Category Archives: Consumer

US inflation cools in October.

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Overall inflation as measured by CPI rose 7.7% year-over-year (YoY), below the 7.9% estimate.

The annual inflation rate fell to 7.7 percent in October from 8.2 percent in September, according to the consumer price index (CPI), a closely watched inflation gauge. Economists expected the annual inflation rate to fall to 7.9 percent, according to consensus projections.

Core CPI, which excludes volatile food and energy prices, increased 6.3% YoY, below the 6.5% YoY change economists expected to see.

The October CPI report is an encouraging sign for the U.S. economy as policymakers rush to bring down inflation without causing a recession. While decline in inflation will not be enough to keep the Federal Reserve from raising rates, it may allow the bank to do so at a slower pace.

References:

  1. https://thehill.com/policy/finance/3729055-inflation-fell-to-7-7-percent-annual-increase-in-october/

Congressional Energy Piñata

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Politicians rarely let facts get in the way of a good sound bite and political theater.

Experience, economics and simple logic tell you that anything Congress does to “fix” a situation, like high consumer energy prices, will probably do more harm than good, writes Fisher Investment’s manager Elisabeth Dellinger, Senior Editor of MarketMinder. So it is a blessing for equity stocks and financial markets that gridlock on Capitol Hill will likely block any energy related legislation coming out of Washington.

Recently, Congress indulged in one of its favorite pastimes: a public flogging of large company chief executives…on this occasion the targets were major energy company chief executive officers. Politicians have accused the industry of price gouging, and a couple of Senators have proposed windfall profits taxes for energy companies.

The allegations at the Congressional hearings appear ‘more politics than substance’. For one, gas prices have ticked down slightly for three straight weeks. In reality, gas prices tend to follow oil at a lag, so gas’s failure to match oil’s rate of decline over the past four weeks isn’t a shock.

Moreover, the oil executives offered some simple, logical answers why gasoline prices haven’t matched the magnitude of oil’s retreat. Some cited rising costs and shortages of drilling equipment as well as transportation bottlenecks. Others pointed out that the industry is still dealing with the wild swings induced by lockdowns, which brought swift production cuts—and then a need for fast restarts when the companies didn’t have the labor or equipment to oblige.

And, there is a third reason, writes Dellinger: Oil isn’t the only major ingredient in gasoline. The ethanol mandate is still the law of the land. Gasoline sold in the US is required to have a certain amount of ethanol blended with refined petroleum—typically around 10% of every gallon. Ethanol is a “renewable” fuel derived from corn, which has jumped in price since Vladimir Putin invaded Ukraine. Corn is now up 42.2% over the past six months, and unlike crude oil, it hasn’t backed down from the post-invasion spike.[iii] Demand from all corners is keeping the price high, and that is feeding into prices at the pump.

But Congressional hearings are rarely about the truth and facts, especially when the facts put Congress’s past deeds in a bad light. True to form, politicians highlight a hot-button issue, press the blame button and advance a politically motivated policy solution, even though it isn’t likely to pass.

Senators’ have offered windfall tax proposals which are in response to claims that these taxes are necessary because energy firms are restraining supplies and production to keep prices up, tied to “financial discipline” demanded of oil firms by investors. Although these are strong emotional appeals intended for their loyal constituents, but the facts demonstrate that there isn’t much evidence of actual excessive windfall profits.

“Energy is a cyclical business, and companies won’t survive if they can’t bank on having good times to counterbalance the bad”, writes Dellinger. “If eventual profits can’t offset losses, there is no math there for shareholders or creditors. Essentially, a windfall tax implemented now would punish companies for surviving. Moreover, it would destroy the incentive to invest. What is the point in stomaching the high upfront costs it takes to drill and pump new wells if there is a risk the government will confiscate your profits retroactively? How can you plan? Retroactive taxes kill investment, and doing this in the oil and gas industry would probably whack US oil production, making prices even higher over time.”

