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LA Wildfire Victims Fight Price Gouging & RTO Brings Fresh Office Fits
00:30:37
Authorities warn against price gouging & workers try to look good for the office
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- [00:01]
Neal Freyman
Good morning, Brew Daily Show. I'm Neal Freyman.
- [00:04]
Toey Howell
And I'm Toey Howell.
- [00:05]
Neal Freyman
Today, reports of price gouging by Los Angeles landlords threaten to escalate the city's housing crisis.
- [00:11]
Toey Howell
Then people are finally revamping their wardrobes and retailers like Lululemon and Abercrombie are cashing in. It's Tuesday, January 14th. Let's ride.
- [00:24]
Neal Freyman
Toby, have you found your inner excellence?
- [00:27]
Toey Howell
Know what, Neil? I'm still working on it.
- [00:29]
Neal Freyman
Well, maybe I can help you. See, there's called Inner Excellence and although no one had heard of it two days ago, it was the number one bestseller on Amazon yesterday. It's all because of a viral clip from a football game on Sunday. Eagles wide receiver A.J. brown was caught on camera flipping through a book on the sidelines during the Eagles playoff game. And commentator Tom Brady remarked he had never seen that before in all of his playing days. That book was discovered to be Inner Excellence, written by performance coach Jim Murphy, and it sports spike to the top of the charts. Brown says he loves this book and brings it to every single game to give him a sense of peace. Toby, you played college soccer. Did you have a book you turned to to get in the right mental state?
- [01:12]
Toey Howell
Neil, Neil, Neil. I was never on the bench with time to read a book. I actually did have a book though. I used to read Inner Game of Tennis before every soccer game because one of my assistant coaches gave it to me before one of my first starts ever. I scored a goal in that game. So then it just became a ritual beforehand. What I'm most excited about though, is that all these toxic Philadelphia fans are suddenly going to become the most, you know, positive, selfless people because they're going to follow in A.J. brown's footsteps. I'm just happy for the city of Philadelphia. Maybe they're actually going to live up to their name as city of brotherly Love. Now a word from our sponsor, public.com Neil, remember we when TV remotes had like 45 buttons on them, none of.
- [01:55]
Neal Freyman
Which work I do.
- [01:56]
Toey Howell
Well, old school investing platforms are kind of like that, but public. It's like having the ultimate universal remote, right?
- [02:03]
Neal Freyman
Stocks, bonds, crypto options all at your fingertips without jumping between different apps and their AI assistant.
- [02:09]
Toey Howell
Alpha is like having a personal investment channel guide, giving you insights on any stock you're curious about.
- [02:15]
Neal Freyman
Plus that 4.1% APY high yield cash account is like finding your favorite show is always on.
- [02:21]
Toey Howell
To upgrade your investment experience, check out public.com, com/morning brew. It's investing made easy Paid for by Public Investing. Full Disclosures in Podcast Description for his.
- [02:32]
Neal Freyman
Day job, Jason Oppenheim owns a luxury real estate brokerage that's the focus of the Netflix reality show Selling Sunset. Now, in the aftermath of the wildfires that devastated L A neighborhoods, he's calling out a practice many of those who lost their homes are dealing with price gouging. In an interview over the weekend, Oppenheim accused landlords of illegally jacking up prices on rental homes to take advantage of advantage of desperate people looking for a roof over their heads. He mentioned sending a client to visit a property that had previously been listed for rent of $13,000 a month. When the client got there, the landlord demanded $23,000. There have been numerous reports like this, corroborated by California's Attorney General, Rob Bonta, who said he's seen businesses and landlords raise prices above the legal limit. That legal limit is 10% above the pre disaster cost. As part of a price gouging law California implemented when it declared a state of emergency last Tuesday, Bato warned that he and other authorities would eagerly prosecute anyone who hiked rents for vulnerable people and go after others participating in white collar scams. Toby these fires have so far destroyed more than 12,000 structures, many of them homes, leaving tens of thousands of people seeking temporary places to live. It's an unprecedented housing crisis on top of an existing housing crisis in Los Angeles.
