Marketers, say you invest in something that seems incredible like millions of views, but then don't see any revenue that's not going to make your CFO happy. Instead invest in LinkedIn ads, they generate the highest row ads of all major ad networks, spend $250 on your first campaign on LinkedIn ads and get a $250 credit. Just go to LinkedIn.com/MBD, that's LinkedIn.com/MBD, terms and conditions apply. Good morning, Brutalee Show, I'm Neil Framon, and I'm Toby Howell. Today, San Francisco's busiest startup is in a tech company. It's a basketball team. Then, who are the hackers behind the biggest crypto-highest of all time? It's Monday, November 2nd. Let's ride. Hope you all had a relaxing weekend because Neal sure didn't. My co-host here took on the New York City Marathon on Sunday and completed it for his first ever marathon. The word I'd use to describe you right now is hobbled, but give us a quick rundown of the race if you can still bear to hear the word run that is. Well, first of all, Toby, we both ran Marathons recently, right? Because you just did Chicago last month, so I want to put some respect on your name first of all. I mean, certainly the hardest thing mentally and physically I have ever done by far, but probably the most interesting thing happened before the race even started. I was in the Uber on the way to Staten Island to start, and the Uber driver just, we're talking about the marathon, and he goes, "Sir, I know nothing about Marathons. Is there any benefit to running one?" And I had to pause for a second and like, take a B and just think, "Yeah, why am I doing this?" And, you know, I came up with personal challenge and he's like, "There's no financial benefit, right?" And he's like, "No, I'm literally paying hundreds and hundreds of dollars to do this." And, you know, I think that is my main takeaway. It is a personal challenge to see what you can achieve. And if you told me I was going to do this last year, I mean, I had never run a longer race than a 5K turkey trot, but you are always someone who says, "Go big, choose that big hairy goal that you think you can accomplish, and you can actually do it." And I think that's my main takeaway, is something that seems so out of reach for you. If you just keep chipping away at it, keep chipping away at it, you eventually can do it. And you might be really sore afterwards, but it's something you can do. Well, here's the big question. Will you do another one? I will say my first thought after finishing was, "I am never doing anything like that ever again, because that was just straight torture for like the last two and a half hours." But you know, ask me in six months, yeah, I won't deny it. Well, we're proud of you. And now a word from our new sponsor, Runway, Neil, you were born for Runway. You think I should be a model? Oh, God no. I mean, Runway, the company giving marketing and creative teams new ways to make ads, social content, TV spots, and more. Okay, hurtful. But Runway's Creative Suite lets anyone generate, edit, and finish, video, images, and audio for campaigns, as well as social and product content. So whether you're solo or part of a team, you can produce content that always stays true to your brand. You can tell Runway, HN, about your project, product, audience, or live campaign. And it finds the angle's most likely to land. Then it starts building concepts, adds full campaigns, and so much more. Each size for every spec you need. Sign up for free at runway.com/morningbrew and get 25% off paid plans with the code "morning brew". Finance, the biggest crypto exchange in the world, is hurting worse than Neal today. After getting hit with the largest crypto hack ever, Binance has been in full crisis mode, trying to figure out how to track down the $6.3 billion haul North Korean hackers got their hands on. The hack itself was carried out by the group "Trader Trader" and happened faster than you can listen to this episode. The compromised employee laptop helped hackers gain access to customer funds, but Binance clarified that the attack was much more sophisticated than just one laptop, with signs that the heist was orchestrated well in advance. Once they stole the funds, it became a race against time to recoup losses before the hackers could wash the cryptocurrency away into the ether. Binance first smashed the pause button on any withdrawals to prevent panic from spreading through its customer base. Then it began working with stablecoin issuers like Circle and even the Trump-backed World Liberty Financial to ID in finance some of the digital wallets holding stolen assets. In total, Binance says it was able to recover $3 billion of the $6.3 billion stolen, but 2.4 billion disappeared beyond any issuers reach according to investigators. When the dust settled, Binance was able to "cover" $6 billion, meaning 95% of customers were made whole. Binance will