On the bright side, the likelihood this windfall tax legislation goes anywhere stands about zero. The 50/50 Senate hasn’t managed to pass anything contentious and probably won’t start now—not with Democratic Senator Joe Manchin, who has effective veto power, representing a state with a big natural gas and coal industry.

Midterms currently look poised to deepen gridlock next year. Angry Congressional political tweets and sound bites might stoke fear and hit constituents’ sentiment during midterm campaigns, but financial markets should quickly view that these bills are likely to be ‘dead on arrival’.

Conversely, NYT foreign affairs columnist Thomas Friedman suggests that the U.S. needs to implement an ‘oil import tax’ that sets the price of oil in America at around $50 to $60 per barrel. This tax, he opines, would provide a stable, predictable price for oil companies, and eliminate the wild price swings and volatility in oil prices American have experienced over the past two decades.

“One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis.” Bill Ackman, Pershing Square

References:

  1. https://www.fisherinvestments.com/en-us/marketminder/dont-let-the-politicking-on-gas-prices-fool-you
  2. Federal Reserve Bank of St. Louis, as of 4/6/2022. US regular all formulations gas prices, 3/14/2022 – 4/4/2022. Data are weekly.
  3. https://www.cnbc.com/video/2022/04/08/the-us-needs-an-oil-import-tax-says-nyts-thomas-friedman.html

Wells Fargo rejected nearly half of their Black homeowners refinancing applications

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Only 47% of Black homeowners who submitted home mortgage loan refinance applications in 2020 were approved by Wells Fargo as opposed to 72% of white homeowners, according to a Bloomberg News analysis

While home mortgage rates in the U.S. hit an all-time low during the pandemic, African American homeowners did not have the same level of access to refinance and ultimately lower their long term interest costs as other homeowners.

“Only 47% of the Black homeowners who submitted refinance applications in 2020 were approved by Wells Fargo as opposed to 72% of white homeowners”, according to a Bloomberg News.

Wells Fargo rejected more Black homeowners refinance applications than it accepted.

While Black applicants had lower approval rates than White applicants at all major lenders, the data show, Wells Fargo lagged behind other major lenders in their approval rates for minority applicants and had the biggest disparity and was alone in rejecting more Black homeowners than it accepted. Overall, 71% of Black refinancing applicants in the country were approved in 2020, according to Bloomberg’s analysis.

Wells Fargo, the third largest bank in the United States by assets, was the sole lender that rejected more Black applicants than it accepted. Black homeowners faced more refinancing denials than other minority applicants such as Hispanic homeowners and Asian homeowners,

This remarkable wealth event has seen U.S. homeowners refinance almost $5 trillion in mortgages over the past two years. This refinancing has allowed White homeowners to save an estimated $3.8 billion annually by refinancing their mortgages in 2020, according to researchers at the U.S Federal Reserve. But it’s a door that barely opened for Black Americans, who make up 9% of all homeowners and locked in just $198 million a year, less than 4% of the savings.

Bias in Wells Fargo’s approvals for refinancing home mortgage loans

Wells Fargo approved a greater share of applications from low-income White homeowners than all but the highest-income Black applicants, who had an approval rate about the same as White borrowers in the lowest-income bracket.

The U.S. Justice Department has censored banks for lending practices that tend to elevate costs for minority borrowers. After the 2008 housing crisis revealed discriminatory treatment, authorities unleashed a wave of penalties against U.S. lending giants. Wells Fargo agreed in 2012 to pay more than $184 million to settle federal claims that it unfairly steered Black and Hispanic homeowners into subprime mortgages and charged them higher fees and interest rates.

