Author: openjargon

Tesla is on the brink again. Sales are slowing even after the company slashed prices. The company is laying off 10% of its workforce — 14,000 workers from Shanghai to San Jose, from the factory floor to the executive suite. The company had to recall every single Cybertruck it shipped. And Tesla's position in China, a country that has become critical to its future, is getting shakier.

There's only one person to blame for the company's shambolic state and only one person whose exit could save Tesla: Elon Musk. For the past few years, Tesla has looked unstoppable, but during those high times, Musk failed to implement any strategy that would insulate the company from what has become a violent global electric-vehicle price war. The company is incinerating cash, losing market share, and holding more aging inventory than ever before.

Tesla reported its first-quarter earnings on Tuesday and missed expectations across the board, even though Wall Street was already expecting the worst. Earnings per share came in at $0.45, lower than analysts' expectations of $0.52. Free cash flow fell a stunning 674% as Tesla focused on AI research and making capital improvements. Gross profit fell 18% from the same time a year ago, and gross margins fell from 19.3% to 17.4% over the same period. If Tesla the company were a car, this is when you start to hear it make a rattling sound.

The company's problem isn't a matter of getting through "production hell" or "delivery hell" on a new model, which Tesla has been able to survive. Hell is, at the very least, a location. Tesla's problem is that it has no clear direction. It doesn't matter how much cash a company has on hand if it's blowing it on products that aren't ready to scale — like a robotaxi. Or cars that no one wants — like its dated models.

Musk seems to understand at least that much: For years, Tesla has teased the development of the Model 2 — a $25,000 Tesla for the everyman. This is the car the market wants, and a Reuters report from earlier this month that the Model 2 was being scrapped (which Musk denied) sent the stock into a tailspin. Given this clear signal from investors, the company pivoted and announced in its earnings release that it planned to speed up production of "new and more affordable products" to early 2025. Wall Street ate this up: in spite of the miserable results, Tesla's stock has gained nearly 20% since the earnings announcement and analysts were falling over themselves to praise the news. It's like people have never seen this play from Musk before, but anyone who's been following Tesla knows we have.

Musk is notorious for delivering so late that any sort of timelines are to be taken with a grain of salt. Even Musk's most loyal shareholders — like Ross Gerber of investment firm Gerber Kawasaki — were dubious. In an interview with Bloomberg on Tuesday after Tesla's report, Gerber said that he "can't rely" on what the company says about timelines anymore. In the company's post-earnings conference call, Musk only mentioned vague plans for speeding up the production process and spent more time talking about his far-off vision for an Uber-like robotaxi fleet.

"I'd say at least eight to nine years before they get a robotaxi working," Tu Le, the founder of the electric-vehicle consultancy Sino Auto Insights, told me in a recent interview. "I think they'd argue that they already made it. But I'm thinking about the best-case scenario. And I'm being very optimistic.

Being late wasn't a problem when Tesla was the only company making good EVs, but that's not the case anymore. Musk does not have eight or nine years to save Tesla, and making vague promises to deliver a new car that the market actually wants — while appealing to Wall Street — does not relieve the pressures the company is facing now. On one side of the world, competitors in China can make cars at a much lower cost. On the other side, legacy automakers are leaning on their combustion-engine and hybrid car sales to make it through the slowdown in demand for electric cars. If the Chinese market is a rock, then Western markets are a hard place. Tesla is caught in between. The company needs a serious leader with practical ideas — no self-driving gimmicks, no blowtorches, no broken Cybertrucks, no shitposting, no video-game marathons, and no casual ketamine use. Basically, no Elon. It needs a singularly focused, ruthlessly productive leader who can deliver the Model 2 — without copious delays.

On Tuesday, Musk addressed the recent round of layoffs by saying that Tesla needed to restructure itself for a "new phase of growth." He's right about that, the carmaker does need a major shake-up — starting with him.

The future did not have to look this ugly for Tesla. In 2020, the company was on top of the world. Its Shanghai plant started cranking out lower-cost, higher-margin cars. It was building a plant in Germany and another one in Texas. It sold more cars than ever before. Consistent annual profits led to a glorious stock market rally, and Wall Street rejoiced.

What did Musk do with those glory days? He sold a bunch of his Tesla stock to buy Twitter, tried to get out of the deal, and then was forced to go through with it. He blew up some rockets (to be fair, some also made it to space). He implanted a brain chip into a bunch of monkeys. He brought a kitchen sink to work and added a few more CEO jobs to his plate. He publicly bungled Gov. Ron DeSantis' attempt to launch a presidential campaign. At Tesla, Musk delivered about 4,000 Cybertrucks — every one of which has been recalled for faulty acceleration — while frittering away any goodwill the company has with its core customers.

What I'm saying is that as much as Tesla accomplished in the past few years, it's clear Musk should've spent more time with it. Tesla failed to craft a strategy for chaotic times in what is still clearly a nascent EV industry. Sure, the company has been on a multiyear campaign to get lean and cut costs, but that strategy isn't enough to balance out price cuts, weak demand, and the need for major capital expenditures to get through this period of fleet stagnation.

Tesla failed to craft a strategy for chaotic times in what is still clearly a nascent EV industry.

A true visionary CEO — which Musk has long claimed to be — would have pressed the advantage that Tesla developed in the EV market. They would've done research to try to understand what EV demand would look like after early adopters bought cars. They'd know what kinds of buyers would enter the market at that stage and which kinds of cars those buyers would want. A true visionary CEO would meet those customers where they are. Back in November, I spoke with Navdeep Sodhi, a pricing analyst at Sodhi Pricing Associates, who told me that Tesla should advertise to educate the public about the cost benefits of its cars, like savings on gas. Advertising could have also helped assuage concerns about issues like range anxiety. This month, Tesla laid off its entire marketing team.