absorb the financial impact of these stolen funds, not our users, the company said in a statement. Neil, Binance resumed withdrawals over the weekend, but now it faces an uphill battle to restore customer trust after an episode that left the whole industry reeling. You said this took place in less than a time it would take to listen to this episode. This happened over the course of 20 whole minutes. It all went down Thursday afternoon. Binance first saw that there was a breach in their systems and they saw maybe a billion dollars leave. So they got everyone executives and security team on a Zoom call and Binance is a global operation. It doesn't operate in the United States, but from Abu Dhabi to Asia, all those places, they got on this Zoom call and then they just watched in horror with those little blue boxes. I can't even imagine what their faces were like as these funds were drained, $6.3 billion worth in 20 minutes, one of the largest financial crimes ever perpetrated in just 20 minutes. And who is trader, trader, it's so hard to say this, but I'm just going to spell it out for you guys. T-R-A-D-E-Rs. That's the trader. And then traitor, T-R-A-I-T-O-R. This is a state-sponsored North Korean hacking group. You have probably heard of some of their work, if not their name before, because they are behind many of the largest crypto hacks in history. They often do things like social engineering via fake job offers. They want to pose as IT workers within legitimate operations to gain access to sensitive data. So they are behind the attack and the method that they use often to actually make away with the funds is that once they drain a target, once you have $6.3 billion in crypto, what are you supposed to do? Because crypto is a very weird industry and that you can literally see these stolen funds moving across public blockchains for a long part of it. So it is this thing where regulators are saying, "I'm following where this money is going, but can I actually do anything to stop it?" And what trader, trader often does is they go to a exchange, a mixer pool that's called Tornado Cash, which is they take the assets from a freezeable token, which is something like a stablecoin that a central issue or actually controls. And then they deposit it into this thing called a mixer pool. It becomes Ethereum, it gets mixed in with a lot of other legitimate transactions, but then once it's in that pool, you can no longer follow the funds. And so this is all happening in the ensuing days where people are trying to catch it, but then the funds are being basically going incognito mode and that's where you lose $2.4 billion. So it is a weird industry in the sense that you can track the funds for the most part until you can't track them anymore. I wonder how many of our listeners are going to pause that and rewind it and start writing that down about how to steal all this money via the blockchain. North Korea, for North Korea, this has been a huge part of their economy. Remember, they are under sanctioned by much of the world. They can't buy things with US dollars and they can't have access to Western weapons and technology and all those things. So what they've done to literally boost their economy is just become this elite hacking enterprise. Bloomberg economist economics noted that the country captured 75% of its total 2025 revenue in the span of 20 minutes from this particular hack and you're seeing it play out in their economy. It expanded 3.7% in 2024. They're building huge buildings that you can actually see from space. So when you're talking about an industry that is powering the North Korean economy, it's literally hacking nearly 89% of reported crypto hack losses this year have been distributed to suspected North Korean linked hackers. So they are the entire industry that is kind of making crypto shake in its boost right now and it is powering their real economy as you mentioned. Moving on. Last Friday on the stock market marked a wipe out for the ages with the tech focus Nasdaq plunging 2.9% for its worst day since June. The S&P 500 wasn't far behind shedding 1.8% for its worst one day session also since June. Cracks appear to be widening in the AI trade that's buoyed markets and the economy all year. On Thursday Google lost more than half a trillion dollars in value its biggest loss ever. After it revealed its AI overviews might be cannibalizing its cash cow search engine. Things only got worse from there with Amazon reporting disappointing earnings and Intel sending everyone into holol weekend on the spookiest note shares plunged 29% their worst days since 1974 after whiffing on its sales forecast. That's bad for Intel but it's also bad for you the American taxpayer because remember the US government holds a 10% stake in Intel. All these AI jitters crushed one of the hottest trades of the past few years semi-conductors. The Philadelphia semi-conductor index which contains a basket of the biggest chip companies dropped 7.2% on Friday. Toby, this is a precarious time for AI companies. Investors are no longer handing them a long leash and when they fail to show how they're massive AI investors.
