fee isn't standardized across the city, but it typically ranges from 10% to 15% of a full year's rent. For a $3,000 a month apartment, the broker fee could run up to $5,400. Yeah, it is a nightmare to move here. So home costs are going to be a lot cheaper, right? Not so fast, because landlords aren't going to eat the new broker fees by themselves. The Wall Street Journal reported that New York City apartment seekers woke up yesterday to the biggest overnight rent increases in the city's modern history as owners foisted their new costs onto prospective tenants. That is exactly what opponents of this law, like the real estate industry, were warning about. They argued that by putting the Broker burden on landlords, rents would surge. Of course, it's all very early, so we don't know exactly how this is going to shake out, but a significant moment in real estate history nonetheless.
Toby Howell
Yeah, it lops off a ton of money that you had to kind of shell out upfront, which was just a massive expense. I mean, I just went through this process, which kind of stinks, honestly, because I did pay a broker fee, even though we were one month away from this fair act coming into play. So, yeah, that stings a little bit. But if we just go back into the history of why brokers were even a thing in the first place. Back in the pre Internet days, they were kind of a gatekeeper to a lot of listings. You needed to have a broker to find the best apartments. But now that StreetEasy exists and all these other sites exist Zillow, you can see the inventory. So that's why it just hurt even more and why it became almost anachronistic, that feeling of paying a broker, even though you didn't even interact with them until maybe they unlocked the door for you. So that is a reason why this fair act gained a lot of momentum. But I will say New York is quite the rental market. No other city on earth really comes close for one 70% of residents in the city rent. That puts a ton of pressure on supply. You go back to listings. Last April, 1.6 million people were looking to rent. There was just 6,300 active rental listings in the entire five boroughs. So vacancy rates are super low here. So that is why the New York Real Estate Board and a lot of these real estate groups are arguing that this lawsuit is going to jack up rents, is going to make the supply crunch even worse because they're just going to start passing those broker fees on to people in the form of raised rents.
Neal Freyman
What this really is going to do, you know, one effect it definitely will have is encourage more mobility so people will move more because the upfront costs have come down. You were stuck in your apartment for so long maybe because you're like, well, I'm paying like a lot in rent, but when I move, I'm going to have to pay that huge broker fee to begin with. And that's what you just dealt with. So whoever wins from this, maybe it'll be renters. But who will definitely win is moving companies, because everyone's going to move.
Toby Howell
Speaking of moving, let's move on. Up next, we're going to serve you up a hearty helping of news numbers. If you're Taking your business abroad make sure your finances are ready to go global with Wise Business. Wise Business is the account for doing business in other currencies.
Neal Freyman
Wise Business accounts have the tools you need to do business abroad, process payments, get paid and manage your money from anywhere around the world. And Wise Business doesn't break the bank. There are no hidden fees, no markups on the exchange rate and no ongoing subscription cost.
Toby Howell
Getting started is simple. You can make payments in just a few minutes. Wise Business also integrates with your sales and accounting software so you can streamline your financial processes.
Neal Freyman
To learn more about how you can use Wise Business to save time, money and stress, visit wise.com/business that's wise.com/business.
Toby Howell
With all the heat you'll probably be experiencing this summer, your monthly wireless bill shouldn't also be making you sweat.
Neal Freyman
That's why with plans Starting at just $15 a month, Mint Mobile is helping users chill, literally and financially. And for a limited time, Mint mobile is offering three months of unlimited premium wireless service for 15 bucks a month.
Toby Howell
All Mint Mobile plans come with high speed data and unlimited talk and text delivered on the nation's largest 5G network. No more sky high monthly bills, data overages or surprise charges.
Neal Freyman
You can still use your phone with any Mint Mobile plan and bring your phone number along with all of your existing contacts.
Toby Howell
This year, skip breaking a sweat and breaking the bank. Get this new customer offer and your three month unlimited wireless plan for just 15 bucks a month at mint mobile.com/morning brew that's mint mobile.com/morning brew upfront payment.