For years analysts warned Musk that competition was coming, not just from legacy automakers but from the very Chinese market that fostered Tesla's success. Beijing has a pattern of supporting Western companies in China's markets in order to foster competition, then, once China-based rivals are able to catch up, tipping the scales in favor of homegrown companies. Add in the fact that Beijing has cornered nearly every aspect of the battery supply chain — from mining and refining metals to manufacturing the batteries themselves — which has helped China's EV makers to churn out models at price points as low as four figures. The new options have put Tesla on the back foot in one of its most important markets: Tesla's share of China's car market shrank to 6.7% in the fourth quarter of 2023 from 10.3% at the beginning of the year.

To maintain its lead, Tesla should have been singularly focused on building the Model 2 — moving down the pricing scale to where there were more customers. But it stopped innovating, the Model 2 hasn't materialized, and Musk's realization that the company needs to actually deliver on a Tesla-for-the-people may be coming too late. Instead of boosting sales with an impressive or accessible new option, Tesla has tried to goose demand by erratically lowering the prices of its existing models to increase volume. This has not worked as planned: automotive revenue fell 13% from the same time last year, according to Tuesday's earnings release, and gross margins in the automotive division fell to 14.8% from 18% a year before.

Tesla has always been a "growth" company, the up-and-coming player taking on the legacy automakers. But now the company has entered a new stage of development — it's a large, mature firm, and continuing to grow requires larger amounts of capital, discipline, and focus. There was never a moment for Musk to rest on his laurels, but after 2020 Tesla started to look less like a place where Musk was constantly innovating and more like a place where Musk sourced cash to do whatever else he wanted with his life. Maybe he got bored, or maybe he got distracted — either way, Musk stopped pushing the envelope at Tesla way too early.

During the conference call, Musk had a million excuses for why this quarter was so poor — Houthi agitation in the Red Sea, an arson in Berlin, updates at the Fremont Factory. He asserted that Tesla was not a car company but rather an AI robotics company. He spoke ad nauseam about turning Tesla into a self-driving Uber service but refused to answer any questions about the Model 2. Look over here. Look over there. Pay no attention to exactly how we're going to deliver his cheaper car. Wall Street has fallen for this before, and it's becoming embarrassing that it has fallen for it again — especially at a time when Tesla and the EV market are in such a different position.

Forget growth — now the company that should have been America's EV juggernaut needs to figure out survival.

The gestures toward actually producing the Model 2 drove a post-earnings stock pop, but given Musk's years of distraction and myriad projects, shareholders should be more concerned that he may fritter away Tesla's resources on something else — whether that's an AI that can copy his voice, turning X into a dating app for libertarians, or building another vanity clown car. If the Model 2 doesn't come ASAP, it's tantamount to Tesla waving the white flag in the global EV wars for the foreseeable future. Forget growth — now the company that should have been America's EV juggernaut needs to figure out survival.

When Musk entered the EV Thunderdome, Tesla was the only game in town, interest rates were at 0%, and most of the country was convinced he was Iron Man. Since then, China has become an EV power player, legacy automakers have been trying to get a cut of the action, debt has become more expensive, and half the country has started to think Musk is Lex Luthor. Things have changed, and Tesla's leadership needs to change along with them or get left behind.

Linette Lopez is a senior correspondent at Business Insider.

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• A Gen Z reporter decided to delete the TikTok app from her phone.
• The addictive nature of the app's algorithm led to wasted hours on mindless content.
• The reporter is still trying to figure out whether she wants to return to TikTok.

Watching that white musical note disappear from my iPhone screen was more satisfying than any ASMR video I could ever watch.

After a few years of spending about 7 hours a week on arguably the trendiest app of the 2020s, I decided it was time to say goodbye to TikTok — although I'm unsure if it will be a permanent decision.

I created my TikTok account at the pandemic's start while stuck at home with nothing to do. And while the past four years have been filled with thousands of videos I will never remember again, TikTok has made me and my thumb very weary over the past few months.

Two weeks ago, I decided to log out to give my thumbs a break, and so far, it's felt like heaven.

Why I quit

It's not just me: TikTok's audience is no longer growing like it was a few years ago. Business Insider's Alistair Barr posited that young people were growing up and taking on more responsibilities, and TikTok was hindering their productivity.

A supporting statistic is that the app's average monthly users between 18 and 24 declined by nearly 9% in the US from 2022 to 2023, The Wall Street Journal reported recently, citing analytics firm Data.ai.

What was true for me, at least, was that TikTok took hours away from my day. I started thinking about what I could be doing instead: working out, planning future trips, getting better at my hobbies — literally anything else.

However, my addiction may also be a consequence of my job: I report on trends and feel pressure to stay current.

On TikTok, there's been a long-running joke that users of the Zuckerberg-owned TikTok knockoff, Instagram Reels, are always behind on what's cool because whatever you see trending on Reels went out of fashion weeks ago on TikTok.

TikTok videos also frequently drive the discussion on Elon Musk's app X. I learned about this glycine meme after every Gen Z on Earth because I got it from Twitter, not TikTok.

The addicting nature of the app's finely tuned algorithm, analyzed and written about for years, also hooked me. Top Wall Street analysts once compared it to crack cocaine. Although I don't have experience smoking crack, I did find it hard to stay off the app when it was easily accessible.