from start paying off, the carnage is spectacular. - It was so spectacular. We already have a nickname for what went down just before the weekend at Jonathan Crinsky, the managing director at BTIG described the earnings fall out as the Texas chainsaw massacre. - I like it, I like it, I think it's pretty good. But essentially what everyone is reacting to is the fact that after years of pretty easy money and like the blessing of Wall Street to continue on these buildouts, now you no longer see such a lenient and long leash. AI companies are facing a much tougher environment for borrowing and raising capital. The headlines I was saying too is that the AI boom is running into a Wall Street funding crunch. Remember, not many companies, pretty much only like three or four companies can fund the AI buildout via their own revenue and even like the greatest money making companies in history, Google, Microsoft, these companies are running into negative free cash flow. So you have to turn to Wall Street, you have to turn to the bond market to fund these. And if the bond market starts climbing up a little bit and saying, all right, show us the revenue. That is when you start to see everyone tightening and everyone kind of saying like, oh, this could turn into a Texas, Texas chainsaw massacre and get pretty ugly as it did. - And this is not just happening in the public markets but also the private companies that want to go public. We're seeing perhaps funding dry up open AI which wants to go public. Next year, just raised half of the $30 billion it had initially targeted in its most recent funding round. So far, they've just secured $11 billion in commitments and they did so at a valuation that was smaller than they were intending. They wanted to get a valuation in this most recent funding round of 1.4 trillion. They just raised money at 1.25 trillion. So some jitters over there and then the other company that's going public next week, Anthropic, they're also sparked some of the jitters in this stock market as well because there was a report by the fan out of times that Blackstone told investors that Anthropic might not get an investment grade rating following its IPO and might be in junk status. So when you're talking about the bond market climbing up and not giving sums to these companies like they had been, I mean, open AI Anthropic, the two big AI startups, we're seeing that in action right here. - Maybe it could be a blessing in disguise though 'cause what we did see on Friday is sort of a broadening out of the stock market. We saw consumer staples companies rise 1.4% on Friday. We saw the energy sector rise nearly 2%. So maybe it is quelling fears that the market has become too top heavy, too tech heavy. And even this morning we are seeing futures back up again, the S&P 500 futures are up. 0.5% in Nasdaq 100 futures are up nearly 1%. So maybe it is something where like it's a healthy correction. The market got too concentrated in a couple of names now. It's just more companies are participating in a rally. - Right, we're seeing the Nasdaq absolutely get wiped out but the S&P 500, which is a broader basket of companies, it fell less than 1% in October. It fell less than 1% in September. It's still near its all time highs. So right now this carnage is just really focused on AI companies and specifically the tech sector. Welcome to winners of the weekend. The segment where Toby and I pick one stock who went all out with their Halloween costume and another that mailed it in which everyone noticed. I won the pre show, who's in most need of a massage contest. So I get to go first. And my winner is the Golden State Valkyries, which, and I know there's a lot of competition, might just be San Francisco's most successful startup. Just 17 months after they played their first ever game, the Valkyries won the WMBA Championship Saturday night defeating the Atlanta Dream in the league's first ever game seven. That is, the fastest, a new North American professional sports team has ever won a title. It's a testament to the play of the scrappy underdogs and their coach Natalie Nakase, who became the first female coach of color to win a WMBA title. But it's also a handsome payout on a bet made by the team's owner, Joe Lakeb, a former venture capitalist who also owns the city's NBA team, the Golden State Warriors. Back in 2023, Lakeb paid $50 million for the Valkyries, the first WMBA expansion team in more than 10 years. And he got right to work hiring a squad of three brilliant female sports executives who, according to Lakeb, are, quote, making me look good. How's this for looking