Numbers Tell A Story

Most of you know I’m a finance numbers geek. Numbers excite me like Slash’s epic guitar solos! In a normal world, when demand for product or service increases, so do the numbers for the folks creating said product or service. Today the exact opposite is happening. May I ask you something? How many of you can put pen to paper and create a story that evokes human emotion? You might have the preconceived notion that everyone in Hollywood makes oodles of money. Not so. And all Hollywood success starts with the story. So we need to stand up for the incredibly talented writers whose creative and passionate minds we need. Without the writer, there is no story. Without the story, we have nothing.

The call to action? Cancel your streaming subscription and make your voice heard on social media in support of the Writers Guild of America strike! As a fledgling screenwriter and aspiring producer, I really appreciate your support. The cost of settling.

My Aunt Ursula

If you’re really lucky in life, a special person enters, a kindred spirit of sorts, who figures prominently in all that becomes your life.  I am a very lucky person!  I am here today to introduce you to, and to celebrate the life of, my beloved aunt Dr. Ursula Henderson, who lived an exceptional life in service to others, who ascended to the heavens this past week, at 95 years of age.

Ursula Henderson was born in 1927 in London, England.  Her keen intellect and compassion for people led to her graduation and the degree of Medical Doctor from the London School of Medicine for Women.  An institution formed in 1874 by an association of pioneering women physicians, it was the first medical school in Britain to train women as doctors.

Dr. Ursula Henderson would then traverse the Atlantic Ocean to perform her medical residency at hospitals in Manhattan and Princeton, New Jersey, becoming board certified in Neurology and Psychiatry.  It was on that ocean liner journey to America where she met the man she would later marry, British born Robert Stevenson, the Oscar nominated Film Director of “Mary Poppins.”  They later settled in the Los Angeles area where my aunt built a private practice in Psychiatry and treated America’s veterans at the VA Medical Center, while Bob directed films for Disney.

In the late 1970s, they moved to the lovely Santa Barbara enclave of Montecito after Bob had a stroke.  Ursula drove up one weekend, met with a real estate broker, and found a lovely ranch home that she could easily make wheelchair accessible and set up for home care.  It was a magical place nestled within bustling hedges just off San Ysidro Road, with gardens and fish ponds and bird baths.  Ursula went on to Chair the Department of Psychiatry at the women led and founded Cottage Hospital in Santa Barbara, and continued a life of travel and active civic engagement.  A staunch lifelong Democrat, she was a fierce advocate for those less fortunate, leading the charge on an innovative program to support the homeless in Santa Barbara.  She would lose her dearly beloved Bob in 1986.

Ursula met my Uncle Wally in the early 1990s, while serving on the Board of the City College.  Uncle Wally was my “second dad”, having lost my father in 1982.  They were both widows who met later in life, instantly hitting it off, who enjoyed a wonderful eleven years together before my uncle passed, also from a stroke, in 2003.  They were very social, fully engaged in civic and philanthropic duties, and loved to travel!  Although my uncle was an American citizen, he did actually live in London for a period of time in the 1970s as the Head of European Sales for Revlon.  It was a great pairing of a couple with a tremendous zest for life!

I first met Aunt Ursula when she and Uncle Wally visited Manhattan in October 1992.  My brother and I met them for a lovely breakfast brunch at their hotel, and I met them for dinner in the Oak Room.  I was instantly fascinated!  My aunt is the kindest, loveliest person you will ever meet, with extraordinary intellect, and of course great stories to share!

I first visited their home in Montecito in March 1996, and Ursula and I have been bound at the hip since.  She is actually one of the reasons I moved to L.A. in 2017.  I knew then she was not going to be around that much longer, and I guess I just wanted to be closer.

She had already sold her treasured home in Montecito, and had moved into a lovely retirement community on the northern end of Santa Barbara.  It was a difficult transition  for her, as she loved that home so much, and had put so much energy and imagination into it over the years.  But she was an amazing woman who made the move work well, in her final years.

It was great living in Studio City and driving up the 101 for Saturday visits.  The coastline is just breathtaking, nestled up against the mountains.  My aunt and I are two kindred spirits, fiercely independent and determined professional women, who believe in the greater good, and in our ability to shape it.  

So many great memories to share! Aunt Ursula was an avid reader, her home filled to the brim with books, and multiple newspaper and magazine subscriptions from both sides of the Atlantic. She was a pet lover with multiple kitty and doggie boos!  In the morning, we would eat in the little breakfast nook in the kitchen, with all her lovely furry creatures lined up for their bowls.

We often went out to lunch and dinner, shows, and many movies.  I remember one in particular, ‘March Of The Penguins’, such a wonderful film!  She encouraged me to walk down to the ocean.  There was this hidden trail that only the locals knew about.  I was an adult, but it was like I was a little girl who had found the secret garden.  Some days I would stroll the shoreline all the way to Stearns Wharf.  I felt like I was in heaven on earth.

We talked a lot about all the complexities and challenges in our world.  During one of my many treasured visits, we got up at two in the morning to watch the funeral coverage of Nelson Mandela on CNN.  That’s how we rolled!  A few years later when I had the trip of a lifetime and visited Mandela’s home on Orlando West Street in Soweto, South Africa, we talked a lot about the enduring legacy of such a great man, and what visionary leadership embodies.  Aunt Ursula is such a class act, a very special person I am going to miss greatly!

She was a great source of information and support for my brother. It warms my heart knowing that she was so happy to learn of Geoffrey’s recent medical breakthroughs.  She delighted in hearing about his girlfriend Jasmine and the abundance he has created for himself in his life.

As for me, she frequently asked about Guns N’ Roses, and in particular about lead guitarist Slash, as she knows he’s my favorite. She loved to hear about all my music advocacy efforts, capital markets technology work, political activities, gymnastics, and of course most recently about my screenplay.  She frequently commented how I lived a fascinating life, and that she was so proud and happy for me.  Oh my goodness, right back at ya Aunt Ursula!

This is where it’s going to get really hard.  As some of you may know, I just finished a strong working draft of my feature film screenplay “The Deal Closer”, which I submitted to the Writers Guild of America in February 2022.  You never quite know when the creative energy will flow and the story will come tumbling out of you and solidify.  In my case, this transpired over the past year, following a completed first draft in the fall of 2019.