- [03:52]
Toey Howell
Yeah, people are pretty desperate to get into a house right now, so a lot of them just end up throwing money out of place. They'll go see any place just to get a roof over their head. And of course, unfortunately, you have people taking advantage of this, despite what California laws actually say. And you mentioned that L A County was already facing a housing crisis. That was even before you factor in these estimated 12,000 structures burning down. Part of it is just California is very expensive place to live. There's not a land. There's a very strict regulatory environment in a limited housing supply. So if you just look at rents across Los Angeles, they're averaging $2,820 on Zillow. And it all combines to send rents in Los Angeles to be much higher than the national average. Rent in Los Angeles averages $2,820, which is higher than the national average of $1,983, 33% higher than the national average. And then you toss in rebuilding factors as well. That brings in a whole host of new problems. So they're not just getting rent gouged when they're trying to Find a roof over their head. But also, you're looking ahead and kind of staring down a lot of rebuilding issues as well.
- [05:00]
Neal Freyman
Yeah, I just want to put a point on the price gouging. Let's talk about the reports that have been mentioned. There was one real estate broker who pulled 400 listings from their agents listing service in Central Los Angeles and San Fernando Valley. Of more than 400 listings that they pulled, about 100 has had raised rent more than 10% since Tuesday. The the L A Times found a property in Encino that had been listed for $9,000 a month earlier. In January, after the fires, it was now on Zillow for 11,500. The news outlet L A list found a property in Bel Air listed on Zillow for $30,000 a month as of 11, January 11, which was three days ago. That was almost double the $16,000 a month that the property was listed at in September. So this is a widespread practice, and once these news outlets find it and call it out, it seems like they kind of disappear from Zillow or they go back down to the 10% threshold. It's unclear whether the algorithms behind pricing are driving, you know, are driving this increase because they respond to demand or landlords are doing this knowingly. Either way, it is illegal. But you did mention rebuilding in L A. California Governor Gavin Newsom has talked about, or is already talking about L A 2.0. There are huge events happening in Los Angeles in the coming years. You have the World Cup. They're hosting a bunch of Games in the World cup next year, and then they have the Olympics in 2028. So there is a huge rebuilding plan. One thing he did do was sign an executive order that limits that scraps or suspends some of those harshest environmental regulations that have constricted housing in California and led to it being the costliest and longest place to get a building project done.
- [06:49]
Toey Howell
Yeah, there's definitely some question marks about L A 2.0, because the group behind the Olympic Games has set a budget of around $7 billion. Taxpayers, though, would be on the hook if you do go above for any cost overruns above that $7 billion threshold. So that obligation and the fact that maybe taxpayers could be on the hook for even more costs in the future, even as they're trying to rebuild, has called some, has prompted some people to say that L A should pull itself out of the Olympics. They have enough to deal with with rebuilding from these fires. Maybe the International Olympic Committee isn't something that they need to deal with. At the current moment, and then not even to mention the World cup that comes even before the Olympics in 2028. So L A 2.0 is going to have some challenges, but already Gavin Newsom and many in California are looking ahead, trying to figure out how to plot a way forward from this tragedy. People are finally trading in their Covid era sweats for new chinos, and retailers are cashing in. Lululemon and Abercrombie reported tasty earnings yesterday, with both raising their guidance for the year ahead, forecasting that shoppers will keep spending into the new year. Credit card networks corroborated this, seeing a jump in closed shopping, with Visa and MasterCard both reporting an over 5% bump in the category over the holiday period. But a solid quarter wasn't enough to impress Wall Street. Lulu and Abercrombie ended up trading lower yesterday, with Abercrombie falling as much as 18% as traders digested the good but not great forecasts and worried that sales increases have been powered by discounts that eat into profit margins. Despite trading in the red, it does look like wardrobe revamps are ticking upwards as return to office mandates from major employees like Amazon and JP Morgan prompt shoppers to trade in their sweatpants for something more work appropriate. Neil People are trying to get their style identities back.
