'Maxinomics' Explains Tariffs, the Space Race, Can the US Buy Greenland? And More

Summary

Morning Brew Daily Podcast Summary Episode: 'Maxinomics' Explains Tariffs, the Space Race, Can the US Buy Greenland? And More
Release Date: January 20, 2025
Hosts: Neal Freyman and Toby Howell
Guest: Phil Andrews, Founder of Maxinomics

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1. Episode Overview

In this special holiday episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell engage in a comprehensive discussion with Phil Andrews, the charismatic mind behind the Maxinomics brand. The episode delves into a diverse array of topics, offering listeners insightful analysis on current economic policies, industry trends, and futuristic innovations.

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2. Should the US Buy Greenland?

[03:48] Phil Andrews:
"I can't see a reason why the US wouldn't want to buy Greenland. Of course, if the people of Greenland agreed to join the United States..."

Phil Andrews explores the strategic and economic incentives behind the United States potentially acquiring Greenland. He highlights Greenland's abundant natural resources and its increasing strategic value amidst global climate changes. Andrews emphasizes that such a purchase would require Greenland's consent, echoing historical precedents like the Alaska and Louisiana Purchases.

[04:39] Toby Howell:
"The US did buy a territory from Denmark in the early 20th century, and that would be what is now the US Virgin Islands."

Toby references historical transactions to underscore the feasibility of territorial acquisitions through negotiations rather than force.

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3. The Power and Impact of Tariffs

[05:16] Phil Andrews:
"Tariffs are far more powerful than you think... the US Market is the largest consuming market in the world."

Phil delves into the significance of tariffs as a tool for economic policy, discussing their ability to regulate market access and influence manufacturing decisions. He contrasts the low tariff rates of the US with the increasing trend of manufacturers relocating overseas due to previously low trade barriers.

[06:59] Neal Freyman:
"Should tariffs be implemented this time? Is there anything we learned last time that can be applied now?"

Neal prompts a reflection on the previous implementation of tariffs in 2018 under Donald Trump, seeking insights into potential outcomes of renewed tariff policies.

[07:25] Phil Andrews:
"I wouldn't think that this is just some grand gesture... tariffs are coming back into vogue."

Phil predicts a resurgence of tariffs across various categories, suggesting that their reintroduction could have nuanced effects on both consumers and businesses, depending on the sectors targeted.

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4. Domestic Manufacturing and Protectionism

[09:13] Phil Andrews:
"I don't have specific numbers on whether tariffs boosted manufacturing, but the incentive structures have shifted."

Discussing the relationship between tariffs and domestic manufacturing, Phil notes the challenging timeline for reversing years of manufacturing offshoring. While the immediate impact of tariffs on bringing jobs back is uncertain, the long-term potential for reshoring remains a possibility.

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5. Southwest Airlines Adopts Assigned Seating

[11:14] Phil Andrews:
"Southwest is ditching its roots because they don't have loyalty perks to offer customers."

Phil examines Southwest Airlines' strategic shift towards assigned seating and premium perks, contrasting it with competitors like American Airlines that offer extensive loyalty programs. He expresses concern over how this move might affect Southwest's brand loyalty, which has historically been strong despite the lack of traditional airline perks.

[12:35] Neal Freyman:
"Delta's success with premium seats indicates industry viability of this model."

Neal adds that industry trends towards premium offerings are financially driven, citing Delta's positive financial outlook as evidence.

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6. The New Space Race

[14:35] Phil Andrews:
"With orbital launches skyrocketing from 141 in 2021 to 263 this year, the new space race is fueled by reduced costs."

Phil paints a picture of the modern space race, highlighting the dramatic increase in orbital launches driven by technological advancements and lowered costs. He compares this surge to the transformative impact of shipping containers in the 1950s, emphasizing the role of entrepreneurs and national militaries in this renewed competition.

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7. The Future of Autonomous Vehicles

[16:35] Phil Andrews:
"Babies born today might never need to learn how to drive a car."

Phil discusses the maturation of autonomous vehicle (AV) technology, noting significant advancements and increased adoption through companies like Waymo. He envisions a future where AVs become the norm, enhancing safety and altering societal norms around transportation.

