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Good morning, Brewed Daily Show.I'm Neil Freiman.And I'm Toby Howell.Today, college tuition is going down.
Wait, what?Then the UK is rolling out its biggest tax increase in generations to avoid falling further behind the United States.It's Friday, November 1st.Let's ride.
Good morning to everyone waking up from their candy coma or who couldn't sleep at all after a horror movie marathon.Hope it was a great Halloween.Big weekend coming up.
Daylight saving time is ending early Sunday morning, which means you get one extra hour of sleep, but it's going to get dark out real early.Toby, how are you celebrating?
I'm celebrating by going for a little jog.I am running the New York City Marathon on Sunday, and I've gotten a few questions on how potentially you could follow along.
If you do want to follow along, download the New York City Marathon app and search my bib number, which is 4926 or my name, Toby Howell.
I will be wearing all orange, head to toe, because I'm running the race in partnership with HubSpot, so I will be hard to miss.
All I request that, if you see me, give me a hearty let's ride, or maybe even a Neil's numbers, but yes, hope to see you out there.
The one other thing I do want to plug, too, is Neil and I are hosting a shakeout run in partnership with Hoka the day before the race, so if you're running the race or just want to hang with us to jog a few miles,
Meet at the flagship Hoka store on 5th Ave at noon on Saturday.It's gonna be a good time.Nothing like race week in New York on the New York City Marathon.Now, a word from our sponsor, Bonobos.
Neil, I cannot believe it, but this is our last Bonobos ad.But think of the memories we made along the way, from wearing our Bonobos suits on the pod to hosting our first ever trivia night with Bonobos, where we got to meet some of you all in person.
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We need to talk about college tuition prices.You probably just broke out into a cold sweat.He's going to talk about how they're spiking even more, you think.But on the contrary, I come bearing good, incredibly surprising news.
The cost of college is going down. A new report by the College Board found that tuition at many of the nation's colleges and universities has been flat or is in decline.
In fact, public flagship universities in 45 states charge less for tuition and fees in 2024 than in 2019 after inflation.Even private nonprofit colleges are getting cheaper.
Average tuition and fees have fallen from nearly $19,000 in 2014 to about $16,500 in 2024 after accounting for inflation and aid.
And Neil, that aid part you mentioned is key.The College Board said that tuition is going down partly because there's been an influx of money to colleges from federal, state, and local governments.
After decades of states pulling back on funding, education appropriations per full-time college student has surpassed 2008 levels in half of all states.
This is probably coming as a shock to a lot of people, ourselves included. NYU, Tufts, Brown, Yale, Washington University, and other colleges all charged more than $90,000 for the 2024-2025 academic year.
So when you see headlines like that and just our intuitions and how much we pay for college,
We're like, oh my god, you know, college costs are out of control, they're only going up, but that is just not the case when you actually look at the fine print because of aid and things like that.
At four-year public schools, 31% of students pay nothing for tuition and fees, and 18% of students at private colleges and universities also qualify for the same deal.
So colleges have this thing where they put out this sticker price to the world that gets broadcasted in headlines all over, and what you actually pay is a lot less, and the overall trend line is staying flat or even going down, which is a huge surprise.
It was a huge surprise.College is a competitive market just like any other market.I mean, we see the restaurant industry right now fighting over customers by lowering prices.Same is kind of true for colleges.
More colleges are competing for a smaller pool of prospective high school students, so they've really been forced to make tuition cheaper, and the way that they are doing that is because a lot of state and federal funding is flowing into these universities.
A lot in the decline in net prices of state colleges is because they are getting more funding.And I think it is.
We have to go back to another story we did, um, which was a bunch of Northeast students are now going to college in the South because states are learning that if you can get people, young people, young college educated people to move to your state and go to colleges, a lot of them stick around.
It has a big impact on local economies.About two thirds of college graduates do end up working in the States where they attended college.So I think that might've been a little bit of a wake up moment that
Maybe we shouldn't be pulling funding away from making college more affordable.We should be putting more funding into that.
Now, people listening to this, and if I were listening to this, I'd probably be like, okay, Neil and Toby, you went to college.You know that tuition and fees are just a fraction of what you'd pay.What about the all-in costs?
Room, board, personal expenses, textbooks, things like that.That must be going up, right? Well, yes, a little bit, but not by much as inflation at all.
The net cost of attendance going into 2024-2025 school year versus the previous year at private universities was up 1.4%, lower than inflation, up by less than 1% at public four-year institutions, much less than inflation.