- [08:47]
Neal Freyman
They really are. I mean, if you bought a holiday gift for someone while you were shopping, you probably picked out a piece of clothing for yourself. Apparel spending over the holiday season was essentially on par with electronics. I think this does have a lot to do with those discounts that retailers rolled out. It was just cheap to buy clothes. The apparel category had the highest discount rate in the US of any category at about 33% this holiday season. And then if you look at broader inflation over the past couple of years, apparel has stayed pretty flat relative to the overall trends. Clothing prices have rose just 1.1% between November 2020 to 23 and November 2024. Overall rate was 2.7%. Footwear has just basically stayed flat. It's budged up 0.7%. So and then you have all of these discounts rolling out as well. So I think people just found value. They bought those three for $50T shirts or whatever they needed to do to maybe perhaps it's going back to work because we know Amazon, JP Morgan, a bunch of other big corporations have pulled people back to the office and you can't go in your sweats anymore.
- [09:55]
Toey Howell
And just anecdotally NBC talked to a few personal stylists who have said that they are hear more clients acts ask for back to office outfits. Once NBC talked to estimated that a quarter of new clients are coming in asking her for help putting together an outfit for work. I think we could use a little help as well Neil.
- [10:16]
Neal Freyman
Looking at Aaron, Mega is not doing.
- [10:17]
Toey Howell
They're not doing their job. It is interesting though because I said that a lot of those companies reported strong earnings but you saw their stocks fell. Abercrombie is one of those big names that fell a lot yesterday and it's almost like they're a victim of their own success. They have had blowout quarter after blowout quarter. They've had this big renaissance that we've talked about multiple times on the show and it's just tough to keep that momentum going. Even though they are forecasting over 15% sales growth in the new year, that's just not enough for investors at this point. Some other winners of potentially this back to office shopping boom Gap raised its full year outlook after a strong start to the season. Nordstrom said it was seeing shoppers snag more clothes in the under that $100 threshold, looking for a good value as well. Lululemon expects sales to grow between 11 and 12%, which was a slight revision upwards. And then Urban Outfitters actually released their holiday results and said that they grew 10% compared to a year ago. So we are seeing these modest, not blowout increases maybe like we saw coming out of COVID but still increases as people are trying to, you know, revamp and refresh in their wardrobe.
- [11:28]
Neal Freyman
I'm excited to see all of your new fits. All right, Made in China tags are taking over the world. China is making so much stuff and selling it abroad that it ran a trade surplus last year that's almost unheard of in modern history. That surplus, which came out to nearly $1 trillion for 2024, mean China's factories are dominating the world's manufacturing at levels not seen since the US post World War II, according to the New York Times. Let's quickly define our terms. A trade surplus is the value of a country's exports minus the value of its imports. Last year, China exported $3.6 trillion worth of goods and services and imported 2.6 trillion. That gap, when adjusted for inflation, dwarfs the export numbers put up by manufacturing powerhouses like Germany, Japan and the US over the last century. It reminds me of what NBA player Klay Thompson said Sunday night after scoring his 16,000th career point, an incredible accomplishment. But when asked about it after the game, he remarked, it's cool, but it makes you realize how ridiculous it is that LeBron has 40,000. It's insane in terms of exports. The rest of the world is clay. China is LeBron. Yeah, so I know your mind.
- [12:41]
Toey Howell
I'm still processing that, that clay lebron metaphor right there. One thing that did propel it to this record year was a very strong December too, because a lot of shipments were rushed to the United States because what is coming the incoming presidential administration, Donald Trump, before he can start take office and start raising tariffs on China, a lot of brands and companies imported goods to get out ahead of those tariffs. So that led to a new single month record surplus of $104 billion. It is just truly domination at this point. Some of the industries that China dominates the most are things like cars, solar panels. They have been flooding the global market with these things, leading to an economic bonanza for the country. But also potentially it's too much of a good thing, depressing some of the prices of these cheap goods. It has led to a rising tide, floats all boats within the country though, because exports create jobs not only in the factories, but it also, you have to have these high earning designers, these high earnings engineers, research scientists as well. So it really has been an economic boom for China. Of course it's going to be a boom because when you're running this much.