[17:39] Phil Andrews:
"The Waymo experience is elevated compared to Uber and Lyft... it's like your own little world for a little period."

Sharing his personal experiences with self-driving cars, Phil highlights the privacy and customization that AVs offer, underscoring their potential to transform daily commutes.

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8. Costco's Business Model Excellence

[20:06] Phil Andrews:
"Costco maintains its identity through the Kirkland brand, offering quality products without being pushy."

Phil praises Costco's effective use of its private label, Kirkland, to deliver high-quality products at competitive prices. He emphasizes the seamless shopping experience Costco provides, free from aggressive sales tactics, which fosters strong customer loyalty.

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9. Fast Food Industry: Chipotle vs. McDonald's

[21:29] Phil Andrews:
"At Chipotle, you get about 100 calories for every dollar spent, with higher quality ingredients compared to McDonald's."

Analyzing the fast food sector, Phil contrasts Chipotle's value proposition with McDonald's, focusing on the quality and caloric efficiency of their offerings. He notes that Chipotle's approach has unlocked new markets, allowing for significant expansion opportunities due to its appeal to health-conscious consumers.

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10. Growth of the Sun Belt

[23:30] Phil Andrews:
"The Sun Belt's growth is driven by affordability and favorable weather, but rising housing prices could slow this trend."

Phil attributes the Sun Belt's population boom to its lower cost of living and attractive climate. However, he warns that escalating housing prices and overcrowding could pose challenges to sustained growth in regions like Phoenix and Nashville.

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11. 2025 Predictions

Rating Scale:

• 1: Not Going to Happen
• 100: Very Likely

a. AI Bubble Pops; Nvidia Stock Falls 50%

[25:17] Phil Andrews:
"I don't think the AI bubble will pop. Nvidia stock is unlikely to fall 50%."
Prediction Rating: 95/100 (Phil compares this likelihood to dating Dua Lipa)

Phil dismisses the notion of an AI bubble bursting, citing ongoing productivity gains and the integral role of AI in various sectors. He predicts continued growth and investment in AI technologies.

b. Apple Intelligence Fails to Ignite a New Round of iPhone Buying

[26:35] Phil Andrews:
"Apple's AI initiatives have been underwhelming but may stabilize over time."
Prediction Rating: 60/100 (Tony Romo predicting a football play)

Recognizing the initial disappointment with Apple's AI offerings, Phil remains cautiously optimistic about future improvements under Apple's strategic adjustments.

c. Tariffs Reignite Inflation; Fed Hikes Rates

[27:17] Phil Andrews:
"There's a possibility tariffs could reignite inflation, prompting the Fed to hike rates."
Prediction Rating: 70/100

Phil considers the reintroduction of tariffs as a potential inflationary trigger, which might compel the Federal Reserve to adjust interest rates to mitigate economic pressures.

d. Google Forced to Sell Chrome by the US Government

[27:56] Phil Andrews:
"I don't believe Google will be compelled to sell Chrome."
Prediction Rating: 10/100

Phil doubts the likelihood of the US government forcing Google to divest Chrome, suggesting it would only cause minor disruptions.

e. Starbucks Stock Doubles Under New CEO Brian Niccol

[28:38] Phil Andrews:
"Starbucks is poised for a renaissance under Brian Niccol over the next 12 to 18 months."
Prediction Rating: 85/100 (Tony Romo on this)

Phil expresses strong confidence in Starbucks' future performance, attributing it to strategic leadership and menu optimization initiatives led by CEO Brian Niccol.

f. Maxinomics Hits 100,000 YouTube Subscribers

[29:43] Phil Andrews:
"Maxinomics will reach 100,000 YouTube subscribers early this year."
Prediction Rating: 90/100

Phil anticipates significant growth for Maxinomics' online presence, driven by engaging content and increasing audience interest.

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Conclusion

This episode of Morning Brew Daily offers a wealth of insights across various domains, from geopolitical strategies and economic policies to industry-specific trends and futuristic technologies. Phil Andrews' expertise provides listeners with a nuanced understanding of complex topics, making it a valuable resource for anyone looking to stay informed about the latest developments shaping our world.

