Retired People of the World, Unite!

Campus Theater
Campus Theater (Photo credit: Gerry Dincher)
Are marketing gurus waking up to new markets out there? Have they (finally) realized that the Baby Boomers are about to retire - nay, that they're retiring? It's going to be a tsunami of consumers over 60. And that will change the marketing game forever. 

So far, products were sold with pretty pictures of youth. Now we'll get your grandmother selling you a red hot Ferrari, I can just picture her wiggling out of the racing car (or running away?). Ah, no matter, the name of the game is Baby Boomer Buying!

At least that's what AARP and their magazine think - and what they think does matter, after all the magazine sells to over 22 million readers! That makes it the biggest magazine in America (and perhaps the world). As Andrew Newman of the New York Times recently pointed out  (see article below), they've launched a new campaign aimed at advertisers that features people in their 50s and early 60s, arguing that "brands should be focusing on them, not people ages 18 to 34, commonly referred to by the marketers who covet them as millennials."

Indeed. Advertising has traditionally focused on the young and that was a very good strategy when the Baby Boomers were young back in the 60s and 70s. Now they're old, and the numbers should speak to marketeers: as of now, they're some 75 million of them in the United States alone and the numbers are growing. Also population is aging everywhere, Japan in particular but also in China (where by 2040 there will be many more retired people than active workers).

The numbers have clearly spoken to Hollywood. It is trying to get boomers back in the movie theatre, producing films to their taste like “True Grit,” “The King’s Speech,” “The Fighter,” “Black Swan”, “The Social Network”. They have all been "surprise hits" at the box office and reaping Oscars. Wow! So selling to Baby Boomers does work! As the New York Times put it in an article reviewing this developing trend in movies (25 Feb 2011), they have become hits “based on wit and storytelling, not special effects”. 

Gone is the pointless gore and violence and wild, unrealistic flings of fancy. What a relief! As far as I'm concerned (but then yes, I'm a Baby Boomer), I'm totally fed up with wild pursuits through improbable settings, sprays of ketchup blood and the deafening sound of gunfire and explosions. 

Remarkably, people are getting used to seeing old faces. Films featuring old actors are making it to top rankings in the box office: Judi Dench and Maggie Smith (both 76), Helen Mirren (65), Sylvester Stallone (64), Liam Neeson (58), just to name a few. But I'm sure you can think of many more. For example, French actors like Gérard Depardieu or Alain Delon.
LONDON, ENGLAND - FEBRUARY 07: (EDITORS NOTE: Image has been converted to black and white) Dame Judi Dench attends the World Premiere of 'The Best Exotic Marigold Hotel' at The Curzon Mayfair on February 7, 2012 in London, England. (Image credit: Getty Images via @daylife)

What is striking is the change in plots. For the first time, movies are squarely focussed on the retired and aging. For example, “RED”, a hit in 2010, stands for “retired and extremely dangerous” and the current hit  “The Best Exotic Marigold Hotel,” is about a group of British retirees who go to India (Fox Searchlight).

The exploding growth of Facebook and Twitter is largely the result of a surge in adoption by older people: a recent US poll (Pew Research Center’s Internet & American Life Project, Feb 2011) shows that the share of Americans older than 50 using social networks doubled in 2010, with a virtual majority of baby boomers, and about one-quarter of the nation’s seniors, now using the sites to stay in touch or reconnect with long-lost friends.
The media is catching up (not just AARP for whom Baby Boomer retirees are at the center of its mandate). Since March 2011, the New York Times has tried to launch a free quarterly magazine and associate website called "Your Guide to Better Living" aimed at Baby Boomers. As far as I can figure out, it's not online yet or at least not visible to the average Google navigator - which goes to show that it's not easy to market to Baby Boomers. This is something that Chuck Nyren points out in his excellent article: a marketing campaign works if it promotes a product that is NOT age-related. Why? Probably because we all like to look hip. It's a left-over of the Baby Boomer heredity. We can't get excited about ashen faces, hearing aids and walking sticks.