References:

  1. https://www.bloomberg.com/graphics/2022-wells-fargo-black-home-loan-refinancing/
  2. https://www.msn.com/en-us/money/news/wells-fargo-rejected-nearly-half-of-their-black-homeowners-refinancing-applications/ar-AAVa7tL

Shopify and Operation HOPE to Create One Million Black-Owned Businesses by 2030

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Operation HOPE and Shopify Join Forces to Help Create One Million Black-Owned Businesses by 2030

See the source image Operation HOPE and Shopify Join Forces to Help Create One Million Black-Owned Businesses by 2030

Operation HOPE in partnership with Shopify today announced a new initiative called ‘HOPE One Million New Black Business & New Black Entrepreneurship Initiative (1MBB)’.  The initiative’s goal is to help create one million new Black-owned businesses in the U.S. by 2030. To realize this mission, Operation HOPE is working with Shopify, a leading global commerce company.  Shopify intends to provide up to approximately $130 million of resources through 1MBB over the course of this initiative.

Shopify advances mission with up to ~$130 million of resources

Shopify’s mission is “Making commerce better for everyone”  The ‘all-in-one’ e-commerce company helps “people achieve independence by making it easier to start, run, and grow a business.” They “believe the future of commerce has more voices, not fewer, so…[they’re] reducing the barriers to business ownership to make commerce better for everyone.”

“We [Shopify] work to break down the barriers to entrepreneurship every day,” said Harley Finkelstein, Shopify President. “By collaborating with Operation HOPE and working together on our shared passion for helping underserved communities succeed, we believe we can help unlock even more economic opportunities for Black business owners across the country, leading to greater choices for shoppers everywhere.”

Historically, the Black community has faced systemic barriers to entry that have prevented their full participation in the entrepreneurial journey. Together with Shopify, Operation HOPE aims to reduce these obstacles, encouraging more aspiring Black entrepreneurs to start and scale businesses, and provide them with the tools, resources, and education they may need to succeed.

Operation HOPE research has shown that 58% of Black businesses were deemed at risk or distressed and suffering from low profits, low credit scores, or income shocks in the months immediately following the onset of the COVID-19 pandemic (April 2020). Over the course of the pandemic, the number of Black workers and business owners fell sharply, over 40%, a more severe economic impact compared to other racial groups. The pandemic’s disproportionate effects on Black businesses result in both acute and long-term impacts on Black families and future generations. At present, four in 10 Black adults belong to families in which someone lost a job, was furloughed, or had hours cut, or lost work-related income because of the COVID-19.

To level the playing field, 1MBB intends to focus on critical tools for business success such as technology and resources, educational programs, and the opportunity to access capital. Through this program, Black business owners have the opportunity to sign up for Operation HOPE’s programs of community uplift, financial literacy and education, and upon graduation, Shopify plans to provide aspiring Black entrepreneurs a tailored education with tools and resources to launch or expand their businesses.

“Creating generational wealth through the creation of new Black businesses and Black entrepreneurs is a direct gateway to social justice. The creation of ownership, jobs and opportunity in a generation helps to strengthen democracy and ensure freedom through self-determination. This is empowerment at scale,” said John Hope Bryant, CEO and Founder of Operation HOPE. “To have Shopify actively supporting the 1MBB Initiative is a true game changer. Working together, we can scale our business creation platform to help underserved communities and enhance economic prosperity across America.”

To learn more about this initiative, visit www.HOPE1MBB.org.

References:

  1. https://news.yahoo.com/operation-hope-shopify-join-forces-122900144.html
  2. https://www.businesswire.com/news/home/20201020005715/en

Digital Pirates Are Hacking Brokerage Accounts | Bloomberg

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“Cyber hacking has now become the biggest threat to investors’ financial well-being.”

Cybersecurity experts say the exponential rise in online stock trading on apps such as Robinhood has created a parallel opportunity for hackers. And even the most diligent traders can fall prey to the increasingly sophisticated tactics of today’s digital pirates.

According to the Financial Industry Regulatory Authority (FINRA), a government-authorized not-for-profit organization that oversees U.S. broker-dealers, cyber threats to brokerage firms are increasing and with these threats comes the increase risk of potential harm to investors. Dangers to accounts include email hack attacks, improper transfer or theft of customer assets, and misuse or even theft of customer data.