Neal Freyman
Of $45 required equivalent to $15 a month limited time new customer offer for first three months only. Speeds may slow above 35 gigabytes on unlimited plan taxes and fees extra C Mint Mobile for details welcome to Neil's Numbers, the segment where I share three stats from the week's news that will have you hitting every fairway at Oakmont. My first number is more than 700, which is how many stock trades were placed by House lawmakers and their families in the six days between April 2, when Trump announced Liberation Day tariffs on the rest of the world and April 8, when he rescinded most of them. That period was one of the most volatile for the stock market in recent memory and attracted more trading volume than any other period since records began began in 2007. Lawmakers weren't planning on sitting it out. According to a Wall Street Journal analysis, House members and their families placed more trades in April than any other month of the past year. Some like Republican Marjorie Taylor Greene, were big buyers. She scooped up at least $28,000 worth of stocks like Amazon, FedEx and Palantir. Others yoloed into riskier bets like options. Democrat Josh Gottheimer of New Jersey tapped a call options trade tied to Microsoft stock on April 4, a company he used to be an executive at. The trading flurry around Trump's tariff announcements has increased scrutiny on the ability of policymakers to play the stock market. While backlash has risen in the past few years, notably around prolific trader former House Speaker Nancy Pelosi, it hasn't led to any reform. Many lawmakers have called for a stock trading ban to no avail, including Reps. Ro Khanna and Rob Bresnahan. And I mentioned those two because, according to the Wall Street Journal, they and their families reported the most stock transactions of anyone else in the House in the week following Liberation Day.
Toby Howell
I think we all forget how crazy of a time that was in the stock market. First of all, I mean, we were having like the biggest gains and the biggest losses back to back. But the first thing I did when I saw this headline is I wanted to know who made out with some money, who made profitable trades here. And unfortunately, the way stock disclosures work, you can't really pinpoint exactly how much money they made or loss. For instance, a typical purchase disclosure might read that a member bought between $1,001 and 15,000 of stock on a given day. You don't have to give specific amounts or the exact size of the investment. So that is a little bit of a bummer because I did. If all these people are trading, I want to see who actually made money, who lost money. But it's just a little bit difficult to pin down the exact numbers.
Neal Freyman
Now, the Wall Street Journal reached out to all these lawmakers that they did this analysis on and to a t spokespeople for them said, look, I wasn't actually making trades. I have an outside financial advisor who did this without my knowledge, and they didn't talk to me. And so they sort of, you know, deflected it to their third party financial adviser, saying, I don't really know what's going on. It was a crazy time in the stock market. Literally everyone else was trading. But that's not going to stop the criticism at all. Meanwhile, there's another bill that's coming through Congress right now. It's bipartisan AOC Chip Roy of Texas, who's a Republican. They're working on a new bill, so we'll see if anything amounts to it but over the past few years it's certainly been this outcry over certain trades that are made and then sort of silence on this on the side of congressional lawmakers who actually need to put this into place for my next number. A few Waymo cars may be burned to a crisp in L A, but all the other ones are out there busy saving lives. A forthcoming study, the most comprehensive analysis of self driving car safety ever released, found that self driving cars are far safer than human drivers. According to Vox, Waymo analyzed the performance of its fleet of cars across 56.7 million miles driven in San Francisco, Phoenix, Louisiana and Austin and found that compared to human drivers, the robo taxis had 81% fewer airbag deploying crashes, 85% fewer crashes with suspected serious or worse injuries, 92% fewer crashes than that involved injuries to pedestrians, and 96% fewer injury crashes at intersections. In one sense, this shouldn't be surprising. Self driving cars don't need to respond to texts. They don't get tired, they never drink, they don't belt the chorus to Pink Pony Club with their eyes closed. Human drivers do all that with as much as a 2.5 second gap between you perceiving something and reacting to it in a car traveling 60 miles per hour. That's contributed to the nearly 40,000 traffic fatalities in the US last year. Deaths that perhaps could be preventable with more Robo taxis.
Toby Howell
Yeah, this was an eye popping study because especially actually this was relatively small when it comes to the actual amount of miles driven. 56 million miles feels like a lot, but drivers across the US typically log 3.3 trillion miles a year, so there is obviously a big delta there. So that could mean that this study could. It might be overstating the safety impacts, but it also might be understating because if you start to extrapolate those numbers across 3.3 trillion miles driven, that is a lot of lives that you start to save. You know, 40,000 deaths a year, if you can start chipping away at that, that is one of the underrated parts of this autonomous driving revolution is just how much safer the roads could actually end up being.