The same is true for literature. Novels with the aging and retired as protagonists are on the rise - what I like to call BB novels (for Baby Boomers just like YA novels are for Young Adults). That's precisely what my next novel, A HOOK IN THE SKY, is about. But if BB novels are going to be sad, tragic stories about wrinkles and back aches, you can bet no one will want to read them! 

A good BB novel is one that makes you smile, that let's you get in the head of older people and understand them. Empathy is the key word here. We'll all get there some day, old and bent, but it need not be a drama. No, there can be good things about growing old, it's just a matter of looking for them. I think that's what that Deborah Moggach's novel, The Best Exotic Marigold Hotel, really does: it exorcises the fear of Death, it tells you how to handle age with grace and dignity and it makes it sound (at last!) like good fun! A skilful black comedy, it's a great read, I highly recommend it.

It's everything a BB novel should be. And I'm not surprised it's such a roaring success - and the film too. It's BB times coming up!
NEW YORK, NY - APRIL 23:  A detail of actress ...
NEW YORK, NY - APRIL 23: A detail of actress Pooja Kumar's ring and bracelet is seen at the 'The Best Exotic Marigold Hotel' New York Premiere at Ziegfeld Theatre on April 23, 2012 in New York City. (Image credit: Getty Images via @daylife)

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Why the US Economy Recovered Faster than Europe from the 2008 Crisis

The Federal Reserve: The Biggest Scam In History
The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)
The reason is simple and everyone knows it (including economists): quantitative easing. That's what the Federal Reserve has been doing - and done twice since 2008, spending hundreds of billions of $$$ to buy bonds (Treasury bills) thus automatically pumping money in the economy and helping to jumpstart it. And that's what the European Central Bank (ECB) has NOT done - or done very little of it: just €212 billion (some $ 260 billion). 

Peanuts compared to the Fed!

So it should come as no surprise that the crisis in Europe has lingered on, indeed has grown explosively while things in America are looking (a little) better - and it might go on this way provided the whole world (and international trade) is not taken down by a European implosion...Not to mention the other four reasons threatening the world economy according to Mr. Doom (see the first article below about Nouriel Roubini's predictions - all frighteningly likely). 

English: Nouriel Roubini, Turkish economist, p...
English: Nouriel Roubini, Turkish economist, professor of economics at the Stern School of Business, New York University. From the Confederation of Norwegian Enterprise conference, 2009. ‪ (Photo credit: Wikipedia)
This is also why the IMF, in a recent report highly critical of the Eurozone policies, called on establishing a stronger monetary union to break the tide stemming from what it diplomatically described as the "adverse links between sovereigns, banks and the real economy" that have grown "stronger than ever". It warned of an economic slow down accompanied by a high risk of deflation (25% by 2014), and told the ECB to engage in quantitative easing or else...

What's this business of "adverse links"? Put in simple words: European government finance their deficits with bonds (what the IMF calls "sovereigns") that are snapped up by banks (lately national banks rather than foreign) that finance themselves from the ECB at super low interest rates (less than one percent). Thus they are able to fill up with bonds that give them returns many times higher (in the 6% area and more) than the cost of the money they borrowed. And they do this rather than lend to local businesses ("the real economy"): it's a sure way to fill their coffers and achieve the reserve levels required of them by European regulators. 

In short, a vicious circle.

Quantitative easing, since it turns the Central Bank into a major bond buyer, can break the said vicious circle. Banks will find the Central Bank is competing with them, hence, with more buyers in the bond market, rates on bonds will inevitably drop and become less enticing. That will force them to turn elsewhere to make money and (hopefully) start lending to business, which is what they really should have been doing all along.

But quantitative easing makes people uneasy and fiscal disciplinarians (like the Germans and the Republican Tea Party) downright furious. They see it as reckless pumping of money that causes inflation - for them, it's a scam, it's immoral, it's something that destroys the future of our children. Moreover when the ECB was established, it was meant to fight inflation, not deflation.  