good? In their two seasons, the Valkyries have sold out every single game at the Chase Center in NBA Arena. No other WMBA team has done that. The Valkyries also led the WMBA in sponsorship revenue. Instead of record with more than 12,000 season ticket holders, Toby, even in Silicon Valley terms, this has been an incredible investment. And Lakeb kind of called his shot when he was introducing the new team at an introductory press conference. He said, I'm telling you right now, we will win a WMBA championship in the first five years of the franchise. So a lot of people started surfacing that quote. Lakeb, obviously, was very quick to divert the glory towards this executive team that he had assembled. One of those is President Jess Smith. She had a pretty unique branding perspective, I thought. She said, if you're blue and gold, you will forever be compared to the warriors versus being two unique products I get to grow into two powerhouse opportunities. So when you are starting a new team up from scratch, you have to make every single decision. Do we want to associate ourselves with this other Bay Area team that is obviously enormously successful? Or do we want to, you know, create our own threats, create our own identity, which they did, which turned out to be absolutely the correct decision there. But it is fascinating how much it does behave like a startup in the early days of starting a franchise because every single decision about culture, colors, everything goes into will you be successful on the court? - Yeah, only 8% of the Valkyrie season ticket holders overlap with the warriors, which is exactly what they set out to do. And that is a remarkable statistic. And we talk about investment, startup, Silicon Valley, let's look at the numbers because Lake Up is going to make a pretty penny on the Valkyrie's if and when he decides to sell them or sell a stake. So he spent $50 million. That looks like an absolute bargain. They generated, this team generated $100 million in revenue so far this year. There's a bunch of new expansion teams coming online in the WNBA for the next few years in places like Philadelphia. They are going for $250 million. So I can't do back in the math. Back in the napkin math, but I think that's $5.50 million. So whatever he's going to sell this team or wants his pay out, then he's going to make a ton of money. He said, we have no interest in selling. He said, there's a tremendous interest in what we're building, and what we have been approached. Many, many times by potential investors, we are having too much fun in building something great for our fans. - I think it's so cool. This team has zero all WNBA selections. Their coach did not win coach of their year, so they kind of have this chip on their shoulder identity. It's going to be hard to have a chip on your shoulder, though, when you win a WNBA championship within two years of becoming a franchise. All right, we're going to take a quick break and come back with my winner of the weekend right after this. If you're an e-commerce owner, your morning probably starts with a lot of tabs and make your brain start screaming. - Herplexity computer helps put your mind at ease by connecting to the tools you are to use and builds a command center that gives you a complete picture of your business. - Before you wake up, it can pull together your revenue, ad spend, margin, inventory, email performance, and more. - Try Perplexity Computer for free at pplx.ai/brew. That's pplx.ai/brew. - Man, Neil, bon, sure are tricky, huh? - You can say that again, not to mention the market is huge rate shift and risk-high in plain sight. That's why I have a partner with scale and expertise matters. Luckily, Vanguard can bring both. - That's right, Vanguard bonds are institutional quality. Their lineup includes over 80 bond funds. They're actively managed by a 200 person global squad of sector specialists, analysts, and traders. - So, advisors out there, if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com/audio. That's vanguard.com/audio. Disclosure, all investing is subject to risk. Vanguard Marketing Corporation distributor. The business landscape in the US feels like it's changing as often as the specials board at a fancy farm to table restaurant. - The upcoming midterm elections are likely only going to bring more change. - Thankfully, PWC can help. Using decades of experience and expertise, they work with leaders to help make sense of the volatility. - PWC starts by identifying how changes in trade, AI, capital, and energy can affect your business. From there, they'll gather insights, model trade-offs, and share perspectives you can use to inform your decisions. - Get support leading through change head to pwc.com/us/20206 midterms. - My winners of the weekend are Etsy Witches who are raking in the cash by promising sunny skies on wedding days. It sounds like these set up for a Nathan for you episode, but people are paying up to $40 for spells intended to prevent rain on their big days. It started as sort of a joke on TikTok, but searches for weather-related spells and witches are up 206% this year on Etsy as brides aren't leaving anything up to chance. I wanted to do everything I possibly could to control a good wedding outcome. Cecilia Iole, a self-described type A bride told The New York Times. Hank Mason, who runs Crystal Conjure Magic, is a 77-year-old who charges 13 bucks per weather spell. His business grew 25% last year as the trend took hold. And eight, 29-year-old podcast.
