Business

The equine industry is… boosting the economy?

One thing business insiders surely didn’t expect to propel the economy last year were horses. The American Horse Council’s 2023 Equine Economic Impact Survey was just released and it showed some quite shocking results.

While horses are expensive, the industry did help out in ways that many probably wouldn’t expect:

• The equine industry added $177 billion to the US economy last year, up almost $50 billion from 2017.

• It was responsible for around 2.2m jobs, and not just the expected ones like trainers, and vets, but truck drivers, nutritionists, chemists, and journalists.

Horses? This much money?

I know, I know. I thought the same thing. But horse enthusiasts are the core of the equine industry, and anyone who knows one is well aware of just how much they love to pamper their galloping friends like a spoiled kid.

• The Horse magazine found its respondents averaged $1,600 on monthly upkeep costs for their four legged friends.

• These numbers surge when you include maintaining horses for competitive purposes (like racing or dressage), with some riders reportedly paying almost $8,000 per month.

Of course, buying high-end horses in itself can run you a pretty penny. The 49 horses sold at last fall’s PSI Auction in Germany went for a combined $21.6 million (which averages to about $440,800 per horse).

Rein in your enthusiasm

While the horse business may have contributed a lot to the economy, the year wasn’t without its hurdles:

• The US horse population is in slight decline, with 6.6 million in 2023, compared to 7.2 million six years ago.

• In the face of national doping and safety reforms, the racing industry remains a mess… over 624 horses died on tracks in 2023 (regardless, Americans placed $11.66 billion in bets last year).

While we can thank horse enthusiasts for their contribution to America’s GDP, I think we all still want to ask how someone could spend a house-worths amount of money on a horse.

Capital One just acquired a big asset

This acquisition could change how you use your credit card. Capital One, mostly known for its celebrity driven advertisements with household names including Samuel L. Jackson, Jennifer Garner, and John Travolta, is buying Discover Financial Services in a $35.3 billion deal.

It’s (literally and figuratively) a really big deal:

• Capital One and Discover combined would create the Number one US credit card company by loan volume, shooting past JPMorgan and Citigroup.

• It’s also one of the banking sector’s largest deals since the 2008 financial crisis.

Why is Discover worth so much?

Discover is a scarce type of financial services company that both issues credit cards and operates a payments network, which facilitates transactions between issuers and merchants.

Capital One CEO Richard Fairbank said that by adding Discover, he could start building “a payments network that can compete with the largest payments networks and payments companies,” a reference to Visa and Mastercard, which currently dominate the industry.

This could be a turning point. Capital One has typically attracted sub-par customers (those with lower credit scores), but it’s looking to attract a crowd with deeper pockets who are willing to spend the big bucks with their JP Morgan Chase and AmEx cards.

• Last year, Capital One acquired Velocity Black. It’s a digital concierge app with upscale services which include swimming with sperm whales in Dominica (sounds fancy). And in Discover, it’ll acquire a customer base with higher credit ratings.

But Discover has been in damage control mode recently. Last year, its CEO stepped down after the company uncovered compliance issues, and Q4 profit plunged 62%.

However, antitrust regulators could prove to be a problem for the acquisition (which is standard for banks of this size). Capital One and Discover would become the sixth-largest bank by assets, and Consumer Financial Protection Bureau Director Rohit Chopra (who isn’t a huge fan of mergers anyway), was just discussing the lack of competition in the credit card sector last week.

Farmland may be your new best investment

Everyone is trying to curve inflation somehow, by investing in gold, crypto, or… a hundred of acres of wheatfields in North Dakota? The amount of farmland bought by investment firms has skyrocketed 231% from 2008 to the middle of 2023, according to the National Council of Real Estate Investment Fiduciaries.

Investors owned $16.6 billion worth of farmland at the end of last year, which is up $9.2 billion from 2020. Apart from being mostly untouched by inflation, farmland has other qualities that make it a decent investment:

• The world will need to produce 60% more food by 2050, according to UN estimates.

• The value of farmland increased from $2,700 per acre in 2010 to $5,460 in 2023, according to the USDA.

Now that farmers are competing with wealthy investors, experts worry it’ll be harder for the industry to attract young people to the field, especially as the average age of farmers increases.

Politicians are worried about who owns it

Politicians in the US are heated about investors snatching up farmland, but they’re practically boiling over foreign investors buying it. Several members of Congress and over 36 state lawmakers have proposed bills in the past year that would limit or ban non-US citizens or people from certain countries (mostly foreign adversaries like China, Russia, and Iran) from buying farmland.

• Chinese billionaire Chen Tianqiao is the second-biggest foreign owner of US land, even though less than 1% of foreign-owned land in the US is owned by Chinese interests, according to the USDA.