So even the all-in costs are going up by less than inflation, which we know has been going up a ton in the last four years.
Hopeful stat here is we talk a lot about the student loan crisis and people piling up student debt Well undergrad borrowing is down for the 13th consecutive year.
That's also a news item You probably haven't heard undergrad students and their parents borrowed ninety nine billion dollars in federal and private loans last school year which is down from a peak of a hundred and fifty nine billion in 2010 and 2011 and a lot of
of this is attributable to $15.4 million, and the oncoming freshman class for 2025-2026 is expected to be down 5%.So you're right.Colleges are in an all-out battle to compete for students, and they're having to lower tuition.
Just something, a news item I never thought I'd talk about. Okay, let's head to the UK, where if you're the kind of person who has a butler named Cuthbert and flies in private jets, you might want to skip to the next story.
Britain's ruling Labour Party, who ousted the Conservatives this summer, unveiled their much-anticipated budget yesterday, and it proposes a major tax hike on the wealthy to pay for more public spending.How major are we talking?
The government wants to raise $52 billion in new taxes, which is the biggest increase in a generation. As promised in their campaign this summer, labor is going after the 1%.
With these tax hikes, they include new taxes on inherited wealth, capital gains, and the jet-setting crew who live in the UK but make their money elsewhere.
Speaking of jet-setting, taxes will be increased for private jet flights and a tax break for private school fees will be removed.Employers will also be required to pay higher taxes on their workers' salaries.
In introducing the budget, Finance Minister Rachel Reeves, who, interesting fact, is the first woman to hold the position in the 800 years it has existed, blamed the conservatives for presiding over a lagging economy that has been left in the dust by the United States.
She said this budget was a responsible course forward to get public finances in order and kickstart economic growth.
I mean, something had to change over the U.K., so you might as well go big.The head of the government budget watchdog said that this is, quote, one of the largest increases in spending, tax and borrowing of any fiscal event in history.
So, I mean, a little dramatic there, but there is a massive gap between the U.S.and European economies in general, not just the U.K. Real gross domestic product has risen 10.7% in the US compared with pre-pandemic levels.
Compare that to around Europe.France is languishing at 3.7% growth.Britain is at just 2.9% growth, and Germany's at 0.2%.
So there is just, I mean, you can call it a black hole left by the Conservative Party, but there is just a sort of economic malaise settling in around Europe and around Britain itself.So they think that this is the right path forward.
Increase taxes so we can increase public spending, increase public investment. try to get out of this hole that they've been stuck in since the pandemic.
Investors are a little wary that this will kickstart growth, though.Yesterday, there was some major moves in the UK bond market, which I know everyone is paying attention to.
But you should pay attention to it because bond yields jumped the most in a year.So that's a proxy for borrowing costs.
They are now the highest level in the year in the UK, which is an indication that investors aren't so bullish that this new budget over the next in the near term or the long term will produce any meaningful gains in growth.
The Labour Party would, you know, contend that.But the Conservatives, there's been a war of words that are going on between the Labour and the Conservatives, who they ousted after 14 years.
Former Prime Minister Rishi Sunak, he called the budget an enormous borrowing spree that contains broken promise after broken promise. We have investors and the conservatives saying one thing and the labor saying one thing.Trust us.
We need to get this spending.We need to start spending on infrastructure.And here in the United States, there's been a ton of spending.
Biden administration has done a lot of infrastructure spending, things like the IRA, the Inflation Reduction Act to spur economic growth.So that's kind of what the UK is going after as well.
I think the UK is trying to paint this picture where they're saying, we have so much public debt right now, and what it's doing is sapping our ability to invest in things like infrastructure.
So much of the government's budget has been just hoovered up, if we want to use a UK term there, by borrowing costs.So they're trying to say, we need to invest in our crumbling public services.
We need to reduce the debt burden that we're facing right now.And I think the path forward is through higher taxes on the 1%. Like Lightning McQueen in Cars 3, Tesla is getting passed by a younger, faster car maker, BYD.
The Chinese EV maker leapfrogged its elder competitor, posting revenue in the third quarter that topped Tesla for the first time ever. A 24% rise from last year sent profits to $28 billion, edging out Tesla's $25 billion Q3.
It was the first time that BYD nosed the head buoyed by record vehicle sales, despite a bit of an EV slowdown in China over the past few quarters. Luckily for BYD, though, it doesn't just sell EVs.