Before deciding to delete, I spent 1-2 hours a day scrolling through my feed, gleaning so much information about nothing that mattered. Despite being painfully aware that another cute dog video would not materially improve my life, I would keep mindlessly moving on to the next clip.

So, after a particularly aggressive scroll sesh, I decided I had seen the embarrassing reminder asking me to limit my screen time one too many times and unceremoniously relegated TikTok to the app graveyard.

A better work-life balance

Other Gen Z TikTok addicts who spoke to the Journal shared similar concerns.

20-something Keilah Bruce told the Journal she neglected chores like laundry and dishes to scroll on TikTok. Another, Gautam Mengi, a film student, saw his grades freefall, and he couldn't even take out the trash without the app open.

Luckily, it never got that bad for me, but I never had time for hobbies. I told myself I wanted to start working out more, get back to reading more books on my newly purchased Kindle, and add the final stitches to my many unfinished embroidery projects. But TikTok wouldn't let me.

You may expect a dramatic story about me struggling to fill my time and desperately longing to return to TikTok after deleting the app, but that wasn't the case. I only tried to log on once because a friend sent me a post. It helped that I had forgotten my password and didn't feel like retrieving it.

And I would never want to make a new account and retrain the algorithm. It's like getting out of a long-term relationship — what I had with my original algorithm was real, and I couldn't just jump into something new.

TikTok dupes — like Reels or YouTube Shorts — are not satisfactory replacements. I do find myself scrolling through them for a few minutes a day to get that fix, though.

And if I need to look up information on TikTok, like an influencer's contact information, I limit myself to an account I exclusively use on my work laptop.

Now I do fun things, like go outside and touch grass. I even encountered a rattlesnake on a hike last week (not as fun). Doing these things is even more enjoyable than watching them. Who would've thought? But perhaps most importantly, my overall mental health improved: I don't have that post-scroll regret that makes me feel crappy about spending hours of my life I will never get back.

Will I return?

The choice to return to TikTok may be taken from me anyway, as a potential ban looms, but I'm divided on whether I even want to rejoin the app.

TikTok is a wonderful place to find young people doing inspiring things. I love seeing how our generation uses the app to start and maintain small businesses, enact positive social change, and use their voices to speak up about issues affecting marginalized communities. These are the things I like and will continue to write about.

However, it is also full of hate speech and trolls, and I would argue that the comments can be just as toxic as X at times. I've found that avoiding an endless stream of transphobia, fatphobia, and ableism is good for the soul.

So, for now, I'm off the app — at least until I learn some self-control.

TikTok did not respond to a request for comment from Business Insider.

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• Russia defeating Ukraine could spark chaos and slam the global economy, Jamie Dimon said.
• The JPMorgan CEO said a Putin victory could fuel a nuclear arms race and trigger more battles.
• Dimon warned US-China tensions and wars in Europe and the Middle East threaten the world order.

A Russian victory in Ukraine could throw the world into disarray, transform the global economy, and trigger nuclear proliferation and further conflicts, Jamie Dimon warned.

"It could be a potential disaster," the JPMorgan CEO told The Wall Street Journal this week.

Dimon emphasized that Russia has invaded a free, democratic nation and threatened nuclear war to deter resistance.

"We've never had nuclear blackmail before, which is also teaching the whole world that maybe having nuclear weapons is a pretty good thing because people will be afraid of you — you can abuse a neighbor if you feel like it," he said.

The boss of America's biggest bank cautioned that if Russia conquers Ukraine, other countries may question whether they can rely on the US to defend them from military assaults, or to have their back on the "economic battlefield," Dimon said.

Governments worldwide will reassess the security of their food, energy, and other critical resources, and might decide to partner with other countries, he added.

"I'm a little worried that if Russia wins that war, you're going to see the world enter a little bit of chaos as people realign alliances and economic relationships."

The billionaire banker has been sounding the alarm on the tumultuous global environment for a while.

"The geopolitical situation is probably the most complicated and dangerous since World War II," he told the Economic Club of New York this week, adding that the world order is being "challenged."

In his annual letter to JPMorgan shareholders this month, Dimon pointed to the wars raging in Ukraine and the Middle East, the US and China clashing over issues like trade, and the recent spike in terrorist attacks as evidence that a historically "treacherous" era may have begun.

In a September interview, Dimon flagged the Russia-Ukraine war as the greatest threat to the world, and said countries were worrying about relying on other countries for everything from food and energy to microchips and rare-earth metals.

He added that the battle could be an "inflection point for the free democratic world," and said there's "no playbook" for navigating the current geopolitical melee.

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• I lived in New York for most of my life and last year I decided to move to South Dakota. 
• We have more access and closeness to nature now. 
• I do miss the cultural diversity that New York had to offer. 

Last year, I decided to leave New York, where I lived for most of my life. In September I packed up and got on a plane to fly to the area I fell in love with a few years earlier when I visited. This is how I ended up in the flyover Midwest part of the country — South Dakota — and I love it.

South Dakota is beautifully different. After six months of living here there are some things I miss about my life back East. But there are also things here that my daughter and I would not have had the privilege to experience had we not moved.

I miss living near water

For all the great things South Dakota offers, large bodies of water are not on that list. There are rivers and lakes here, but they are far less grand. There are no beaches that have un-ending sand for all the castles that a toddler can build. I must travel a substantial distance to reach the banks of any significant body of water, whether it's the Missouri River or any of the lakes in Minnesota.

On the East Coast, you are never far away from a day at the beach or a stroll on a boardwalk — something my daughter and I used to do daily. Every evening, we walked our dog and indulged in the waterfront community along with everything it offers — the scenery, the sandy beaches, the yachts, boat trips, impromptu performers, outdoor cafés, and all the other daily buzz of shoreside living.