from Brandon and Florida also paid $40 for a spell for his wedding day which totally worked by the way because it was gorgeous weather all weekend. Most of those who pay for the service can acknowledge that it likely has a very little effect on the weather but when it comes to your wedding with such high emotional and monetary stakes what's another 15 bucks to cover all your bases including the woo woo ones. Neil, so we get an Etsy wits on staff to make sure our shows go smoothly. Hold up. 29 year old podcaster from breed and tin. Is that you? You guys paid for Etsy which on your wedding day to make sure the weather was good? We did. Actually, it was it was just me I surprised my bride to be with that. Technically Etsy bands spellcasting. That's an interesting thing. So I had heard about this trend going into my wedding weekend. So I go on Etsy. I go give me a which like give me someone who can conjure a spell that will make this wedding a success and actually what it returned was mediums who would manifest outcomes for me. And I was extremely surprised at kind of the depth of product that I got. I kind of wrote some things about who we were, what we were hoping for. And I got back like 10 pages of notes that were extremely tailored and specific to the very things that we were saying. So it was fascinating. I mean I'm sure there were some AI involved in it because like the amount of text I got back in the amount of time that it took to return it. So these are very profitable businesses for people. But it was a medium manifest thing, something for me, not actually a which catching it casting a spell. And for you like so many other people are getting married. This is just another vendor to the amount the infinite amount of vendors you're already paying. The average cost of a wedding was 34,200. This year according to the not which honestly seems like a lowball. That's up more than $6,000 from five years ago. You're already paying for a band or a DJ for flowers for I could go on and on. So you think to yourself what's just another $20, $30, $40 for some piece of mine for the weather. Of course not every time this works out, I the one of the biggest windfalls for these Etsy witches when it came to wedding was remember two months ago there was this big nor Easter in the northeast. And that was on one of the busiest wedding weekends of the year. And these Etsy witches absolutely raked it in. And I don't think they could do anything about the wind patterns that affected all of those weddings in New England in and Tucket. They all got so rained on. So yes, I mean this obviously doesn't do any there's a limit to their powers. Yeah. It is extremely funny too that some real witches or people who describe themselves as real witches think the trend is ridiculous. Victoria Zaskowski a psychic in tarot card specialist believes magic is real, but then argues that there's obviously limitations of what it can accomplish. She calls the weather the viral weather spell trend nonsense and hoax focus. So you have real witches weighing in and saying these people are just trying to make a buck off of these anxious brides. Her advice to brides is buy a tent and have umbrellas available. Very practical which right there. Some which on which violence. Alright, it's Monday. So here's what you need to know to stay ahead in the week ahead. Look, it's all about the midterms, which will be held tomorrow on election day. Republicans currently control the White House in both legislative chambers, but amid concerns about the president's handling of the economy, the Democrats look poised to take back the House and possibly the Senate tipping the balance of power for Trump's final two years. There are plenty of high stakes state and local issues as well, including gubernatorial and mayoral races, plus ballot questions like whether california will enact attacks on billionaires or dc bans flaw grow up. Most importantly Wednesday morning will bring the incredible realization that you will no longer be slammed with political ads and texts for at least the next year. No, we have this thread going on slack where we're keeping track of midterm angles to hit. And I think I checked it's about 17 articles long. I mean, at this point, so there's a