For more in-depth analysis and engaging content, listeners are encouraged to follow Phil Andrews on his YouTube channel and other social media platforms under the handle Maxinomics.

Transcript

[Neal Freyman]

Good Morning Brew Daily Show. I'm Neal Freyman.

[Toby Howell]

And I'm Toby Howell.

[Neal Freyman]

Today, if you want to learn a lot in a short amount of time, this is the podcast episode for you.

[Toby Howell]

It's a special holiday show featuring the smooth talking fact dropping Phil Andrews of maxinomics. It's Monday, January 20th. Let's ride.

[Neal Freyman]

Today is Martin Luther King Jr. Day, a federal holiday that has many of you home from work. It's also also Inauguration Day where Donald Trump will be sworn in as the next President of the United States. And to cap it all off, the college football championship game is tonight between Ohio State and Notre Dame. A ton going on.

[Toby Howell]

A ton going on. That's a great way to describe this episode that we taped ahead of the holiday. We talked to Phil Andrews, who is the man behind the Maxinomics brand for Morning Brew. This guy is a human encyclopedia. He can talk with expertise on topics ranging from autonomous cars to Costco's store design to weather the US should buy.

[Neal Freyman]

Greenland a true man of the world. We learned a lot from Phil. And no, you'll also get a lot out of the conversation.

[Toby Howell]

But first, a word from our sponsor, Yahoo Finance. Neal, One of the beautiful things about investing is the earlier you get started, the more things compound.

[Neal Freyman]

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[Toby Howell]

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[Neal Freyman]

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[Toby Howell]

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[Neal Freyman]

If you're interested in trying out Yahoo. Finance for yourself, and you should be, head to yahoo.finance.com.

[Toby Howell]

And now, here's Phil from Maxonomics. Phil, welcome to the show.

[Phil Andrews]

Thank you so much for having me. It is a pleasure and an honor to be here.

[Toby Howell]

So first question. Your YouTube channel and social media accounts are called Maxonomics, but your name is Phil. What is going on there? Who are you and how did you end up at Morning Brew?

[Phil Andrews]

That's a great question. I'm glad I get to say this because so many people call me Max, they see me on social media and they assume My name is Max. Rightfully so. Though the name Maxonomics was just the name that was chosen for the third web. I came about via a variety of websites that served investing data to the retail investor and just the general public. Maxonomics was the third one. It was just kind of the name that stuck when it was time to have a name. And so here we are. I came from that background of the Internet, and in writing for a bunch of different websites, I ended up making video. People like, you were really good. You should get on video. I was like, no, no, no, no, no. I don't do video. And yet, after a little bit of time, Morning Brew reached out and we formed a partnership. And here we are now. I'm on the morning of your daily podcast. It is pretty, pretty interesting ride.

[Neal Freyman]

And where are you located? Like, what city have you spent the most time in your life?

[Phil Andrews]

I have lived in a variety of different places around the United States, but right now I am just outside of San Francisco, about an hour south of San Francisco, enjoying a little bit of the sun. That's where I call home. But I am originally from Philly. Philly. So I'm Phil from Philly. And you will hear it occasionally come out of my mouth. I'll say water. I say water, and a few other things. Like, I'm from Philly because I'm from Philly.

[Neal Freyman]

Great. Now it's time to pick your brain a bit. Should the US Buy Greenland?

[Phil Andrews]

I can't see a reason why the US Wouldn't want to buy Greenland. Of course, if the people of Greenland agreed to join the United States. There's a variety of resources. The land area, the. It's becoming more and more strategically valuable given that the planet is warming up and a lot of the ice on top of Greenland is melting. So I don't see a big downside to the United States owning Greenland. I think it's probably been said, you know, the Alaska Purchase was a huge deal. What a. What a benefit, what a boon. The Louisiana Purchase was probably the best move that Thomas Jefferson made out of all of the good moves that he did make. So why wouldn't Greenland be a benefit to the United States? Again, I'm not. I don't think that it should be taken by force or, you know, threatened to be taken over. If the people would have Greenland want to join the United States, we would gladly take them.

[Neal Freyman]

And they do want to be independent from Denmark. And I would remind our listeners that the US did buy a territory from Denmark in the early 20th century, and that would be what is now the US Virgin Islands. So no Virgin Islands without it, without a land sale.