But we have more access to nature now

New York City and its surrounding areas are densely populated, leaving little room for nature. What does exist is highly curated and manicured. Many parks enforce a "look but don't touch" policy for certain areas, while those allowing lawn access are flooded with people. Surrounding counties do not provide much of a solution either, as most of the nature is fenced in by backyards and private lawns. That's just what you get when you have to accommodate so many people. To truly disconnect and have an opportunity to explore nature, I had to research and prepare for long day trips.

Nature here is less curated and more accessible. Parks are protected as wild zones rather than meticulously manicured gardens, fostering a more symbiotic relationship with nature and wildlife. Nature takes up more space and gives more opportunities for roaming and exploring.

We dig for earthworms in the playground mulch. We stumble on turkeys and pheasants when we're walking our dogs. We play in the muddy banks of brooks and streams. My daughter climbs rocks and scrapes her knees without a second thought, and it's beautiful. For her, more time spent in nature unlocked new levels of confidence, curiosity, and desire to explore.

I miss cultural diversity and its food

New York is unlike anywhere else when it comes to cultural diversity. Taking advantage of that, every Friday I used to find a new food or experience for my daughter and I to try. It was my way of expanding her horizons.

There are some hidden gems in South Dakota as well, but they are nothing compared to what you can find in the New York City area. There are Ethiopian, Indian, Greek, and even Mongolian restaurants here, but they are extremely limited, and sometimes you're stuck with mediocre versions of vibrant foods from immigrant communities back east.

There's more focus on family here but I miss my friends

New York is a great playground for adults — there are a lot of unique experiences. For kids — not so much. That's not to say there aren't any, but the expectation for a lot of the activities is that you leave your kids behind. This creates challenges as a newly single mom being relegated only to kid-friendly spaces. There is a hunger for adult connections and friendships that are a lot harder to make as a parent.

Here, the environment makes it easier. Places are a lot more co-mingled between adult and child-friendly experiences. The area is a lot more family-friendly, and as a result, I can get out and find fulfillment and excitement while still giving my daughter room to be a kid. Places that cater to adults have kid sections, and if they don't, people are a lot more understanding because it is a lot more likely they are parents themselves. There is a more communal understanding that we are all in this together.

That said, I moved to an area where I knew no one, and that comes at the cost of leaving it all behind. To say I miss the community that was built around me is an understatement. These are the same people who saw me and my daughter nearly daily. I wish I could invite them over and chatter over a cup of coffee, but we are a thousand miles away, and that is bittersweet.

Making friends as an adult is harder, even more so in a car-centric community. But that has forced me to really step out of my comfort zone and get involved — both for my daughter and me.

What we gained: a sustainable cost of living

New York is expensive. The Midwest is not. For me, as a single parent it is a lot more manageable, and I can spend more on giving my daughter quality experiences and resources.

In New York, everything costs a pretty penny, and I needed to be very careful in balancing the budget. There was a lot of window shopping for entertainment that wasn't always affordable. It would be nice to go to a museum or a toddler class every weekend, but spending $30 and possibly more when you count food and add-on activities quickly overtakes any budget that I had.

At the end of the day, I love that I have moved. New York was great and offered me lots of opportunities, but in the era of mom-hood, Midwest fits us better.

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• Andy Collins is a Valorant esports athlete in its Challengers League.
• An esports collegiate scholarship paid for most of his undergraduate and master's degrees.
• After working from 8 am to 5 pm, he practices and strategizes with his team for four hours.

This as-told-to essay is based on a conversation with Andy Collins, a 26-year-old software engineer from Chicago pursuing a professional esports career playing the first-person shooting game Valorant. It has been edited for length and clarity.

Decades ago, it seemed like every American child wanted to become an astronaut after seeing the United States' rapid progress in the space race.

My aspirations were a little bit different. As a kid, I grew up playing video games with my dad, later moving on to playing Counter-Strike: Global Offensive, a globally popular first-person shooter where I competed online with friends.

It didn't take a man to walk on the moon to convince me of my future in high school. But when I started seeing people making a living playing video games professionally in high school? That was my astronaut moment. That's when I knew I wanted to compete at the highest level.

With a clear goal, I set my sights on improving my skills within the game, eventually receiving a scholarship to play for Robert Morris University. Being a professional esports competitor wasn't the most well-known or traditional career path at the time. My friends didn't really seem to care that much until the streaming platform, Twitch, grew in popularity, and with it, interest in competitive esports.

Being on a collegiate roster, I always had to perform at my best, even with a grueling schedule. I would've lost valuable scholarship money if I had been demoted from the starting roster.

Thankfully, that didn't happen, and I graduated in 2019 with a degree in computer network and security and a master's degree in information systems.

Taking the next step

After graduating, I started working as a software developer at a virtual reality gaming company. I played some on the side, but I was quickly losing interest in Counter-Strike, the game I'd spent thousands of hours trying to perfect.

Riot Games released Valorant in 2020 as the company's entry into the first-person tactical shooter games, which reignited my drive to compete.

I had an incredible boss who understood that drive and supported me, allowing me to work on a non-traditional schedule as long as I accomplished all necessary tasks.

The grind paid off, and in mid-2021, I was signed as a player to pro esports organization DarkZero's first Valorant roster, finally living out my dream on a professional team.

But the esports world is fickle— you've got maybe two weeks of bad performances before your team axes you from the lineup or roster. After about nine months on the team, DarkZero decided to go a different route with its roster and booted me from the team.

