The CFPB Sizzle, Patent Trolls Fizzle And Millennials Face A Rough Ride

The CFPB managed to have an encouraging-looking day in court this week — while patent trolling most certainly did not. And millennials faced critiques for their brunch choices — and a mounting wall of data that indicates that a generational fizzle is not actually out of the question.


CFPB: Depending on how you look at it, the Consumer Financial Protection Bureau either got some mixed signals from oral arguments tied to a landmark court case over the Constitutionality of its structure…or it seemed to get a nod from judges, where questioning and legal back and forth centered on the idea that maybe an agency makeup where there is one director in place is more accountable to the president, than, say a board with several members. The key issue is out in the open, and advocates were quick to tout victory. It’s tough to call this one, but the debate wends on, and a ruling may take a while before denouement – in the meantime, the sizzle comes from the hints from the bench that maybe things are fine just the way they are.

Mobile Order Ahead: Add to the list of major merchants offering mobile ahead: Wawa. Makes sense that a convenience store would look to offer convenience on breakfast, lunch and dinner. The launch looks like a successful one, as the company has said that two thirds of respondents to a survey of Wawa Rewards users said they have used their phones to satisfy hunger pangs.

How about Millennials: Style may be fleeting, but Millennials are forever. Well, not really, as we all get older, but Millennials are Forever 21, with the retailer looking to expand its footprint — but in a freestanding store that caters to that younger crowd. And here the new store, Riley Rose, will have experiential spaces to mold and meld in-store shopping experiences and online ones.


China’s Credit: No immediate emergency, but never a good sign to see a credit downgrade when China’s consumers are powering the global commerce outlook. Moody’s takes its rating down a notch and China has to borrow more to keep up previously torrid economic growth rates, which means higher risk, which means higher rates…and so on, into a rough spot, perhaps.

Patent Trolls: Perhaps a nice fizzle in the making, as the Supreme Court makes it harder for this cottage industry of nuisance to gain ground against tech giants. No more using East Texas as a filing station, and finding juries that are sympathetic right off the bat. Now you’ve got to sue in the defendant’s jurisdiction. Fizzle and foil for these spoilers.

Barnes and Noble: Tough row to hoe amid an 8 percent sales decline and an outsized entrant into the field, again and apparently again, which would be Amazon. The CEO struck a hopeful note that bookstores may be far from being shelved, but is bigger (as in those big B and N flagship stores) always better?

Fizzle of The Week:  Millennials 

Millennials are quite possibly the most written about and speculated upon generation of human beings in history — particularly when it comes to documenting the many, many woes that seem to have trailed them as a generation. Generation Y — a million or so think pieces have explained — is burdened by skyrocketing student debt, shackled to a job market that crashed and burned just as they were entering it and fundamentally different from any of the people who came before it.

The long-regarded concern is that the sriracha generation got such a late start on being adults that they may not be able to grow out of it, so to speak.

This in itself is actually an old headline — as it turns out, the generation of people currently retiring from the workforce has a long and glorious history of being told that they weren’t going to amount to a hill of beans either.

That’s right — the Greatest Generation once felt about Baby Boomers the way Baby Boomers now feel about millennials.

But, by the numbers, millennials are perhaps a generation with a few more flashing warning lights than those who came before. A quick glance at the data about people born in the last 20 years of the 1990s is less than wholly encouraging — the majority of the generation will under-earn their parents over the course of their lives, their movement into the housing market can be best described with the term “glacial,” and those years outside of their own houses aren’t being spent in apartments — more millennials are living at home with their parents for longer than any generation of Americans. They’re also getting married later and having children less often.

That was the background noise going into this week, when millennials and their less-than-great expectations had a way of sneaking in and out of the news cycle in disturbing — and fizzle-reminiscent — ways.

It started with a fight over avocados — and whether it was possible that perhaps millennials might be moving out of mom’s house just a bit faster if they were willing to cut back on their extravagant indulgences on avocado toast.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” Australian millionaire and property mogul Tim Gurner told 60 Minutes.

The sentiment got a big reaction from Twitter, where millennials all over the world pointed out that perhaps their real estate issues weren’t entirely avocado-based and various kitchen table mathematicians determined that to put a down payment in on a house anywhere in proximity to the Silicon Valley would require giving up one’s daily avocado toast habit for 60-70 years.

And while that debate was admittedly silly at times, it was far less silly-seeming when the Federal Reserve of New York released its most recent household debt figures that revealed that whatever it is millennials are buying, it sure isn’t houses. As of 2017, 61 percent of new mortgages were given to borrowers with credit scores of 760 or higher. In 2008, 36 percent of mortgages went to that super-prime borrowing class, in 2017 that number was below 5 percent. The average millennials credit score — 625.

Millennials also likely aren’t buying that avocado toast on a credit card, either — credit card debt is much more heavily held by consumers over 50. Americans over the age of 60 hold 22.5 percent — ten years ago it was 16 percent.

And student loans — the type of indebtedness that millennials most often have? In an environment where default rates are, on average, fairly low — below 4 percent — student loan delinquencies are high and climbing. Almost 11 percent of student loan debt is 90 days overdue or more. By Fed estimates, as many as 22 percent of those loans could risk being overdue but for deferred loan payments due to unemployment or continuing education.

The total value of student loans was around $1.3 trillion in the first quarter, a 120 percent increase since 2008.

And those already defaulted loans are about to get more expensive. Students taking on new debt will see their rates tick up roughly 20 percent, as the new rate posted by the Treasury is roughly 70 basis points higher.

Department of Education loans will now have rates in place of about 4.45 percent — up from the 3.76 percent that had been levied through the current academic year ending next month. The attendant rates in loans shouldered by the borrowers now goes from an average of 6.3 percent to about 7 percent, which will mean borrowers will see their annual costs go up about $400 on average.

And while one might like to hope that millennials will earn their way out of this, the results of Millennials @ Work, a new study by Accel Partners & Qualtrics, says that almost a decade into the recovery, millennials are still having workplace issues since their two biggest career ambitions are to get a job that pays “a living wage” and is “stable.”

“Millennials want stability — yes, that may shock you, but it’s true,” said millennial attorney James Goodnow, 35, co-author of Motivating Millennials. “Many Baby Boomer executives think millennials are just cashing in on a short-term gig so they can scrape together enough money to go hike Mount Kilimanjaro or buy an unlimited annual skydiving pass.”

The problem, the firm noted, is that because Boomer bosses think their millennial employees would rather be skydiving, they tend to treat them as expendable.

“This ‘they’re probably leaving anyway’ mentality creates a self-fulfilling prophecy where business leaders don’t invest in their youngest workers, who then leave as a result,” Goodnow said.

So, what did we learn about millennials this week? Their parents have all the mortgages and credit cards, many of whom are in debt to still support their millennial offspring, the student debt that they aren’t paying already is about to get more expensive, and at least one author thinks they are budding professionals hiding inside the façades of laissez-faire employees only out to fund their next big adventure.

Plus, no one respects their brunch choices.

It was definitely a fizzly kind of week.



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