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The Wealthy Are Fueling US Spending & ChatGPT For Teens?
00:28:19
The rich enrich retail & OpenAI clamps down
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Good Morning Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today, Americans are continuing to spend, but one group is putting the team on its back.
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Then Tesla's door handles are futuristic, sleek, hidden and now under investigation. It's Wednesday, September 17th. Let's ride.
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Prediction streams of Robert Redford movies are going to skyrocket this week. The legendary actor and director who defined aura before it was a thing died at 89 Tuesday morning. Redford's breakout movie came in 1969, appearing alongside Paul Newman in Butch Cassidy and the Sundance Kid, and went on to make lots of critically acclaimed and commercially successful movies. And in the decades since. But as much as Redford gave off Hollywood movie star vibes, he shied away from the bright lights of L A and made an even bigger mark on cinema elsewhere in Utah. After moving to Utah because it was where he knew no one, Redford helped create the Sundance Film Festival, which planted its flag in Park City and for decades has showcased independent films that would otherwise not find audiences. If not for Redford, we wouldn't have all the President's Men, but but we also wouldn't have Napoleon Dynamite, Reservoir Dogs or Queens Boulevard.
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Redford was certainly a one of a kind star with a lasting legacy. Also a magnetic look and vibe, but sometimes that actually worked against him. A great anecdote about Redford. He was potentially going to star in the Graduate as Dustin Hoffman's character, but the director Mike Nichols recounted how he pulled him aside and said, you can never play a loser. And Redford said, what do you mean? Of course I can play a loser. And I said, well, okay, have you ever struck out with a girl? And he said, what do you mean? And he wasn't joking. So yes, Redford was a legend who didn't get to star in the Graduate because he was too dang good looking. To play a loser. And now a word from our sponsor. Indeed. Neil, you ever been in the middle of hiring for a role, drowning in resumes and thought to yourself this kind of stinks?
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Story of my life. Post a job, get inundated with resumes and somehow still miss the best candidates?
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Well, you hired me, so you didn't miss them all. But that's why Indeed Talent Scout is such a game changer. It's like having an AI powered companion built right into your hiring process so.
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It instantly surfaces match candidates while I'm doing literally everything else.
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Exactly. Talent Scout pairs Indeed's massive pool of job seeker data with AI to instantly surface top matches so you can hire faster and smarter.
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It sounds like cheating, but like the good kind.
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The kind that gets you your dream candidate before someone else scoops him up. Imagine missing out on another Toby.
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You're right. I can't imagine a world where I'd miss Toby. To learn more, head to indeed.com/brew. That's indeed.com/brew. It's hard out there to find a job, but Americans are still spending like they bill, 700 an hour. Retail sales rose for a third straight month in August, beating expectations. And further evidence the prolific American consumer is keeping a recession at bay. Consumer spending accounts for 2/3 of US GDP. So as shoppers go, so goes the broader economy. Back to school. Shopping was a big factor. Those intimidating teens who hang around your local strip mall are flush with new fits and rocking. Fresh Jan. Sports, online retailers, clothing stores and sporting goods led the way among nine of 13 categories that posted increases last month. Spending at bars and restaurants also bounced back from a decline in July, a 0.7% in August. So everything's hunky dory, right? Maybe not. Looking under the hood of the shopping data, you find a more concerning story, one that shows a lopsided economy. The wealthy have continued to spend while everyone else is pulling back. According to Moody's analytics, consumers in the top 10% of the income distribution accounted for 49.2% of total spending in the second quarter, the highest level in data stretching back to 1989. Just 30 years ago, the richest 10% accounted for 36% of consumer spending. Toby. This may help explain why spending data continues to chug along even as the labor market grinds to a halt. Turns out it's just a small wealthy cohort propping up the economy.
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Let's look under the hood. Even more Americans are increasingly falling behind on their car loans. According to FICO data, credit scores are falling at the Fastest pace since the Great Recession. Google searches for help with my mortgage is now higher than the 2008 financial crisis. Peak hiring is also slowing, as we've talked about. And in general, country is losing faith in capitalism overall, which is another trend we've talked about on this show. And yet retail surged 0.6% in August. They've risen now for the third straight month. So it's pretty clear that there is this massive bifurcation between how a lot of people are feeling about the economy and the ones propping up the economy through all their spending. A big part of that though is equities and stocks. Because if you are in the richer 10%, you likely invest in stocks. And stocks are still at an all time high, which makes, you know, opening your wallets a little bit easier. When you see that number in your brokerage count going up. When you see your house increasing in value as they have over the past few years, you are going to continue to spend. So clearly it is a little bit of a brittle situation though, because if those 10% don't feel as confident or if we have a drawdown in the stock market, then that's when retail spending probably won't look as rosy going forward.