The harsh realities

No longer on the DarkZero team, I now live in Austin and work remotely as a network and software engineer for my old virtual reality gaming job's parent company in Chicago.

I haven't made it back to the paid, franchised division of Valorant esports just yet — I'm living off my $75,000 salary for now — but I am still competing, now in Valorant's Challengers League under the team "Thinking Men."

Money in esports is a tricky subject.

In 2023, the vast majority of the North American Challengers League — the group of teams competing for an opportunity to ascend to the top tier franchised division — were signed to paying contracts by organizations like FaZe Clan, The Guard, or OR Esports. That's no longer the case. Many teams and players are either unpaid or paid less than minimum wage, leading players to point fingers and try to figure out the culprit.

And sure, while some of Valorant's highest-earning players make 6-to-7 figures each year between their contracts, endorsement deals, and lucrative streaming, that's simply not the norm. In the most-esteemed franchised league in Valorant, the floor of player salaries is $60,000.

My time with DarkZero was before Riot Games introduced franchising to its leagues, meaning that floor wasn't even there. I only made around $48,000 with the team, but it was enough to live off of.

I know it's controversial, but I feel like a lot of the players who are speaking out about low pay would rather complain than work a few hours a day Ubering, bartending, working for DoorDash, Starbucks, or any other part-time position.

If you're going to justify investing 10 hours of your day playing the game, you need to find some other way of making it profitable, like streaming or individually coaching players.

Many of these young esports athletes are coasting off their savings or burying themselves in debt trying to make it onto the stage at a Riot Games-organized event, just as I did after DarkZero.

Taking a little bit of time off from the game each day to earn rent money probably wouldn't even affect their in-game performance. Even though I'm playing far fewer hours per day than before — I only spend around four hours after work each day playing other teams and strategizing for my weekly matches — I'm in my best-ever form.

That wasn't always the case, though. Over the course of my esports career, I've gained the discipline to be able to acknowledge all of the factors that I can control and optimize them as best I can.

When I was teamless last year, I had all of the time in the world to improve but didn't have an ounce of discipline. I've now realized discipline is the biggest factor when juggling getting better in-game while working an 8 a.m. to 5 p.m. job and still trying to get in bed by 11 p.m. each night.

After years of competing, this is the first time where I don't care what the results are. If my team wins, or we get relegated or stay in for the rest of the season, none of it actually really matters to me.

I'm not afraid of getting dropped and I'm not afraid of having to restart. I love competing, so I'm going to keep on doing it and be the best I can be.

Are you a professional esports athlete and want to share your story? Email Madison Hall at mhall@businessinsider.com.

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• Slower growth and rising inflation has brought back distant cries that stagflation is coming.
• This would force interest rates to stay higher for longer, putting pressure on US businesses and consumers.
• One investor says anyone looking to hedge this risk should focus on fixed income.

A pair of economic reports has brought back a word no central banker ever wants to hear: stagflation.

The difficult scenario occurs when inflation rises and growth stalls, a dangerous combination just experienced by the US economy.

Worries emerged when Thursday's first-quarter GDP reading slumped against expectations, growing at an annualized 1.6% rate. That's a considerable slowdown from previous quarters, and falls well under estimates of 2.5%.

Just a day later, personal consumption expenditures did the opposite, outpacing forecasts on Friday. The inflation metric, favored by the Federal Reserve, rose 2.8% against a 2.7% consensus.

"If you take [the] inflation report in conjunction with yesterday's GDP report, I think what investors really have to start positioning themselves for is the resurgence of the stagflation debate," LPL Financial's chief economist Jeffrey Roach told Business Insider.

If this was to actually take hold, it would not be a welcome sight for markets. 

Lessons can be drawn from the 1970's, a decade often cited as cautionary tale. Iin that era, a cycle of low growth and double-digit inflation only ended after the Fed sent interest rates sky-high, driving the US into a recession. When issues first emerged, volatility sent stock markets falling.

To be sure, stagflation isn't Roach's base case, as he and other analysts will want to see more data points before making such a call. 

"It really all depends on the inflation part of the equation, and if that forces the Fed's hand to be higher for longer," said Mike Reynolds, vice president of investment strategy at Glenmede, told BI. He also noted that he's recently become more attentive to stagflation risks.

"A couple of Fed officials are floating ideas of maybe additional rate hikes — that's not the consensus — but the fact that it's being talked about now is kind of indicative of the situation that we're in," Reynolds said.

Among the most prominent Wall Street voices warning of stagflation right now is JPMorgan CEO Jamie Dimon, who has made frequent references to the 1970s as a reason for why markets shouldn't get too comfortable with the current economy: 

"I point out to a lot of people, things looked pretty rosy in 1972 — they were not rosy in 1973," he recently told the Wall Street Journal, warning that a slowdown could come in the next two years, amid rising inflation.

In the case that monetary policy is forced to stay higher this year, both Roach and Reynolds agreed that consequences could come about as soon as 2025. 

In Reynold's view, any fallout would be delayed by election-related fiscal boosts, though this would only add to inflation, worsening the Fed's options. 

Meanwhile, 2025 and 2026 will see both the government and businesses rolling over debt, Roach said, adding that if rates stay high, that only increases the risk of something breaking.

To hedge against any rising risks, Reynolds suggested modestly going underweight on equities. He said this could be offset with additional exposure to fixed income, though investors shouldn't overexpose themselves to duration, as future inflation risk could add upside to rates, weighing on long-dated assets.

Alternative investments could counter any disappointment in bonds or equities, Roach said.

