Brace yourself for one wild week
https://youtu.be/-uKr8dRmTXY
Good morning! Now that you’ve survived the weekend we all get to deal with the fact that not only does the weather for much of the United States absolutely SUCK this week, we’re also less than two weeks from Christmas, Hannukah, and Kwanza. Those of you who still have shopping to do might want to consider doing it online because the weather outside is going to be beyond frightful in many places.
It’s still early as we’re looking at the news this morning so all the Monday horribleness has yet to hit. However, we have five things you need to know.
1. Prepare To Pay More At The Pump
We’re going to see some higher gas prices this morning because of an agreement between OPEC and non-OPEC countries to reduce oil output over the next several months1. Saudi Arabia, which has long been a hold out on reducing production, agreed over the weekend that they would pull their levels down below 10 billion barrels per day2. The reduction is not as much nor as long as some OPEC members would have liked, but it’s enough to create a significant jump in prices.
Goldman is saying that this cut is primarily to balance out excess inventory and doesn’t see the production lasting too long. February futures rose to just above $56 a barrel this morning which is a bit scary for those of us on a budget, but that doesn’t mean a return to $3- and $4-dollar a gallon prices. With the rising prices, US oil production could increase quickly, which would send prices back down.
No one is saying yet what effect the higher prices might have on holiday travel. Most people have already made their plans and we all know how upset grandma would be if we didn’t show up. Still, this could be a difficult budget hit for those who don’t have much wiggle room for extra spending.
1. Reuters: “Oil surges after output cuts, strong dollar weighs” By By Saikat Chatterjee Dec 12, 2016, 3:18am EST
2. Reuters: “Goldman says non-OPEC output cut deal aimed at inventory glut“ Dec 12, 2016, 3:15am EST
2. The Grinch Came To Venezuela Early
Actually, the Venezuelan government says it’s playing Santa Clause after seizing nearly four million toys from a warehouse near Caracas1. The government is accusing toymaker Kreisel of hoarding the toys in an effort to create scarcity, driving prices up. Stores throughout Venezuela have complained that the company hasn’t been fulfilling orders and when they did the prices were several times higher than normal.
The government’s official statement says that the toys will be sold at steep discounts. However, William Contreras, Venezuela’s national superintendent for the defense of socioeconomic rights, has promised that “every child will get a toy” for Christmas, so we’ll see exactly how that works out. No word yet from the toy company. All this story needs is a big dog and a bunch of meddling kids and we have a blockbuster movie for the holidays.
1. National Public Radio: “Venezuela Seizes Nearly 4 Million Toys, Saying They’re Overpriced” By Bill Chappell December 11, 20164:23 PM ET
3. Cars Without Drivers Are Coming
If you find yourself driving through Michigan, particularly the Detroit area, don’t be surprised if you look over in the lane next to you and find that no one is driving the car next to you. That reality just became possible last week as the Michigan legislature passed a group of bills allowing autonomous cars to drive on public roads1. The purpose, of course, is to allow Detroit automakers to compete with companies such as Google who have been testing driverless cars in California for some time now.
In fact, this new set of bills, which Michigan Governor Rick Snyder says he’ll sign, give Detroit automakers more freedom and less oversight with their testing than any other state with the possible exception of Florida. California, which has been the leader in autonomous car testing, still requires a human driver as backup, just in case something goes wrong. The Michigan bills don’t require any humans in the car at all. While this is exactly the type of laws automakers have been wanting, the safety issue is probably going to be a sticky one.
Michigan Transportation Director Kirk Steudle says they’re leaving it up to automakers to decide when a car is safe for the road. Uhm, he is aware that GM just recalled another 50,000 vehicles last week2, right? I’m not sure trusting automakers to determine when a car is safe is necessarily the smartest move in the book. This could make driving in Michigan very interesting.
1. Associated Press: “MICHIGAN LETS AUTONOMOUS CARS ON ROADS WITHOUT HUMAN DRIVER” By TOM KRISHER Dec 9, 11:10 AM EST
2. Associated Press: “GENERAL MOTORS TO RECALL NEARLY 50,000 POLICE SUVS” Dec 10, 11:52 AM EST
4. You’re Not Still Using That Samsung Phone, Are You?
We all know Samsung has had some problems with their Note 7 phones doing bad things like blowing up and catching fire. The company issued a recall of all the phones last month and one might think that would put the problem behind them. Apparently not. It would seem there are still a significant number of people who, for whatever reason, did not turn in their phones. That means there are still Note 7 phones out there ready to go boom when one least expects it.