And now at 95 years of age, living in the highly supervised Quail Lodge at the Valle Verde Retirement Community, but still with tremendous mind and brain capacity, Aunt Ursula was very interested in reading my screenplay.  She knew the story premise and was urging me to share it with people who could help get it made.  I produced a professionally printed 102 page color copy and sent it to her priority mail.  Two weeks ago she left me a lovely voicemail, with joy in her very eloquent British voice, that she had read my “very interesting” story, and wanted to talk some more.  We did speak briefly a few days later, but planned to continue the conversation.  That conversation would never happen.  She was ready to go, and the angels in heaven called her to join them.  While I was completely unprepared for that, it so warms my heart that one of her final moments was reading my story, and that it brought her such joy.

When I do finally bring “The Deal Closer” to the big screen, as the Producer with final cut decision making authority, you can count on a brief tribute section to Aunt Ursula!

Thank you for listening and letting me share my heartfelt and emotional memories.

Powering The Digital World Is About To Get More Expensive

What impact will Russian aggression against Ukraine have on your digital use? Given the resulting displacement in energy supply, probably a lot.  Everything we do on our phones, tablets, and laptops involves a network of fortressed buildings around the globe, called the data center.  Inside the data center sits racks of computers called servers, upon which powerful algorithms run, so we can best live our lives in this digital world.  Beyond the obvious space capacity limitations, each data center operator has to purchase enough energy to power these mighty operations, to keep the facilities cool, to ensure optimal performance.  Who will absorb these increased costs?  Will the data center operators pass on these costs to firms who lease space inside the data center?  Will they in turn pass these costs on to consumers?  Who’s in a stronger position to manage their p&l performance?

In a report issued in December 2020, the global data center power market was forecast to grow from $19.1 billion in 2020 to $26.1 billion by 2025.  This on new data center construction globally to meet storage demand, and on the unprecedented rise in power consumption to support new cutting edge technology, which has increased both operational and power costs.  Global Data Center Power Market

Layer in the actual and projected rise in crude oil and natural gas, brought about by firmly united NATO country sanctions against non-team player Putin’s Russia, you can quickly see we’re going to have an expense problem.  Swift NATO response to the February 24, 2022 invasion has resulted in member countries instituting crippling financial sanctions, including shutting down imports of oil and gas from Russia.  The battle in Ukraine further disrupts the supply.

Goldman Sachs, who attributes their success to a very intentional team culture, has issued a report by their Commodities Research Team.  As Russia and Ukraine supply 17% of oil and 11% of gas to the rest of the world, the energy sanctions hit will be painful.  The impact will be greatest in Europe, particularly Germany, but will certainly be felt here in the United States.  Russia and Ukraine supply three million barrels of crude oil a day.  Goldman predicts the west can offset half of this by releasing strategic oil reserves, and relaxing sanctions in Iran and Venezuela.  The remaining 1.5 million daily shortfall in crude oil will result in higher prices to reduce energy consumption, forecasted at a range of $125 – $175 per barrel in 2022.  The April 1, 2022 price sits around $100, with the 52 week range at $57.63 to $130.501.  Goldman Sachs Podcast Impact of Russian Invasion on Global Economy

Data centers are primarily powered by electricity, which are impacted by rising natural gas prices.  According to the U.S. Energy Information Administration (eia), wholesale electricity prices trended higher in 2021 due to increasing natural gas prices.  Our reluctance to date to address the major impacts of climate change have resulted in especially volatile storm and temperature conditions, which in turn puts pressure on prices.  More on that here.   Since the onset of the war, natural gas has risen from $4.79 on March 1 to about $5.60 on April 1, 2022.  The 52 week range is $2.45 to $6.471.  

The good news is that major data center providers like Equinix, who benefit from veteran and strategic thinking management, have made significant advancements in energy efficiency and sustainability innovation. In December 2021, the Clean Hydrogen Partnership announced EUR 2.5 million in funding, choosing seven companies – Equinix, InfraPrime, Rise, Snam, SOLIDpower, TEC4FUELS, and Vertiv, to develop low-carbon fuel cells to power data centers.  The EcoEdge PrimePower (E2P2) project aims to provide economic and resilient prime power solutions for the data center environment.  It is hoped this could also reduce carbon emissions from operations by up to 100%.  Consortium to Lead Fuel Cell Development for Data Centers

In January 2022, Equinix announced its first Co-Innovation Facility (CIF) located at its Ashburn Campus in the Washington, D.C. area.  This is part of a broader Data Center of the Future initiative.  The CIF is a new capability that enables partners to work with Equinix on trialing and developing innovations to define the future of sustainable digital infrastructure.  Equinix Joins Partners in Sustainability Innovation

Broadly speaking, Equinix has been engaged for some time in transforming energy efficiency.  Since 2011, they have invested more than $130 million to reduce energy consumption within their data centers.  Equinix Energy Efficiency  The other major data center provider globally is Digital Realty.  For information on their operations and sustainability efforts, read more here.

All that being said, with the clear acknowledgement that I’m a big Equinix fan who follows their financial performance closely, it remains to be seen how this current global energy firestorm will impact p&l performance in 2022

Keeping it simple, I turn to the latest guidance provided by Equinix CFO Keith Taylor on February 16, 2022, a mere eight days before the invasion.  Following Q4 2021 revenues of $1.706 billion and adjusted EBITDA of $788 million, Q1 2022 guidance informs a revenue range of $1.726 – $1.746 billion, and adjusted EBITDA of $781 – 801 million.  FY 2022 guidance for revenue is projected to be $7.202 – $7.252 billion, adjusted EBITDA $3.307 – $3.337 billion. 

Clearly there are many variables that will determine any forecast variances that may occur.  If the energy cost scenario plays out as anticipated, I would expect that adjusted EBITDA will show unfavorable variances to forecast, likely starting in the second quarter.  Even if the decision is made to pass on these increased costs, the timing of client contract renewals will affect this decision.  I will look to the upcoming quarterly investor calls for guidance, and keep you all updated.  Please join in the conversation and let me know your thoughts!  Stay safe and be well!

Feature Image: Please enjoy my favorite digital photo of my amazing brother Geoffrey and I at Lady Gaga’s performance at the L.A. Forum in December 2017! Yes we are a very musical family! #DigitalMemoriesToLastALifetime

Data sourced from the Wall Street Journal.

