Friday, August 5, 2022, Savannah, Georgia


Notes From My Journal

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It’s Beautiful. But Is It Safe?

I’m spending the week in Baltimore, where my primary client is headquartered. I’m here for meetings about the receding economy, the effect it’s had on our industry, and the challenges it poses to our business right now.

Baltimore is an interesting small city. It has as much history as just about any city in the country. It has been the headquarters to more than its share of Fortune 500 companies. It has some beautiful buildings, a couple of excellent museums, ample good restaurants, a half-dozen nice little parks (one of which I’m sitting in right now), and all the diversity a SJW could want.

But in most measurable ways, Charm City is going downhill.

For one thing, Baltimore has a serious crime problem, ranking well above the national average. Violent crime spiked in 2015 after the death of Freddie Gray, which touched off riots and an increase in murders. The city recorded 344 homicides that year, or 55.4 per 100,000, the highest rate per capita in its history. And despite efforts to reduce the murder rate, it has continued to climb.

This trend is not limited to Baltimore. At least 10 other cities, including Washington, DC, Chicago, LA, and Milwaukee have experienced the same rise in violent crime. Not only homicides, but also rapes, robberies, and aggravated assaults.

And yet, if you were sitting here in Mount Vernon Square right now, looking at Baltimore’s own Washington monument, you might find all this hard to believe. That’s because, like the other cities mentioned above, most of the violent crime here, approximately 80%, occurs in what they call “underserved” neighborhoods – i.e., largely African American neighborhoods infested with drugs and the gangs that traffic drugs.

So, the mainstream media doesn’t report on it. And the conservative media points it out only to blame it on the Democrat mayors, DAs, and other city officials that run these cities.

But that still leaves 20% of the crime taking place in “safe” neighborhoods like Mount Vernon, where our offices are. And that 20% counts. It is where Baltimore’s businesses, big and small, are located. It is where most of the city’s workers spend their days, both in their offices and at restaurants and shops before and after work. Safety here is an issue. It was always a risk, but a minor risk. Since 2015, though, as I pointed out above, it’s become a serious risk. Employers like us are becoming increasingly uncomfortable with the danger our employees are subjected to on a daily basis.

Since the pandemic mandates, a sizable portion of our employees have been working remotely. Among other advantages, this means they don’t have to worry about being mugged on their way to work. Efforts to bring them back to the office are being met with considerable resistance. This begs the question: Would we be better off if we were located somewhere else?

Politicians can shrug off a rise in violent crime when most of is contained within the drug zones. But when the primary employers of the city’s population begin to move out, how will these cities deal with an accelerating unemployment rate that is sure to follow?

The Economy & Investing

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The Latest Example of What We Can Look Forward To

Robinhood, the stock trading app that was so hot a year ago, announced that it is laying off around 23% of its workforce. This is its second significant layoff. The first was 9%. The layoffs will be primarily in operations, marketing, and program management. They blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”

Why does that matter? As I said in Tuesday’s blog post, the financial advisory market has a history of shrinking months before recessions and subsequent market downturns. Robinhood is not in the financial information business, like we are, but it’s Fintech, which is close.

I see this as another indication of what’s to come. Click here.

If you lost money investing in Robinhood, you should have been reading the advice of my friend and colleague Charles Mizrahi, who pointed out the company’s weaknesses last year. In this short article, he explains why it was a bad “play” to begin with, click here. [LINK]

 

More Bad Economic News

US household debt increased by 2% to $16.2 trillion at the end of June. Given 123 million households, this means the average family debt grew by nearly $10,000 last year. That’s significant.

Also worrying: Debt delinquencies are up. The biggest factors are mortgages, auto-loans, and credit card balances. (Credit card balances jumped by 13%, the largest increase in more than 20 years.) Add to that the fact that the Fed has finally begun to raise rates, which will make repaying current debts more difficult.

What that means: The combination of higher household debt and higher interest rates on mortgages means that sensible people will be spending less on all discretionary expenditures, and senseless people will be quickly spending their way into bankruptcy. Both of these trends will make it more difficult for us to stop our currently shrinking GDP.

 

Business & Marketing

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Here Today; Gone Tomorrow

A Lesson From the Demise of Juul

When you are part of a fast-growing business in a fast-growing industry, it’s easy to imagine that growth is normal and that the good things that come from growth are going to keep on keeping on. But as I’ve discovered many times in my career, it ain’t always so.