[Toby Howell]

The more you know, today is also Inauguration Day and the soon to be President Donald Trump's signature economic proposal is tariffs. Your most recent YouTube episode is titled Tariffs are even more powerful than you think. Why are tariffs more powerful than I think? And also how did you get inside my head?

[Phil Andrews]

I am curious to know how that is inside your head. But the tariffs are far more powerful than you think for a variety of reasons. It could probably go on for about 30 minutes on the history of tariffs, how they've shaped the world, how they have changed, particularly since 1995 when the world Trade Organization came about. But tariffs are just this very powerful tool that govern access to a country's consumers, a market. The US Market is the largest consuming market in the world. You and I, we buy stuff every year that that accounts for about 70% of GDP or about $20 trillion worth of spending from us. And 7 trillion of that is spent on goods, things like cars, dishwashers, mugs, pencils, whatever it happens. And the United States, with the lowest or the 14th lowest tariff rate in the entire world, has kind of opened up its market to every manufacturer that wants to sell to the United States. And this has been great for consumers in a lot of way, in way for prices. But low tariffs incentivize manufacturers to move manufacturing outside of the United States. And this is what's been happening for about the past 20 years and in huge droves in the early 2000s. So tariffs are this incredible tool that has kind of been put on ice over the past 25 years and is just now coming back. And I think we'll start to see the impact that tariffs had because what the World Trade Organization did not to go on is it removed the ability for a country to unilaterally change its tariffs for different countries. And the US pulled out of the WTO in about 2018. And so tariffs are coming back into vogue.

[Neal Freyman]

Well, what do you think we can learn about the tariff regime from last time, when Trump implemented them in 2018 that might help us understand what's coming for consumers and businesses in the United States and around the world? Should they be implemented this time? Obviously, there are so many question marks. We don't know how high they're going to be or where they're going to go or on what goods they're going to be placed on. But is there anything that we learned last time that can maybe be applied to, you know, our new era going.

[Phil Andrews]

Forward, of course, and the blanket implication this time of it's just going to be 25% across the board for all goods. That's a huge number and, you know, pretty scary in a variety of different ways. But the one thing that I would say is for the, for President Elect Trump, I would believe what is coming out of his mouth. While some of this is certainly a negotiating tactic, this is a man that typically does follow through on a lot of the stuff that he says, or at least attempts to. So I wouldn't think that this is just some grand gesture to try and get a better negotiating position. I would expect to see tariffs come in at a pretty decent clip across a variety of different categories as as much as it affects the US Consumer. We did see the price of goods that tariff put Trump's on, that Trump put tariffs on in 2018 rise, but the broad inflation level, it had almost zero effect on broad inflation. So it's going to depend a lot on how these are instituted in categories. But for the most part, it's hard to predict the effect until we see exactly how they're going to come in. So I would take a bit of more of a reactionary standpoint here and say they're coming, they're going to come in a variety of ways on a variety of goods. Exactly what that's going to be is to be seen.

[Toby Howell]

Did we actually see a boost in domestic manufacturing on the industries that were affected by tariffs? That is kind of the protectionist mindset when it comes to tariffs, is that by applying these tariffs, it will hopefully incentivize people to move their manufacturing to the United States and hopefully, you know, strengthen those specific industries. Did we see any of that last time around?

[Phil Andrews]

I don't have, I don't have great numbers on whether or not the categories that we put tariffs on. It brought manufacturing back. And I honestly think it would probably be too early to tell. Six years is a short amount of time to install an entire new manufacturing base. But what I can tell you is a little bit of the inverse of that. In 2000-2010, 5 million manufacturing jobs left the United States. And one of the big problems with that, or why that occurred was because when the, when China joined the WTO and the WTO became an institution in 1995, and, and companies around the country looked at this and said, okay, well, if the United States can't raise tariffs in the next 20 years, like they can't unilaterally go in and just next change tariffs on, say, mugs, then I can confidently move my manufacturing outside the United States and not have to worry that that's going to change and all my profit margins are going to be destroyed. So that incentivized so many companies to leave, and between 2000, 2010, 5 million manufacturing jobs left. And there just hasn't been this threat of tariffs that have incentivized companies to set up shop here. And I think we're still in this period of. All right, are tariffs really back? Like, are we really doing this again? And if they are, as a new manufacturing company, am I willing to take the risk of setting up shop outside of the country, or do I definitely want to set it up here and not take that tariff risk? So, to your question, I don't have specific numbers on whether or not that has occurred, but I think it's too early to tell. This is a much longer process, I think, than that.