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Yeah, there's a huge concentration of equity ownership at the top of the US wealth ladder. Think about this. The richest 1% in the country owns 50, 50% of stock market assets. The top 10% holds around 90%. The stock market is at all time highs right now. These people are feeling flush. And then another bifurcation in the economy is whether you owned your house before COVID or not, if you owned a house in 2020, the housing market overall in America has climbed 57% to a record 55 trillion from 2020 to 2025. That means in five years, the housing market's value is increased by $20 trillion. So if you bought a house, if you own your house before 2020 and if you own a lot of stocks, I mean, these are the people that are fueling spending in America's economy.
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And then the other aspect of this seemingly great report is the fact that it's not adjusted for inflation. So part of the gain in retail spending could just be that people are paying higher prices, are playing more for their cars, more for their apparel going forward. So yeah, yes, they look strong on face value, but some of that is just due to the fact that prices have been rising. So. And maybe it's masking some of that weaker underlying demand that we've been speaking of. OpenAI is working to make their platform safer for kids under 18 by rolling out a quote different Chat CBT experience for teenagers. No, that doesn't mean your Chat bot will start using Riz and Skibidi all of a sudden. The update is meant to help bar kids under 18 from using the standard version of chat CBT, given some recent risks it's posed to teens. Mental Health OpenAI is facing down multiple lawsuits from parents who had a teenager die by suicide, where long conversations with Chat CBT were potentially a factor to combat potential harm. Sam Altman said in a blog post yesterday that the company was working to build a system that could automatically detect the age of a user, then separate them into two versions of Chat GPT, one for kids aged 13 to 17 and one for adults 18 years and older age. If there is a doubt, we'll play it safe in default to the under 18 experience, Altman also wrote, and in some countries and situations users will be asked to verify their age with an id. The key difference in the teen system is that it will be trained to avoid conversations that are flirtatious or about self harm, even if it's in a creative writing setting. Parental controls will also be available at the end of September. Now the lawsuits are piling up for OpenAI. Maybe this automatic bifurcation of models for teens and adults will will temper some of the worst outcomes.
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It's not just lawsuits, but the FTC is also investigating seven AI companies over the way their AI chat bots interact with children. This has become an issue that has come to the fore in the past few months with these parents and speaking out about particular incidents with their kids that are truly horrifying. And it comes also as Chat CBT released this huge report, first of its kind report showing just who exactly is using chatbots and what they're using ChatGPT for. And from this report we know that ChatGPT is dominated by young people. It didn't even it didn't even include people under the age of 18 in this report, but they said that nearly half of the conversations studied were from people aged 18 to 25. So a lot of the power users for ChatGPT are young people who's maybe frontal cortexes haven't been fully formed yet.
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Yeah, there is a lot of good information in this report as well. One interesting anecdote was there has been a gender shift in who is using Chat CBT. When it was first launched in 2022, 80% of the user base had male sounding names that has flipped and now feminine sounding names which is the way that these researchers kind of judge who is using the report make up 52% of the user base now. So totally seen that early adopter kind of tech pro vibe switch into now. It's a majority female platform. And then also a fascinating anecdote was that a lot of people don't use chat CBT for work at all. Actually In June of 2024, 53% were using it for non work activities. That is now sitting at 72% as of June of 2025. So some of the data is a little skewed because they excluded enterprise and education data. But it definitely suggests that OpenAI is leaning towards becoming a consumer product, maybe the apple of the AI words world, which is different from maybe a different company like Anthropic, who is is definitely more work heavy. So definitely a consumer product that they're building right here. Which is again why these safety features are important because people aren't just using it as a work tool, they're using it as a friend, as a companion, as something to talk to. And that is especially problematic if those people are teens.
