More Than Just Data: Innovation, Lots of Debt?, Not So We, and Nice Job World.
Yesterday, I was having a discussion with a few friends and the topic of the Mega Millions came up. None of us won.
As shocking as this might be, the chances of us winning were actually zero since none of us bought a ticket. As we were discussing this, one friend joked, “Well, I am now $1B poorer than I would have been,” and another friend responded, “Think of it as saving $2.”
The proverbial glass is half empty vs. half full was happening here, but it did spark an interesting conversation about the $2. One argument is that the chances of winning are so small that it is just a waste of money. The other argument which was made is that the $2 is a small payment for some fun conversations about what you would do if you won.
Good points on both sides, but do you have to spend the $2 to have the conversation? The general consensus was that, no, you do not, but then one person in the group made the point that by actually spending the $2 it makes the conversation “more real.” Now, a 1 in 300 million chance of winning (roughly) feels decidedly unreal, but it felt like there was something to the sentiment. How vested do you have to be in something for it to be real? Similar to the glass, what it is, is likely in the eyes of the beholder.
There are many ways to look at events, and oftentimes there is no right or wrong answer. But sometimes these small differences are what can divide people. This is especially sad when the disagreements are not about anything all that consequential. Regardless of whether the glass is half full or half empty, we should be able to agree that there is a glass with water in it. We should also be able to agree that even if we all had bought tickets, the outcome would likely be the four of us chatting about what we would have done with the payout.
As always, here are some other stories that caught our attention this week.
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1)????56% > 47%
The team at Trendency has a few topics that we tend to geek out over more than others, and if it hasn’t been too obvious from the postings over the last month or so, streaming is one of those topics. It is fascinating to see how people’s habits have been changing over the last three years, and also the views that Americans hold about the bigger players in the space as the use of streaming continues to increase. While this change is going on it is also fascinating to see how the opinions of the streaming companies themselves are changing.
One example of this is with how innovative Americans feel Netflix is as a company. Last year 47% of Americans felt that Netflix was innovative (25% felt they were very innovative), while 42% felt that they were not very innovative. This year the percentage of Americans who view Netflix as innovative jumped to 56% and the concentration of those who feel the company is not very innovative dropped to 34%.
2)????$1Trillion
According to the most recent data from the Federal Reserve Bank of New York, Americans now have more than $1 trillion dollars in credit card debt. This was an increase of 4.6% compared to Q1 of 2023. This is clearly a big number but as with many headlines there is a lot more going on with this story. The trajectory of credit card debt has been heading up since the turn of the millennium (before that but let’s stick with the 2000’s for the purposes of this discussion). In 2000 the credit card debt in the US was sitting at about $550 billion. A $1 trillion is nearly double that.
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During the same time period the number of people in the US has increased from roughly 282 million to 334 million. Which means we moved from $1.95 in credit card debt per person to $2.99. This equals about a 54% increase in dollars of debt per person. Which is not good, but less than the 82% increase in the overall level of debt.
Another factor to consider is the number of credit card accounts. In 2000, there were about 385 million credit card accounts in the US. At the end of 2022, there were 518 million (an increase of 35%). If you look at the amount of debt per account it was $1.42 in 2000 and now stands at $1.93 — an increase of 35%.
Regardless of how you slice it, the increase is a concern, but the big number in the headline tends to mask what is happening under the surface.
3)????$47B = $260M
This week, WeWork issued a warning that there is a “substantial doubt” that it will be able to continue operating as a viable company. This is not good news for commercial real estate (it has not been a good run for this industry) and will certainly have repercussions in many cities across the globe. This is not to say that shared office space is done. Companies like Regus reported their best six-month sales period ever. WeWork was once valued at $47billion and now is trading at $0.13/share.
Now there is quite the dilemma for commercial real estate companies that own properties that WeWork has leased. If WeWork declares bankruptcy then they will likely be able to break most of their leases. If they fight the bankruptcy and the company goes under then very little chance they will get paid out. Talk about two bad choices.
4)????2 billion
While it was heartbreaking to see the US Women’s team lose in the round of 16 to Sweden on penalty kicks (to go along with the German women not making it out of pool play) the viewership of this year's tournament has been staggering. The estimates are currently that 2billion people will watch games around the globe, nearly doubling the viewership from 2019.
In roughly 10 days there will be a new World Champion, sad for the teams I root for, but great for the game.
We hope you enjoyed this week’s edition and, as always, we look forward to your thoughts and hearing what stories caught your eye this week. Next week is a week of R&R for me, so no newsletter until August 25th.