- [13:52]
Neal Freyman
Of a surplus, it is a boom for factories. But I think it points to underlying weakness in Chinese consumers, which has been the main problem. When you're exporting so much more than you're importing, it means that your people are not buying as much stuff. And the problem with making so much stuff is there's an overcapacity. They're making two to three times as many products as their own people can consume. So they're shipping them abroad. They are lowering prices because when there's more supply, prices go down. The volume of China's exports has been rising more than 12% a year. The dollar value of its exports has been growing at half that pace. That shows that there's a price war going on. It's leading to lower prices. And that's inviting a ton of backlash from the US But a ton of other countries as well, like the EU and Brazil. And the US is gearing up to slap more tariffs on Chinese goods. And so are Europe, Brazil, India, all these other nations that are saying, well, we want our own manufacturing to do well, but you're flooding our markets with really cheap goods. We're not going to stand for that. So it also exposes a vulnerability in China. So we'll see. I mean, just this, it's a staggering amount of stuff that they're making. I mean, especially in cars. I mean China was an importer of cars for its entire history. Now, now it's exporting more than the United States, Japan, Germany, all of these legacy, you know, powerhouse powerhouses in, in the auto sector. So it's quite staggering what these factories are churning out.
- [15:18]
Toey Howell
The question now becomes, can China maintain its huge lead on the rest of the world if these raising tariffs do come to fruition, like it is likely to do so up next, it is time for Toby's trends.
- [15:34]
Neal Freyman
It's 2025 and that means if your B2B marketing strategy doesn't include improving your ad targeting, your ads could get lost.
- [15:41]
Toey Howell
In the Thankfully, LinkedIn ads can make sure your message reaches the right audience. It gives you direct access to a billion members, 130 million decision makers and 10 million C level executives.
- [15:54]
Neal Freyman
Plus, with LinkedIn's targeting capabilities, you can precisely reach your target audience by job title, industry, company and more.
- [16:00]
Toey Howell
Yep, and all those capabilities drive big time results. In B2B tech alone, LinkedIn generated two to five times higher return on ad spend than other social media platforms.
- [16:10]
Neal Freyman
Start converting your B2B audience into high quality leads today. They'll even give you a $100 credit on your next campaign. Go to LinkedIn.com/MBD to claim your credit. That's LinkedIn.com/MBD. Terms and conditions apply. Pop quiz Toby. What do brands like Aloe, Allbirds and Skims have in common?
- [16:30]
Toey Howell
For one thing, they're all top notch brands that sell directly to consumers.
- [16:34]
Neal Freyman
Bingo. But achieving big name success comes down to more than having a cool brand and brilliant marketing. Who's behind the scenes powering each and every one of sales? Shopify.
- [16:43]
Toey Howell
Of course, nobody does selling better than Shopify. They're home to the number one checkout on the planet.
- [16:49]
Neal Freyman
And we've got to mention, they're not so secret. Secret Shop pay Shop pay boost conversions up to 50%. That means fewer abandoned carts and higher rev numbers.
- [16:59]
Toey Howell
Shopify should be every business's one stop. Shop to growth.
- [17:03]
Neal Freyman
Level up your biz and sign up for your $1 per month trial period at shopify.com morning brew all lowercase that's shopify.com/morning brew all lowercase.
- [17:18]
Toey Howell
A job listing that looks too good to be true. An application sent off into the void with no response. A sneaking suspicion that maybe this job opening isn't even real. If you've applied to a job in recent years, you may have been haunted by so called ghost job posting. And it's these rise of spooky listings that I want to talk about on today's edition of of Toby's Trends. Ghost jobs are roles that companies toss up on jobs boards and advertise online, but have no real intention of actually filling. By hiring Platform Greenhouse's estimate, these types of roles account for up to 22% of all jobs advertised online. But why do companies have roles up with little intention of filling them? One potential reason is to make it seem like they are still growing even when they aren't. Another reason they keep the fishing lines out is the slim hope of landing an albatross hire someone too good to pass up. Some companies do it to comply with federal law, posting about a role publicly even if Gary, the CEO son has already been tapped for the job. Whatever the reason, it's a growing problem that can make the employment market feel even more hopeless for potential job seekers. Now there's already enough ghosting in the dating market. Now you have to battle it in the job market too.