So will the ECB listen to the IMF's advice?

LONDON, ENGLAND - MAY 22:  Christine Lagarde, ...
LONDON, ENGLAND - MAY 22: Christine Lagarde, the Managing Director of the International Monetary Fund, addresses a press conference in the Treasury on May 22, 2012 in London, England. A report on the IMF's annual assessment of the UK economy has recommended that the Treasury consider measures to improve its current economic weakness such as Quantitative Easing and cutting interest rates. (Image credit: Getty Images via @daylife)

But there's something else at work here: the ECB is also mandated to defend the stability of the Euro - thus if prices will slow down significantly, as they may well do, particularly in the so-called European southern periphery (read: Greece, Italy, Spain etc), the ECB may well have to engage in quantitative easing, whether it likes to or not.

Because worse than inflation is deflation: when consumer prices fall, investment prospects collapse, sales slow down, businesses close down and unemployment soars. Whatever advantage to the consumer may derive from lower prices simply evaporates.

Which brings me to my last point: sovereign debt is NOT the equivalent of a private household debt - whatever the Germans and the Tea Party say. There's no moral payback for keeping it in balance year in, year out. To think of it that way is wrong. But to never balance the budget is also wrong. You should be a fiscal disciplinarian in good times, not in bad times. When things are going well, that's when you should call on governments to balance their budget. Otherwise no. It's the government's role to ensure stability of the currency and limit economic downturns and the pain of unemployment. 

Since John Maynard Keynes, we know what government policies work, so why not use them? Why repeat the mistakes of the Great Depression?
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The End of Commuter Trains? How the One Percent Uses Technology to its Advantage

High speed trains have displaced commuter trains - at least here in Italy on the much travelled Rome-Milano route, and I suspect in all other countries where super fast trainst have been introduced using the existing railways. Now if you build special railroads for your fast trains, there's no problem, it's an additional service for those who can afford it and are looking to save on their travel time - namely big time politicians and managers, in short the one percent.

But, and this is a big BUT, if you force your high speed trains on existing railways, you necessarily cut into the scheduling of  slower local trains, in particular commuter trains. And that affects the rest of us, the 99 percent. I was sharply reminded of this yesterday when I decided to spend the day in Rome with my 98 year-old mother: I took the train from the Chiusi-Chianciano station which is not far from our summer place in the Umbrian countryside, figuring that it would be less tiring than driving into town. In addition, I'd be able to enjoy my Kindle and catch up on my reading. A nice train (yes, that's the picture up here) with good seats and air conditioning. But so slow...It took two hours on a trip that used to last one hour or maybe one hour and ten minutes only a few years ago!

And there was simply NO faster alternative!

Now, some five years ago when I travelled like this - in the halcyon days before the Rome-Milano high speed train service came on - it was possible to find several convenient options of reasonably fast trains that made it to Rome in about one hour. 

No more. 

The fastest train now makes it in one hour and 45 minutes and most of them take two hours. That's a doubling of the travel time! Plus the options are far fewer than before: about four or five trains a day as against a train every hour. 

That makes for a very big difference! I remember I had colleagues who had chosen to live in nice big country houses near Chiusi Chianciano and used to commute into Rome every day, taking about an hour an half, considering the subway ride added at the end of the train trip. A long commute but bearable. I wonder how they manage now with a two and half hour commute!

Thus Italy can proudly say it has a "Ferrari" train service driving a "high-speed rail renaissance". Sounds good, looks good, here it is, the "Red Arrow" (Frecciarossa):

Italiano: Frecciarossa ETR500 a Milano Central...
Italiano: Frecciarossa ETR500 a Milano Centrale, opera propria, 03/05/2009, l'autore sono io, copyright libero (Photo credit: Wikipedia)
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Caravaggio: 100 Drawings Just Discovered...Really?