Neal Freyman
For my final number, here's a little trivia question for you. Which US restaurant chain generates the most revenue per location? Pause here if you want to venture a guess. Okay, the answer is Din Tai Fung, a Taiwanese soup dumpling chain. And it is not even close. Din Tai Fung. Sixteen U.S. locations generated an average of $27.4 million last year, which is almost double second place. The steakhouse Mastros. According to industry researcher Technomic. Here's some more context on just how ridiculously lucrative Din Typhoon stores are. As restaurant business notes, the company's revenue per store would be like combining two Cheesecake Factories into one restaurant. Nearly four Chick Fil A and a little under seven McDonald's. If you haven't heard of Din Typhoon, it began in 1958 as a cooking oil company but transformed into a noodle business and first landed in the US in 2000. Business is booming across 180 locations in 13 countries. It did $412 million in total sales last year, an almost 20% annual increase. It's famous for its xiaolong bao or soup dumplings. But scoring some is notoriously hard and will probably require you to wait in a line. Toby, think you could have guessed this?
Toby Howell
No. I know I couldn't have guessed this because you quizzed me on this and I immediately said Chick Fil A because I thought that that was the gold standard. But then Tai Fung just has one, a higher average check size, two, they're big and three, they're busy. And that's the holy grail of just ripping revenue per location. So I do want to give. So if you go to the other top five, there's three steakhouse restaurants with between like 10 to 20 locations. And then you have the Cheesecake Factory that comes in six place 12 million per location, but it has 250 locations. So I know this is about Din Typhoon, but I also want to put some respect effect on the Cheesecake Factory's names because then Tai fung only got 16. Cheesecake Factory, 215. Those things are big and they're still ripping in revenue. So just.
Neal Freyman
You don't think Cheesecake Factory has enough respect to its name?
Toby Howell
I don't know. I mean I just wouldn't have put it at number six on this list. I mean it's a, it's above Nobu. Like it's making more money per restaurant than Nobu. But yeah, Din Tai Fung, that was an eye popping number. Like it is not even close how much more money it's making per location. So I've never had it. I haven't contributed.
Neal Freyman
We got to go. They just opened one in midtown and apparently the line is extremely long. So that was, that was like one of the most hyped restaurant openings of the past few years is because there is so much excitement around this particular chain. There's not that many in the United States and you've been, you've no I haven't been.
Toby Howell
Oh, you haven't been either?
Neal Freyman
No.
Toby Howell
We got a date. Let's do it.
Neal Freyman
Okay, let's run to the finish with some final headlines. Elon Musk is saying, I want you back to President Trump after their very public blow up last week. The world's richest person sent a flurry of 3am tweets on Wednesday saying he regrets some of his posts about Trump, claiming they went too far. Perhaps he was referencing when he endorsed Trump's impeachment or claimed without evidence he was on the Epstein list. Either way, Musk has since deleted some of those most scathing posts and appears ready to make up unclear if this has any connection to Tesla's $150 billion wipeout during the falling out day last week, the biggest one day plunge in the company's history. Toby, things seem to be a okay between those two.
Toby Howell
I mean, who among us haven't fired out a couple of 3am texts or tweets? Kind of regretting some things you said earlier. So I do think that Tesla especially are pretty happy with kind of this makeup arc that Elon is on. You look at the stock, it's gained four straight sessions. It's up about 10% of this week as Elon is kind of refocusing, maybe making up with the administration, but also refocusing on his businesses. Because June 22 is a big date coming up for Tesla. That is when they're tentatively launching their Robo taxi in Austin, Texas. So check, mark, check the box off that make up with Trump. And then the next big box that Tesla and Elon has to check is launching this robotaxi. Nintendo's new Switch console is selling like hotcakes. The company announced that it had already moved three and a half million switches twos in its first four days, a new record for the 130-year-old company. Despite fears that the much higher $450 price tag might scare away some gamers, quite the opposite has been true. Significant upgrades to performance, graphics and screens while keeping a familiar form factor has been a winning formula. Still, if it wants to catch up to its elder sibling, the original switch, it's got 148.5 million units to go. Three and a half million, Neil. Not a bad start, but respect your elders.