“Cyber hacking has now become the biggest threat to investors’ financial well-being,” said Andrew Stoltmann, a Chicago-based lawyer and former president of the Public Investors Advocate Bar Association. “Unfortunately, brokerage firms haven’t invested the money needed in order to keep cyber hacking of brokerage accounts from happening.”

The cyber threat

More believable “phishing” emails, said Jonathan Care, a research director who specializes in cybersecurity and fraud at Gartner, has aided in the hacking of accounts. Such missives might use personal information gathered from publicly visible social-media accounts. They may use the logos of financial institutions to look official to even the most discerning eye enticing unwitting investors may be baited into forking over their log-in information.

Other tactics take place in the background and make legitimate-seeming web activity risky. Some hackers set up WiFi networks in public places with monikers that sound credible — such as the name of a nearby business — which can in fact be used to take control of a system.

Malicious software installed on some machines can detect when users log into financial accounts and even make additional transactions they did not intended to authorize, Care said.

How to protect your brokerage accounts

Digital traders should change their passwords frequently, experts say, and avoid unfamiliar WiFi networks. They should be sure to have two-factor authentication enabled, which requires a secondary code to sign in.

But more than anything else, even savvy users could benefit from simply paying more attention to the flurry of emails, texts and other messages that flood their devices.

Recourse if hacked

Investors who think their accounts are compromised should immediately notify their brokers, who may be able to track down where funds were wired and reverse the transfer. After alerting their brokers, investors may also find it helpful to file a complaint with law enforcement. The most direct way to do that in the U.S. is with the FBI’s Internet Crime Complaint Center.

A common industry practice is to promise to cover 100% of losses as a result of unauthorized activity in a brokerage account. The sticking point, of course, is whether the company will rule the breach was indeed unauthorized or lay the blame on you. Since brokerage firms have a strong incentive to compensate consumers for losses.

“With most of these firms, the judgments are really reputational,” said Adam Fee, a former federal prosecutor in the Southern District of New York who is now a partner at Milbank, a law firm. “When something bad happens, they are asking, ‘Do we want a bunch of articles about how people are out money because we messed up and didn’t react?’”

Practice Cyber Safety

Your online security can be enhanced by doing your part to safeguard your brokerage accounts and personal financial information.

Sound cyber safety tips include using up to date firewall and anti-virus programs on your personal computer, as well as formally logging out of all online sessions related to your account once you are finished. If you use apps on mobile devices to access your financial accounts, be sure to password-protect your device—and make sure you select the highest security setting that the app offers (such as disabling quick access or keeping your account open even if you close the app).

Email awareness is essential. Cybercriminals use a variety of phishing techniques—scams that use spam email or a fake website to lure you into revealing your bank or brokerage account information, passwords or PINs, Social Security number or other types of confidential information.

Beware of emails that request personal information. And, don’t reply to, or click on a link in, an unsolicited email that asks for your personal information. When in doubt, log onto the main website of your bank, credit card company or brokerage firm using the website address that appears on your account statements or credit card—or call your firm using a telephone number you know is legitimate.

Stay Protected While Connected

The bottom line is that whenever you’re online, you’re vulnerable. If devices on your network are compromised for any reason, or if hackers break through an encrypted firewall, someone could be eavesdropping on you even in your own home on encrypted Wi-Fi.

You can protect yourself from online fraud:

  • Practice safe web surfing wherever you are by checking for the “green lock” or padlock icon in your browser bar— this signifies a secure connection.
  • When you find yourself out in the great “wild Wi-Fi West,” avoid free Internet access with no encryption.
  • If you do use an unsecured public access point, practice good Internet hygiene by avoiding sensitive activities (e.g., banking) that require passwords or credit cards. Your personal hotspot is often a safer alternative to free Wi-Fi.
  • Don’t reveal personally identifiable information such as your bank account number, SSN, or date of birth to unknown sources.
  • Type website URLs directly into the address bar instead of clicking on links or cutting and pasting from the email.