The Musical Artist P&L in Today’s Digital Streaming World – 2021 Update

The Rock&Roll gymnast is pleased to pen this year’s update of “The Musical Artist P&L in Today’s Digital Streaming World”.  2021 global recorded revenue totaled $25.9 billion1, surging 18.5% to last year’s results of $21.9 billion, and exceeding my forecast of $24 billion.  This is nearly double the average annual growth rate of 9.6% between 2015 and 2020.    

In the United States, 2021 U.S. record industry sales revenue totaled $15 billionon 418 million units sold, at a total average unit price of $25.873.  In comparison to 2020, sales revenue grew 23%, a new annual growth record. The average unit price increased 25% on robust growth in digital streaming subscriptions and the first annual increase (+56%) in physical sales since 1999.  Wow!  Further, since 2015, the average physical unit price has risen from $14.04 to $18.72.  The volume is still a far cry from the height of the market, but it’s very encouraging to see positive growth!  

Ironically, the digital music format that sent the global recorded music industry plummeting by more than half between 1999 and 2014, is now leading the revival.  84 million U.S. consumers paid for interactive digital streaming subscriptions in 2021, more than double the 35 million who paid in 2017, and nearly 14 times higher than the 6 million who did so in 2013.  Associated revenues hit $8.6 billion in 2021, while also maintaining an annual average paid subscription rate just above $100 since 2013.  To see annual streaming growth rates in the U.S. of 20-60% without price erosion is most encouraging.    

 

Streaming growth is expected to continue with projected 2030 revenues to reach $38 billion globally, but at a slower annual rate of 10-15% as the market matures, according to Goldman Sachs Analyst Lisa Yang’s team.  Of the forecasted $38 billion, expect $27 billion in paid subscription and $11 billion in ad supported.  Also to note, China, whose streaming service Tencent reports 71 million paying subscribers and 636 active monthly users, is forecasted to surpass the United States in streaming revenues before 2030. Goldman 2020 Music In The Air Report 

This leads us into the important discussion of “On Demand Ad Supported Streaming”, which is primarily YouTube, and new entrant TikTok .  In 2020, Lisa Yang reports that the average royalty rate per video stream was 3x lower than the rate per audio stream in the U.S.  I should note that the gap is about 6x lower when comparing pure on demand add supported video.  Said another way, the YouTube “Value Gap” is still significant.  While some see evidence of an improved relationship between music content owners and YouTube, I can tell you first hand, we have a long way to go.  Currently, there are about 1.9 billion active monthly users on YouTube versus 406 million Spotify, 80 million Apple, and 60 million Pandora.  To be clear, this monetization gap is not sustainable for the music creative community.  The entry of TikTok and future renegotiations with the record labels might just provide some leverage, given the success of this new platform. I’ll stay on this.

The final and most important point we need to discuss is songwriter compensation. There is a major disparity in today’s digital streaming era, between royalties paid to the recording artist and record label for the sound recording copyright, versus the royalty paid to the songwriter and music publisher for the “song” copyright. 

For every $10 monthly streaming music subscription, here’s where it goes:

Platform $3.30
Record Label $3.80
Recording Artist $1.70
Music Publisher $0.60
Songwriter $0.60

While the recording artist is able to negotiate in an open market, the songwriter’s royalty is regulated by the U.S. Copyright Act of 1976, and more recently by the passage of the groundbreaking Music Modernization Act (MMA) in 2018.  While the passage of the MMA resulted in the U.S. Copyright Rate Board (CRB) declaring a much needed royalty increase to songwriters for the 2018-2022 term, the powerful digital service providers (DSPs), led by Spotify, appealed this rate increase in a most disingenuous fashion!  To date, the matter has not yet been settled in the courts.  Moreover, the DSPs are requesting a further rate reduction for the 2023-2027 pricing term.  This is not a sustainable model for the songwriter!  Just remember, without the songwriter there is no song, and without the song there is no music!

Please ask me about a leaning forward, badass organization doing something about this, Songwriters of North America (SONA).  Look for future updates in 2022 as I stay on all of this! 

I guess it’s only fitting to take you out with some live photos from the rail for Guns N’ Roses August 2021 LA Stadium performance.  Enjoy!

All Global data is sourced by the IFPI 2022 Global Music Report Summary IFPI 2022 Global Music Report Summary

All U.S. data is sourced by the Recording Industry Association of America database, with all $ figures not adjusted for inflation.  U.S. RIAA 2021 Year End Music Report

3 2021 U.S. total units sold of 418 million includes 84 million paid subscription streaming.  Please note that certain forms of revenue cannot be quantified in units sold and are therefore excluded in the average price calculations.  This includes Limited Tier Paid Subscription, On-Demand Streaming (Ad-Supported), Sound Exchange Distributions, Other Ad-Supported Streaming, and Synchronization revenue.  

“The Deal Closer” Takes Flight!

When you’re a born creative with emotion and purpose that fills an ocean, everything is possible!

“The Deal Closer” follows the journey of steely eyed investment banker Katherine Gilbert, from the heyday of 80’s Wall Street to the hills of Laurel Canyon and the wildly decadent Rock&Roll scene on the Sunset Strip.  Katherine’s collision course with rocker Billy Desario, effused in love and business, and complete dedication to the music pure and simple, will fill the audience with rich and storied culture.  But it’s Katherine’s journey coming to terms with the sudden murder of her estranged mother, who was also her business partner, and the person she has become in pursuit of career success, that will propel you forward in this fast moving and inspiring story of ambition, love, and betrayal.

I can’t wait for you to meet my characters!  

Elegant queen of finance, don’t mess with her she knows her stuff, I give you Fallon Montgomery, Katherine Gilbert’s “Wall Street is not welcome on the Sunset Strip” mother.  Not with us long, Fallon does make a formidable impression out of the gate, and her legacy will be felt until the end credits roll.

Meet Robert Tyler, wise and charming investment banker, can tame the most wicked of beasts, always intrigued by Fallon Montgomery.  But it’s Robert’s role as mentor, protector, and champion of our complex protagonist Katherine Gilbert, that reminds us why we care so much about our heroine.

Detective Walsh is the quintessential NYPD homicide detective who’s seen it all.  The driving force who we quickly ascertain will get the job done, perplexed and moved by the cold and hardened daughter he sees in Katherine, stays the course right through to the climax scene which will blow you away!

Of course it wouldn’t be a Rock&Roll movie without the band.  Meet Frankie Nickels, The Warriors cool, hot, has his shit together, lead guitarist.  Beyond laying down epic riffs on the electric guitar, in lock step with badass frontman and songwriting partner Billy Desario, Frankie’s commitment to the band is a strong running current that sees this story through to its provocative finale.