In fact, it’s common for fast-growing start-ups to hit a point where sales level out. Or start to fall. There are many reasons why that happens. Four of them can be lethal.

From the inside:

* Insufficient capitalization.

* An inability to discover the optimal selling strategy before the clock runs out.

From the outside:

* An economic downturn in the industry.

* An unanticipated act of government over-regulation.

This last one is what happened to Juul, a pioneer in the e-cig industry that got big fast by promoting its e-cigs to minors by producing them in flavors like mango and crème brûlée. By 2018, the company was dominating the market. Altria (Marlboro’s parent company) bought 35% of Juul for $12.8 billion, giving the business a total valuation of $38 billion.

When the media began reporting on how popular Juul’s products were in middle schools, the FDA took action, and in June banned the company from advertising in the US. Altria’s $12.8 billion investment has since crashed by 97%.

Click here.

 

Uber’s Latest Feature: Is It Good for the Customer Experience?

When dealing with issues in business, you’re always looking for ways to increase productivity by simplifying routines and incentivizing employees to accomplish more in the time they have.

Uber recently introduced a feature that may simplify decisions for its drivers and motivate them. But it may also reduce the quality of the customer experience. I’m talking about the new technology that shows Uber drivers the customer’s destination and what they will earn from the trip before they accept the ride. The company claims this will result in fewer cancelled trips for riders. Yes, it will reduce those annoying, last-minute cancellations. But it will also – almost certainly – mean that if you want an Uber for a short ride, perhaps anything less than 30 minutes, you may have to wait a long time to get one.

Click here.

 

 

Fun and/or Interesting

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If Gender Is Not in Our Private Parts, Is It in Our Brains?

Here’s a TED Talk about transgenderism that is worth a look. It’s given by a transgender woman who is also a neurobiologist with very impressive credentials. In her presentation, which she is obviously uncomfortable giving, she presents a very interesting case for a “natural” explanation for transgenderism. In a nutshell, her theory is  that gender is determined in the uterus in two stages. First, the genitals are developed. Then, about a month later, the brain goes through the changes that make it male or female. A transgender person, according to her theory, is someone whose physiognomy is one gender and whose brain is another.

Putting aside the political problem of suggesting that there is, in fact, a difference in the brain structures of males and females, it’s a fascinating idea. And it may be true. Among other things, it would explain why transgender people say they “felt” like they were one sex or the other from an early age.

Unfortunately, her talk doesn’t fulfill its early promise. After introducing the theory with some intriguing charts and data, she pivots to make a pitch toward compassion and understanding by bringing up the oft-quoted datum that 40% of transgender people contemplate suicide. This, of course, suggests a point that is verboten to even contemplate: that transgenderism is, fundamentally, a mental problem, even if it is biologically rooted.

So, this TED Talk is ultimately disappointing. But the theory may be right. It deserves further study. And another TED talk. I’ll be looking out for it.

Click here… and let me know what you think. 

Worth Watching

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France

Directed by Bruno Dumont

Starring Léa Seydoux, Blanche Gardin, and Benjamin Biolay

Released in theaters Dec. 10, 2021

Available to rent or buy on various streaming services, including Amazon Prime

K and I like to spend an hour or so in the evening watching TV shows and movies together. By together, I mean we are next to one another. Each on our own iPad.

I’d like to spend more time watching the same shows with K so we can talk about them. But the current protocol is for me to suggest a movie from my list and for her to respond, yes or no. The problem: My list doesn’t often overlap with hers. And if the movie I suggest isn’t already on her list, her answer is usually no.

Last night, we chose a movie from her list. And we watched it together.

France is a French movie about a TV journalist. I thought it was good, although nothing about it was entirely comprehensible. It has a point of view. I think. And it has a very charismatic lead actor. But the direction is both too retro-artsy and too avant-garde for my comfort zone. It’s a film that gets you thinking the next day, which is great. But mostly by raising such questions as, “Why didn’t her husband say a single thing to her about the front-page tabloid report on her indiscretion?”

I recommend France, but with a caveat. It may leave you with the same level of confusion as it left us. And it was panned by several critics who saw it as a Black Comedy, which it is not.

Still, it was serious and interesting and engaging. I’d give it 3.75 out of 5 stars.

The Plot: 

Léa Seydoux stars as France de Meurs, a seemingly unflappable superstar TV journalist whose career, home life, and psychological stability are turned upside-down after she carelessly drives into a young delivery man on a busy street. This triggers a series of self-reckonings as well as a strange romance that proves impossible to shake. As France attempts to slow down and retreat into a simpler, anonymous life, her fame continues to pursue her.