Read more: https://www.bloomberg.com/news/articles/2020-10-13/brokerage-account-hack-what-to-do-if-money-in-robinhood-other-apps-is-stolen?utm_campaign=news&utm_medium=bd&utm_source=applenews

STOP. THINK. CONNECT. ™

The STOP.THINK.CONNECT.™ Campaign is a national public awareness campaign aimed at increasing the understanding of cyber threats and empowering the American public to be safer and more secure online. Cybersecurity is a shared responsibility. We each have to do our part to keep the Internet safe. When we all take simple steps to be safer online, it makes using the Internet a more secure experience for everyone.

References:

  1. https://www.finra.org/investors/alerts/cybersecurity-and-your-brokerage-firm
  2. https://www.bloomberg.com/news/articles/2020-10-13/brokerage-account-hack-what-to-do-if-money-in-robinhood-other-apps-is-stolen?utm_campaign=news&utm_medium=bd&utm_source=applenews
  3. https://www.cisa.gov/stopthinkconnect
  4. https://www.cisa.gov/sites/default/files/publications/NCSAM_TheftScams_2020.pdf

U.S. Economy and Stock Markets are Highly Disconnected

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“The stock market isn’t the economy. The economy is production and jobs, and there are shortfalls in virtually every sector of the economy.”  -Janet Yellen, former Chair of the Federal Reserve

We remain in the midst of a global crisis as the impact of COVID-19 infections continues to spread. As a result, we are experiencing an income crisis for a wide swath of the working population. The labor market decline was most catastrophic on low-end age earners. Those jobs have been the slowest to recover and many of those jobs have been loss permanently.

financial markets reflect assessments of the value of assets today based on investors’ expectations for the cash those assets will generate.

The U.S. economy is highly consumer-driven according to economists; our Gross Domestic Product (GDP) levels are guided primarily by consumer spending. The “V-shaped” recovery in retail sales data has been a boon to the bull market narrative. There is, however, legitimate concern over the potential impact if the Congress and Executive branch are unable to hammer out a compromise on extended unemployment benefits.

Causes of the disconnect

“Financial markets reflect assessments of the value of assets today based on investors’ expectations for the cash those assets will generate.” Vanguard Investments

Hope-ism and federal intervention are buoying up the stock market. “Hope-ism” is the wishful thinking that makes investors believe that the economy will not only recover quickly, it will snap back with vigor as the virus is quickly vanquished.

Federal intervention has been stratospheric over the past decade plus. Coming into the pandemic, the Fed had injected $5 trillion in Quantitative Easing (QE) from the 2008 recession. Now it has added another $3 trillion in the first round of COVID-19 relief and will likely add at least another $2 trillion, bringing the total to a whopping $10 trillion.

The two, the U.S. economy and equity stock markets, will reconnect again. Either the economy will recover, as the stock market predicts, or the stock market will reprice and crash. In the following we discuss the causes of the disconnect and what investors should be concerned about as the disconnect corrects.

Investors should expect a stock market correction. Greed will give way to fear. FOMO (fear of missing out) will become FOLO (fear of losing out). Also, there are plenty of other threats to the economy and stock market including a global debt crisis, cyber crime and terrorism, trade wars and socioeconomic unrest.

References:

  1. https://www.marketwatch.com/articles/the-disturbing-reality-fueling-this-bull-market-51598004009?mod=mw_more_headlines
  2. https://seekingalpha.com/article/4368901-stock-market-will-reconnect-economy-what#:~:text=There%20are%20two%20reasons%20that%20the%20stock%20market,other%20way%20to%20reconnect%20is%20a%20market%20crash.
  3. https://www.barchart.com/story/options/146523/inside-volatility-trading-august-25-2020

Schwab Sector Views: New Sector Ratings for the New Year | Charles Schwab

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Macro environment:  Rising stocks and Treasury yields, fading U.S. dollar

We continue to see a gap between the health of the manufacturing sector and that of the services sector and consumers. Despite recent U.S.-China trade war de-escalation, manufacturing activity remains under strain from ongoing tariffs, new tariff threats and still-elevated trade policy uncertainty, combined with slow global growth. On the other hand, the services sector continues to thrive amid strong consumer confidence and consumption, in large part due to a strong job market. 