The songs!  Without the songwriter there is no song.  Without the song there is no music.  The Warriors first big anthem “Candy Apple Nights”, will definitely bring the audience to its knees.  But it’s epic ballad “Marigolds In The Snow”, an ode to Billy’s big brother Nick, that tears at the fabric of this fierce and passionate Sunset Strip band, that must hit hard to deliver the record deal of the decade Katherine is determined to close.

Writing a screenplay is like climbing a mountain blindfolded.  You have no idea you’re inches away from walking off a cliff, while at the same time you may have just triggered a landslide that’s about to come crashing down upon you.  But the really hard part about writing a screenplay is actually finding that mountain!

Huge thank you to my Screenwriter Warriors Zoom tribe Margaret, Deborah, Suzanne, Rachel, and Amy!  The feature film screenplay only takes flight with recurring, thoughtful, insightful feedback from badass creatives determined to close the deal!  

Our tribe was born from the selfless, brilliant, and most nurturing Relationship Driven Screenwriting instructor Michael Weiss, whose feature film Writer credits include Warner Brother’s “Journey to the Center of the Earth” that grossed $244 million worldwide.  Michael’s commitment to his students stands tall, particularly as he currently has two scripts in production and development with Warner Brothers and Sony Pictures.     

It all started on a solid foundation of feature film writing structure I learned from veteran filmmaker Matthew Harrison.  A Feature Film Director in the Director’s Guild who hails from the lower east side of Manhattan, Matt’s enduring relationship with the brilliant Marty Scorsese, who executive produced his third feature and original screenplay “Kicked in the Head”, is a tremendous asset to his students. Matt brings that high level of experienced perspective while also keeping us informed of current trends.

My UCLA Extension screenwriting instruction rounded out with the very thoughtful, entertaining, and instructive Leon Martell, MFA.  Leon, a two time Ovation Award winner, who has directed productions at Carnegie Hall, and whose work is performed at Walt Disney Concert Hall and The Hollywood Bowl, is simply brilliant in helping his students dig deep to bubble up honesty and intimacy with our beloved characters.

I’d like to take you out this time with a sneak peek from the first half of Act II, followed by some brilliant screenwriter humor. Enjoy!

“The Dealer Closer” Excerpt

Katherine stands up and throws her napkin into the garbage pail. Score!

KATHERINE

It’s all under control. When have I ever failed?

ROBERT

You don’t have to prove anything. She was always impressed. She just wanted more for you.

KATHERINE

Alright we’re not having this conversation.

ROBERT

Hands down she was one of the best in the business. But she gave up the joyous side of her, to achieve that.

KATHERINE

Well that’s one way of putting it.

ROBERT

It’s not too late for you. You saw it and did something about it. Your passion for music is game changing. It saved you.

Robert reaches into his sports jacket pocket and pulls out a ticket, slides it across the countertop to Katherine.

ROBERT

I could only get one. It’s completely sold out. I’m told everyone in your world will be there.

Stay tuned folks!

Screenwriter Humor

The Long Game

Thank you to Slash and Betty White for reminding us to be cool and play the long game!

By now everyone has seen last week’s earnings highlights.  The one that really caught my attention read “Goldman Pays Up for Talent, Sending Profits Down”.  Huh?  In 2021, Goldman reported record net earnings of $21.6 billion, more than double 2020 results of $9.5 billion, and more than double results in recent history, $8.5 billion in 2019, and $10.5 billion in 2018. 

JP Morgan was hit with a similar headline, “Wells Fargo Up, JP Morgan Down”.  This on 2021 net earnings of $48.3 billion, which soared 66% to 2020 results.  

These onerous headlines were referring to quarterly changes.  Goldman Q4 net earnings of $3.9 billion fell (27%) to Q3, and (13%) year over year.  JP Morgan Q4 results of $10.4 billion fell (11%) to Q3 and (14%) year over year.  This is important because long term capital appreciation demands a long term growth strategy.  The problem is short-termism.  CEO’s are under enormous pressure to deliver strong quarterly earnings reports and to distribute wealth rather than reinvest.  Investors responded this time by sending shares of Goldman and JP Morgan down.  

In a 2015 article I wrote, McKinsey’s Dominic Barton, BlackRock’s Laurence Fink, and Rodel CEO Bill Budinger intensified the debate on the short term approach, challenging leaders to play the long game.

I think Jamie Dimon got it right in his response to investors, “We will be competitive in  pay.  If that squeezes margins a little bit for shareholders, so be it.”  Further, Mr. Dimon asserted that JP Morgan wouldn’t meet its longer-term target returns this year and maybe next year.  I’d say that qualifies as playing the long game, as Laurence Fink’s 2015 letter to Fortune 500 CEOs urged.

While Wells Fargo is cutting costs, other banks with bigger Wall Street operations reported higher expenses, largely because investment banking and trading results have soared, with the demand for talent high.  It has taken more than ten years for global markets volume to rebound since the near collapse of the world financial system in 2008 and 2009.  This is welcome news not only for an industry forever changed by these events, but for New York City and State tax coffers.  This will also help small business in the New York metro area, COVID notwithstanding, in a city metropolis plagued by increasing income disparity.

What else are the big banks investing in?  The answer is technology.  Advances in artificial intelligence (AI) and machine learning (ML) factor squarely in post trade settlement.  Ongoing transformation in cloud operations, interconnection, communication services, payments, and enhanced data security are also garnering noteworthy investment.  

Technology spend worldwide is projected to grow 5.5% in 2022 to $4.5 trillion.  This follows a robust level of investment in 2021.  As one example, investments in European tech firms soared to $93.3 billion last year, a record, and a 142% increase over the year before, according to CB Insights. 

U.S. Banks are very focused on this.  JP Morgan has instituted a technology in residence program and recruited McKinsey Partner Neha Gargi as their new Head of Global Technology Strategy. 

Goldman is leaning forward as well with deep talent search.  In Spring 2021, they reached out to me, having identified my trading technology FP&A background.  I interviewed with a veteran new hire leading their technology efforts in their Americas Operations group.  This person had an engineering and product background outside capital markets, most recently within the APAC region.  I didn’t land the role but it really caught my attention, revealing the intensity of their strategic focus.

