Good morning! The race for the next speaker of the House is getting crowded, with 9 candidates now vying for the most senior position in Congress. Today we're exploring:
Renter’s market
For Americans looking to get their foot on the property ladder, buying has perhaps never made less financial sense: CBRE analysis, cited by the WSJ, suggests that average new monthly mortgage payments are now 52% more expensive than typical rent on an apartment in the US. This disparity is now the most pronounced that it's been across the 27-year span of CBRE’s research.
Unreal estate
Various factors have coalesced in recent years to make the concept of buying a house, for many people at least, something of a pipe dream. The new analysis adds to the evidence that housing is at or near “peak unaffordability”, as steep prices, low inventory, and still-rising mortgage rates keep bidders at bay.
Theory would suggest that rents and house prices should move roughly in line, but the real world is rarely so neat and tidy. Indeed, CBRE’s analysis suggests that buying was the “value option” for much of the 2010s — a period that must feel far away for the 51% of non-home-owning Americans who fear they’ll never afford that first purchase.
Where we go from here depends on your perspective: either rents are about to soar to catch up, or house prices could be set to drop.
A foot in both camps
Although it sells billions of dollars worth of clothing and equipment every year, Nike is still predominantly in the shoe game, managing to do what most Marketing 101 courses would tell you is impossible — selling footwear for both fashion and performance.
But, recently, Nike seems to have misstepped, as competition from fitness-focused brands such as Hoka and On have started eating into its running business. In its latest quarter, Nike’s footwear sales dropped a concerning 2% in North America, with price rises obfuscating a 10% decline in sales volume — Swiss brand On, which is backed by Roger Federer, reported a 52% jump in sales in its most recent update.
Sneakerheads have long coveted Air Jordans and Air Force 1s, while models such as the Vaporfly were so successful they sparked an entire genre of “super running shoes” — but recent models haven’t been flying off the shelves in the typical Nike fashion.
Direct feedback
Nike’s strategy over the last decade has been all about going direct, selling straight to customers either online or at one of its ~900 stores around the world. For a brand-obsessed business like Nike, this makes a lot of sense.
Owning the distribution gives control over everything from how your sneakers are displayed, to what kind of discounts (if any) you’re willing to give. It also means you make more profit, because there’s no middleman taking a cut. Nike took this strategy far, even breaking up with department store giants like Macy’s — only to come back to the table over the summer.
PET peeve
Last week, a group of chemists detailed a novel class of potentially recyclable polymers that may be constructed into a variety of plastic-like materials, but can be broken down after use to be reformed into new products. Although only a preliminary finding, the research highlights the ongoing efforts from scientists around the world to find a solution to single-use plastics like PET and HDPE — with humans still producing ~400 million tons of plastic waste every year.
Other recent efforts have included plastic-eating bacteria and fungi, but nothing yet has proved scalable enough to temper our global plastic addiction.
Breaking the cycle
After plastic broke into the mainstream in the 1950s, it took another 3 decades for curbside recycling to be introduced in the US.
Since then, despite the boom in recycling processing facilities that followed — with the amount of plastic recycled domestically skyrocketing from 20,000 tons in 1980 to 3 million tons nearly 4 decades later — the rise of recycling hasn’t been enough.
Data from the EPA reveals that in 2018 some 36 million tons of plastic were produced in the US, of which only 8.7% was recycled. Since plastics take anywhere from 20-500 years to degrade, and a total ~4.9 billion tons of the material over all time is estimated to have been discarded after one use, reprocessing all this rubbish using current methods would take centuries.
• TLDR: 56% of Americans say they usually click “agree” before reading online privacy policies.
• Another week, another mega oil deal: Chevron is buying Hess for $53 billion, following on from Exxon’s $60 billion Pioneer acquisition earlier this month.
• Tinder’s unhinged new “Matchmaker” feature allows up to 15 of your close friends and family to help pick your next date.
• Scorsese’s Killers of the Flower Moon made $23 million at the domestic box office — the third-best opening of the director’s storied career, though still not enough to knock Swift’s concert film off the top spot.
• Google’s new game, Odd One Out, tests if you can spot the AI-generated artwork.
Off the charts: Which struggling company is thinking outside of the box by appointing long-term Spanx boss Laurie Ann Goldman as its new CEO in an effort to keep the business fresh? [Answer below].