[Toby Howell]

Let's shift gears here a little bit. If you take a scroll through your Instagram page, you'll see a lot of videos about the airline industry, specifically Southwest. That airline recently announced it is changing its famous boarding system to include assigned seats and premium perks. What do you think about Southwest kind of ditching its roots in falling more in line with the broader airline industry?

[Phil Andrews]

One of the reasons that Southwest is doing this, in my opinion, is because they don't have anything to offer loyalty customers. Right? So if you're an American Airlines, I don't know if you, either of you have, you know, an allegiance, Delta, United, whatever it happens to be. I happen to be on American Airlines just because I got on it 10 years ago, and it's very hard to get off. It has been beneficial. But American Airlines gives me free stuff for a variety of different categories of flying. Southwest just gave all of that stuff away for free. Right. There's no first class. There's very little in terms of, like, early boarding. There's no lounge. Like, there's nothing that Southwest had to offer to as a, as a loyalty perk. And that has been good and bad. A lot of customers would say they love that about Southwest. But a big part of the traveling public now, especially our generations, the millennials and lower, love perks. They have travel credit cards. They have loyalty points, and they want those perks. You know, the ability to be upgraded to first class is. Is like a nice thing. So Southwest doesn't have any of that. And a lot of people are kind of tired of just the random boarding process. So I'm a little worried about Southwest as a company. However, they have Great brand loyalty. So we'll see.

[Neal Freyman]

Seems like a business decision too, because Delta has shown that when you offer these premium seats, that's the way forward for the industry. That's basically how you make the bulk of your revenue. Delta CEO said a few weeks ago that 2025 was going to be their best financial year ever. So Southwest maybe is just not in a position where it can continue what it has done for decades and needs to adopt this more segmented model because this is how you make money as an airline now. It's just not profitable otherwise.

[Phil Andrews]

Yep, industries change. Southwest seems to have gotten the message that premium is in vogue right now.

[Neal Freyman]

And speaking of perks on flights, Delta and DraftKings just announced a partnership. It's very vague, but do you think we'll ever see gambling reach the skies?

[Phil Andrews]

I'm wondering from a regulatory perspective how this would happen because it's state by state. Gambling laws happen state by state and frankly, I'm not sure how that would play. If you're taking a flight from California to Texas, how do you get over all those regulatory hurdles? Because there has been very light on details. I think that Delta and DraftKings are like, yeah, this would make a ton of sense. We've got people sitting in our seats for a couple of hours. Let's let them gamble. But I think executing this is going to be much harder than it seems.

[Neal Freyman]

And actually at the federal level, gambling on flights is barred on all US Commercial flights. So there is the potential that they go to the Trump administration and lobby. But it might, it might render itself as a much more limited partnership than. We want. I was about to say we want, but like maybe then some people want.

[Toby Howell]

I think as you fly over each state where it is legal, it drops in and out when you're over that state specific airspace. So as you're flying over Vegas, get your bets in. And then once you hit, you know, Iowa, it's, it's, it's done. Let's go up in altitude a little bit. You posted a video recently about the new space race. What is the new space race?

[Phil Andrews]

If you look at a chart of orbital launches, this is taking a rocket and putting it outside of atmosphere and into space. In 1967, 141 orbital launches happened. We didn't hit that number again, 141 launches until 2021. In 2021, we did 145 orbital launches. And if you look at the chart, it's just a stock chart that you really want to be in. It just has gone vertical 263orbital launches this year. And the number is only going to continue higher. The what's happened here is that the cost to put something into space has gone so low that we've hit this, this moment that's basically the shipping container. If you look at the shipping container back in the 1950s, it changed everything about the world, how you can move goods around. It costs about $6 a ton to load something onto a ship container back in the 1950s. Today, because of shipping containers, it's about 16 cents. And this is what Space X has done for rockets and of course companies like Rocket Lab and a variety of others that are starting to spin up. So as the cost has dropped, people are looking and saying, okay, well what part of space is valuable and do I want to occupy or want to be a part of? So the new space race has been a function of dropping costs and then everybody saying, well, I don't want to miss out. So this has been an entrepreneurial thing, but also militaries at this point in time. So this is the first time in space history that we have not just nation states and militaries, but we now have entrepreneurs saying, all right, let's go to space and do some stuff.