But for now, stagflation is just a distant possibility, and the threat may diminish with future reports or a GDP revision, both experts noted. 

On Friday, Bank of America pushed against the scenario, citing no signs of stagflation. Echoing points by Reynolds, its note focused on the fact that first-quarter GDP fell on inventories, while consumer spending remained resilient — potentially boosting PCE.

"This created a narrative of 'stagflation' or a negative supply shock. We think that view is misguided, as it is based on an apples-to-oranges comparison," the firm said.

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• When I landed a job, I started dating a guy from the interview panel shortly after. 
• We were outed as a couple, so the company struggled to promote us; we became targets for ridicule. 
• We eventually got married and left the company together. 

I smoothed down the pink fabric of my blazer as I slid into the office chair for my job interview. On the other side of the rectangular meeting table, three young men dressed in polo shirts and khakis settled in with yellow notepads.

"So, tell us a little about yourself."

I started rambling on about my education. As a recent graduate, it didn't seem like there was anything else I could talk about.

I felt less nervous a few questions later, and my interviewers also seemed to relax. The serious-looking man with dark hair slicked back led the questioning while the blonde-haired one made witty cracks. But the last guy on the panel with a deep, rich laugh caught my eye.

The blue polo he wore set off the sapphire of his eyes, and when he laughed, his whole body shook with amusement. His voice was deep and washed over me with a slow southern drawl. I found myself hoping I'd get the job just so I could spend more time with him.

I was hired and learned more about the guy from the panel

Thankfully, I landed the job. The position was entry-level, and the pay was peanuts, but at least I had my foot in the door. The blonde jokester was my supervisor.

At the end of the first week, I was taken on an official department tour, where I met the man with a deep laugh again. His name was Jason, and he was a team lead training his own new hires. I found myself sad that I wasn't assigned to him.

The tour included meeting the other new hires, all three female. We became fast friends. We'd all eat lunch together and gossip about our bosses and complex job tasks. The shared frustration helped us bond.

Three weeks in, one of the girls commented that Jason seemed interested in me. "You have to tell us if he asks you out," one of the others commented. "That would be hilarious," another said. They assumed that I would reject him, so I kept silent.

One Friday evening, it happened. Jason walked me to my car and asked if I wanted to grab a drink. I said yes. We spent hours chatting on that first unofficial date, and I knew then that the attraction was more than surface-deep.

We started dating

We kept our budding romance secret for the first few weeks but were outed at the company Christmas party. Some of the looks I got were friendly; others were outright hostile. The company president, however, was almost encouraging.

Once our relationship became public, the dynamics at work shifted. The friendly lunches ceased, as I was now dating the enemy. I felt a growing sense of isolation as many in the department seemed to go out of their way to avoid me — while others started actively teasing me.

As an added insult, several coworkers outright asked me why I was dating Jason. I didn't know how to answer. I got the impression they believed I was trying to sleep my way to the top.

Thankfully, things were smooth sailing with management — at least at first. I even got a small promotion. Then, the department head quit, leaving my boss and Jason in charge. Word came from above that I could not report to my boyfriend, so the teams were split accordingly.

This essentially halted both our careers. Jason would never be promoted any further lest he become my boss; this also stunted my upward mobility.

I transferred departments

An opportunity arose in the IT department that I was uniquely suited for, and I jumped on it. The move definitely relieved some day-to-day tension — both at work and in my relationship with my now-fiancé.

The switch, however, opened up a new can of worms. My old boss and new boss didn't get along, which meant Jason was fussed at when he was caught at my desk. Coworkers started timing how long I spent in Jason's office. Any in-person communication between us was considered a waste of the company's time. We took to emailing one another to avoid confrontation.

Our careers were once again on track, but our every move was watched like a hawk.

We left the company

Two years after we married, my husband received an outside offer he couldn't turn down.

When we announced we were leaving, we were greeted with surprise. "I thought you were lifers," said one woman. All the other married couples at our workplace stayed long-term; we were breaking the trend.

Leaving the company was bittersweet, but it brought a sense of relief. We had no more arguments about work and there was no more tiptoeing around our managers.

My husband and I are much happier now not working together, but we still chuckle whenever someone asks, "So, how did you guys meet?"

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• Icon of the Seas and Wonder of the Seas are Royal Caribbean's newest and largest cruise ships.
• I stayed in both of their balcony staterooms — a $130-per-person-per-day difference.
• Icon's pricier cabin looked more modern but lacked the functionality and comfort of Wonder's.

Do you know what $900 could buy you? More than three years of Netflix's premium plan, a new Gucci purse, or 2,059 spicy chicken McNuggets.

Or, in the case of Royal Caribbean's two largest and newest cruise ships, the cash could mean the difference between a cheap but functional balcony cabin and, ironically, a more expensive but less comfortable one.

Staterooms with balconies are the most popular cruise cabin category. After all, if you're going on a vacation at sea, wouldn't you want to be able to feel its breeze from your room?

But not all cabins with private outdoor spaces are created equal, even on two new mega-ships owned by the same cruise line.

I sailed on Royal Caribbean's Wonder of the Seas in 2022 and its larger successor, Icon of the Seas, in January.

Royal Caribbean assigned me an ocean-view balcony cabin for both complimentary sailings, the longest of which was three nights on Icon.

Both ships are operating seven-night cruises around the Caribbean in 2024.

About 66% of Wonder's cabins fall under the 'balcony' category. On Icon, they make up half of the staterooms.

Wonder of the Seas' balcony cabins start shy of $1,110 per person in 2024.

