Will Office Work Ever Be the Same? 

The government lockdown was good for Amazon. Retail shopping ceased, giving anyone that wasn’t already familiar with Amazon shopping to get used to the ease, simplicity, and value of it.

When demand began increasing exponentially two years ago, I wondered how the quality and punctuality of Amazon’s service would hold up under the extra pressure. And it held up very well. Amazon has maintained its top position in the minds of US consumers as faster, more reliable, and cheap.

This may help explain why Amazon’s digital ad revenue grew 18% year-over-year to $8.76 billion last quarter. More than analysts expected and outpacing Google and Facebook. (In fact, Facebook’s revenue shrank for the first time ever by 1.5%.)

This is a trend that is likely to continue because of several factors:

* Amazon is positioned better for shopping. Users go to Apple for social entertainment. They go to Google to find out something. But they go to Amazon to shop and buy.

* Apple’s recent privacy update, where the company gave users the right to opt out of targeted marketing, has made Apple ad space less attractive to direct-response advertisers.

* As a result of the above, Amazon’s ads are cheaper – about 70% cheaper than Google and 44% cheaper than Facebook.

Fun Fact: Amazon has a virtual product placement tool, meaning it can insert brands into its TV shows and movies in postproduction. Click here.

Another Crypto Hack 

Cryptocurrencies have taken a beating this year. But crypto enthusiasts – at least the ones I know – have not given up hope. On the contrary, they are expecting another rally.

The most important thing to know about cryptocurrencies is that they are currencies. And currencies, as we know, facilitate commercial transactions by providing a trusted medium of exchange. Trust is the key word here. So long as people believe that a currency will be more or less as valuable in the future as it has been in the past, it retains its value.

The history of Bitcoin and other cryptos has been anything but steady and predictable. Chart the prices over the past 10 years and you have a rollercoaster graph. With each crash, some amount of faith disappears. That is not good.

But that’s not the only concern. The other worry is hacking and stealing. When cryptos first appeared on the scene, they were introduced as impossible to steal. But then they were stolen. And stolen again. Just last week, I read about a $190 million hack of the Nomad platform.

Click here.

And here.

No. COVID Vaccinations Are Not Entirely Risk Free.

Based on the reading I’ve done (which is more than I ever intended to spend time doing), I believe that the COVID vaccines are safe. Mostly. But not entirely. There have been reliable reports of seriously negative reactions that are disconcerting. And particularly when they are about children, whose immune systems are typically strong enough to be able to survive COVID at the same rate as they survive the common flu.

A nine-year-old died in California last week after receiving a Pfizer coronavirus vaccination. She had no listed preexisting conditions and was not hospitalized. According to VAERS (Vaccine Adverse Event Reporting System), this was the ninth child death reported since the FDA authorized both Moderna and Pfizer’s vaccines for children between the ages of six months and five years in June. Click here.

How Would You Rate Your Child’s School?

WalletHub, a research group, did an analysis of the top-performing school systems in the US. It was based not just on academic outcomes (graduates into top schools) but on factors like class size, instructor credentials, and safety. At the top of the list: Massachusetts, Connecticut, New Jersey, Virginia, and Maryland. At the bottom: West Virginia, Arizona, Louisiana, Alaska, and New Mexico. Click here.

New Hope for Cancer

Health breakthroughs often turn into huge financial windfalls for the companies that make them. And that means potentially huge gains for investors smart enough to get in when share prices are low. An always strong market sector for this sort of play is anything related to cancer. And just last week, researchers announced that they have figured out how different cancer cells respond to drug-delivering nanoparticles. The advance may allow for tailored drug treatments specific to cancer type. Click here.

War and Inflation: The Deadly Duo

Ernest Hemingway, not a geopolitical analyst, was nevertheless a geopolitical thinker. He had it right when he said that there are two sure ways to ruin a country. War and inflation.

We’ve got both now.

War

On February 24, following weeks of mounting tensions, Vladimir Putin ordered a land, sea, and air invasion on Ukraine. Americans and Western Europeans were outraged, considering the invasion an affront to national sovereignty and democracy. Most of them, in a rare moment of political consensus, committed to helping Ukraine resist.

Meanwhile, it’s impossible to ignore the terrible costs. They have been enormous. And as the war continues, and it may continue for some time, those costs keep rising.

In terms of human life, it’s estimated that, as of the end of June, between 6,000 and 11,000 Ukrainians and more than 25,000 Russians had died. Economic losses to the Ukraine range from $564 billion to $600 billion since the war started. At least 195 factories and businesses, 230 healthcare institutions, and 940 educational facilities have been damaged, destroyed, or seized. Damage to residential buildings and roads account for almost $60 billion in losses.

The economic costs to Russians are now estimated at more than $20 billion a day. Inflation has climbed to at least 13%. The ruble has lost more than 20% of its value, and Russia’s GDP, according to an economist at the Institute of International Finance, will likely shrink by more than 10%.

At a time of already high food and energy prices, the conflict has caused the worst spike in commodity prices in 50 years. Russia, now facing crushing Western sanctions, is a major exporter of natural gas, oil, and coal. And Ukraine – the “breadbasket of Europe” – is a key source of wheat and corn. The likely wholesale disruption of its harvest this year could be a disaster. Especially in the developing world, where rising grain prices are a life-and-death issue for millions afflicted by poverty.