• Canadian investors sit in the number one spot, owning 31% of foreign-held US land, which comes out to just under 1% of total US agricultural land.

Industry experts estimate that investment firms only control about 1% to 3% of the market. But, considering the pace in which the firms are buying land and how fast they’re driving up prices, lawmakers are concerned. That’s why many are guessing restrictions will be placed as part of a farm bill that’s expected to pass some time within the next year.

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Grab Bag

Your company might be spying on your messages

Everyone can admit sending their coworker an off-handed message about their boss on Microsoft Teams, but now, you might want to hold back. Several employers are now using an AI-powered app to assess and monitor messages across Slack, Microsoft Teams, Zoom, and other platforms. Beware.

What app?

It’s called Aware, powered by a midwestern-based startup that launched in 2017, according to CNBC. And its clients are no small fry, they include: Nestle, Walmart, Delta Air Lines, and Starbucks to name a few. It utilizes AI, trained on previous employee interactions, to analyze messages and determine:

• How different groups of employees feel about the company or decisions it makes.

• If bullying or discrimination is occuring.

• If employees are sharing confidential information about the company.

• How often teams communicate with one another.

• If employees are sending inappropriate texts, photos, or videos.

In theory, this makes it easier for companies to assess employee sentiment and potential problems in a world that’s only becoming more digital. Aware CEO Jeff Schumann said a company with 10,000 employees might send around 180 million messages per year, and bigger ones can hit over a billion, which is 300% to 1000% more than before the pandemic.

But, there are concerns

Privacy experts say tools like Aware could prompt viable concerns, even though similar tools exist for email communication. Aware lets companies determine what words or issues they want to flag (like harassment or fraud) but uses anonymized data and (allegedly) can’t tell the company which employee did/said the flagged action.

• However, there are other apps to root out the troublemakers. Another tool, eDiscovery, can flag messages for certain risks, and then identify a specific employee.

Several experts showed concern about employees’ ability to defend themselves, but Schumann said all important information and decision-making ability is left with humans… however, you might want to double check what messages you send to your coworkers from now on.

Is this the future of air travel?

Would you want a future where you don’t have to worry about bringing your passport to the airport? Of course you would, but what if they scanned your face instead… While the TSA has used facial recognition technology since 2019, the “tipping point” for airport biometrics could come in 2024, according to The New York Times.

Around the US, experimental programs are already coming our way:

• Delta Digital ID allows PreCheck members to scan their faces instead of boarding passes and IDs at five US airports.

• United Airlines lets PreCheck travelers use their faces to check bags at some airports.

• American Airlines flyers can get into the airline’s Dallas airport lounge with just their faces.

The TSA already uses facial screening verification at about 30 airports in the country and is extending to over 400 more in the coming years, biometric technology looks like it’s here for the long haul (or flight).

Biometric technology is increasingly popular

70% of global airlines will use biometric tools for identification within the next two years, with 90% of airports already investing in biometric technology, according to SITA’s latest insights report.

While no one who’s seen Minority Report wants their face to be scanned constantly, it could cut down on time spent at the airport. Facial scanning removes over a minute from the bag drop process and 15 seconds off security interactions, according to SITA’s report.

Comparatively, biometric technology has already been implemented on a far wider scale internationally:

• Singapore’s Changi Airport is going ditching the passport entirely.

• Germany’s Frankfurt Airport lets passengers use their faces for the whole travel process.

• In China, 86% of the country’s international airports use biometric tech. Beijing Capital International Airport lets travelers use their faces at every point in their trip, even at the little airport convenience stores.

In the US however, only around 36% of international airports regularly use facial recognition. Most of the updates are due to a 2001 congressional mandate requiring airports to add systems that allow for biometric identification of all travelers coming in or out of the US.

That process (which scanned 113 million people last year) is done for those looking to come into the US and will be available for all departures in a couple years. Although, there are those who rightfully doubt the technology’s security and privacy implications, which seems to be a little concerning.

Fast Facts

Chip Control: Elon Musk said the first Neuralink patient made a full recovery and can now control a computer mouse using only their thoughts.

Seized Ship: The crew of a cargo ship was forced to abandon their vessel after being attacked by Houthis in the Red Sea, the first time a crew had to abandon ship since the militant group began striking commercial vessels last year. 

Electric Employee: Uber Eats Japan is partnering with a robotics firm and Mitsubishi Electric on autonomous robots that will soon become apart of their staff. Look for a robot if you want your food delivered.

Foldable Phone: Apple has reportedly built multiple foldable iPhone prototypes, but they wouldn’t launch anytime before 2026, if they ever do.

Mind-Mixer: A new study says electronic music alters your consciousness... not just the drugs you took at the festival.