Neal Freyman
Not a bad start. It's the best console launch of all time by a big margin. PS5 shipped 4.5 million units in its first seven weeks. We're talking 3.5 million here in four days. PlayStation 4, 2.1 million in a little over two weeks. And yes, the original Nintendo Switch has sold over 150 million units, but it's been around since 2017. In its first month, it sold 2.74 million. So Nintendo Switch is on an absolute rocket ship trajectory. Extremely popular product and, you know, a historic opening.
Toby Howell
I've seen more Mario Kart Open World clips on my social media feeds than I've ever seen of the game before. And I want to play it. It's just literally people driving around doing nothing. But it looks fun. I don't know how to describe it.
Neal Freyman
Finally, the music world is mourning the tremendous loss of Brian Wilson, the leader and chief songwriter of the beach Bo, who has died at 82. When you hear Beach Boys, you might think, oh, surf in usa, Southern California sun, convertibles, let's all go have some fun. But Wilson was a far more innovative artist than that gives him credit for Pet Sounds, the Beach Boys album with Wouldn't It Be Nice and God Only Knows was a seminal album of the 20th century, ranking number two on the Rolling Stones Greatest Albums of All Time list. Wilson's sophisticated compositions and complex vocal harmonies earned the praise and jealousy of his musical rivals like the Beatles. Beatles producer George Martin once acknowledged that Sgt. Peppers would not have happened if not for Pet Sounds. And Bob Dylan said Wilson needs to donate his ear to the Smithsonian.
Toby Howell
Yeah, Paul McCartney called God only Knows the greatest pop song ever written, which is pretty high praise. And then also Elton John said in 2021 documentary that he had an orchestra in his head. Just the highest praise from the biggest musicians of the last hundred years here. And we were listening before the show. The Beach Boys have so many bangers too. Like, I know 10 songs. I don't really listen to all the music God Only Knows. It's just a fantastic song. If anyone's seen, you know, the End of Love. Actually that's probably maybe what I associate it with, but this group made the Billboard top 4036 times in 36 years. Just an absolute powerhouse of musician and a big loss for the music community.
Neal Freyman
That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. We are so close to the weekend. If you have any thoughts on today's episode, send an email with questions, comments or feedback to Morning Brew daily at Morning Broadcom. Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup is picking up Good Vibrations. Devin Emery is our president and our show, a production of morning brew.
Toby Howell
Great show today, Neil. Let's run it back tomorrow.
Morning Brew Daily: Episode Summary Release Date: June 12, 2025 Episode Title: Disney and Universal Sue AI Image Company & NYC Broker Fees Are Banned
In this episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell delve into pressing topics affecting the economy, technology, and the real estate market. From the latest inflation trends to high-stakes lawsuits in Hollywood and significant changes in New York City's rental landscape, the duo offers insightful analysis to help listeners stay informed.
Neal kicks off the discussion by highlighting the recent inflation data, revealing that the Consumer Price Index (CPI) for May increased by a modest 0.1% from the previous month, bringing the annual inflation rate to 2.4%—a figure still above the Federal Reserve's target of 2%. Notably, shelter costs saw a 3.9% annual rise, the smallest since late 2021, and egg prices plummeted by 11%, marking their lowest level since December.
Neal notes, “Inflation isn’t doing much of anything right now, which is a good thing” (02:31). However, Toby raises concerns about the reliability of CPI data due to staffing shortages at the Bureau of Labor Statistics, potentially undermining the trustworthiness of economic indicators essential for Fed decisions.
As the Fed prepares for its upcoming meeting, the hosts discuss the likelihood of maintaining current interest rates. They anticipate that with a cooling labor market and easing inflation, Federal Reserve Chair Jerome Powell might consider rate cuts in future meetings, though not imminently.
Notable Quote:
“Neal, you know that feeling when you haven't prepared for a test... That is how I feel about this World Cup.”
— Toby Howell (01:32)
A significant portion of the episode is dedicated to the landmark lawsuit filed by Disney and Universal against Midjourney, an AI image generation startup. The studios accuse Midjourney of copyright infringement, alleging that the company used their vast libraries of copyrighted characters to train its AI without permission.
Neal summarizes, “Midjourney is the quintessential copyright free writer and a bottomless pit of plagiarism” (08:41), emphasizing the gravity of the situation as Disney and Universal, powerhouse studios with extensive IP portfolios, take a stand against AI-driven content creation. The lawsuit contends that Midjourney not only trained its models on protected intellectual property but also generated images that directly infringe upon these copyrights.