So, yes, the war in Ukraine has been bad for everyone involved in every conceivable way.

Now, if you believe everything you read in The New York Times, you may see it as an unprovoked, maniacal attempt to expand the Russian ex-empire. I’m not a geopolitical expert myself, but I have read bits and pieces about Ukraine over the years and, more recently, did a cursory study of the Cold War. And that narrative didn’t ring true to me.

The US and Russia have been in a military/political contest for as long as I’ve been alive. It has ebbed and flowed, but it did not end, as many say, on Dec. 26, 1991.

As, I recounted in my July 19 blog post, the proxy wars we’ve been fighting since the end of WWII have not stopped. Nor have our efforts to reduce Russia’s military danger by strengthening our diplomatic and military alliances. That was our main objective when we, along with Canada and our Western European allies, formed NATO in 1949. And the movement – however legitimate on the part of some Ukrainians – to join NATO, was, to the Russians, a threat comparable to the Cuban Missile Crisis.

I’m not trying to justify Russia’s decision to invade Ukraine. But I am trying to put it in what I think is a broader and fairer context. It’s too easy to think of it as unprovoked. It was, in part, a terrible and tragic response to our continuous commitment to the Cold War.

Inflation 

In the simplest terms, inflation is the general increase in the prices of goods and services over time.

As prices rise, the amount of goods and services that can be bought with a unit of currency decreases. Another way of putting it is that inflation is the decrease over time of a currency’s purchasing power.

Inflation is not always or completely bad. Most economists agree that a small amount is a good thing. When an economy is healthy, wages rise, and consumption rises along with it. An inflation rate of 2% to 3% is usually considered healthy. But a rate of 9% or 10%, like we have now, creates a significant strain on the economy. At this rate, the cost of living is rising considerably higher than wages. And when you get into rates of 20% or 30%, the economy nosedives.

Of all the costs that determine inflation, the cost of energy is the most important. That’s because every business and every industry – from toilet paper to electric cars – consumes energy for the manufacturing, storage, delivery, and distribution of goods. And that’s what makes our current situation particularly onerous. The overall inflation rate is about 10%, but the cost of energy is much higher.

In a free market, the rising cost of energy would be tempered by reduced demand. But since the US abandoned the gold standard in 1971, our government has attempted to regulate the economy by printing more dollars when our elected officials want to “stimulate” the economy. The problem is: The more of these “make-believe” dollars they print, the more inflation they build into the system. The inflation, of course, happens after those responsible have left office, so they don’t have to worry about being blamed for it.

In a future post, I’ll tell you what I’m going to do about it.

Last week, a Google executive announced that “almost 40% of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search. They go to TikTok or Instagram.”

That’s crazy! Click here for a brief explanation of what it means for Google.

Oh, the Irony!

After Twitter announced it was suing Elon Musk for pulling out of his offer to buy them, Musk posted a meme of him laughing in a series of four photos with captions: “They said I couldn’t buy Twitter… Then they wouldn’t disclose bot info… Now they want to force me to buy Twitter in court… Now they have to disclose bot info in court.” Click here.

Spider Webb, RIP 

Spider Webb, a NYC-based tattoo artist that was a key figure in promoting the craft as a fine art, died July 2. One of the guys from Fantastic Damage, the tattoo business that rents one of the suites next to mine, told me about it. Apparently, their shop is well known. And they and their employees are all very cool looking. Plus, their place reeks of marijuana starting at 8 a.m. So, I trust their judgment when it comes to – well, just about everything. They said that Spider Webb was “the man” and a “legend” in the industry. I looked him up. I have seen many tattoos that are more technically impressive than his (including the work done by Fantastic Damage). But, the story of his life and struggles, and the force of his personality, impressed me. I think I can understand why he was so revered.

Click here for a video clip that will give you a taste of his work, his life, and his personality.

And click here to read a piece about him from the NYT.

The Private Jet Business Is Booming

Corporate spending on private jets for CEOs and board members in the US hit a 10-year high in 2021, per Financial Times. Meta led the pack, and was the only tech company in the top five. As a group, S&P companies spent almost $34 million last year, a 35% increase over the year before. PR spokespeople attributed the increase to the pandemic. Maybe. Maybe not. In any case, the trend has proven to be a windfall for private jet operators like Wheels Up, which went public in 2021, and Jetty, which has an Expedia-like platform to simplify private jet bookings.

Caution: This is probably a media prank. It seems hard to believe. But the report is that the state has banned travel by state employees to 24 states because, as AG Robert Bonta explained, “they are deemed unfriendly to transgender people.”

Decide for yourself whether this is real. Click here.

My liberal friends support the concept of affordable housing. So do I. But there is a cost to it that some are not willing to pay. Click here for an interesting look at why so many liberal cities don’t have enough affordable housing.

Bureaucratic business regulations are not just a nuisance, but a considerable cost to businesses. They reduce productivity and make financial objectives more difficult to accomplish. Undoubtedly, some regulation is necessary to limit bad business practices. The challenge is always to outlaw the bad things without curtailing the good ones.

It’s bad in the US. But it’s even worse in the European Union. (I know. My partners and I have businesses in England, France, Germany, and Spain.) In addition to the umpteen regulations negatively impacting the production of goods and services, the EU has created hundreds of rules meant to “protect” employees from every imaginable form of workplace abuse.

Click here to read about one of them.