So, Samsung has announced that it is disabling all Note 7 phones in the US with a software update.1 Samsung issued a statement last Friday saying that the mid-December software update will render the phones completely useless. They won’t even charge properly. Danger averted, right?
Not necessarily. Those who bought their phones through Verizon won’t be getting the update. Verizon claims that it doesn’t want to strand customers who don’t have a backup phone. Therefore, it will not be pushing the software update out to its customers.
1. Reuters: “Samsung to disable Note 7 phones in the U.S. via software update” Dec 9, 2016, 1:12pm EST
5. And Finally …
Here’s one for all my photography friends and colleagues out there. Flickr, the photo hosting service owned by Yahoo, has released data for the year showing that camera phones dominated its service once again. Are we surprised? No, not at all. Flickr is a pedestrian service, not one limited to professionals. Therefore, it makes sense that pedestrian cameras would dominate. What we do find surprising, however, is that only two DSLRs, both Canon EOS 5D models, made the top ten and mirrorless cameras account for only three percent of the photos on the site.
I’ll be honest, while the data is certainly interesting, it doesn’t concern me a great deal as a photographer. I don’t use Flickr and haven’t since it sold to Yahoo several years ago. The site was designed for and is dominated by amateurs. That’s not a bad thing, but there is a definite difference between the tools used by Mom and Pop on vacation versus the professional taking your family portrait.
If anything, the report shows how dramatic the divide is between equipment used by professional versus amateur photographers. As the price for professional equipment goes up and the quality of cell phone cameras increases, we’re going to see that divide become more noticeable. This especially applies when discussing mirrorless cameras which are almost totally a tool used by the pros.
1. Flickr blog: “Smartphones Dominate Flickr Uploads in 2016, Apple Leads Device Makers” December 6, 2016
That’s the five things we think you should know for this Monday. We’ll be keeping an eye on things as they develop today and be back with more news first thing in the morning. Now, get out there and make this Monday beg for mercy.
5 Things You Should Know: 12/21/2016
8:11:14 AM 12/21/2016
https://youtu.be/w1R_6E5YXRE
And A Happy Solstice To All
Hey there! Happy Winter Solstice! It’s the shortest day of the year, among other things, which means that from here on out the days start getting longer. That’s a good thing, isn’t it? We certainly hope it is. And we’re still looking at warming temperatures as we head toward the Christmas/Hanukkah weekend so hopefully travel problems will be few.
As we look at the news this morning, there is still a lot of clean up from Monday’s events. Police in Germany released the person they initially thought was the driver of the truck that slammed into a holiday market in Berlin and a manhunt is underway. Russia has doubled down on its relationship with Turkey. And officials in Geneva said that the person who shot up a mosque there was not a Muslim extremist. Those situations are likely to be ongoing for a while. So, our five things you should know this morning takes us in a slightly different direction.
And then things went boom
By now, if you’ve been on social media much at all, you’ve likely seen the video a passerby took yesterday as the San Pablito fireworks market in Mexico exploded yesterday1. While the site was a spectacular event to watch, the death toll in that chain reaction explosion now stands at 29, with 72 still being treated for injuries. Some of those injured have burns over 90 percent of their body.
There is no word yet as to who or what might have caused the explosion. Inventory at the market was higher than usual because of the upcoming holidays. The fireworks market is an integral part of the local economy and something that is carefully guarded. However, this is not the first time that the San Pablito market has gone up in flames. A similar incident in May of 2005 did a similar amount of damage, though fewer lives were lost in that explosion.
Amidst the chaos of the explosions and huge plumes of smoke, survivors ran for the nearest exit, many becoming separated from their families and leaving behind personal items such as cell phones. Relatives are still scrambling to find those who are missing. Sadly, explosions like this are all-too-common an occurrence in Mexico, especially around holidays and religious festivals. Yesterday’s explosion, however, was the worst the country has seen in several years.