While economic momentum overall has slowed, we do see signs of stabilization in both the United States and abroad. Accommodative monetary (central bank) and fiscal (tax cuts and government spending) policies have provided a strong tailwind for the global economy. The signing of a “phase-one” trade deal between the U.S. and China, combined with congressional passage of the new U.S.-Mexico-Canada (USMCA) trade pact, have eased some trade uncertainty. Amid this apparent global economic revitalization and shrinking trade risk, Treasury bond yields have risen, the value of U.S. dollar has declined and U.S. stocks have advanced to record highs.

However, geopolitical risks—while reduced somewhat—remain elevated, and equity valuations are high. Given this combination, we think bouts of increased volatility and more frequent pullbacks are possible. This doesn’t necessarily mean the rally won’t keep going—it’s likely the strong momentum in stocks may continue until there is a catalyst sufficient to deflate the current extremely bullish investor sentiment—but the risks need to be considered.
— Read on www.schwab.com/resource-center/insights/content/sector-views

Corporations: Value Based and Purpose Driven

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“Doing good is good for business”

According to one corporate Chief Marketing Officer who spoke at CES 2020, sixty-three percent (63%) of global consumers purchase items from companies with purpose. Said another way, a majority of global consumers, either consciously or unconsciously, purchased goods and services from companies whose overriding purpose and values were to make the world better. Purpose must be more altruistic than just increasing shareholders returns through capital gains and growing revenue, cash flow, earnings and dividends.

Salesforce.com

Marc Benioff, founder and Co-CEO of Salesforce.com, strongly advocated that corporations, especially big technology companies, must be a force for good and that brands can play a major role in doing good. He conveyed the message during a C-Suite session this month at CES 2020 that businesses can be mutually financially successful, sustainable and philanthropic business. He stated the point that a business can and should successfully serve the interests of all stakeholders, which includes the planet. In his opinion, every corporate CEO should adopt a public school, public hospital or combat homelessness in the community they operate. In short, all stakeholders have to matter; and, the planet and local community are key stakeholders.

“Don’t read people’s lips; Watch their feet.”

Marc’s company, Salesforce.com, from its beginning is 1999, has made trust its major value and serving all stakeholders’ interests which include giving back to its community a core purpose. Putting action to their words, the company has directed one percent (1%) of corporate resources which is over $300 million (profits, equity, and time) into giving back to the community. He went as far as proposing a corporate tax to battle homelessness. As a result, Salesforce.com has been regularly ranked as one of the best places to work in America and has had a 4,000 percent return on investment (ROI) for their shareholders.

“Businesses are the greatest platform for change.”

In his opinion and how he designed Salesforce.com, businesses are the greatest platform for change and people are basically good; his intent when he left Oracle to start Salesforce.com was to create a company culture based on trust and optimized to enable employees to do good. He felt that “…purpose is defined by the company; it cannot be enforced”.

Stakeholder Capitalism

Stakeholder capitalism, Marc Benioff opined, is a more fair, a more just and a more equitable form of capitalism than its predecessor. It means paying men and women the same. It’s means embracing values of trust, truth and doing the right thing over time. He often asks technology companies’ CEO’s and boards what are their priorities, what are their highest values, and what is truly important to them. Since in his view, making money is easy; doing the right thing takes effort and dedication.

But, leadership is about who you are and what you do. CEO’s of major technology companies must look at their values and purpose. They must assess whether they’re using these influential platforms to make the world better or just to make money. Despite the recent negative news surrounding big technology companies like Facebook on issues of privacy and impacting the U.S. Presidential elections, Marc stated that they can do both…make the world better for all stakeholders and make money for shareholders.