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Yeah, we got a specific breakdown of what people are using ChatGPT for. It's very interesting. The number one use case for chat GPT among users is practical guidance. 28.3% of all chats. This is defined as seeking how to advice help with schoolwork tips on working out. So Tony, I know you like to use ChatGPT for working out. So you are part of this cohort that is using ChatGPT as just basically an overall advisor for your life. Number two was writing help. This is the second biggest category and he said among that the biggest use for among within writing help is to have chat CBT critique your text or edit it before you send it off to the final recipient. And the number three, seeking information. This is basically using chat CBT as Google. I would say this is what I use chat CBT for. Tell me the last five NFL MVP is just give me some, some information. And that's what Google is looking at. And they're probably thinking okay, that's good that it's three and not number one. But we still got a target on our backs. And then at the bottom of the spectrum. Now this is fascinating because this has been huge in the news about how kids and teens and even other people are forming parasocial relationships with Chat CBT. Only 1.9% of messages were conversations related to asking for advice on relationships and discussing personal reflections, while just 0.4% was role play. So if you're talking about people who think they have an AI girlfriend or a boyfriend, it seems like that is in the major, major minority here. According to Chatbots data, Tesla's motorized flush door handles aren't just frustrating to use, they're also potentially a serious safety issue. That's according to U.S. auto safety regulators who opened an investigation into Tesla's electrically powered door handles after receiving reports from owners who couldn't get into their car. The National Highway Traffic Safety Administration is looking at certain Model Y vehicles for now, but said the scope could widen to include more. Scrutiny is rising on Tesla's flush door handles, which debuted with the Model S in 2012, expanded to more Tesla vehicles in the years since, and have become widely adopted by other EV makers. While they make the car look sleek as heck, these electronic door handles don't work that well when there's no electricity, as in when the battery dies. Tesla has included manual releases for its doors in emergency situations, but they are not in convenient locations and many owners don't even know where they're located. The regulatory probe comes on the heels of a major Bloomberg investigation that details many examples of people being injured or even dying when they couldn't open their Tesla doors after a crash. Toby, maybe this was a design choice that was too innovative for its own good.
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Yeah, it's certainly one that was design focus in mind. Because door handles, if you are a designer, are a little bit ugly. They're not aerodynamic. And so what if we could just make them flush and make them just a little better on the eyes. But it does make them a little more dangerous. And the issue is the industry goes as kind of Tesla goes. So when Tesla set the standard and said, we're going to make these door handles motorized and electric and flush, a lot of other car companies started copying them, especially in their EVs, showing that, hey, this is our futuristic tech. And that has become an industry standard. Now that is a real headache for people in emergency situations because you need, you know, it's called like the big red button principle. All UX design goes away in an emergency situation where seconds matter. And so when you're having to try to search for a manual door release that is in different places across different models, that's when it becomes dangerous. So that's why we've seen just this surge in reports, especially as EVs have adopted the standard across the industry.
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Yeah, I didn't know this, but actually Tesla has two different batteries in its car. There's a low voltage pack that operates systems like windows, doors and the touchscreen, that's 12 volt power. And then there's that high voltage pack that propels the car. So if the low voltage battery, that 12 volt dies or is disabled, then you can't unlock the car the way it's supposed to. And you have to find this latch, which sometimes is under the seat and people just don't know where it is. And especially if you're a kid, you have no idea where it is. But you can understand why automakers, especially EV makers, are moving in this direction with this particular design choice. And it has to do with vehicle efficiency. One of the big things for a potential EV buyer is okay, what is the range on this car? And you can reduce track a little bit by putting these door handles flush to the car. But however they did some experiments on this, it really doesn't add a ton of drag to have real standard mechanical door handles. It adds a drag coefficient of about 0.01 which equates to a little more than a mile of EPA range. So it really is a design choice and not anything else. Because if you actually look under the so called hood, then you find that doesn't reduce drag all that much. A bigger component is just how big the wheels are.
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And then obviously designers love it because it looks better. But actual people who are buying cars don't love it that much. J.D. power does. You know this quality survey over the years and percolating problem areas have become more and more of a thing. Percolating problem areas are basically in going into and out of a vehicle. And, and these door handles are just so non intuitive to use sometimes. I mean the, the cybertruck did away with them completely. There are no external door handles. So this is something that consumers don't even necessarily like. And yet they continue to be a part of this EV design language. Maybe some of the regulations might make it so that these will not be legal going forward. So if you do not like this era of hidden or electronic door handles, it may be coming to a close eventually. Now let's take a quick break and come back and talk about flag football. This message is a paid partnership with Apple Card. I'm a person who really appreciates simplicity. And when it comes to credit card rewards, the simpler the better. That's one of the many reasons I have an Apple card. The rewards are super straightforward. I earn up to 3% daily cash back on my everyday purchases. There are no points to calculate, no limits or deadlines. Plus it's super easy to access my card and make payments from the Wallet app of my iPhone. If that sounds like the kind of simplicity you want in a credit card, apply for Apple Card in the Wallet app on your iPhone. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Brands terms and more@apple card.com do you, like millions of.