Where is this all leading?  Utilizing the long game, I’m bullish on America and believe we can transform the U.S. economy and regain the top spot from China.  But we need to get going on this.  

In some related good news, mountains have moved on Capitol Hill with groundbreaking bipartisan support in the U.S. Senate, with passage of the $250 billion U.S. Innovation and Competition Act, also known as the Endless Frontier Act.  This week the U.S. House takes up this effort, largely seen as a critical and effective means to counter China’s technological ambitions. 

So let’s get moving!  What are your thoughts on this?  I’d love to hear!

As always I’m reminded that nothing lasts forever, even cold November rain.  Hmm, sounds like song lyrics. Enjoy!

Guns N’ Roses November Rain

Feature Photo courtesy of the IMGUR platform and the L.A. Zoo, on whose Board Slash sits, along with Betty White when she was still with us.

Please note Addendum links below to supporting articles.

Goldman Sachs Sees Profits Slips

Wells Fargo Up, JP Morgan Down

Cynthia 2015 Article Long Term Capital Appreciation  

Banks like JP Morgan: Inflation Is A Double Edged Sword

Gartner projecting $4.5 trillion Tech Spend

European Tech Scene

JP Morgan Technology In Residence

JP Morgan hires new Head of Global Technology Strategy

Bipartisan Senate Passes Bill To Boost China Competitiveness

U.S. House Takes Up China Competitiveness Bill

Stories That Define The Power Of The Human Spirit

“If it’s a great story, it’ll make it to the screen.”  Much can be said about the fortunes of the powerful Hollywood elite.  You know, the deal makers.  As a fledgling feature film screenwriter and producer, who rocketed out of my chair in Jeanette Milio’s “Entertainment Financing: From First $ To Distribution Of Profit” course, and whose screenwriting craft has been ably developed by the creative brilliance and dedication of Matthew Harrison, Leon Martell, and Michael Weiss, I’ve learned first-hand just how hard the task is, even for those with finance and writing prowess.

But when you’re a born creative, with emotion and purpose that fills an ocean, everything is possible!  Perhaps this explains why, two years later, I’m still binge watching one of the finest pieces of scripted drama in American television history, “Queen Of The South” (QOTS).  Epic cinematic history I will never forget!  If my story “The Deal Closer” makes it to the big screen, and it will, the screenwriting and story development mastery of showrunners Benjamin Lobato and Dailyn Rodriguez, and the QOTS writers will figure prominently in my motivation!

While the details are different, born out of circumstance of life, the two stories follow a similar path.  A naive yet strategic and highly competitive female mind, drawn to risk and danger, makes her way from innocent youth to powerful industry leader.  The journey is complex and tragic, a wild ride filled with danger and delicious passion in iconic settings of culture, that ultimately leads the heroine to confront the adult persona that holds her captive. 

I’ll be honest.  While the immensely talented and charismatic Peter Gadiot brought me into the “Queen Of The South” series, it was Alice Braga’s powerful portrayal of Teresa Mendoza, that grabbed me hook line and sinker!  An accomplished feature film actress whose IMDB credits span productions from her native Brazil, to sought after roles in Hollywood, Alice Braga brings this compelling character to life in her first television series!  A young girl from the drug running streets of Culiacan, the capital city of Sinaloa, Mexico, whose trajectory to “Jefa” of the largest drug cartel in the western hemisphere, to eventual escape and betterment of purpose, will captivate the human spirit!  Based on the international best seller “La Reina del Sur” by Arturo Perez-Reverte, in this five season television series, Alice Braga has delivered one of the most engaging and dramatic character arcs in American TV history.  Salud!

A remarkable cast that transcends geography and experience, completes this first-rate show running package.  Hemky Madera as Teresa’s loveable but fierce protector Pote plays a veteran cartel sicario, who handily dispenses punishment and death to the evilest of characters.

Molly Burnett, who joined the cast in season two, delivers an intense and captivating character arc in Kelly Anne.  A young lawyer who graduated at the top of her class, but became a doormat to her abusive husband, then betrayed la Jefa in a drug and alcohol induced mindset, eventually turns her life around and creates a safe world for those she loves.   

The creative brilliance of Ryan O’Nan, first as writer, and second as actor, as our beloved King George, is responsible for some of the most memorable adventure scenes and creative dialog of this series.  We will always remember the affectionate names he chose for Teresa, Pote, and James; Principacia, Chewy, and Baby Chapo.

While it’s hard to imagine ever having any good feelings for evil CIA operative Devon Finch, the audience is mesmerized by actor Jamie Hector’s masterful delivery of this very evil character who doesn’t mince words with anyone.  The Writer who developed this character, and the Casting Director who chose Hector, stand tall among the crowd!

Jon-Michael Ecker as Teresa’s drug running boyfriend Guero, delivers an intoxicating performance that spans four seasons, in life and in death, that gives new meaning to the words, “raising the stakes”.

Devoted cartel captain Chicho, who joined the cast in season four, portrayed by the very talented Alejandro Barrios, simply draws the viewer in with a quiet yet strong presence.  It’s pure milk and honey when Teresa leaves him the New Orleans winery and distillery.

Alimi Ballard as the highly principled and suave Marcel Dumas, the reigning drug lord in New Orleans before Teresa arrived on the scene, simply brings down the house with prolific performances in seasons four and five.  In a very powerful and final scene you’ll just have to watch, we experience the true depth of Teresa’s generosity and body of spirit, through the quiet deftness and emotional ferocity of Ballard’s Dumas.  Devoted viewers will never forget that waterfront scene.  Yes it’s all about #QueenFamilia.

I could write a whole treatment on the amazing acting talent of British born Peter Gadiot.  With Dutch and Mexican heritage, kudos to the resourceful development exec or agent who brought Gadiot in to play the enigmatic James Valdez.   His complex and enduring relationship with our heroine, is pure emotional candy from the finest sugar cane, that tugs emphatically at our heart strings.  I first discovered this Drama Centre London trained actor in the fantastical Adam Horowitz and Edward Kitsis adventure “Once Upon a Time in Wonderland”.  There was no looking back after that.

I’d be remiss if I failed to mention the outstanding work of cinematographer Abraham Martinez, and Composers Raney Shockne and Giorgio Moroder, whose feature film quality production will reign long for this USA Network scripted TV series!  You can catch “Queen of the South” on Netflix or purchase the series on Amazon Prime, as I have done.