What I Liked About It: 

All the things it didn’t do, including make clear the auteur’s view of French media and its darlings. I also very much liked the face of Léa Seydoux, who plays the lead, and the banter between her and Blanche Gardin, who plays Lou, her producer/agent/friend and booster.

What I Didn’t Like So Much: 

Several of the “scenic” shots that lasted 10 to 15 seconds longer than I felt they should have, and some close-ups that were three to four seconds too long.

Critical Reception 

* “Something here feels lost in translation. France is like trying to complete a puzzle when one of the pieces is missing.” (Adam Graham, Detroit News)

* “Even when it’s outlining its own ideas more through rhetoric than character, France keeps us on our toes regarding what’s around the corner.” (Michael Phillips, Chicago Tribune)

* “In part because of the depth of Seydoux’s performance, the film becomes less an allegory of a nation and more a gripping character study, a portrait of a mask of personal and professional regard slowly slipping away.” (Mark Olsen, Los Angeles Times)

* “For those willing to take it seriously, there’s a lot here to unpack. The rest will probably just reach for the remote.” (Peter Debruge, Variety)

You can watch the trailer here.

Arts & Letters

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Congratulations to the Lionesses, England’s women’s soccer team, for making history Monday night! 

Their win over Germany in the European Championship final – after a 56-year title drought for the UK – would have amazed the man who wrote this letter to the editor of the Pall Mall Gazette in 1895:

“[A woman] is physically incapable of stretching her legs sufficiently to take the stride masculine… the smaller a woman’s foot is the prouder she is of it, and very naturally. I dearly love to see her feet come peeping in and out of her skirts, as the poet says ‘like little mice’ (delicious simile!).

“I don’t think lady-footballers will ever be able to ‘shoot’ goals. In order to score a ‘point’ they will find it necessary, I fear, to charge the enemy’s goal en masse and simply hustle the ball through… Sir, I have seen two women fight and never wish to witness a like scene again, and I think that the aspect of two lovely girls, flushed and mud-bespattered, causing their rounded shoulders to collide ever and anon with brutal force, would be a most deplorable one. The whole thing is so foreign to the poetry of life – if poetry can be said to exist when an educated and refined lady urges her sisters to don men’s attire and play men’s games.

“Women may boat, women may ride – they can do both gracefully – but women may not, with an advantage to themselves, ride a bicycle or kick a football. These pastimes are beyond them… Let women ‘keep’ books, write books, paint pictures, ride horses and row boats, but for the love of heaven stay them from making sights of themselves on the football field, or objects of ridicule on the bicycle saddle.”

(Source: Girls With Balls, by Tim Tate)

Fun and/or Interesting

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Do I Really Have to Sell My Florida Beach House?

We’ve all been told that global warming will raise ocean water levels dramatically along coastal areas everywhere because of the melting of the polar ice caps. Right? That’s what I was told, and for many years, I had no reason to disbelieve it. But then I had this thought: When the ice melts in my glass of Diet Coke, the level of the Coke doesn’t rise. Even if the drink is 80% ice to begin with. So how will melting polar ice caps raise the water level of the ocean? I looked into it. Turns out the term “polar ice cap” refers to the ice that sits on top of land, not in the water. DOH!

A Word to the Wise

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An auteur (oh-TUR) – French for “originator” – is a filmmaker whose personal influence and artistic control are so great that he/she is regarded as the movie’s author. As I used it in my review of France, above: “[I liked all the things the movie didn’t do], including make clear the auteur’s view of French media and its darlings.”

Readers Write

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Re “Understanding Gravity in Five Lessons” in the July 22 issue: 

“I love your research. The YouTube on Gravity was fascinating. Something I have been interested in for 50 years.” – MF

 

Another testimonial for our book, Central American Modernism:

“It’s great to get an insight into Salvadoran Modernism in art which is just so hard to find good writings about in this country. I showed the book to my parents, who were impressed since they had no idea there was art created in El Salvador and that museums and collectors collected them outside the country.

“I will continue reading more this weekend and start from the beginning and read about every country since it’s all connected in one way or another. Thank you.”

WR

Consignment Director

Urban & Contemporary Art

HERITAGE AUCTIONS

 

Someone talking about me… 

Todd Brown, one of the brightest young marketers in the industry these days, sent this in:

“Thought you’d maybe enjoying seeing this little clip of me talking about you during a live interview.”

Watch it here.

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