All posts by James Cannon

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com

New York Economy Showing Signs of Rebound

Economy, , , , ,

When 25-year-old entrepreneur Neil Hershman decided last year to open a flagship branch of Dippin’ Dots/Doc Popcorn in midtown Manhattan, he made the decision with a generous dose of nostalgia.

“I grew up like many others eating Dippin’ Dots exclusively at an amusement park or sports game,” Hershman told QSR Magazine, a journal covering the food service industry. “I wanted to bring that same experience to the millions of young adults and families traveling through Manhattan daily.”

Nostalgia aside, however, the decision to invest time and money in the city was a business call and a vote of confidence that the city’s economy will soon begin to bounce back from the downturn that accompanied the coronavirus last year.

The new store, which is scheduled to open in early April at 1 Madison Avenue, adjacent to Madison Square Park, is not the only indication that things are looking up for New York. The real estate sector, too, is showing more signs of vitality than it has in years.

“It is a reach to say the city’s property markets are roaring back,” the Financial Times reported in early March. “But the beast is certainly stirring. The first two months of 2021 have been the strongest opening to a year in Manhattan since 2015, the height of the market. February alone saw more new deals than any single month since May 2013.”

Even more significant, said the FT, is the fact that the economic growth appears to be led by wealthy New Yorkers eager to get back to museums, Broadway, sporting events, ballet performances and more.

“I’m optimistic on the eventual return of normalcy to New York City within the next 24 months,” concluded Neil Hershman.

Is Remote Working Here to Stay?

Remote Work, , ,

Much has been written about the shift to remote work since coronavirus emerged.  A year into the Covid-19 era little progress has been made on creating the conditions to emerge from pandemic mode: Vaccination programs have gone slow in many Western countries, and new variants of the virus have emerged in the United Kingdom, South African and Brazil, calling into question the efficacy of the vaccines that are currently on the market.

Traditional wisdom would posit that those factors will have an outsized impact on bringing workers back to the office. But while Covid-19 may have sparked the shift to remote work, there is no indication the trend will reverse itself on the day after the pandemic.

Not many people would choose this…
over this

According to Forbes, the number of workers permanently working from home is expected to double in 2021, with up to 70 percent of the workforce predicted to maintain arrangements to work from home at least five days a month – regardless of developments surrounding Covid-19.

“The rise of remote will lead to people re-prioritizing what is important to them,” said Chris Herd, founder and CEO of Firstbase, a tool to help companies transition to remote working.

Herd told Inc.,  “Organizing your work around your life will be the first noticeable switch. People realizing they are more than their job will lead to deeper purpose in other areas.”

Herd says remote work is beneficial for both employers, who can focus on outcomes and eliminating “senseless tasks,” and for employees, who have the ability to work when they want, spend time with their families and concentrate on their health and exercise.

Early signs appear to validate Herd’s analysis. Commercial real estate values have plummeted in urban centers around the world, with rental prices down 30 percent in New York, large swaths of empty office space in downtown  Sydney and Melbourne, Australia, and London-based HSBC announcing it would slash office space around the world up to 40 percent.

2021 Paycheck Protection Program Opens With New Reqs

Economy, , ,

The Biden administration has announced updated regulations for the Paycheck Protection Program in order to ensure funding reaches small business owners. The new regulations will limit loan applications under the program to businesses with fewer than 20 employees for the first two weeks of the new application period, which begins on February 24.

The new rules will also alter some eligibility requirements for applicants with felony records, outstanding student loans and uncertain citizenship status.

In a statement released by the White House, the administration said the revamped program is aimed at ensuring “equitable relief to hard-hit small businesses,” as well as rooting out waste, fraud, and abuse.  

Last year, the Small Business Administration and Trump administration officials came under criticism for approving loans to large corporations while blocking assistance to so-called “Main Street” businesses.

The PPP is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion aid program ratified by Congress last March to provide relief to business owners who have suffered significant drops during the corona crisis.

China Covid Recovery Means Challenges for Hollywood

News

With China having largely contained the coronavirus, the movie industry in the world’s number two consumer market is primed to return to pre-pandemic levels in 2021. That presents opportunities and challenges for legacy studios in Hollywood as Western economies struggle to reopen their leisure economies.

Bloomberg reports that ticket sales for Chinese movie theaters during the first five days of the Lunar New Year brought in 5.7 billion yuan ($882 million), a 33% jump over 2019, the  previous record year.

The financial newswire also said shares of Imax China Holding Inc. jumped by 31% in Hong Kong and that Alibaba Pictures Group Ltd. had rallied 35%.

For Hollywood, China’s growing percentage of the global film consumer base has not been seamless, and will likely involve more upheaval. In addition to the obvious language barrier – the gap between Mandarin and English is harder to bridge than between English and European languages – there are also cultural and political hurdles to overcome.

Chris Fenton, a long-time Hollywood executive and author of last year’s Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business, told NewsGram that Beijing is demanding the right to dictate the content of American movies – and getting it.

“(Beijing has) amazing influence over Hollywood,” Fenton told the online Newsgram site. “There are a couple of versions of it. One is a premeditated version of what is censored even before it was written or scripted, which is this idea with any sort of sensitive topics, whether it has to do with Taiwan, or Hong Kong or Tibet … things that have something to do with human rights issues, whatever it is. Those are essentially taboo in Hollywood.”

According to Aynne Kokas, a professor of media studies at the University of Virginia, the issue is not likely to disappear for Hollywood any time soon. “China’s market is now central to any major release,” Kokas told Bloomberg.

“Diminishing market share presents a worrying picture for Hollywood studios” that may have been relying on China to recoup blockbusters’ budgets, she said.

Rescheduled Olympics Now In Doubt

Sports, ,

One of the largest casualties of the coronavirus pandemic was the 2020 Summer Olympics, which had been scheduled to take place in Tokyo from July 24 to August 9. The competition has been rescheduled for this summer, but it is far from certain that it will go ahead as planned: According to Wall Street Journal, 80 percent of the Japanese public does not want the influx of foreign athletes and spectators at a time when Covid-19 cases have spiked in the country.

The athletes are ready, but is Japan?

Those concerns are exacerbated by the example set by the Australian Open tennis competition, currently underway in Melbourne. Competition organizers there have been criticized for allegedly putting profits ahead of public health by allowing foreign players into the country.

In addition, Yoshiro Mori, the head of Japan’s Olympic Committee, faced calls last weeks to resign after complaining that “talkative” women in sports organizations caused meetings tended to ‘drag on’.