As for my feature film project “The Deal Closer”, while the primary intent in this article is to share my passionate and heart fueled ride as a devoted fan of “Queen of the South”, I’m here to say my story has taken flight!  I’ve stormed the canyon to the summit, driven on the powerful and overflowing creative fire that QOTS has sparked inside of me!

Supported by a committed and thoughtful group of screenwriting warriors who I meet with weekly on Zoom, I’m most grateful for Margaret, Deborah, Amy, Rachel, and Suzanne.

The Deal Closer follows the journey of steely eyed investment banker Katherine Gilbert, from the heyday of 80’s Wall Street to the hills of Laurel Canyon and the wildly decadent Rock&Roll scene on the Sunset Strip.  Katherine’s collision course with rocker Billy Desario, effused in love and business, and complete dedication to the music pure and simple, will fill the audience with rich and storied culture.  But it’s Katherine’s journey coming to terms with the sudden murder of her estranged mother, who was also her business partner, that will propel you forward in this fast moving and inspiring story of career ambition, love, and betrayal.

Stay tuned I’ll certainly let you know when “The Deal Closer” rocket ship blasts off!

I guess it’s only fitting to take you out with this incredibly beautiful and inspiring scene, crafted in rich cinematic experience.  Queen of the South James and Teresa Final Scene  Enjoy!

USA Network Queen of the South

USA Network Queen of the South

Global Leadership: U.S. Call To Action!

The United States of America is at an inflection point in the global economy, $20.8 trillion in 2020 to China $24.2 trillion.  The dominant leader since WWII, the U.S.’s reign was first challenged in 2008 with the near collapse of the global economy.  The first unprecedented U.S. bailout of $466 billion, in combination with a ($243) billion drop in gross domestic product (GDP) in one year, kicked off new levels of debt that, in the absence of transformative GDP growth, would be hard to overcome.  JP Morgan CEO Jamie Dimon, in a keynote interview at the Wall Street Journal’s (WSJ) CEO Summit in early May, says the U.S. hasn’t experienced healthy growth in the last twenty years.

U.S. Treasury Secretary Janet Yellen, the second keynote speaker at the Summit, acknowledged that it took the U.S. almost a decade to get back on track following the 2008 financial crisis, and that we lost a lot in the process.  So where are we now?  After U.S. Debt to GDP hit 52.2% in 2009, it has risen further still to 71.9% in 2015, and 78.4% in 2019.

During that same period, China’s long term ability to recover and grow has exceeded that of its only serious competitor, the United States of America.  After flirting with the top spot in 2009, China’s economy first took a small lead over the U.S. in 2017, then widened that in 2020.  The International Monetary Fund (IMF) projects China’s economy will grow to $35.9 trillion by 2025, far outpacing the U.S. forecast of $25.8 trillion.  GDP figures adjusted for purchasing power parity provide the true picture.  India is in a distant third at $8.7 trillion, while Japan, Germany, and the top 10 European economies have barely moved, huddled under $5 trillion in 2020.

The COVID pandemic and America’s second unprecedented bailout and stimulus package totaling $6.2 trillion raised the ante again, bringing the United States debt level to $21 trillion entering 2021, exceeding GDP at a 101% total Debt to GDP ratio.

To be clear, economists will tell you that a 4% deficit to GDP annual spending ratio is normal.  But that guidance takes on new meaning when you’ve experienced a 9.8% and 15.1% deficit to GDP spending ratio in two of the last twelve years.

China’s entry into the World Trade Organization (WTO) in 2001 changed the game.  That, coupled with U.S. corporations’ short term profit focus, with increasing levels of service outsourcing and product importing, has put the United States of America in a position of catch up.

As the United States Trade Data Trends graph demonstrates, U.S. corporations have been betting against American ingenuity and talent since 1980, exporting services and talent overseas, and then importing resulting product.  You could argue this strategy has worked well, as the Dow Jones Industrial Average (DJIA) has grown exponentially from $963.99 in 1980 to $30,606.48 to end 2020.

Multiple well respected business minds argue otherwise, and have been raising the alarms in recent years. The pressure for CEOs to deliver in the short term is significant.  Outsourcing is a quick solution in a truly global world, where the rules are not all the same.

BlackRock’s Larry Fink led his 2021 annual address to shareholders expressing “steadfast commitment to long-termism”.  This follows his 2016 letter to every Fortune 500 CEO, urging corporate leaders to “play their part by persuasively communicating their company’s long-term strategy for growth”.

In 2015, McKinsey & Company Global Managing Director Dominic Barton and Canada Pension Plan Investment Board CEO Mark Wiseman launched an initiative to promote a longer term focus in business, following a survey of 1,000+ C level executives and board members, where 79% said they felt pressure to deliver financial results in a two year time frame.

Bill Budinger, inventor, entrepreneur, founder & CEO of Rodel, Inc., a firm that manufactures electronics products, argues American investors are killing their golden geese, where planting has been replaced by harvesting.

Can we reclaim our intended position as economic leader of the free world?  Absolutely!  America is the land of dreams and innovation! But we have a lot of work to do, in areas that to date, have alluded us.  This includes investment in education and training in manufacturing, and enduring development of STEM talent in segments of the population known to deliver, in particular women.

Ironically, timing of the COVID-19 pandemic recovery is in our favor.  JP Morgan CEO Jamie Dimon believes we are at a near “Goldilocks” level of recovery, that will deliver fast growth with mild inflation.  Janet Yellen agrees.  We need to seize this moment and to coin a gymnastics phrase, we need to hit four of four routines.

We must invest where ROI potential is greatest!  We can do that while also helping small business and people on the lower end of the income spectrum, who have been disproportionately hit by the COVID pandemic.  Brilliant!

A great example of this is Goldman Sachs’ pledge of $10 billion to their “One Million Black Women” Initiative, launched in March 2021.  They believe that reducing the earnings gap for Black women could create up to 1.7 million jobs and add $450 billion to U.S. GDP annually.  This follows on Goldman’s long term recognition of the power of the purse of women broadly.  Lloyd Blankfein, in a 2008 speech for their 10,000 Women Initiative had this to say.  “When you get to the topic of trying to invest and create GDP, there is no better, more efficient investment, there’s no lower hanging fruit in the world to pick, than the investment you make in women.”

