Influx Insights Weblog

the new american dream- a debt free life?

Influx Insights — 2010-01-20T18:49:34Z

It looks like Americans are becoming allergic to debt, the numbers had been accelerating upwards every single year, The Fed started records in 1979, now it looks like they are tumbling downwards. What defines a country when new homes, new cars and the debt financing of those material possessions are all in decline?

Posted by Ed Cotton

the nyt on the day jackson died

Influx Insights — 2009-12-17T12:49:25Z

An amazing piece of data visualization showing the traffic to the website of the New York Times on the day Michael Jackson died. Look for the eruption in traffic from 5.20pm onwards when TMZ first broke the news.

The New York Times site traffic, US, June 25, 2009 from Nick Bilton on Vimeo.

Posted by Ed Cotton

where's the economy really at?

Influx Insights — 2009-12-10T12:24:01Z

It's hard to keep track of the economic news these days with various divergent perspectives and points of view, but it pays to listen to the experts and in this case, Tim Geithner , who heads up the US Treasury.

Here's a quote from a testimony he gave to congress yesterday.

"However, the financial and economic recovery still faces significant headwinds. Unemployment remains high, along with foreclosure and delinquency rates. Although RealtyTrac's October report shows a third straight month of decreasing foreclosure activity, foreclosures are still up nearly 19 percent since October 2008. And delinquencies of subprime residential mortgages reached over 26 percent and conforming mortgages nearly seven percent in the third quarter. Further, according to First American CoreLogic, roughly one in four homeowners owed more on their mortgages than the properties were worth in the third quarter of 2009. These conditions place enormous pressure on American families and homeowners.

Bank lending continues to contract overall, although the pace of contraction has moderated and some categories of lending are growing again. For example, commercial and industrial loans contracted at an annual rate of 27 percent in the third quarter, but 16 percent since then. Such loans are particularly important for small businesses, which generally cannot raise money by issuing debt in securities markets. Meanwhile, residential mortgage loans from banks have increased at an annual rate of two percent since the third quarter.

The contraction in many categories of bank lending reflects a combination of persistent weak demand for credit and tight lending standards at the banks, amidst mounting bank failures and commercial mortgage losses. There have been 130 bank failures this year, compared with 41 over the decade that preceded the current recession. And the number of banks that the FDIC classifies as "problem institutions" has reached over 550 this year, compared with 76 in 2007 and 252 in 2008. Further, FDIC-insured commercial banks reported that net charge-offs--that is, losses that have occurred--increased to 2.9 percent as a share of loans and leases in the third quarter, up from 0.6 percent before the recession. And delinquencies of commercial real estate loans were nine percent in the third quarter and increasing.

Banks' willingness to lend also has a significant impact on consumer spending and, consequently, economic growth. Macroeconomic Advisors, a consulting firm, found that a 10-point increase in bank's willingness to make consumer installment loans yields a 0.3 percentage point increase in personal consumption expenditures."

So, what's he saying...

- Foreclosures are still around and bigger than they were in 2008, but activity is decreasing.

- A quarter of all homeowners owe more on their property than their property is worth.

- Mortgage loans are growing, but banks are not lending to business.

- Banks are still in trouble- 130 bank failures this year and 550 classified as "problem institutions".

While many are talking about recovery, these factors which don't even examine unemployment, suggest this is going to take time.

Posted by Ed Cotton

james surowiecki doesn't believe in a new frugality

Influx Insights — 2009-10-07T11:46:01Z

From this week's New Yorker.

"As people try to rebuild their nest eggs, the savings rate is bound to remain higher than it was a few years ago. And what we spend our money on will change, too; housing costs, which were the central cause of the rise in Americans’ indebtedness in recent years, should eat up less of our budgets in the future. But the evidence for a radical shift in the way we consume seems more like the product of wishful thinking (there’s a palpable longing among pundits for Americans to become more frugal) than anything else. In many categories, spending has dropped only slightly, if at all. And, while these are very tough times for retailers who believed that spending could only go up, retail sales rose briskly in August. Before we go proclaiming this the age of the American tightwad, a little perspective is in order. Even after the worst recession of the past seventy years, retail sales this year will be about where they were in 2005. Does anyone really think that four years ago Americans were misers?"

I don't believe this is a binary equation, some people will have to become more frugal, others with more confidence and means will certainly get back to spending. The challenge is to understand who these different groups are.

Posted by Ed Cotton

a sobering view on the future of consumption

Influx Insights — 2009-10-05T11:10:16Z

The Economist's blog offers a sobering perspective on the future of consumer spending in the US.