[Neal Freyman]

Let's stick with this future looking perspective. We've been promised self driving cars for a decade now, but there finally seems to be actual momentum with Rainbow racking up rides in San Francisco and expanding to other cities. How close is our autonomous future? Are babies born in 2025 ever going to need to learn how to drive a car?

[Phil Andrews]

I think that the answer to that is probably, probably no. I mean an infant today they would. Sixteen years from now we're looking at 2040.

[Neal Freyman]

These probably not.

[Toby Howell]

Yeah, generation Beta.

[Phil Andrews]

Yeah, yeah, the betas, we'll call them something else. Yeah, whatever the term is for av. AV riders that don't have driver's license, I mean a lot of people in New York don't have driver's license and a lot of kids get around by Uber now. It's way safer. I'm not a parent, I don't know if you guys are parents, but one of the things that whenever I've talked to parents is like we would prefer for our kid to not have to drive. There's 35, 000 car accidents that cause fatalities around the world around in just the US every single year. So if that number can be lowered and I think it's hard to argue that autonomous vehicles aren't safer. I mean we can get into little details, but over time it will become safer because autonomous vehicle doesn't want to look at its phone ever, or have a chat or drink coffee or whatever it happens to be. So I think the answer to that is yes.

[Neal Freyman]

You live near San Francisco. Have you been in a self driving car and what's the experience like?

[Phil Andrews]

I've spent a bunch of time in Waymos. I've probably taken 20, 25 trips in Waymos at this point in time. The first that you notice when you get in a Waymo is that it's private. There's no, there's no driver. I mean, I'm sure there's cameras and speakers in there and I'm sure if somebody really wanted to listen to you, they could. But you get in there with somebody and you can talk about whatever you want at whatever volume you want. You can choose the music like you can have a party. It's like your own little world for a little period of time. So it is very nice in a variety of ways. You know, the windows don't go down. You set your preferences once and when you get in the next Waymo preferences are there. The experience is quite elevated compared to what we have experienced with Uber and Lyft in the past.

[Toby Howell]

We'll be right back with more Phil after this.

[Neal Freyman]

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[Toby Howell]

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[D]

Hey, I'm Ryan Reynolds. Recently I asked Mint Mobile's legal team if big wireless companies are allowed to raise prices due to inflation. They said yes. And then when I asked if raising prices technically violates those onerous two year contracts, they said, what the are you talking about, you insane Hollywood. So to recap, we're cutting the price of mint unlimited from $30 a month to just $15 a month. Give it a try at mint mobile.com/switch.

[Phil Andrews]

$45 upfront payment equivalent to $15 per month. New customers on first three month plan only. Taxes and fees. Extra Speed slower above 40 gigabytes. Details.

[Toby Howell]

You are a big fan of Costco's business model and frankly, who isn't? $50 hot dog soda combo. You cannot beat that. What can the retail industry learn from the way Costco does things while maintaining their own identity?

[Phil Andrews]

One of the things Costco does is maintain its own identity so well with the Kirkland brand. I think it's probably underrated. I mean, everyone talks about, everyone loves Kirkland. But like Costco wine, the Kirkland brand is good. I mean, and so are a lot of their white label Kirkland products. So they give you this ability to just go in, wander around and spend money on things that you really do need at a really nice price point without being pushy. There's really no sales. Things are just kind of placed where. Things are just kind of placed where people can go find them and they don't change anything. Right? The $50 hot dog is such a really good, it's such a good example. The CEO or CFO years ago or a couple of years ago, I think you guys probably remember this. He's like, definitely used a curse word. He's like, we are not going to change the price of the hot dog. I think that that's what people want, is they want that stability of a product and a brand saying, we are what we are. We're not changing it. Just keep coming and we'll keep giving you what you want.