About half of its sales are actually hybrid vehicles, so Tesla fans, yes, it is still the biggest pure EV seller in the world, and it does have the most popular battery-powered model in China, too, thanks to the Model Y, but it's no longer in objects in the mirror are closer than they appear scenario between BYD and Tesla.
It's just a full-on race at this point.
Absolutely, I mean Tesla delivered more all-electric cars than BYD as you mentioned 463,000 to BYD's 443,000 but that is not the full portfolio of cars that PYD has they sold 686,000 plug-in hybrids and they also have these crazy hybrids that get insane range couple of them go more than 2,000 kilometers due to some
tech wizardry that they produced over there.
So we know that EV sales are slumping and hybrids have been really the winner of 2023 and 2024 as people dip their toes into the electric market but don't want to go full battery and BYD has just been an absolute, you know, perfect position with a huge consumer market over in China to win that over.
You are seeing just how big a threat BYD is in how Volkswagen is doing recently.
I mean, we've talked about the fact that Volkswagen is closing down three plants for the first time in its history, basically saying like, hey, we cannot compete with the cars coming out of China right now.
So even though we are comparing BYD to Tesla right now, the BYD wave is sweeping up legacy automakers as well.The U.S.wants to stop that wave in its tracks though.They do not want these Chinese EV makers infiltrating the U.S.
market and so there's been this proposal of 100%
100% tax or here that it is here a hundred percent tax from the United States in Canada in response They're saying that there's this unfair state subsidization of China's car industry right now But right now be idea slowly infiltrated Europe.
They want to 90% of their sales are still domestically in China They do want to expand but the u.s.Is saying We do not want you coming over here because of just how but much of a threat it is to legacy automakers
The US and the EU.I mean, the EU this week on Wednesday slapped tariffs on imports of Chinese-made EVs on up to 45%.So they are trying to block Chinese EVs.Not block, but, you know, that would be 100% tariff, like what the US and Canada are doing.
But 45% means they definitely want to slow the roll because Chinese cars make up 20% of all new car purchases.And you're seeing what's happening to Volkswagen.They aim to close three plants in Germany. for the first time ever.
Overall though, I want to zoom out to other U.S.automakers before we go.Ford is feeling it with this EV slowdown.Yesterday they said they would pause production of their electric F-150 Lightning truck until next year, January 6th.
And I remember two years ago when there was a bazillion long wait list for this Lightning EV truck and now they are pausing production because of sapping demand.So that just really tells you where the winds are blowing here.
Up next, after a wild week in the market, let's see who our Stock of the Week, Dog of the Week is.
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It is Stock of the Week, Dog of the Week time, where Neil and I bring you one stock who got all Twix, Reese's Cups, and Skittles while trick-or-treating, and one stock that only got Dots, black licorice, and candy corn.
Neil, you won the pre-show game of who can eat the most Haribo gummy bears, so you're up first with a tummy ache.
What's our Stock of the Week?My Stock of the Week is Brinker International. which probably doesn't mean anything until I tell you it's the owner of the restaurant chain Chili's.Brinker popped more than 8% this week because Chili's is kicking butt.
On Wednesday, the chain reported a year-over-year sales increase of 15% while traffic jumped 6% last quarter, and it's all the more impressive given that All of Chili's rivals are either flatlining or going bankrupt.Traffic to U.S.
restaurants was down by 3.3% this year, while visits to casual dining restaurants dropped 4.5%.So what is Chili's doing right?
It slings good enough food for affordable prices, and that's been a winning formula for Americans battered by high inflation.One huge success story has been this Big Smasher burger meal, which rivals the McDonald's Big Mac, costs just
10.99 and includes unlimited drink refills and bottomless chips with salsa and french fries.That's been a significant traffic driver," the CEO said.Plus, you can't talk Chili's success without its comedic, relevant marketing.
Its promotional team has tapped into pop culture trends and responded quickly when Chili's dishes have gone viral on TikTok, which happened with its triple dipper appetizer platter.It's gonna be a rare restaurant W.
The restaurant industry is so odd because what Chili's did well is just name a burger, the Big Smasher.
I know, as soon as I was saying that, I was like, is this a real thing?But it does speak to a wider truth.You gotta nail your social media presence.You gotta nail these promotions, these special items.So the Big Smasher and the Triple Dipper,
I mean it offers six dollar margaritas as well Which never heard so if you look at what the broader how the broader fast casual industry is doing right now They are obsessed with trying to get prices down because you just see bankruptcies everywhere you look but Chili's is like you want a big smasher, which again does provide great value It shows like it's part art part science here.
People do just have this great love for Chili's right now, though.
