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🎀 The pink tax, explained

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Taco Bell has reportedly hired Pete Davidson to help apologize for its breakfast menu, which has included questionable items like the waffle taco.

In today’s email:

  • Homes are being sold in… bulk?
  • Feature: The guy who crashed the stock market.
  • Pink tax: Do products for women cost more?
  • Around the Web: An expert stone skipper, NFL but indie, a database of discoveries, and more cool internet finds.

🎧 On the go? Listen to today’s 10-minute podcast to hear Jacob and Zack discuss a new business model in streaming, plus the housing market’s grim picture — and its connection to cows.

The big idea
home falling off iceburg

Zachary Crockett

Why homebuilders are in panic mode

A year ago, the housing market was so frothy that one aspiring homeowner offered to name their firstborn child after the seller if their offer was accepted (it was not).

Today, builders are having such a hard time finding buyers that they’re turning to investors, offering multiple homes at bulk discounts, per The Wall Street Journal.

What happened?

Mortgage rates have jumped from 3.01% a year ago to 6.7% last week, a 15-year high, sparking two big consequences:

  • Demand for mortgages dropped 29% YoY in September.
  • Builders are increasingly skeptical that family buyers will get approved for financing, leading them to seek other options.

One of those options is selling to investors, who can often buy homes in bulk at a 10% to 15% discount. But given the current lack of demand, some builders are offering discounts as high as 20% for investors to take inventory off their hands, per WSJ.

And it could get much worse

Two trends paint a grim picture for builders going forward:

  • Homes under construction were up 14% YoY in August, meaning supply is going up while demand goes down.
  • Investor purchases are already down, and increasing rates make financing these homes even more expensive.

This could lead to steeper discounts as builders struggle to find buyers.

More importantly, the fallout could have a lasting impact on first-time buyers: If investor purchases increase, it will both reduce inventory and keep prices high, making a daunting housing market even harder to break into.

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TRENDING
eyeball wearing a hat

Mamma mia! Nintendo dropped a poster ahead of the Super Mario Bros. movie trailer premiere tomorrow, and people think Mario’s butt is… too small.

SNIPPETS

The end? Elon Musk changed his mind on Twitter, yet again, reportedly offering to proceed with his $54.20/share buyout.

The EU voted 602-13 in favor of a universal charger for mobile devices, meaning iPhones will likely have to adopt USB-C ports.

US job openings took a 6.2% dive in August, a sign that the tight labor market that’s driven inflation could be loosening.

Airbnb users say algorithms are banning them over minor offenses in background checks, like an unleashed dog.

Micron could spend up to $100B on a New York semiconductor factory that would boost domestic supply and add ~50k jobs.

Freeze: Amazon announced a pause on corporate hiring in its retail division through the end of the year.

Sheryl Sandberg, the former Facebook COO, joined the ACLU to announce a $3m donation to champion abortion rights.

Poshmark shares jumped as much as 14% on Monday following the announcement that Naver, a South Korean internet services provider, will acquire it for ~$1.2B.

Our Trends analyst Julia dropped 60 slides about her favorite marketing growth channels to focus on right now, like corporate gifting and the comeback of direct mail.

Feature story
stock crash newspaper headline

The banker who caused the 1929 stock crash

Today, Charles Mitchell has largely been forgotten. At the outset of the Great Depression, however, the man was the most wanted banker in America.

On Oct. 24, 1929, when the market opened, stocks plummeted so fast the New York Stock Exchange’s ticker tape couldn’t keep up.

  • Around noon that day, across the street, Mitchell hurried up the steps of the House of Morgan. Inside, he and bankers J.P. Morgan Jr., Thomas Lamont, and Albert Wiggin decided to go on a stock-buying spree to inject confidence into investors.
  • “I still see nothing to worry about,” he told reporters.

But that day was Black Thursday, and the next week brought Black Monday and Black Tuesday, the crash’s defining days.

Weeks later, when the smoke cleared enough to assess the damage, fingers pointed at Mitchell. Sen. Carter Glass said later, “He, more than any 50 men, is responsible for this stock crash.”

Why?

Read the full story →
Free Resource

What does it mean to be a content creator?

A few years back, the title was still reserved for Instagram influencers, YouTube educators, digital marketers — the specialized pros.

But this year, HubSpot surveyed 1k consumers and found that 30% of 18- to 24-year-olds and 40% of 25- to 34-year-olds consider themselves content creators.

If you post for chums, clout, or cash, you might be interested in what these three creators have to say about today’s content landscape.

Inside the minds of content experts:

  • The state of the booming creator economy
  • How micro- and nano-influencers changed the game
  • Tips for thriving in saturated digital spaces

Read the insightful blog post.

On content creation →
Pink Tax
Pink Tax

The ‘pink tax,’ explained

Last week, California Gov. Gavin Newsom signed a bill prohibiting companies from gender-based pricing, or else face a hefty fine, per The Sacramento Bee.

New York enacted a similar law in 2020, and both aim to end the so-called “pink tax.”

But it’s not a tax

It’s when similar products are priced higher when marketed to women. Often, those products are pink — like these lady laxatives.

A 2015 report from the NYC Department of Consumer Affairs analyzed 794 products and found that women’s products cost more 42% of the time.

  • Toys intended for girls were priced an average of 7% higher (e.g., a Radio Flyer scooter that cost ~$25 more in pink than in red).
  • Personal care products were 13% higher (e.g., Schick razor cartridges that were $3.50 more when marketed for women).

Similar bills have been introduced at the federal level, but haven’t passed.

Will the laws help?

One 2021 study doubted legislative impact and necessity after failing to find evidence of significant disparities when comparing personal care products and their ingredients.

Others point out that it’s only one part of a larger problem that includes the wage gap.

For now, one tip to avoid the pink tax is to buy gender-neutral items. Or, choose the blue razors, which work just as well.

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AROUND THE WEB

🕊️ On this day: In 1989, the Dalai Lama won the Nobel Peace Prize.

🪨 That’s interesting: One man’s lifelong quest to master skipping stones across water.

🔍 That’s cool: A massive, searchable database of archeological finds discovered by the public in England and Wales.

🏈 Haha: NFL intro theme songs, but make them indie.

🐈 Aww: And now, just making the rounds.

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Elon Musk Tweet

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Editing by: Mark “Waffle Taco” Dent.

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