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The Fed’s Latest Housing Bubble

Is the current housing market in a bubble that is ready to pop? If so, what is the source and magnitude of the market distortion. The topic of a possible…

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Is the current housing market in a bubble that is ready to pop? If so, what is the source and magnitude of the market distortion. The topic of a possible housing bubble has been a topic of discussion lately, especially before Fed officials went on the warpath against Consumer Price Index (CPI) inflation. I have been asked about this issue and below is a truncated response to all those inquires.

I was asked in 2005 to write a chapter about housing bubbles for a proposed book on housing economics and government intervention. Much of the book would be about matters like government planning, zoning, eminent domain, and various government subsidies. My chapter would be a “macro” topic in contrast to the many “micro” housing topics.

I had been following and writing about the then current housing bubble (HB1) since 2003, having just left a stint in the Alabama Banking Department as the Assistant Superintendent of Banking in Alabama to take a professorship of macroeconomics at Columbus State University in Georgia.

I wrote for LewRockwell.com and Mises.org about the housing bubble and in 2005 I published my article “Skyscrapers and Business Cycles” in the Quarterly Journal of Austrian Economics which made the general theoretical connection between Fed policy and real estate investments and in this case, the connection between Fed policy, record setting skyscrapers, and economic chaos.

While my chapter was submitted in 2006 it was not published in the intended book until 2009 during the aftermath of the bubble.1 Not only did the editors invite me to include material in the final published version that they had originally deleted as too controversial. They also drew attention to my chapter at the beginning of their introduction to the book:

To the extent that the media was aware of my work, especially on the skyscraper curse, the response and level of appreciation was mixed. On the one hand, CNN was positive, if not surprised, that my work was so accurate and specific:

One person who wasn't surprised by the economic woes greeting the dedication of the Burj Khalifa (renamed Monday from Burj Dubai in honor of the sheikh of Abu Dhabi, which recently threw Dubai a $10 billion lifeline) was Auburn University economist Mark Thornton.

He predicted tough times for the emirate two years ago in a blog post entitled "New Record Skyscraper (and Depression?) in the Making." He noted that economic depression or stock market collapse usually occurs prior to completion of such skyscrapers.

On the other hand, The Economist took my “skyscraper curse” model to task because it did not stand up to somebody else’s poor understanding of the data involved. The magazine did not actually use my name in their article, although my academic article is listed in their reference list although my name was missing there too. My letter to their editor was not published and after many months I was extremely surprised to receive an email from them saying that my letter to the editor had been misplaced. Despite its discovery, they did not publish it. Extremely odd?

Review of the Charts

Here I will review the charts that I used in my 2006/2009 chapter and update the charts for the current housing bubble. As you will see, the Fed clearly did not learn its lesson and stuck its fingers back into the cookie jar. Of course, much more could be said about this housing bubble, but I will mention here that the bubble in real estate is cloaked in what my friend Keven Duffy correctly calls the “everything bubble.”2

The first chart is based on the Federal Funds Rate, which is the Fed’s main policy interest rate. They can control it directly and because it is the interest rate that banks charge other banks for very short-term loans, it sets the foundation for most other interest rates in the economy.

My chapter was completed in early 2006, but I had been studying and writing about the first housing bubble since early 2004. The paper was not published until 2009, long after the bubble burst and policy makers at the Fed and elsewhere were busily trying to cover up their mistakes.

What followed was seven years near the zero target rate and multiple rounds of bailouts and quantitative easy. This changed in 2016 as the Fed tried to engineer a return to normalcy and a soft landing. It did not work and under the cloak of the covid-19 crisis, the Fed went into double panic mode with a return to zero rates and quantitative easing combined with the Federal government’s unprecedented fiscal stimulus.

At the far left of the graph, you can see the Fed has once again embarked on a normalcy/tightening phase that has only just begun. The Fed has yet to raise its target rate above 1 percent. Balanced sheet reductions will be small until after the November election. Their response is particularly anemic so far given that CPI inflation is above 8 percent.

The thirty-year fixed-rate mortgage is a primary driver of housing bubbles. The 6 percent rate that caused the previous housing bubble seems high compared to recent years, but 6 percent is lower than at any time since we went off the gold standard in 1971.

The truly remarkable rates occurred only in the last few years when a combination of the Fed driving its policy rate to zero, massive quantitative easing, including massive purchases of mortgage-backed securities (MBS) and a tame CPI inflation led to the lowest rates ever, often less than 3 percent!

The Fed’s verbal war on CPI inflation by its top policy makers threatening large and sustained rate hikes and enormous balance sheet reductions, combined with out-of-control CPI inflation has moved market mortgage rates up sharply, now above 5 percent. The shift in recent years to fixed rate mortgages and away from variable rate mortgages should insulate current holders but could also crush potential home buyers and eventually hurt mortgage investors, banks, the Federal Deposit Insurance Corporation (FDIC) and even the Fed itself, which is the largest investor in mortgages.