Yeah, they say that the Big Smasher has twice the beef of a Big Mac, so they're really hammering that value, and McDonald's has come under fire for increasing its prices, where it's very hard to distinguish between whether you're gonna get a better deal at a fast food place like McDonald's or a casual chain like Chili's.
But yeah, overall, let's zoom out to the restaurant industry.
American consumers now just look at those chains like they're tchotchkes bar and grill from office space just outdated Not relevant to the modern consumer I think Chili's has been able to buck that trend and stay modern through these viral marketing techniques but restaurant chains this year are on track to declare the most bankruptcies in decades outside of
2020 we know we had big Red Lobster Hooters is also teetering TGI Friday's just closed 50 locations abruptly So everywhere you look restaurants are down But Chili's is a remarkable outlier and I'm sure a lot of other restaurant CEOs including the new Red Lobster CEO is taking notes
My dog of the week is Supermicro Computer.It's not often that an auditor resignation letter makes headlines, but EY did not hold back when it announced it was stepping down as Supermicro's accounting firm this week.
Supermicro is the buzzy AI stock that's shot up to a $50 billion market cap and made its way into the S&P 500 by being a vendor that sets up GPU clusters companies use to train their AI models.
But some cracks in its financials started to show through earlier this year, culminating this week when its auditor EY wrote that they are, quote, Neil, there were warning signs along the way.
This summer, its shares dropped 19% after Supermicro said it wouldn't file its annual report with the SEC on time.But having your auditor say, you know what, we can't take management at their word anymore, and quit, that is more than a warning sign.
That is a big old red flashing air siren.It has, and we had that air siren earlier this year when Hindenburg Research, which is a short seller, filed a report talking about some alleged accounting improprieties.
This stock, we have to talk about this stock. It went ballistic over the last two years, up more than 2,000%, way more than even NVIDIA's gains.
It shows how the NVIDIA center of gravity has taken a lot of stocks with it on that ride, because when you build data centers, you don't just need the NVIDIA GPUs, you need the computers, like Supermicro makes that house the GPUs.
You need coolants to cool all the heat, so you have all these liquid cooling solutions going absolutely ballistic as well. I don't know whether you want to call this a referendum on the AI bubble or saying the AI bubble has popped.
That's probably not the case here.It might just be a problem confined to Supermicro that can't really get its books together, can't even hang on to an auditor for longer than a year.
Yeah, I do think that one, their rise was powered by the fact that people were looking for names other than Nvidia to invest in and like, Oh, what is this company?Super microcomputer.It feels like it was a diamond in the rough.
So it did go absolutely parabolic, but now it's gone parabolic in the opposite direction.It did just have a trifecta of things like you had the Hindenburg short report.It had that missed sec filing date.It had multiple accounting firms resigned.
So I do think that It probably is a super micro problem if so many people are looking at their books going like listen We don't know what's going on here.
We don't want any part of it It is funny that an auditor resignation letter was like going viral because you don't really hear auditors resign this Noisily everyone called this just the noisiest resignation that they have seen but UI does not want to be associated with this because they really just can't take management at their word with the reports that they're submitting
OK, let's sprint to the finish with some final headlines.And I mean sprint because it's Friday and the weekend is so close.Apple wrapped up a busy big tech earnings week with an Atlanta Falcons type report.Just very mediocre.
Thanks to the release of the iPhone 16, Apple is rebounding from one of its longest sales slumps in history. but it's still struggling in its third-largest market, China, where revenue declined.
Apple is also searching for its next big thing to drive growth, and it doesn't seem like it's the Vision Pro.
Overall, investors weren't too happy with what they heard from all the big tech firms this week, sending shares of companies like Meta and Microsoft lower.
Yesterday, the tech-focused Nasdaq had its worst day in almost two months, and the S&P closed out October with its first monthly loss since April.
Yeah, red October right there.I mean, Tim Cook did try to paint a rosier picture.He said that iPhone 15 sales were stronger than 14 a year ago, and he said 16 is stronger than 15.
He also said that users are adopting iOS 18.1, which introduced some of those Apple intelligence features. twice the rate that they adopted, 17.1.So he's looking for the bright spots here.
It does feel like we are in a bit of a holding pattern until the full suite of Apple intelligence products roll out in December.So one other nugget in this Apple earnings reports during the quarter, Apple paid a one-time income tax charge
of $10.2 billion to resolve this big, long-running tax case dating back to 2016 over how the company was handling taxes in Ireland.