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People all over the world, struggle with procrastination?
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How much time do you have for me to explain?
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Someone shield Giselle's ears because Tom Brady is looking to get back to playing competitive, but he's not donning pads and competing for Drake May's job. He announced on Monday he would be the headliner for a new three team flag football event going down next March. The event, which is not an NFL initiative but will feature NFL players, is taking place far from Gillette Stadium all the way in Saudi Arabia as part of the Crown Prince's campaign to enhance the country's global reputation via sports. You can add flag football to a list that includes the live golf spin off league, ownership of a Premier League club and a season ending tennis tournament in Riyadh to Saudi Arabia's so called sports washing campaign. For football lovers, it does represent an intriguing mix of storylines. Joining Brady are Rob Gronkowski, Christian McCaffrey and a host of other current and former players, as well as three active head coaches. As the NFL looks to grow the game globally, flag football has been one of its main vectors, especially ahead of its debut as an Olympic sport in Los Angeles 2028. To have Brady and other high profile players attach their names to this shows there is some significant investment being made. Now the NFL is hungry for that international audience hosting multiple games overseas this season. Now it's busting out the flags and heading to Saudi Arabia.
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Yeah, as the athletic wrote, it's a match made in pigskin heaven. The National Football League is looking for new markets. Saudi Arabia is looking for new sports. So that's why the two are teaming up. It's interesting that they would go with flag football for this, but this is actually a playbook that has been run by the NFL and other boosters of football. It's seen as the gateway drug to generate broader interest in football, in professional football, in the NFL. So this season, the NFL is playing seven games overseas. It's got Europe, it's got North America, and it's got South America. But what it's looking to is other markets beyond that. It's looking to Japan and the Middle East. These are places that don't really have any football culture at all, as opposed to Europe and South America. They have some familiar familiarity with football and some people do play it there. But in the Middle east and Japan, those are huge markets that the NFL is looking to tap into. And it's hoping that this super buzzy celebrity game within flag football specifically will be that entry point.
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And it does look like flag football is how they want to reach both men and women as well. The league is apparently interview operators to run a professional league with six to eight teams. They want to invest in these individual franchises. Some create some sort of limited partnership between the league and flag football because it's just an easier game to play. You know, I mean, I don't really know how to put the pads on and, you know, do a west coast offense. But everyone has played flag football at some point in their career, so it's just much more accessible. So it's almost like the baseball playbook that if you want to expand it internationally, make the game easier to play baseball, you can play with a stick and a ball. Now, flag football is a little bit easier than, you know, suiting up and going to war on the gridiron.
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And we should add that flag football is coming to the Olympics in Los Angeles in 2020, and NFL players are going to be playing in that. And there's just a lot of excitement around watching these guys play flag football against, you know, some. Some hapless other countries, which I don't envy. Okay, let's spread to the finish with some final headlines. Babe, wake up. The Fed interest rate decision is today at 2pm Eastern, the Central bank is announced an interest rate cut for the first time in nearly a year, its attempt to shore up a rapidly crumbling labor market. And that's not even the most dramatic part. Thanks to President Trump's unprecedented efforts to overhaul the central bank's roster, this is being called the strangest Fed meeting in years. On Monday, Senate Republicans confirmed Stephen Myron, one of the president's top economic advisers, to serve as a Fed governor, meaning he'll be in the room where it happens. So, Elisa Cook, a Fed governor who Trump has tried to fire over allegations of a mortgage fraud. Earlier this week, a panel of judges blocked Trump from sacking Cook before the Fed meeting. Amid all the drama, Fed Chair Jerome Powell, the primary target of Trump's bashing, will step up to the podium for a high stakes presser to explain the decision and talk about what comes next.