[Toby Howell]

We've been talking about food a little bit and you have posted some videos about fast food. Chipotle's market cap right now is around $76 billion. McDonald's is $200 billion. What does calories per dollar have to do with the gap between those two market caps potentially narrowing over the coming years?

[Phil Andrews]

Sure. When you go and anytime we get food right, it's, it's calories. We are eating calories. That's, that's kind of the point. So how much, how many calories can you get for a dollar? Was the premise of that whole video and series that I did. Because it's what we do. I don't think that we instinctively think about it, you know, how many calories am I getting? But if you look through all the menus of fast food and sweet green and kava and chipotle, you can see what kind of price point each of these sits at. And when you look at McDonald's menu. And you look at Chipotle's menu, they each give about 100 calories for every dollar that you spend. And of course, if you go to McDonald's, while it is delicious, I am a. I'm a sucker for chicken nuggets. I think they are a gift to humanity. They're so good. But it's not good for you. It's obviously not good for you. And if you go to Chipotle's menu, it's fairly solid food, right? You can see all of the ingredients. The lettuce is fresh. There's. There's corn, there's produce. You can see all of the ingredients that are there. So for $10, you can get a thousand calories at Chipotle that are of higher quality than you can get at McDonald's. And this has opened up a lot of markets for Chipotle. Fast food can go into smaller rural areas that don't have a affluent customer base because they have a lower price point. Chipotle is the first really kind of healthy fast food, quick service restaurant that is able to this, which has unlocked just this magnificently big market. So the Runway for chipotle at about 7,000 stores now, they could expand by, you know, 500% across the United States over the next 10 to 15 years.

[Neal Freyman]

A wise man once said that three out of every 100 people added to the US population in the last decade have ended up in Phoenix. That wise man was you, Mr. Phil. What is the number one reason behind the growth of the Sun Belt, and what is the biggest risk factor that could slow its roll?

[Phil Andrews]

It was cheap. I mean, it was so cheap. And of course, the weather. I think that there's a. There's a. The reason for the growth is one, the weather. A lot of people wanted to get out of the Northeast, where a. Property prices are extremely high. It's hard to build, it's cold most of the time. And if you move down into the sun belt, where now electricity is much cheaper, it's prevalent. Like, you can run AC throughout the year without a window unit. Like the. The advances in air conditioning have made the sun belt in the really hot areas like Phoenix and Arizona and southern Florida attractive. Like, without air conditioning, this really wouldn't have happened. And there are a few advances that have happened over the past 30 years that have just made it better and better. Not that people didn't live there beforehand, but this has helped for things like industry. You can now set up a big office building in Phoenix and it will remain cool and people can work there, so you can have more jobs in these types of areas. So this is a big part of the growth. But I think the housing prices are not cheap anymore. And if you talk to anybody in the Sunbelt, in places like Phoenix, in places like Nashville, they complain about the influx of people. So before, you know, this, like, niche little thing like, oh, you're moving to Nashville, and people like, oh, yeah, it's great here, but now everybody knows that it's not the niche cool thing anymore. And I think that that could be a little bit of a problem.

[Neal Freyman]

Okay. The year is still young, so Toby and I put together a few predictions for 2025. We'd love for you to rate these takes on the likelihood of them happening on a scale of me dating Dua Lipa to Tony Romo predicting a football play. In other words, not going to happen at all to very likely. So Toby is going to go first.

[Toby Howell]

My first prediction. The AI bubble pops. Nvidia stock falls 50%. And as big tech companies reduce their spending on chips, I think that Neil.

[Phil Andrews]

Has a pretty good chance of dating Dua Lipa. So I'm not going to put it in that bucket, but I think that the chance of engaged. Oh, is she engaged? I didn't know that. Well, things can change. Things can change. I don't think the AI bubble pops. I do not think Nvidia stock falls 50%. This is an area where we're seeing huge productivity gains. I wouldn't be surprised if you guys use it. I certainly use it all the time. It helps me in a variety of ways. So I think the productivity gains throughout the economy are kind of under the surface. It's hard to measure within financial statements right now, but there's a gold rush here. I can't see it going anywhere. It's only going to get better. The. I wrote code for the first time a little bit ago, and the tools available for writing code are so good. And so the people that write code are also the people that develop AI. And I just can't see them pulling the plug on this. They're just going to want to make their job easier and easier.