Medusa, after 1590, by Caravaggio; Uffizi Gall...
Medusa, after 1590, by Caravaggio; Uffizi Gallery, Florence, Italy (Photo credit: Wikipedia)
Caravaggio is one of my favorite painters. Imagine my joy when two Italian art experts unveiled last week their discovery of 100 drawings dating to Caravaggio's youth before he came to Rome and became famous. In fact, Caravaggio's formative years are a complete mystery, no one has ever seen any drawings or early work of the master. Which is why the discovery of 100 early drawings by Caravaggio is a major finding.

Or would be a major finding if true.

NOTE: Since I first wrote this post, the controversy has heated up: the Sole 24 Ore, the country's most respected paper, called the finding a hoax in its Sunday cultural page while Claudio Strinati, a major art critic and ex-director of the Polo Museale of Rome has come out with a statement in support of the two experts. Of course, the perfectly rounded figure: 100 new drawings will inevitably draw skepticism...

It's a pity the two experts didn't go the usual route of peer review and publishing their findings in a respected art journal. Instead they chose to produce an e-book and have it published by Amazon in four languages - or so it is reported in the press. I was only able to find the Italian version, here:

Including VAT and wireless delivery, it costs a hefty $17.50 (we e-book readers are not used to such prices!) but then it's a big book (over 470 pages) and it has plenty of illustrations. It is only available on advanded devices like the Kindle Fire, or else you can read it on your computer (Kindle Cloud Reader) or the Kindle for iPad or Android.

I downloaded a sample on the Cloud Reader and quite frankly I found myself a little frustrated. Oh sure, it's well done, the pictures are stupendous. But much time is wasted in the opening chapter on Carvaggio's early life with pictures of the places where he was brought up (the small town of Caravaggio of course, and Milan). 

What I would have liked to see in the opening is a presentation of the method used to identify Caravaggio's work out of the 1378 drawings in the Simone Peterzano archives. True, we're told that as Caravaggio had the reputation of being a fast worker, one could reasonably assume that in the four years he spent in Peterzano's workshop he might have produced over 1300 drawings and other artwork. Therefore, to uncover just one hundred Caravaggio drawings in those archives is not all that surprising.

Maybe. Still, it would have been better to explain right away what criteria were used to identify the drawings. In addition, according to the curator of the Sforza Castle collection where the Peterzano archives are maintained, the two experts worked from black and white photographs they had asked for and not from the originals.

So is this discovery to be dismissed as a hoax - possibly just a novel marketing trick to launch an e-book? 

Not necessarily. The authors of the book are serious people: Maurizio Bernardelli Curuz is the artistic director of the Brescia Musei Foundation (though not on the Executive Board), the author of many publications and an expert on...Caravaggio, of course. He is also the artistic director of the monthly magazine Stile Arte (he really is, I checked). It's an interesting magazine focused on art history as well as contemporary art issues - though no announcement in there of his e-book on Caravaggio, very discreet of him... His assistant in the Caravaggio project, Adriana Conconi Fedrigolli, is a young art historian, published author and expert in the Lombard painting school, with experience in the use of scientific analytical methods, including radiography, reflectography etc.

It's a pity they didn't pick a more conventional route to launch their Caravaggio project in the art world, because doing it this way has caused a negative backlash (take a look at the articles below). It will now take some time before other art historians verify their findings. 

I'm no expert on Caravaggio, but based on the four drawings presented in the opening pages (an old man's head etc) and that are claimed to correspond to details in oil paintings produced later (the old man's head is repeated in an oil painting, pretty much under the same angle), I can say just one thing: the drawings are remarkably similar, yet...they are strangely better drawn than the later paintings! They appear to reflect a better control of the line, more nuances in the shadows than you can find in his later oil paintings.

Very strange. I know what you're thinking: it the drawings are better than the oil paintings - from a purely technical standpoint - then they can't have been done by Caravaggio, right? He couldn't have evolved backwards through time, getting worse at drawing as he grew older and achieved fame with his extraordinary chiaro-scuro oil paintings, a technique no one had ever used before him. 