Further, many U.S. firms are leaning in on digital transformation and ESG initiatives, recognizing the serious ROI potential.  It’s an exciting time where, not only do we have the opportunity to drive transformative innovation and restore balance on earth, but we can also restore broad based prosperity to the shrinking middle class, which after all, is the engine of the U.S. economy.

In 2016, following a decades long career in technology, most notably as the CIO of Verizon, Dr. Judith Spitz founded Break Through Tech at Cornell Tech in New York City, an initiative making headway increasing the number of women in computer science and tech careers.  An article in the WSJ reports that STEM fields are some of the fastest growing and most lucrative.  Increasing the number of women would likely have big  implications for the economy.

Another great organization, Girls Who Code, founded by Reshma Saujani, and currently led by CEO Tarika Barrett, is doing important work in education, trying to close the gender gap in tech.

A recent Newsweek survey notes that more than 4.5 million fewer women are employed now than at the beginning of the pandemic, bringing the labor participation rate for women to its lowest levels since 1988.  Some 44% of women who were unemployed in April 2021 have been out of work for longer than six months.  We need to act on that!  We need to action where GDP potential is greatest, if we’re serious about taking on China!

Turning to U.S. legislative initiatives, the likely to pass U.S. Senate led $190 billion Innovation and Competition Act, is intended to directly take on rising competition from China.  It includes $100 billion for R&D and investments in emerging technologies where the country that leads, will have a significant advantage in the global economy.  Artificial intelligence (AI), machine learning (ML), robotics, and high performance computing are critical areas of capability in practice today across the globe.  We have to get out in front on this!  And yes, unfortunately this is already impacting lower skilled workers who perform repetitive tasks.  Investment in our workforce with education and training is crucial.

$10 billion has been allocated to the U.S. Commerce Department to establish at least ten regional technology hubs, intended to take on the serious talent shortage we have in U.S. manufacturing.  It is estimated that 3.5 million U.S. manufacturing jobs will need to be filled in the next ten years, where the current U.S. skills gap will prevent 2 million of those jobs from being filled.  This could cost the U.S. economy as much as $1 trillion.

A newer level of concern surrounds a study published in early May 2021 by Deloitte and the National Association of Manufacturers.  It reports that while the COVID pandemic wiped out about 1.4 million manufacturing jobs, the industry has only been able to hire back about 820,000.

$52 billion has been designated to incentivize domestic semiconductor fabrication. Given the alarming 60 Minutes segment in early May, where we learned that Intel’s share of the market has dwindled to just 12%, and that the Republic of China’s Taiwan Semiconductor Manufacturing Company (TSMC) is producing chips that are 30% faster and more powerful than what we are able to make in the U.S, this is an area that requires intense focus and actionable strategy.  Chips are integral to our way of life.  Without them, we don’t use our phones or computers, and we don’t drive cars.

Everyone is in agreement on the value of investment in education and training, from the authors of the Penn Wharton Budget Model (PWBM) to Janet Yellen.  Jamie Dimon offers some targeted perspective.  He agrees that the Biden agenda is right on the issues, but that you can’t just throw money at them.  You have to be specific with measurable outcomes.  He made reference to his role on the New York Business Council where they’re trying to match education with jobs.

I recommend bringing together the Innovation and Competition Act’s $10 billion regional technology hubs plan with the $1.4 billion education investment piece of Biden’s American Families Plan.  We need committed resource at community and four year colleges, working in direct coordination with these regional technology hubs, in direct coordination with regional employers in need of specific talent.  Free college is only helpful if each and every student lands a job, that helps us drive innovation and GDP growth, in direct competition with China.  Yes we need that level of actionable specificity.

We need to bring the supply chain back to America.  Two words.  PPE.  Chips.  Before the COVID pandemic, China based firms produced about 50% of the world’s PPE supply.  One example where this really hurt us, follows a yearlong investigation by The Guardian and Kaiser Health.  They found that 3,607 U.S. healthcare workers lost their lives to COVID in the first year.  Many of these deaths were avoidable, with widespread PPE and mask shortages a contributing factor. That’s completely unacceptable!

Further, the U.S. is in an extremely vulnerable position with poor market share in the global semiconductor chip industry.  How is that playing out right now?  According to a May WSJ article, Americans are shopping for cars in near-record numbers, but the world’s computer-chip shortage has left dealers with the fewest offerings in decades, forcing auto makers to cut production of more than 1.2 million vehicles in North America.  If you’re really paying attention, then you’ll recall the $80 billion auto industry bailout in 2009.  What is the longer term ROI impact on that spend, given this current situation?  It’s clear we need a broader focus across American industry.

We need to make investments in infrastructure, where we currently rank 12th in the world.  We need specific focus on rail, water and the electric grid, and renewable energy where we rank 48th, 23rd, and 24th in the world respectively.  Negotiations continue on Capitol Hill to reach consensus on a spending plan, with the Biden administration currently at $1 trillion to the GOP’s $928 billion.  Sounds like we’re almost there!

We need to stop the global tax race to the bottom.  The Washington Post reported on May 31 that the G-7 is set to support Biden’s minimum global corporate tax.  While it’s early in the game, this is very encouraging news.

Please see graphs and article addendum below.  I hope I’ve got you thinking!  I’d love to hear your thoughts and questions!

I’d like to lead us out with this epic Rock&Roll ballad from the wildly talented, science minded Kiszka brothers.  Here’s Greta Van Fleet with their newly released album The Battle At Gardens Gate.  Out of silence, we will sing! Broken Bells

Graphs:

DJIA Trend

U.S. Trade Data Trends

US Deficit to GDP Trend

US Debt to GDP Trend

Top 10 EUR Economies Trend to US & China

US Trade Balance Top 5 Economies Trend

US China Trade Balance Trend

US Germany Trade Balance Trend

Addendum for your reference and knowledge:

McKinsey Dominic Barton Focusing Capitol on the Long Term

American Investors Killing Their Golden Geese

In the capital markets and technology space, check out these four firms leading on digital transformation and sustainability.

BNY Mellon Future First

Equinix Sustainability

Zscaler Zero Trust

CITI ESG

WSJ Women In Technology

Newsweek Pandemic Cost To Women

U.S. Innovation and Competition Act

Deloitte Manufacturing Skills Gap

PBS News Hour Cutthroat Global Competition For PPE

60 Minutes Semiconductor Chip Shortage

The Guardian U.S. Healthcare Workers Lost to COVID

What’s YOUR Superpower?

I’d love to hear so please share!

