8:11:14 AM 12/21/2016
And A Happy Solstice To All
Hey there! Happy Winter Solstice! It’s the shortest day of the year, among other things, which means that from here on out the days start getting longer. That’s a good thing, isn’t it? We certainly hope it is. And we’re still looking at warming temperatures as we head toward the Christmas/Hanukkah weekend so hopefully travel problems will be few.
As we look at the news this morning, there is still a lot of clean up from Monday’s events. Police in Germany released the person they initially thought was the driver of the truck that slammed into a holiday market in Berlin and a manhunt is underway. Russia has doubled down on its relationship with Turkey. And officials in Geneva said that the person who shot up a mosque there was not a Muslim extremist. Those situations are likely to be ongoing for a while. So, our five things you should know this morning takes us in a slightly different direction.
And then things went boom
By now, if you’ve been on social media much at all, you’ve likely seen the video a passerby took yesterday as the San Pablito fireworks market in Mexico exploded yesterday1. While the site was a spectacular event to watch, the death toll in that chain reaction explosion now stands at 29, with 72 still being treated for injuries. Some of those injured have burns over 90 percent of their body.
There is no word yet as to who or what might have caused the explosion. Inventory at the market was higher than usual because of the upcoming holidays. The fireworks market is an integral part of the local economy and something that is carefully guarded. However, this is not the first time that the San Pablito market has gone up in flames. A similar incident in May of 2005 did a similar amount of damage, though fewer lives were lost in that explosion.
Amidst the chaos of the explosions and huge plumes of smoke, survivors ran for the nearest exit, many becoming separated from their families and leaving behind personal items such as cell phones. Relatives are still scrambling to find those who are missing. Sadly, explosions like this are all-too-common an occurrence in Mexico, especially around holidays and religious festivals. Yesterday’s explosion, however, was the worst the country has seen in several years.
Someone has to take responsibility
With tragedy inevitably come lawsuits as victims’ families look to hold someone, somewhere, responsible for the event that took the life of a loved one. Such is the case in Orlando as the families of three men killed in the Pulse nightclub shooting filed papers in Detroit federal court on Monday naming major social media companies Facebook, Twitter, and Google saying that the companies “provided the terrorist group ISIS with accounts they use to spread extremist propaganda, raise funds and attract new recruits.”2
While the grief of the families involved is understandable, one has to wonder if this is not yet again a case of an over-zealous attorney either trying to make a name for themselves or bilking the grieving families out of thousands of dollars in attorneys fees. The families would have to prove intentional and deliberate collusion on the part of the social media giants to win their case, something that is not likely to happen. Pile First Amendment arguments on top of that and the lawsuit is practically dead in the water before it ever starts.
While only Facebook responded to the lawsuit yesterday, the issue of shutting down the accounts of known terrorist cells has been a primary project for every social media outlet over the past couple of years. Twitter was very public back in August when it announced that it had deleted 360,000 accounts since mid-2015 for violating policies related to promotion of terrorism. All three companies, along with Microsoft, are part of a joint effort to prevent known terrorist accounts from proliferating online. Section 230 of the federal Communications Decency Act protects software companies from speech users post on their sites, making the lawsuit against them even more improbable.
Our sympathies are with the families of the victims, but this lawsuit is nothing but desperate foolishness.
American Apparel is dying
Anyone who once shopped the big malls across the country knows the name American Apparel. They’ve been a mainstay of malls everywhere for over 30 years. However, the retail market has not been nice toward mall-based chains and American Apparel has spent the past several months in the middle of bankruptcy proceedings trying desperately to keep the brand alive. Yesterday, however, a judge agreed to allow the store to close nine locations and approved a liquidation plan should a buyer not be found within a reasonable timeframe.3
The nine stores, which are among some of the brand’s highest profile locations in Atlanta and Dallas, may just be the tip of the iceberg. The entire chain goes up for auction next month, and Gildan Activewear has already set a starting bid of $106 million. However, Gildan is not required to follow through on that bid and analyst are pessimistic about any other buyers attempting to save all 107 locations.
What this means for shoppers is multiple rounds of clearance sales as the company begins divesting itself of as much inventory as possible. However, it is also a warning sign as other mall retailers are beginning to hire bankruptcy attorneys. Fast fashion retailers such as H&M and Zara have taken much of the fire out of mall stores and that entire sector of the industry has been in steep decline for five years now. Expect more fashion-oriented stores to fall over the next two years.
Bobbie Brown exits stage left
The beauty world was caught off guard yesterday as Bobbie Brown, founder of the incredibly popular Bobbie Brown cosmetics line, announced she is stepping away from the brand at the end of the year4. Ms. Brown did not say exactly what she was going to do next. She told WWD that the celebration of brand’s 25th anniversary was a milestone “that made me realize it was time to start a new chapter and move on to new ventures.”
The 59-year-old makeup artist certainly has plenty of options available to her as she has dabbled in a variety of closely-related ventures over the years. The brand itself is owned by Estee Lauder and will continue operating under Peter Lichtenthal, global brand president. Ms. Brown is known for being energetic and creative so it will be interesting to see just where she might apply her incredible talent next.
And Finally …
President Obama may have found something that the incoming administration can’t undo upon its arrival next month. Yesterday, the president banned new oil and gas drilling in federal waters in the Atlantic and Arctic Oceans, a move that, understandably makes environmentalists extremely happy5. The move protects nearly 120 million acres of coastal waters controlled jointly by both the United States and Canada.
Normally, we might throw some shade at the move on the expectation that the next president would simply revoke the ruling using the same Presidential power with which it was made. However, this is one instance where the ruling is almost permanent. The president utilized the little-known Outer Continental Shelf Act that allows presidents to limit areas from mineral leasing and drilling. If Mr. Trump attempts to reverse President Obama’s move, he could only do so through a series of lawsuits that would likely take longer to get through the courts than his administration would be in place.
At the same time, it’s not like anyone has been chomping at the bit to drill in the Arctic waters. Shell Oil was the last company to give it a try and they abandoned those efforts after a tanker lost several thousand gallons of crude thanks to a giant gash in its side caused by ice flows in the area. Drilling there is extremely expensive compared to land-based operations. Still, the American Petroleum Institute criticized the move. The president-elect’s transition team has not yet responded.
We’re running incredibly late this morning, so we’ll have to end the conversation there for now. As always, we hope you’ll stay warm and safe. Don’t forget to subscribe, and we’ll be back with more tomorrow.