Toby adds, “If you prompt Mid Journey, say show me a picture of Darth Vader, it shows you a picture of Darth Vader and that is copyright infringement according to Disney” (09:36). This case is poised to set a precedent for how AI companies obtain and utilize creative content, potentially impacting the entire AI and creative industries.
Notable Quote:
“They are a threat to one of the more popular text to image generators on the Internet as it now has to go toe to toe kneel with one angry mouse and a bunch of minions.”
— Neal Freyman (10:18)
In a historic move, New York City has enacted the Fair Act for Fairness in Apartment Rental Expenses, eliminating the requirement for renters to pay broker fees when securing a new apartment. Previously, tenants were responsible for broker fees ranging from 10% to 15% of the annual rent, translating to substantial upfront costs.
Neal explains, “The broker fee isn't standardized across the city, but it typically ranges from 10% to 15% of a full year's rent” (11:04). For a high-demand market like NYC, this change is expected to significantly reduce the financial burden on renters. However, Toby points out the immediate consequence reported by The Wall Street Journal: landlords are absorbing these costs by increasing rents overnight, marking the largest rent hikes in the city's recent history.
The hosts discuss the broader implications, noting that while the policy aims to make moving more affordable and encourage tenant mobility, it may inadvertently exacerbate the already tight rental market by pushing landlords to pass broker fee costs onto renters through higher monthly rents.
Notable Quote:
“Back in the pre Internet days, they were kind of a gatekeeper to a lot of listings.”
— Toby Howell (12:36)
Neal presents three key statistics:
Lawmakers’ Stock Trades: Over 700 stock trades were executed by House lawmakers and their families in a volatile six-day period surrounding President Trump's tariff announcements. This surge in trading activity has heightened scrutiny over potential conflicts of interest, though calls for stricter regulations remain unaddressed.
Self-Driving Cars’ Safety: A comprehensive study by Waymo reveals that self-driving cars are significantly safer than human drivers. With 56.7 million miles driven, Waymo's autonomous vehicles had 81% fewer airbag-deploying crashes and 96% fewer injury crashes at intersections compared to human drivers. Despite representing a small fraction of total miles driven in the U.S., the potential for reducing the nearly 40,000 annual traffic fatalities is substantial.
Restaurant Revenue: Din Tai Fung, a Taiwanese soup dumpling chain, leads U.S. restaurant chains in revenue per location, averaging $27.4 million per store. This figure nearly doubles that of competitors like the Cheesecake Factory and underscores the profitability of high-demand, specialized dining establishments.
Notable Quotes:
“I did. If all these people are trading, I want to see who actually made money, who lost money.”
— Toby Howell (18:09)
“Self driving cars don't need to respond to texts. They don't get tired...”
— Neal Freyman (20:57)
Elon Musk’s Public Reconciliation with Donald Trump: Following a series of controversial tweets, Elon Musk expressed regret over some of his statements about former President Trump, deleting several posts and signaling a potential reconciliation. This comes amidst Tesla’s recent stock volatility and the anticipation of their Robo-taxi launch in Austin, Texas.
Nintendo Switch’s Record Sales: Nintendo’s latest Switch console has surpassed expectations, moving 3.5 million units in its first four days, setting a new record for the company. Despite concerns over its higher price point, the console’s upgrades have resonated with gamers, positioning it for continued success against established rivals like the PlayStation.
Passing of Brian Wilson: The music world mourns the loss of Brian Wilson, the visionary leader and chief songwriter of The Beach Boys. Celebrated for masterpieces like "Pet Sounds" and "God Only Knows," Wilson’s innovative contributions to music have earned accolades from industry giants, solidifying his legacy as a pivotal figure in modern music.
Notable Quote:
“God only Knows the greatest pop song ever written, which is pretty high praise.”
— Toby Howell (27:53)
Neal and Toby wrap up the episode by reflecting on the impactful discussions of the day, from economic indicators and legal battles in the tech and entertainment sectors to transformative changes in real estate practices. The hosts encourage listeners to stay engaged and informed as these stories continue to develop.
Final Quote:
“We are so close to the weekend.”
— Neal Freyman (28:34)
Credits:
Executive Producer: Emily Milian
Producer: Raymond Lu
Associate Producers: Olivia Graham & Olivia Lake
Production: Morning Brew