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Yeah, Mirren is the big wild card here because he was just so recently confirmed but still gets a vogue. Potentially. What people are thinking is that he's going to kind of align with Trump and push for maybe a larger reduction in interest rates. Trump has been posting on True Social saying that he wants that bigger, you know, 50 basis point cut rather than the typical 25 basis point cut. And then, yeah, you have Cook, who's also wrapped up in all this legal drama, who probably hasn't had time to prepare either. So it's just going to be kind of maybe looking around the table at all the governors going like, I don't even know that guy. Cook has been just dealing with their own situation. What are we all thinking here? So Jerome Powell has to, you know, wrangle the herd once more. And again, all signs are pointing towards that rate cut, but it's going to be a bumpy road along the way. Up next, Trump is accusing the New York Times and four of its reporters of defaming him ahead of the 2024 election, claiming that multiple articles and books, quote, were specifically designed to try and damage President Trump's business, personal and political reputation. The damages Trump is seeking are at least $15 billion. The suit focuses on the timing of the articles and books, which Trump says were at the height of election season meant to inflict maximum electoral damage. This is just the latest in a series of legal actions taken by Trump and his team against news outlets. Remember, he sued CBS 60 Minutes, resulting in a $16 million settlement. In July last year, ABC News agreed to settle a defamation suit for 15 million, while Trump also has a current lawsuit against the Wall Street Journal. But, Neil, this is the Times, and this one is seeking $15 billion.
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The New York Times had a fiery statement in response. It said the lawsuit lacks any legitimate legal claims and instead is an attempt to stifle and discour reporting. So we'll be seen whether the New York Times decides to settle. Like Disney and like Paramount Global, there is a very high bar for a public figure like President Trump to prove defamation. They need to show that the publisher knew what they were writing was false or that they had serious doubts about the truth of those statements. But we just haven't had that adjudicated in court over Trump and his war against the news media. And that's because all these companies have settled before it went to court. We'll see what the New York Times.
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Does Finally, Limewire, the torrenting site that infected your computer but let you download Akon's latest album, has bought Fyre Festival's brand assets. Meaning a peer to peer file sharing site can now throw an ill advised Bahamian festival with all the pirated music we all use to download. This mashup is a real test of the ad age. Two wrongs don't make a right. This all started because Billy McFarlane, Fyre Festival's founder who eventually went to jail for fraud, recently tried to plan a Fyre Festival too, that never got off the ground. So he ended up selling the brand off to the highest bidder, which ended up being Limewire, who apparently outbid Ryan Reynolds Production company. Maximum effort for the ip. As for what to do with a brand notoriously associated with abject failure and fraud, Limewire's new owners, two Austrian brothers who bought up the assets and relaunched it as an NFT platform back in 2022, are trying to run back the same playbook. One thing we've learned with buying brands is that obviously you can't go too far from the original concept, one told Fast Company. So pack a water bottle and a cheese sandwich. Fyre Festival, at least in name, is coming back in some shape or form.
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Yeah, maybe this is an example of a negative number times a negative number is a positive number. Or it could not be. They'd certainly played up the goofiness of this all in the announcement. The headline from this press release was Limewire Acquires Fyre Festival Brand. What could possibly go wrong? They also asked Ryan Reynolds for a quote to, you know, kind of juice the publicity of this. Reynolds said. Congrats to Limewire for their winning bid for Fyre Fest. I look forward to attending their first event, but will be bringing my own pallet of water. It's also the next in a series of defunct brands that are getting resurrected, whether for jokes or not. Napster was bought for $200 million earlier in the spring by a 3D technology company. And then Enron has been brought back by the guy who created this conspiracy theory, Birds aren't real, but that seems to be a joke. So you're seeing a little millennial nostalgia being, you know, brought into 2025 through these brand asset acquisitions. And we'll see whether anything tangible comes out of this. But for, you know, such a small piece of change. It does. I don't know. You know, I don't think we are going to do anything with Fyre Fest.
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I know they say they're not going to throw another festival, but it does seem to make sense because a lot use Limewire to, you know, download music illegally back in the day. So maybe there's like an illegal aspect to it where they do just pirated songs. They've kind of left that era behind. They're trying to do more legit peer to peer file sharing at this point, but I feel like they're not going to resist the sirens call of throwing Fyre Festival 3 or something along those lines. It's also just been remarkable, the staying power of Fyre Fest. I thought that was maybe like just going to be a one time thing, but it has just become synonymous with failure, that people just know it as a brand now. So maybe it was a bargain for what they actually paid for it.
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That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Wednesday. Big shout out to the Smartacles for winning trivia last night and thanks to everyone who came by. Such a blast. And stay tuned for more. If you have any thoughts or feedback on today's show, send a note 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. What could possibly go wrong? Devin Emery is our president and our show is a production of Morning Brew.
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C
Great show today, Neil. Let's run it back tomorrow.
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