My Superpower?  Beyond unparalleled energy and joie de vivre, it’s my analytical chops and “Super Glue” mind.

Yes I’m a numbers geek with at least two complex finance models open at any given moment.  I’m the glue that brings it all together.

And, whether it’s volunteering with the Los Angeles Police Department, breaking story on my feature film screenplay “The Deal Closer”, or bringing in a brilliant neurosurgeon to help my amazing brother walk again, you can always count on the Rock&Roll Gymnast to get the job done.

Yes I’ve been volunteering for over a year, 8 – 12 hours a month, with LAPD North Hollywood Division.  It’s important and rewarding work, where my analytical mind is making a difference.  I volunteer with a designated community program, and with the Detective squad.  Thank you to everyone on the planet who values and safeguards life!

The “Deal Closer” is a psychological thriller and 80s period piece, that follows ambitious investment banker turned Rock&Roll manager Katherine Gilbert, from the heyday of Wall Street, to the decadent hills of Laurel Canyon and the Sunset Strip.  The plan is working until Katherine’s estranged mother and former partner Fallon Montgomery is murdered.  Who did it?  You won’t see it coming and the Climax will blow you away!

When I completed the first draft in September 2019, it was not this.  It was a page one rewrite, flat, tell your story through dialog, weak to moderate key story beats, I have no idea how to write a screenplay, thing.  But, somewhere in the middle of all that, were seeds of an important story about ambition and love, and the ability to absorb what my UCLA Writers Program instructors have been teaching me.  Stay tuned!

But the high mark to kick off 2021, the analytical super glue story of the decade, is a game changing rocket ship that’s about to blast off for my brilliant and beloved brother Geoffrey.

I’ve always been a Math English gal.  Now I can add Science.  For the past six years, my brother has battled a challenging mobility disorder, quite convincingly I should add, thanks to a phenomenal neurologist, Dr. Barbara Allis, who we adore beyond measure.   But something dramatically changed in December 2019, and up until a few weeks ago, nobody has been able to explain why.  My brother can barely stand up and walk, and now uses a walker to get around.

Thankfully my brother is ably supported by Special Citizens Futures Unlimited (SCFU), an impressive organization founded 40 years ago by a sister and a mother, providing comprehensive services and lovely small residential homes to adults on the autism spectrum, in New York’s lower Hudson Valley, Riverdale, and Manhattan.

Although unfortunate, a recent fall and Mount Sinai ER visit, provided impetus for transformative change.  This super glue sister, grateful that all the scans were negative for fracture, of course read all the detail findings on MyChart.  Some lower back spinal changes typical for a person my brother’s age nonetheless prompted me to email  Mount Sinai neurosurgeon Arthur L. Jenkins III, late Sunday night.  At 7:06am the following morning, he was all over it.  Four days later, in a conference call with Dr. Jenkins and my brother, a game changing plan emerged!

Dr. Jenkins is a nationally renowned and highly dedicated neurosurgeon.   A fierce advocate for his patients, he is undeniably, one of the finest diagnostic and pioneering clinicians for complex spinal neurological problems.  Currently the on call neurosurgeon for the NY Jets, he has served as Co-Director of Mount Sinai’s Spinal Neurosurgery Program, and Director of the Spinal Oncology, Minimally Invasive Spinal Surgery, and Spinal Cord Injury Laboratory programs.  In 2017, he launched JENKINS NeuroSpine but still maintains “voluntary” faculty status at the Icahn School of Medicine, teaching the next generation of residents and students.  Beyond all that, he is the nicest, most down to earth approachable guy, with humility abound!

Dr. Jenkins quickly and masterfully identified two distinct areas of focus.  First, is a drainage problem in the ventricles of my brother’s brain, that directly impacts mobility, unbelievable!  It happens to babies at birth, and to people as they age. They don’t always know why it happens, but Dr. Jenkins can fix it!

Second, is a rare transitional anatomy at the base of my brother’s spine, referred to as a “lumbarized S1”.  Dr. Jenkins has led the field in pioneering and innovative solutions and we’ll learn more about this in the follow up visit.

My brother can’t wait to dance again soon with his girlfriend Jasmine, and also to attend his 40th high school reunion!  On that note, as we’re definitely a musical family, and passionately believe in the healing power of music, we’ll take you out with this newly released gem, from the mighty musical genes of the Greta Van Fleet brothers.  I’ll give you some bonus points if you can correctly identify the identical twins.  Enjoy!  Heat Above

 

How Do I Book a Charter to Fantasy Island?

The client doesn’t always know what they want.  Until they see it!  On January 14, 1977, the U.S. TV viewing audience saw what they wanted.  In the decade that Americans endured the U.S. oil crisis, and the end of the Vietnam War and the Nixon presidency, ABC and Writer Gene Levitt bet that people were ready for an escape.  They were right. 

Numbers tell a story and you can’t argue with success.  The original Fantasy Island series spanned seven seasons, included a star studded list of Oscar and Emmy nominated and winning talent, and sealed in history the catchphrase “The Plane! The Plane!”   How did they pull it off?  It was the strong moral code of mysterious host Mr. Roarke and the supernatural forces on the island that drew the viewer in.  Each guest, who paid a substantial fee specific to their socio-economic situation, was destined to learn a life lesson following some unexpected turn in their fantasy.    

Making a bet once again, in a country clamoring for truth and justice, and still reeling from the worst year in U.S. history, Fox Networks Group has given a straight-to-series order for a contemporary version of the classic drama series.  This follows the box office success of the February 14, 2020 release of “Fantasy Island” the movie, with an opening weekend of $12.3 million, and a gross worldwide to date of $48.8 million on a production budget of $7 million.  

The new series is slated to air in 2021 with Sony Pictures’ newly created Gemstone Studios leading the charge.  A boutique label dedicated to premium independent production in a creative and efficient way, the plan is to co-produce with Fox Entertainment.  Veteran Sony Pictures Entertainment creative exec Marie Jacobson, tapped to lead Gemstone last year, along with venerable Writer-Producers Liz Craft and Sarah Fain will lead the creative effort.

While it hasn’t appeared in IMDB Pro as of this writing, I’m certain Jacobson, Craft, and Fain are neck deep in script development.  To all my TV writer friends, perhaps this is your opportunity to pitch an episode! 

As for the rest of us, what is your fantasy for 2021?  Remember creativity will drive ROI and the sky is the limit.  Good luck!