Even with nearly identical itineraries, the ones on Icon are, at their cheapest, a little more than $2,000 per person this year — or double that for the a New Year's cruise.

Wonder and Icon are the most boisterous, flamboyant, and overwhelming vessels I've ever boarded.

The pool decks were intensely colorful, the crowds were inescapable, and the long lists of activities and dining options were paralyzing.

So imagine my surprise when I unlocked my doors to find surprisingly bland rooms.

The neutral tans, blues, and whites did not scream "we belong on the world's biggest and most colorful cruise ships."

The vessels have an almost two-year age difference, as evidenced by some of their decor (mainly Icon's recessed mood lights and the more chic, darker wood tones).

But besides the light fixtures, rugs, and — frankly negligible — wall art and pillows, both cabins were fairly underwhelming compared to everything outside their front doors.

Aesthetics aside, let’s talk functionality.

Both had furnished 50-square-foot balconies.

Regarding the interior space, my 204-square-foot cabin on Icon of the Seas was 22 square feet larger than mine on Wonder.

In retrospect, I would've thought Icon's was smaller. More on that in a bit.

Both king-sized beds faced a television and some wall storage.

And both were flanked by light fixtures with built-in USB outlets, as is expected on most modern cruise ships.

The cruise line says the ships' balcony cabins use two twin mattresses that have been "converted" to make a king bed. It's a common practice I've never had an issue with — until Icon.

On Wonder, the plush pillows enveloped me the moment I laid down. I slept great. No complaints.

Unfortunately, I can't say the same for the new ship.

I (my back pain) could feel the hard ridge where the two mattresses met, making for a pretty miserable and uncomfortable sleep.

So much for starfishing — I kept to one side of the bed to avoid rolling over the bony bump.

For the most part, the living “rooms” were the same.

Both had the same furniture I see on almost every mass-market ship: a couch that could convert into a bed and a desk that extended into a dresser.

But storage, a high priority for cruisers, was organized differently.

Two thin wardrobes with drawers, hangars, and shelves surrounded either side of my bed on Wonder.

Icon, on the other hand, had one large wardrobe next to the living room.

Unfortunately, it had noticeably less shelving. And the metal bins let out ear-piercing screeches at every move — a lazy and annoying detail that the designers could've easily fixed with cheap felt pads.

So far, the differences have been small. But not for long.

I had two gripes with my Wonder bathroom: the lack of hair conditioner and the ill-positioned faucet that flooded the counter whenever I washed my hands.

I had the same issues on Icon. But that was the least of my concerns.

My bathroom on the older ship was well-sized for 1 person, but maybe too small for 2.

On Icon — the world's largest cruise ship — my bathroom was too compact for even one body.

Michael Bayley, the president and CEO of Royal Caribbean International, told reporters in January that 80% of Icon's 2,805 cabins were designed for families, a sharp increase from previous vessels like Wonder.

I'm not sure a family of four could coexist in Icon's balcony cabin — solely because of the bathroom size. There's no way two people could fit in there simultaneously. A fight over who gets priority access to the toilet could ruin a peaceful family vacation! (Which is to say, I'm glad I was traveling alone.)

With the bathroom door closed, I accidentally elbowed the walls more times than I could count.

The spare towels had to be stored on a shelf inside the shower. Because the counter was so small, I had to keep most of my toiletries and products on the shelves or in the drawer.

Surprisingly, that's where Icon excelled. Its bathroom had more storage options than its older counterpart, which didn't even have a drawer.

However, the older ship's shower had a clothesline perfect for drying swimwear. It's a small but crucial amenity, especially on a vessel with so many pools and waterslides.

Unfortunately, both were stocked with two-in-one body wash and shampoo — and no hair conditioner

Let’s go through our checklist.

My balcony cabin on Wonder looked less modern than its successor (the TV on Icon had Chromecast, after all).

But it was significantly more functional and comfortable. The bed was incomparably more pleasant, the closets had more defined storage components, and the bathroom was considerably larger, even if it lacked additional shelving and drawers.

The question is: Which one is more worth its price?

Icon's cheapest balcony cabins are currently $900 more than the most affordable ones on Wonder — an almost $130 per person and day difference.

Based on the quality of the staterooms alone, if you prioritize functionality, comfort, and affordability over modern decor, consider saving money and going with the two-year-old ship.

But let’s not forget that cruise fares include unlimited food, on board activities, and nighttime entertainment.

Both ships have a fairly similar list of amenities. But only the newer one has a waterpark, an adult-only infinity pool club, and a swim-up bar, to name a few unique amenities.

So yes, Icon's balcony cabins are more costly. But the staggering price difference — and tiny bathroom — could be worth it if you think the its surplus of additional amenities is worth paying for.

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• Ceramics maker Maruwa is helping cool data centers amid the AI boom.
• The company has seen its shares double over the past year, the FT reported.
• Maruwa's 200-year history in ceramics contributes to its competitive edge.

The AI boom is driving a surge in data center construction that's sucking up tons of energy.

By 2030, data centers are expected to consume 35 gigawatts of power annually, up from 17 gigawatts in 2022, according to McKinsey & Company. For context, one gigawatt is enough energy to power 750,000 homes, according to CNET.

About 40% of that energy goes toward keeping the servers cool, according to estimates from McKinsey.

This is welcome news to perhaps no one more than a centuries-old Japanese ceramics maker that got its start making dinnerware.

Maruwa, which builds ceramics for circuit boards and semiconductors, has seen its shares double over the past year, according to the Financial Times. And since April, its shares have been at an "all-time" high.

The company says its strength is building materials that dissipate heat — moving heat from sources operating at high temperatures into their surrounding environments.