Well, I would argue the reverse. The fact that the drawings look "better" may just be an unwanted side-effect of using his chiaro-scuro technique. Believe me, it's a daunting technique to execute drawings: you use white paint on a dark background - in effect, it's the reverse of a classic drawing, say lead pencil or ink on a white paper. While it's possible to maintain volume and perspective, certain nuances and light plays are next to impossible to control using the chiaro-scuro technique. 

I know because I experimented with it. I'm not Caravaggio (far from it!) but I liked the challenge of "drawing in reverse" and I did that for a while in 2007-8 (I called that "counterlight painting"). 

Let me show you what it looks like so you get an idea of what I'm talking about. Here's a woman asleep in the subway (I've done a whole series of people in the subway - I love the way people look weird in there):

And here's the drawing it's taken from:

The drawing is more nuanced, if you see what I mean. Did I go "backwards"? No, I don't think so (I hope I didn't!). What happened is that the chiaro-scuro technique constrained me. It forced me to simplify the lines, also the play of light. The simplification is not necessarily a step back, it makes for a stronger overall effect on the viewer (in my humble opinion). All this to explain why some Caravaggio drawings made in his youth before he became the famed creator of the chiaro-scuro technique could well look "better", and yet be really his and hardly a sign that he has evolved backwards!

So are the 100 drawings really his? I'd like to think they are but I don't know, I'm no expert. We have to wait for the conclusions of a peer review, and I sincerely hope we won't have too long to wait!

PS. If you're curious and want to see more of my "couterlight" paintings, you can find them here.

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The Real Solution to the Euro Crisis? Devaluation!

English: €2 commemorative coin Euro Zone 2007 ...
English: €2 commemorative coin Euro Zone 2007 50th Anniversary of the Signature of the Treaty of Rome Français : Pièce commémorative de 2 euros de la Zone Euro en 2007 pour le 50e anniversaire de la signature du Traité de Rome (Photo credit: Wikipedia)
The Euro Crisis started two years ago and thanks to Ms. Merkel's single-minded obsessive focus on austerity and debt reduction, we haven't moved one step closer to resolution of the crisis. The immediate result of this pig-headed approach is that default becomes the only alternative to devalution. Available fixes for the Euro mess are by-passed and the easiest one (devaluation) is simply ignored.


Because our narrow-minded, chauvinistic politicians can't think in Europe-wide terms. You have to consider the Euro-zone as a whole. If five out of the 17 member countries are in deep trouble (Greece, Ireland, Portugal, Spain and lately Italy) and a major 6th one is about to sink in recession (France) not to mention other smaller ones that are suffering too (Belgium, the Netherlands), why, it's obvious: you should stop pretending the Euro-zone currency is in perfect health! 

It's not. 

Its value on currency markets quite clearly does NOT reflect the real state of the Euro-zone economies. It makes no sense at all that the Euro should be higher than the dollar: the US is slowly climbing out of recession while Europe is falling ever deeper into it. The Euro could perhaps be a little above the dollar but not some 25% above it! That's way too much.

The economic solution to such a situation is a classic: devalue! We all know the reasoning: devaluing the currency makes exports cheaper giving them a boost. Et voilà! The economic machine whirrs up again. Exactly what the suffering Southern Europeans need, but mind you, it's also going to help the Germans. Their exports will soar and everybody will be happy again in Europe, and, incidentally, the rest of the world too. Because a sick Europe is making the whole world sick, including China, India, Brazil - the emerging economies that had pulled us out of the 2008 slump and are now in pain as they find they aren't exporting to Europe anywhere near the levels of two years ago. Yes, two years ago when the Euro crisis started...

So why the hell doesn't our political class wake up? I fervently hope Draghi is listening and that the ECB Board meeting will take the right economic decision today and lower the prime interest rate...That would be a first healthy step towards devaluation aand re-aligning the Euro with the dollar.
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