"If American households have been forced to debt-finance spending on necessities, and if debt financing is unlikely to be as cheap or available in the future as it was in the recent past, then households will either have to find ways to reduce the costs of housing, transportation, health care, child care, and so on, or consume less, or work more. None of those options are likely to be comfortable. Americans have often been described as "living beyond their means", but I don't think most people realised that that unaffordable life primarily meant unsustainable access to basic necessities."

The suggestion is that there is unlikely to be a return to normality and for many Americans, any spending beyond the basic necessities, is going to be scrutinized and analyzed with rigor.

Posted by Ed Cotton

americans aren't really saving yet

Influx Insights — 2009-10-01T14:03:06Z

Americans have not really started saving yet, at least when compared to other periods of recession.

Posted by Ed Cotton

there's a conference for everything, even loan modifications

Influx Insights — 2009-09-30T10:04:20Z

While money is tight and the world seems to be stuck trying to work out where it's heading next, the conference industry seems to move forward always looking for new opportunities to bring people together to network and discuss.

Despite the tight caps on travel and expense budgets, if the topic is right and there's money to be made, people will want to talk.

I just got this email about the Loan Modifications Conference, which seems like a deal at $595.

"As you know, the federal government has announced plans to do millions of loan modifications to help struggling homeowners stay in their homes and avoid foreclosure. You probably also know the ramp-up for the program has not been terribly fast or easy, as servicers struggle with capacity issues, program requirements, and mandatory test trial periods for all the modifications.

Is the government program with its stringent mandates the best way to do loan modifications? Or is best practice a mix of techniques, like increased loan terms, decreased interest rates and decreased principal? The rates of re-defaults on industry-generated loan mods have been extremely high, making getting this right an absolute imperative for all servicers."

The banking and finance industry has a lot on its plate, sorting out the home financing mess seems like it should be top of the agenda, so perhaps a conference isn't such a bad idea.

Posted by Ed Cotton

give us the facts, not the greenwash

Influx Insights — 2009-09-28T12:44:27Z

Dan Goleman writes in the NYT, that data supply and provision might be leading to the death of the greenwashing ad campaign.

"The blockbuster for ecological transparency was the announcement in July by Wal-Mart that they are developing a similar sustainability index with the help of an academic consortium. One day shoppers, it seems, will get ecological ratings of products along with price in Wal-Mart (and likely other major retailers as well) as they stroll the aisles.

These rating systems herald the death of “greenwashing,” the advertising sleight-of-hand that plucks a single virtue from a multitude of a product’s ecological impacts and touts its environmental goodness. We will no longer be impressed by an organic T-shirt if its cotton was grown by hogging water in an arid and impoverished land, or if its dye puts workers at heightened risk for leukemia, or if it was stitched together in a sweatshop where young women suffer from needless injuries."

Dan mentions some third parties doing the auditing here, but its likely that there will need to be more policing of claims and some standard setting. At present, despite the best intentions of many, the consumer ends up having a tough time trying to get real answers.

Getting hold of the real data is an expensive process and I sure this is the one 2.0 endeavor where advertising is not exactly the right ethical source of revenue.

Posted by Ed Cotton

going one step beyond organic and local

Influx Insights — 2009-09-25T15:15:45Z

It seems that being local and organic is no longer good enough.

In the escalating arms race for goodness claims, it now appears farmers have to pick and deliver their produce using bio-diesel vehicles.

Spotted at Rainbow in San Francisco.

Posted by Ed Cotton

time lag

Influx Insights — 2009-09-15T15:53:29Z

Wall Street and the Feds tells us the recession is done, but in Silicon Valley things are little different.

Same day, different world.

"As one anonymous tipster told us, "The recession has finally caught up with the usually irrepressible entrepreneurial spirit of Silicon Valley." Indeed, the Demo Pit schwag is minimal at best, and the mood is slightly somber--only a few hundred showed up to the first night's party, which was a blowout event with Samantha Ronson on the turntables last year."

Fast Company reporting on the TechCrunch 50 event.

Posted by Ed Cotton

slow money

Influx Insights — 2009-09-14T16:31:00Z

Woody Tasch has emerged as the leader of a new movement, Slow Money. He's a man with a history in the world of finance and investment and has come up with a new vision and approach to funding small scale entrepreneurs who need funding to stay true to their mission and expand their offerings. This seems like a new type of venture capitalist who is not focused squarely on the next new flavor of technology, but instead funding small scale sustainable alternatives.

Posted by Ed Cotton

amazing: a design competition with a real brief!!

Influx Insights — 2009-09-10T17:56:36Z

Most of the time creative competitions follow the typical blue sky approach to issuing a challenge; they don't tend to define parameters or any kind of real brief.

Creatives then have the huge task of narrowing their thinking down to something meaningful and strategic. You see this a lot with students with their challenges and projects, even at places that supposedly teach planning; the two disciplines sit at opposite end of the table and the strategists often have to force their way into the conversation.