CES 2020 | Las Vegas

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Thursday, January 9, 2020 | 2020 Consumer Electronic Show (CES) in Las Vegas. ( #CES2020 )

Today, I wandered through the Amazon display located in the Venetian Hotel and must say I was astonished by the numerous Alexa powered IoT devices on display. Now, Alexa powers smart bathroom mirrors, kitchen refrigerators and family room televisions, to name a few.

Amazon also featured the relatively small Echo Flex. Echo Flex has all the functionality of Amazon’s Echo Dot, but half the size and can plug directly into a hallway or utility room wall electric outlet. The rep stated that the Flex is great for areas without horizontal surfaces such as hallways.

After a brief stop at the Amazon display, I visited the Dell Experience also located in the Venetian Hotel. There, I learned about the Dell work at home products and the gaming products they offered on the market. Additionally, Dell offered an opened bar that help take the dye off a full day at CES 2020.

American Express Lounge

American Express has annually sponsored a lounge during CES in the North Hall of the Las Vegas Convention Center. During #CES 2020, the lounge was intended for American Express Business Card clients and their guest. It was a place to relax and disconnect from the hectic pace of CES. The lounge offers a very popular and high demand venue for WiFi, refreshments and snacks, everything someone might need to unwind.

5G Network

5G technology is slowly reaching the consumer market with promises of revolutionizing our daily lives. New and innovative technology such as autonomous automobiles and drones will rely on the capabilities offered by 5G technology.

There are three attributes of 5G millimeter wave technology provides: speed, capacity and latency.

One engineer explained that if 4G was a two lane road; 5G would be an eight smart superhighway. The speed of 5G will be more than tenfold faster than the current network. The capacity to carry data would also significantly improve. Also, there would be relatively zero latency with 5G network.

Yet, for all the fanfare behind 5G, the network remains just a concept and vision of the future. The reality once deployed may be far different.

CES 2020 | Las Vegas

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Tuesday, January 7, 2020 | 2020 Consumer Electronic Show (CES) in Las Vegas. ( #CES2020 )

The #CES2020 day was kicked off by Delta Air Lines CEO Ed Bastian and several dozen employees of Delta.Ed Bastian, CEO, Delta Airlines[/caption]

From the dark days following the 2001, 911 terrorist attacks, Delta has strived to become the best in Class for innovation and service.

During the keynote, Ed informed the assembled CES attendees that Delta interacts with 600K customers every 15 minutes. Additionally, Delta has worked to cancel cancellations and eliminated involuntary bumping.

Their objective is to reduce or eliminate the moments of stress flying to CES, especially if attendees flew on Delta.

During the address, he discussed the importance of the “Fly Delta app”. Delta’s intent is to evolve the app into a true digital flight concierge. When the app is fully enhanced, it will be able to track bags real-time.

Aspirational, Delta intends to alleviate the stress of travel and in the near future in the future provide a service to pick up bags from a passenger’s home and delivered them to their hotel.

Another Delta initiative is to provide virtual queueing that informs you when it time to board. It alleviates the necessity of passengers congregating an clogging in the gate boarding area.

Research shows people enter an elevated emotional state when traveling and flying. Delta’s goal is to effectively reduce the level of flying stress.

Two partnerships that Delta has pursued are with John Zimmer, co-founder of Lyft. They partnered with Delta since the future of travel will be multimodal…offer self-driving vehicle, bikes and scooters. Additionally, Wheels Up – democratizing private aircraft travel. Replace 1/3 of main line fleet in five years.

HBO Max

Snap shot, or initial, at launch, HBO Max will have double the content than currently available HBO Now and will continue to grow contest offerings. It is not a direct competitor with Disney or Netflix.

Measure of success will be 50M subscribers in five years. Non measurable metric is to create a streaming service that matters to global audience. Non ad supported viewership does not have a standardized measure. If you want to sale advertising, will need a standardization.

Walking

The one reality regarding CES 2020 is that you walk and you walk a lot . Today, for example, I walked over 8.8 miles in the exhibition halls and attending key nite addresses.. Also, I played spent a few minutes on a high tech self-powered treadmill.