[Neal Freyman]

Okay, next prediction. Apple Intelligence fails to ignite a new round of iPhone buying, putting CEO Tim Cook in the hot seat to find Apple's next big thing.

[Phil Andrews]

It has been underwhelming, hasn't it? It. It really has. I kind of thought that they would do a better job with. I thought they would do a better job with it. However, Apple tends to roll things out a bit. Slower. I think this falls in the middle. Tim Cook hasn't been on the hot seat for a little while. There have been some failures, I think.

[Toby Howell]

Yeah, Vision Pro, Vision Probe. A big swing, but big flop.

[Phil Andrews]

Yeah, yeah, I get this. A 6 out of 10. Getting close to Tony Romo.

[Toby Howell]

There you go. All right, next one. Tariffs reignite inflation and rather than cutting rates, the Fed hikes rates at least one time next year.

[Phil Andrews]

Low. I say this is a possibility. I would never assign a zero, but I think the incoming administration will want to avoid inflation at all costs because if you get tagged with inflation, your group is going to be out of office. So I put this at a though I think that there will be plenty of headlines around this.

[Neal Freyman]

We're taping this on Wednesday, January 15th and there was just a pretty solid inflation report that brought rate cuts a little back, a little bit back in place. So some good news over there. Next prediction. Google is forced to sell Chrome by the US Government.

[Phil Andrews]

I haven't been too close to this case, honestly, but I, I think that that does not happen with the. I don't think that that happens. Yes. I don't have a ton of color on whether or not Chrome is going to be, is going to be sold. I just don't know.

[Neal Freyman]

You don't need a reason. You can just go with your gut.

[Phil Andrews]

I'm going with no, I don't think it happens, by the way. I think it would be a mild dent in Google's armor.

[Toby Howell]

Anyway, so far we're over 5 on predictions. They've all been pretty strong. Now Our highest is a 2 so far. So let's see what you think about this next one. Our second to last one. Starbucks stock more than doubles after returning to sales growth under new star CEO Brian Nicholl.

[Phil Andrews]

This happens over the next 12 months.

[Toby Howell]

Yeah, 12 months. It doesn't have to be more than doubles, but Starbucks stages a comeback is the general thrust of it.

[Phil Andrews]

I would say there's a strong yes there. I would go in there in the 7 to 8 to 9 high five. Tony Romo on this. I think Starbucks has has a renaissance over the next 12 to 18 months.

[Toby Howell]

Because you trust Brian Nicole or because you think that they're going to figure out their cafe situation, make it a more pleasurable experience to, to get coffee there.

[Phil Andrews]

Again, I think they're going, I trust Brian Niccol to do exactly that. He's very good at this and already what you see is him slimming down the menu. All of the things that I think we all went to Starbucks we're like, why are they serving olive oil drinks? Why is the menu five pages long? Like, it can be a much more pleasant experience. I think a lot of people like Starbucks. The brand has such good affinity. So I trust Brian Niccol to get this back on track.

[Toby Howell]

I went one for seven, actually. Neil has one more prediction.

[Neal Freyman]

All right. Will Maxinomics hit 100,000 YouTube subscribers?

[Phil Andrews]

I would say talking my own book here. Yes, absolutely. I think. I think YouTube hit YouTube hits on 100,000 subscribers pretty early in the year. I really like what we're doing. It's been a lot of fun, and the momentum is great.

[Neal Freyman]

And if you like what you heard from Phil today, you can definitely go to his YouTube page, watch incredible videos. It's in the podcast description, and you.

[Toby Howell]

Can also find them on all social media platforms under the handle Maxonomics. Phil, I only wanted to call you Philonomics one time during this show, so thank you so much for jumping on. We hit a lot of topics there, so I hope you all enjoyed listening at home as well. Go check out Phil's stuff. He's on all platforms and he makes awesome stuff. Thanks for joining us, Phil.

[Phil Andrews]

Thank you so much for having me. It's been a pleasure.