Quite simply, a brief is not mandated and neither and the the creative work is rarely accountable.

Refreshingly, Steve Portigal, the king of design strategy, has made a move in the right direction.

Teaming up with Core 77 and 826 Valencia he's contributed a ton of research thinking to the challenge of imagining The Future of Reading. It's not simply a data dump, they've translated their findings into something close to a real brief with lots of juicy information to feast on.

BRIEF:

What will reading look in the future? Will we be using printed books, rectangular electronic devices, embedded technologies?This competition challenges designers to envision a rich future digital reading experience, based on a defined set of design research.

Recently, Portigal Consulting undertook an exploratory research project on reading, books, and digital reading devices, entitled Reading Ahead. Here's what they found:

Books are more than just pages with words and pictures; they are imbued with personal history, future aspirations, and signifiers of identity
The unabridged reading experience includes crucial events that take place before and after the elemental moments of eyes-looking-at-words
Digital reading privileges access to content while neglecting other essential aspects of this complete reading experience
There are opportunities to enhance digital reading by replicating, referencing, and replacing social (and other) aspects of traditional book reading

And here's what they suggest for your design explorations:

Include the sensual
Support the social side of reading
Consider the varied modes and rituals of reading
Develop an ecosystem

More info can be found here.

Posted by Ed Cotton

the end of us manufacturing

Influx Insights — 2009-09-08T16:17:46Z

A new documentary, "The Last Truck" from HBO Films, premiering tonight takes a look at the impact of the closure of a GM truck plant in Ohio.

Here are some comments from some of the workers in the doc.

Among those interviewed in the documentary are: Kathy (body shop) - A 47-year-old mother of three with six grandchildren, Kathy viewed her co-workers as a second family.

Kim (electrician) - A tearful Kim believes that working at the plant was "the greatest job I ever had." He recounts how everyone finished their work on the line and followed the last truck until all the work had been done. Then they all came together as a big group, a family saying goodbye.

Popeye (toolmaker) - Popeye sees the bigger picture, viewing the plant's closing as the end of the good life, the end of American manufacturing as we know it. "My grandson will have a worse life than I had," he says at a nearby bar.

Kate (forklift operator) - After the plant closes, Kate poignantly describes it as a "gentle dragon" taking its last breath before dying.

Clearly the film documents a moment in time when US manufacturing came to a close and the impact of that closure on communities and American workers.

Is it possible to sell American consumers on American Made or has that time long gone?

Posted by Ed Cotton

the rise of a new consumer movement

Influx Insights — 2009-09-08T14:36:41Z

Colin Beavan is the author of a new book, "No Impact Man", where he describes his journey to try and find an alternative form of consumption.

In a r ecent piece in Business Week, Colin suggests that a new consumer movement is rising around a new set of values that are based on honesty in marketing and sustainable actions.

"It's hard to imagine cosmopolitan secular liberals, heartland Christian conservatives, and tree-hugging greens having much of anything in common. Yet increasingly they're all enthusiastic participants in what might be called the "quality of life" movement. When such normally opposing cultures in America have something new and important in common—like the thirst for a better way of life (as distinct from a higher standard of living, which implies only more money)—it signals a sea change. Marketers can either connect with this new movement or be surprised by it.

The "quality of life" movement's consumer hallmarks:

Consumer Detox: conspicuous consumption giving way to more conscious buying;

Everyday Activism: citizens routinely expecting more upfront information on their brands and the values of the companies behind them;

Buying Out: cynicism, if not hostility, toward marketing in general;

Natural, Local, and Ethical: the rapid growth of farmers' markets, natural foods, and fair-trade awareness"

Clearly Colin is onto something new here and a movement that really isn't being championed by more than a handful of companies. There's real opportunity here for companies to break into this market and significant challenges for incumbents who are trying to turn themselves around.

Posted by Ed Cotton

produce less, but better

Influx Insights — 2009-08-28T17:15:10Z

The idea of producing less stuff, but better stuff is a hard one to grasp, but something that makes sense to people outside the marketing world.

Nicholas Nova discovered this interview with legendary designer Dieter Rams, who lays the blame on marketing for pushing more stuff out there.

"no one wants to admit that at some point they have reached the end of the line. Yet you can’t always be making a new shaver or a new coffee machine unless you come up with a real innovation – and here I’m not talking about tinkering with the shape or the colour. And then people think that this will increase sales a bit more. They’re dreaming! Yet for all this it seems as if most managers still believe that just having a sheer mass of products on the market achieves something. Right now, that is the problem with the car industry. They have been shoving more and more cars onto the market yet it is obvious that the markets have long been saturated. And yet these are precisely the development programme targets being set by the design divisions of larger companies. But I still maintain that the way is to produce less, but better. “

Posted by Ed Cotton