- [18:32]
Neal Freyman
Yeah, I mean you mentioned that this is a growing problem and it really is. Over the past five years years, the company Revelio Labs found that the rate of hires per job posting has been cut in half. In 2019, there were eight hires for every 10 job postings. So not as much ghosting going on. By 2024, that number had dropped to four hires per debt per 10 job postings. It feels like what we've seen across the Internet now is the rise of slop and things that necessarily aren't real or backed up by evidence. And now it's happening in the job market. It's a problem that's leading to big inefficiencies for the, for the labor market. It may help explain why even though the hiring numbers are so good for the US economy, people feel like the job market is against them and they can't find a position. It's because they're applying to hundreds of jobs, half of which are never going to be filled in the first place.
- [19:24]
Toey Howell
Yeah, one of the craziest reasons why companies do this is to instill fear in their current employees. 62% of respondents to a survey said that they posted ghost jobs expressly to make their employees feel, quote, replaceable. So you're trying to create this sense of unease. If you are an employee and you see a job posting for your very role, you maybe will work harder because you're like, wait a second, they could just bring someone in at any moment to replace me, which is a really dark way of looking at the employment market. But it's something that survey respondents are saying that they're doing, management is saying that they are doing. Another reason that these companies have them up, too is that they just want to have this sort of optimism going forward. If it looks like you are growing like that makes your company a more desirable place to be, maybe they're hedging their bets. They hired someone, but they're not sure if they want to commit to that person, so they leave a job opening up. There's a lot of reasons and a lot of them end up contributing to this feeling of hopelessness that some job seekers are feeling right now.
- [20:25]
Neal Freyman
Let's sprint to the finish with some final headlines. Dementia cases in the US could double each year over the next 35 years to reach 1 million annually by 2060. That's according to a sobering new study published in Nature Medicine yesterday. The researchers found that adults over 55 had a 42% lifetime risk of developing dementia, much higher than previous lifetime risk estimates. The main reason people are living longer, The US has an aging population and older age is the biggest risk factor for dementia. It's not going to affect everyone equally, though, for reasons experts still don't have a firm grasp on. Black Americans are more at risk and so are women compared to men.
- [21:07]
Toey Howell
Yeah, by 2040, all baby boomers, which is the oldest generation right now, will be at least 75 years old. And that is an age after which dementia diagnosis really increase substantially. So you're right, it is an aging population, but then also the shifting racial makeup of the US population. By 2045, high risk minority groups are expected to be more than half of the U.S. population. And you said for reasons that experts aren't quite sure of right now, these minority populations are at greater risk of, you know, getting dementia. So those two reasons combining together are why you saw kind of these sobering figures come out of this latest study. As a CEO of a major company, words like disastrous are not something you want associated with your tenure. But Patrick Spence, the now former CEO of Sonos, can't seem to escape the word. Spence resigned yesterday as CEO of the high end audio company following a disastrous app redesign back in May of last year that baffled consumers as to just how bad it was. The new app was buggy, rushed and had crucial features missing at launch. Quite simply, customers hated it. And it led to huge problems at sonos, including a 16% revenue decline in the fourth quarter, a 13% decline in its share price and ultimately cost Spence his job.
- [22:28]
Neal Freyman
Let's talk about this new guy who's coming in. He's probably not going to be the permanent CEO, but he is a very interesting figure. Tom Conrad. He has a tattoo of the Sonos headphones on his left forearm. He's been on the board since 2017. He was one of the creators of Pandora, the music service, a vice president of Snap, and then the chief product officer of Quibi, the, you know, the short form video service that barely lasted a year. So he's going to move into this position. Sonos is kind of a house on fire right now. We'll see if he can hold it over until they hire a new CEO.
- [23:04]
Toey Howell
The chief product officer, though, that was behind the rollout of the app, is still on board though. So a lot of people internally are grumbling like it's not just the CEO's fault. This guy is still there as well and led kind of the worst app redesign in history. So Tom Conrad does have his work cut out for him. But, yeah, co creator of Pandora music service. That is someone who I'd want in charge of my company because that, that stuff was great. When it came out, Walmart got itself a facelift. It unveiled a refreshed logo yesterday, its first significant branding Update in nearly 20 years. The new design features a chunkier bold font along with a deeper blue color to go alongside its familiar yellow. There will also be a greater emphasis on its yellow Spark logo as a standalone asset. The redesign is part of Walmart strategy to position itself as a tech driven Omni channel retailer. Because nothing says tech driven omnichannel retailer like a slightly bolder typeface. Overall, this is a more of an update than a big revamp. The brand still looks very similar, which is probably a good thing because business is booming for Walmart right now. Sales at its U.S. stores grew about 5% last quarter compared with the year prior, outpacing rivals like Target.