Someone has to take responsibility
With tragedy inevitably come lawsuits as victims’ families look to hold someone, somewhere, responsible for the event that took the life of a loved one. Such is the case in Orlando as the families of three men killed in the Pulse nightclub shooting filed papers in Detroit federal court on Monday naming major social media companies Facebook, Twitter, and Google saying that the companies “provided the terrorist group ISIS with accounts they use to spread extremist propaganda, raise funds and attract new recruits.”2
While the grief of the families involved is understandable, one has to wonder if this is not yet again a case of an over-zealous attorney either trying to make a name for themselves or bilking the grieving families out of thousands of dollars in attorneys fees. The families would have to prove intentional and deliberate collusion on the part of the social media giants to win their case, something that is not likely to happen. Pile First Amendment arguments on top of that and the lawsuit is practically dead in the water before it ever starts.
While only Facebook responded to the lawsuit yesterday, the issue of shutting down the accounts of known terrorist cells has been a primary project for every social media outlet over the past couple of years. Twitter was very public back in August when it announced that it had deleted 360,000 accounts since mid-2015 for violating policies related to promotion of terrorism. All three companies, along with Microsoft, are part of a joint effort to prevent known terrorist accounts from proliferating online. Section 230 of the federal Communications Decency Act protects software companies from speech users post on their sites, making the lawsuit against them even more improbable.
Our sympathies are with the families of the victims, but this lawsuit is nothing but desperate foolishness.
American Apparel is dying
Anyone who once shopped the big malls across the country knows the name American Apparel. They’ve been a mainstay of malls everywhere for over 30 years. However, the retail market has not been nice toward mall-based chains and American Apparel has spent the past several months in the middle of bankruptcy proceedings trying desperately to keep the brand alive. Yesterday, however, a judge agreed to allow the store to close nine locations and approved a liquidation plan should a buyer not be found within a reasonable timeframe.3
The nine stores, which are among some of the brand’s highest profile locations in Atlanta and Dallas, may just be the tip of the iceberg. The entire chain goes up for auction next month, and Gildan Activewear has already set a starting bid of $106 million. However, Gildan is not required to follow through on that bid and analyst are pessimistic about any other buyers attempting to save all 107 locations.
What this means for shoppers is multiple rounds of clearance sales as the company begins divesting itself of as much inventory as possible. However, it is also a warning sign as other mall retailers are beginning to hire bankruptcy attorneys. Fast fashion retailers such as H&M and Zara have taken much of the fire out of mall stores and that entire sector of the industry has been in steep decline for five years now. Expect more fashion-oriented stores to fall over the next two years.
Bobbie Brown exits stage left
The beauty world was caught off guard yesterday as Bobbie Brown, founder of the incredibly popular Bobbie Brown cosmetics line, announced she is stepping away from the brand at the end of the year4. Ms. Brown did not say exactly what she was going to do next. She told WWD that the celebration of brand’s 25th anniversary was a milestone “that made me realize it was time to start a new chapter and move on to new ventures.”
The 59-year-old makeup artist certainly has plenty of options available to her as she has dabbled in a variety of closely-related ventures over the years. The brand itself is owned by Estee Lauder and will continue operating under Peter Lichtenthal, global brand president. Ms. Brown is known for being energetic and creative so it will be interesting to see just where she might apply her incredible talent next.
And Finally …
President Obama may have found something that the incoming administration can’t undo upon its arrival next month. Yesterday, the president banned new oil and gas drilling in federal waters in the Atlantic and Arctic Oceans, a move that, understandably makes environmentalists extremely happy5. The move protects nearly 120 million acres of coastal waters controlled jointly by both the United States and Canada.
Normally, we might throw some shade at the move on the expectation that the next president would simply revoke the ruling using the same Presidential power with which it was made. However, this is one instance where the ruling is almost permanent. The president utilized the little-known Outer Continental Shelf Act that allows presidents to limit areas from mineral leasing and drilling. If Mr. Trump attempts to reverse President Obama’s move, he could only do so through a series of lawsuits that would likely take longer to get through the courts than his administration would be in place.
At the same time, it’s not like anyone has been chomping at the bit to drill in the Arctic waters. Shell Oil was the last company to give it a try and they abandoned those efforts after a tanker lost several thousand gallons of crude thanks to a giant gash in its side caused by ice flows in the area. Drilling there is extremely expensive compared to land-based operations. Still, the American Petroleum Institute criticized the move. The president-elect’s transition team has not yet responded.
We’re running incredibly late this morning, so we’ll have to end the conversation there for now. As always, we hope you’ll stay warm and safe. Don’t forget to subscribe, and we’ll be back with more tomorrow.
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