That is one big... Here we're talking about the UK doing the largest financial fiscal event in history, raising $52 billion in taxes.Apple paid one tax bill of $10 billion, so that was just one fat tax bill.It reminds me, rent is due.Rent is due.
OpenAI has debuted its Google killer.It unveiled SearchGPT yesterday, its AI-powered search engine that enables you to search real-time information like Apple's stock price or what Neil and Toby wore for Halloween yesterday.
OpenAI is actually pretty late to the game when it comes to real-time internet access, which rivals like Microsoft and Google have offered for months. But Sam Altman and co are bursting into the space like the Kool-Aid man.
There's no advertising when you search Google right now without their AI overview things that they are trying to roll out.You know, you get five to six promoted sponsored links at the top and you have to sift through.
If you search on chat GBT, you can have a conversation with it.You can follow up and there's no advertising.Maybe that speaks to a longer term problem for open AI because they need to make money.So you might see advertising at some point soon.
But for now, it seems like a blissful search experience and they're going to provide. you know, there has been a lot of tension between the AI companies and the publishers who do provide this information.
It looks like OpenAI has signed a ton of deals with publishers, and they're going to have a source tab if you want to see where that information is coming from.But for now, it doesn't look like it tells you to eat rocks, which Google did.
And so that is a win for ChatGPT right there. A team of developers wants to build a mini Monaco in the United States, and they want to do it in Fort Lauderdale, Florida.
The team announced a massive $2 billion development in the city north of Miami, a 40-acre site that will include a St.Regis hotel, multiple condo towers, commercial space, a beach club, and a marina that will have slips for yachts up to 350 feet.
If you want to build a glitzy Monaco in the U.S., Fort Lauderdale seems like an excellent choice.
It's already the yachting capital of the country, and this weekend it's hosting the 65th edition of the Fort Lauderdale International Boat Show, which organizers say is the biggest boat show ever put on.
Toby, I'm debating whether to watch you in the marathon or go down to this boat show because it seems like a lot of fun. go to the boat show.
Monaco is kind of renowned as this tax haven for the rich and wealthy.It has no personal income tax.It 30% of its residents are millionaires.So hearing the words Fort Lauderdale and Monaco in the same sentence is a little bit bizarre, but
You know, it's got this deep water marina.It does say that it's a yachting capital of the United States.So I guess give it your best shot.
My question is with just the hurricane seasons that Florida has gone through in the past few years, is it really smart to put $2 billion towards a development on the water?I don't know.Swing for the fences, I guess, at this point.
Ryan Reynolds and Rob McElhenney are speedrunning the United Kingdom dream, following up their purchase of the Welsh soccer club Wrexham by buying its brewery as well.
Wrexham Lager was founded all the way back when Neil was born in 1882 and claims to be the oldest British lager brewery still in existence.
If they run the brewery, anything like they've run the football club so far, it'll be taking on AB InBev soon, Neil.
Everything they touch seems to turn to gold, and if there's anyone you want in the alcohol business, it probably is Ryan Reynolds.He had the stake in Aviation Gin, which sold to Diageo in 2020 for $610 million.
Meanwhile, the soccer team is doing really well.It's got back-to-back promotions in consecutive It's now in the third league in the UK, only two more promotions, and it gets to the Premier League and the riches that come with it.
Remember, these guys bought this team for 2.5 million dollars, which is nothing to them, and now it's going, you know, supersonic, and now they bought the brewery, which I'm not sure how much money they'll make on the brewery, but hey, I never heard of Wrexham Ale, Wrexham Lager before this, and now I do.
They're currently in third place, too, in League One.So, literally, they are on track for back-to-back-to-back promotions, which just seems like a fever dream at this point.But Super Paul Mullen, their striker, seems to be primarily quality.
That is all the time we have.Thanks so much for spending part of your morning with us.Have a wonderful Friday and an even better weekend.For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com.
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For your daily dose of sharing inspiration, we turn to Toby.
I want you to share the pod with someone running the New York City Marathon this weekend.I can't think of anything that would motivate you to run 26.2 miles faster. Then Neil and Toby delivering the most important business news of the day.
And yes, I know our shows are only about 25 minutes long.So listen to it at one tenth speed and you'll be fine.
Let's roll.That's a preview.Let's roll the credits.Emily Milliron is our executive producer.Raymond Liu is our producer.Olivia Graham is our associate producer.Uchenowa Ogu is our technical director.Billy Menino is on audio.
Hair and makeup is Carbo Loading.Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil.I wish you all well.
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