"The demand for heat dissipation is rapidly increasing due to high-speed communication in data centers, and our company has a strong competitive advantage in heat dissipation," a Maruwa spokesperson told Business Insider.

"We expect that next-generation high-speed communications, including those related to generative AI, will be the biggest driver of our business growth over the next few years," according to the company.

Maruwa's competitive advantage stems from its long history. The company traces its origins to the early 19th century and originally manufactured dishes for Japanese cuisine before shifting to electronics components in the 1960s, according to its website.

"As the company has more than 200 years of history as a ceramic supplier, all the knowledge and technology accumulated since the early 1800s is the core competitiveness of the company," Goldman Sachs analyst Mitsuhiro Icho told the FT.

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• A college enrollment crisis is likely coming this fall.
• It's a result of complications with the FAFSA form, along with a lower supply of high school seniors.
• The impact of the enrollment decline could be long-lasting for both students and colleges.

High school graduates aren't going to college like they used to.

Katharine Meyer, a fellow at the Brown Center on Education Policy at the nonprofit Brookings Institution, told Business Insider that colleges are "very worried."

Over the past decade, a range of challenges have hit higher education: More jobs have become available in the past few years that don't require college degrees, Gen Zers have started to rethink whether the degree is worth the student debt, and, of course, the pandemic prompted some students to press pause on college or even drop out.

Overall enrollment for 18- to 24-year-olds declined from 41% in 2010 to 38% in 2021, according to the National Center for Education Statistics. While enrollment saw a resurgence following the pandemic, per the National Student Clearinghouse — undergraduate enrollment grew 1.2% in fall 2023, and freshman enrollment grew 0.8% — trouble could again be on the horizon.

The immediate concern for colleges and students is the Free Application for Federal Student Aid, or FAFSA, form. The Education Department announced last year that it was overhauling the form to make it easier for parents and students to access, but at the outset, the form's rollout was delayed. There were errors with some aid calculations, forcing some schools to push back their commitment deadlines to allow for more time for students to evaluate their award packages.

The delays and errors have meant fewer students are completing their FAFSA forms. According to the National College Attainment Network, 32.9% of high school seniors have completed the FAFSA through April 19, down 29% from the last academic year.

Based on how a drop in FAFSA submissions during Covid impacted enrollment in the fall of 2020, that's a pretty good indicator that college enrollment will be much lower this fall, MorraLee Keller, senior director of strategic programming at NCAN, told BI.

"At the rate that FAFSAs are being submitted this year, we can project out, unless something major happens, maybe a 10 to 15% drop in FAFSAs," Keller said, though she emphasized that there's still time for students to apply for financial aid if they haven't yet.

But it's not just the FAFSA. There's also a limited supply of high school seniors right now due to lower birth rates during the Great Recession. With a growing number of young people questioning the value of a college degree, enrollment-dependent institutions could suffer financial setbacks — or even shut down.

"I think all colleges are worried," Meyer said. "They're worried on different margins. Even the large institutions, the well-resourced institutions that have large endowments, they're still worried about getting their students through the door."

Students could face lasting setbacks

Most of the FAFSA issues will likely be resolved by this time next year. But some of the delays in early 2024 could have lasting implications. For example, enrollment is still down from pre-pandemic levels, which indicates that if students do not enroll this year due to issues accessing financial aid, they might choose never to enroll down the road.

That would mean that not only will colleges miss out on some graduating high school seniors — but they could also lose currently enrolled students who are forced to drop out because they could not navigate the financial aid system.

Meyer said this especially applies to "students at community colleges or less well-resourced four-year institutions where they're not able to get in touch with somebody to process financial aid."

"The institution doesn't have the ability to do some of the workarounds that other institutions are doing, and we'll see that retention rate go down as well," Meyer said.

FAFSA issues hit low-income families the hardest because they don't have the resources to assist them with the process, and they could lose out on higher education altogether because of it.

"We have across-the-board impact this year," Keller said. "There's so many less FAFSAs in that it's obviously affecting everybody. But the families that need the aid absolutely to pay for school have to be the largely impacted group."

Colleges will be forced to adjust — or shut down

It doesn't help matters that there's also a lower supply of 18-year-olds. The national birth rate declined by nearly 23% from 2007 to 2022, falling at a quicker rate right after the Great Recession.

Meyer said that colleges have been aware of this enrollment dip for a while, and said colleges have two options: convince more high school graduates to enroll or entice older adults back to school.

"Universities are thinking about this as more of a business model and thinking about how do they sustain enrollment so they could stay open," Meyer said. "And so those are sort of the numbers games of enrollment efforts."

However, enrollment declines have already stunted financial growth at some schools. Hodges University — a private Florida school — announced in August 2023 that it would be shutting down in 2024 due to enrollment declines "despite continuous efforts to adapt to changing educational landscapes and provide innovative programs."

Cazenovia College, a private school in New York, shut down in fall 2023, citing financial challenges from the pandemic and that "the population of college-aged individuals had been shrinking."

Meyer said she expects "there will be more closures than usual this year, particularly among these small, private liberal arts colleges."

Beyond that, as BI previously reported, 46% of Gen Zers don't think college is worth the cost, according to a July BI/YouGov survey — meaning colleges will have to put in the work to show that degrees from their institution will pay off. Some schools, like the Texas community college system, are already doing this by working to implement a school structure with funding based on student outcomes.

But the immediate enrollment shock will likely come this fall — and both students and colleges will feel the impact.

Are you a recent high school graduate not going to college? Share your story with this reporter at asheffey@businessinsider.com.

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