lot of angles, but rest assured we're on it. Is this our first midterms at morning brew daily? I can't remember. Well, it's every four years. So I can't we haven't been doing this for four years. So yeah, we're almost to four years ago. First midterms, presidential first midterms. We'll talk about tomorrow. We definitely have to talk about that flaw grow, because that has peaked my attention. All right, while Washington DC will be the main focus. Wall Street has a big week on tap as it tries to send the bleeding from the tech dumpster fire. Companies like Apple, McDonald's, AMD, and Palantir will report earnings hoping to avoid the wipeout suffered by their rivals. Then on Friday, the jobs report for October arrives one week after we found out the US economy was growing at its fastest pace in a year. A lot of people are wondering are any of these earnings going to come in and relight the fire, respark this earnings and that could go one of two ways because you called tech a dumpster fire. So is that a fire we want to re-light or is it going to re-light an actual good fire? Are there good fires, I guess, around a campfire, but everyone's looking to see if something can happen to, you know, spark another rebound in the market. My brain can't process that many double. A lot at you right now. All right. And finally, on Thursday, Logan International Airport in Boston will crown a new voice of Logan to record greetings and announcements over the airport's PA system. The contest has gone viral because instead of relying on accentless politicians, Logan is looking for someone with a distinctive Boston flare, someone whose blood is 90% dunk in ice coffee, someone who drops their Rs like the Celtics drop Jalen Brown. Airport officials said they received complaints that their current announcements sound like anywhere USA and wanted to give passengers a distinctly Boston welcome. The airport received more than 5,000 submissions across state of Massachusetts. And as widow to field down to eight finalists, one of whom will be selected the winner on Thursday. Here's a sample of the voices who made it this far. Welcome to Boston Logan International Airport. Front door to the Capitol of hot hustle and hometown pride. The city runs on ice coffee, raw ambition, and unbeatable team spirit. So let's go! Whether you're grabbing a lobster roll by the Habba, waiting in line for a canola in the North end, heading out to Glossafor, Little Salt Air. Wow, we're wicked glad you're here. It was coming. We could all, we could all hear that coming. I thought it was funny, though, that the contest guidelines, you can't just be full Bostonian. The winner must achieve effortless understanding and crystal clarity while also sounding natural in friendly. So you can't just turn up the accent to attend. There were some, there were some good candidates there. Did you have a favorite or? I mean, I don't know his name, but maybe like the third or fourth guy that has more of a baritone. Yeah, I thought that would be nice to hear. The totality was there over the airport last year. Yeah, because imagine you're coming in from overseas. I need to know where to go. And you hear this guy, not even speaking barely English. It's like when we go to Scotland, and you're like, I don't understand you at all because of your thick accent. But anyway, I think this is a super fun idea in general. Absolutely. I have to have some distinctly local flare rather than have just a generic politician method message coming over the loudspeakers. Philadelphia is the next water. How is that? It's pretty good. Yes. All right, that is all the time we have. Thanks for starting your morning with us and have a wonderful start to the week to share your thoughts on the episode or anything else. Send an email to
[email protected] or DM us on Instagram at and be daily show. Let's roll the credits. Emily Miliron is our supervising producer. Raymond Loot is our senior producer. Our producer is Olivia Gravon. Our associate producer is Olivia Lake Technical Direction by Nina Miller, Heron makeup, forgot to change the clock. And our show is a production of MorningBrew. Great. So today, Neil, let's run it back tomorrow. Business news today. It's everywhere and it moves fast. But knowing more gives you an edge. From your job to your finances, the big life decisions. It is the news shaping the decisions you make every day. So if it matters this much, why is it still so hard to keep up with? Well, that's where MorningBrew's newsletter comes in. And we have one goal. To make business news easy to follow, think of it like a smart friend explain the news after they did all the research for you. And the best part? Our newsletter is completely free. So head on over to MorningBrew.com/subscribe and see why over 4 million people start their day with MorningBrew.
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