- [24:19]
Neal Freyman
Apparently, it was inspired by a trucker cap that was worn by founder Sam Walton. And it was written in the typeface antique olive, which Walmart has used through from the 1980s through the early 2000. So I guess you got to get inspiration somewhere. But for many people, I mean, if you should go to Morning Brews X page and look at the difference, you'd be. It's hard to tell the difference. It's very much like Apple's iPhone updates from 14 to 15, they put a fresh coat of paint on it. But I guess, you know, I don't I'm not a designer branding expert. Apparently you have to refresh your logo every few decades to remind people that you exist. Not that Walmart has to remind people that it exists, but is doing this from a position of strength.
- [25:00]
Toey Howell
It certainly is. It didn't reinvent the wheel here, but I will say it is good. Like boulder is better. I like the deeper blue a little bit like that. But I think they are doing it in order to tell the story that, like, hey, we are this new Omni Channel retailer. We do have a very big online business. So let's do a slight logo tweak, a slight color update to let people know that we are a new Walmart. So, yeah, it's not all about the actual visual interpretation of the business. Part of it is the brand storytelling.
- [25:30]
Neal Freyman
And the A's are much. The A's are cool. Now.
- [25:33]
Toey Howell
I like it. Like, I actually do. It is a slight tweak, but I agree with you. I think it looks better.
- [25:37]
Neal Freyman
The world's largest gathering of humanity kicked off yesterday. No, it's not a Zinn giveaway in Murray Hill. It's the Maha Kum Mela, a Hindu festival that occurs once every 12 years. Rivers. Over the next six weeks, over 400 million people greater than the total US population will travel to a city in northern India to bathe in the confluence of three rivers sacred to Hindus. Two physical, one mythical. This is a logistical challenge that will put your super bowl party to shame. To prepare for the onslaught of people, authorities have constructed 150,000 tents for a makeshift city that will have roads, electricity, water, communication towers, and 11 hospitals. They've also set up 145,000 restrooms and 99 parking lots. Toby, is that even enough? It's 400 million people.
- [26:27]
Toey Howell
That's what I was thinking. It doesn't feel like enough. 400 million people is just so hard to wrap your mind around. Obviously, it's bigger than the entire US population, but also that is 200 times the 2 million people that make the typical pilgrimages that to Muslim holy cities of Mecca every year. So 400 million people is just a vast amount of people. It also got me thinking, what's the largest mass of humanity that I have ever been around? And I think it was the New York Marathon last year that seemed like a logistical, you know, insane thing to pull off with just these sheer amount of porta Potties. That was only 50,000 people. So I can't imagine seeing what the porta potty lines look like at, you know, this festival.
- [27:09]
Neal Freyman
I think mine was the like some of the inaugurations when I went to Maryland, we would just hop down to DC for the inaugurations in 20082012 and there was so many people there. I couldn't think of anything that could be bigger than that because the subway stations are swamped. You can't see anything. Cell service is down. So kudos to these organizers because to pull off an event with 400 million people is actually mind boggling. Let's wrap it up there. Thanks for starting your morning with us and have a wonderful Tuesday. For any questions, comments or feedback, send an email to Morning Brew daily at Morning Bukom. And don't forget in all the hectic ness of your day to share the podcast Friends. Don't let friends be ignorant about China's trade surplus. For a more specific sharing recommendation, Toby spent all night brainstorming and now he has an idea.
- [27:56]
Toey Howell
I want you to share the podcast with someone who could work on their inner excellence, maybe send them the book, and then also send them this podcast episode to go alongside of it. It is a great one two punch.
- [28:07]
Neal Freyman
Let's roll the credits. Emily Milian is our Executive producer. Raymond Lu is our producer. Olivia Graham is our Associate producer. Uchenawa Ogu is our Technical director. Billy Menino is on audio. Despite rumors, hair and makeup is not a ghost job. Devin Emery is our Chief Content Officer and our show is a production of Morning Brew.
- [28:25]
Toey Howell
Great show, Danielle. Let's run it back tomorrow.