If CPI does not soon collapse, the Fed will have to move rates much higher and that would trigger a downturn in housing statistics including prices and new permits—the new housing bubble would go bust. Recently on Bloomberg, a top Fed official was asked if its policy could reduce home prices and make it more affordable for first time buyers. The official quickly coughed and said the Fed would never reduce home prices, only the rate of increase. I’m glad that isn’t my job!

In the twenty years prior to completing my paper the total amount of real estate loans at commercial banks increased from $1 trillion to $3 trillion, a massive $2 trillion increase. That same number increased from $3 to $5 trillion, another $2 trillion increase over the last fifteen years despite a soft or negative overall market from 2009 to 2015.

The personal saving rate was above 10 percent on the gold standard and few people were on the public dole. Since going off gold in 1971 the saving rate has been declining and registered near zero when I completed my chapter in 2006. It has since risen to a higher level but remained below the gold standard percent-of-income level, until the covid-19 crisis hit, and the Fed went into its inflationary panic response in March 2020. The Federal government also ran massive deficits combined with multiple rounds of “stimulus” vote buying sprees. With vast amounts of free money and historic economic uncertainty, the personal saving rate spiked to over 25 percent and has since returned to the prior rate between five and 10 percent.

The money supply as measured by the MZM statistics increased by 50 percent during the first housing bubble and has increased another 50 percent since then, increasing in the last few years from roughly $6 trillion to $9 trillion. Obviously, the Fed is trying to do the impossible, which is to engineer and print the economy to prosperity, or whatever goal they are pursuing.

During the previous housing bubble, the amount of Real Private Residential Fixed Investment increased substantially, nearly doubling in the fifteen years leading up to the bubble’s end. During the second housing bubble, it has nearly doubled again. During the previous housing bubble, I marked the beginning of that bubble by noting that housing investment even increased during the prior recession. Investment also spiked again in the recent short recession during 2020 which might suggest that the current bubble has yet to reach its final stages.

Another good measure of housing is the number of single unit housings starts, measured here with New Privately Owned Housing Units data. That number increased substantially in the fifteen years of the previous bubble, before dropping precipitously to a record low. Housing starts have been on a similar trajectory since the previous bubble-bust ended. Although it has so far not reached the same height of the previous bubble its absolute increase is about the same and the number of multi-unit dwelling has noticeably surpassed the previous bubble. Also, the number of employees in the construction industry has reached back to the previous record levels that occurred during the previous housing bubble.

The amount of household debt increased enormously during the previous housing bubble and continued to increase for two years after my paper was completed, before hitting the crash/recession and tapering off for several years before being reignited and reaching its new highs. Since mid-2013 household debt has increased by over 30 percent despite the covid-19 crisis bout of higher household savings.

There are a number of alternative explanations for the red-hot housing and construction sectors, but I have viewed this market as a bubble in the making for many years. My anticipation is that while it could continue for some time, ultimately, we will see that mistakes were made caused by the Fed.

Prior to the last crash in housing prices Fed officials told us there was no housing bubble, that the Fed had near-omniscience and power, and that they would intervene quickly to prevent a bubble or a bust in housing. They claim that was their own transparency, but it turns out it was really their deception of us.

Then on top of that, the Fed acquired new powers and authority, Congress enacted sweeping regulatory and reporting requirements, while everyone else became much more skeptical about house flipping, multiple home ownership, and the charms of “housing prices never go down,” and “no one ever lost money in real estate” maxims.

Now we hear that people are still desperate to buy a house despite outrageous prices. That prices are bid up higher than asking prices. That homes-for-sale inventories are non-existent in some markets and that available homes are snatched up instantly in other markets. That buyers are in a catch-22 of rising prices and rising mortgage rates. That recent buyers can flip for a profit. To me, these are all echoes from a housing bubble being blow up to its inevitable breaking point.

  • 1. Mark Thornton, “The Economics of Housing Bubbles” in America’s Housing Crisis:  A Case of Government Failure Edited by Benjamin Powell and Randall Holcombe. Independent Institute, 2009.
     
  • 2. Bubbles usually get named after the sector most impacted by the Fed’s monetary inflation and low interest rate policy, but most asset classes have reached bubble proportions in this cycle. NOT SURE IF HE ACTUALLY COINED THE PHRASE.
     

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Spread & Containment

Best Stocks To Buy Today? 3 Travel Stocks in Focus

Check out these travel stocks as China loosens its lockdown restrictions.
The post Best Stocks To Buy Today? 3 Travel Stocks in Focus appeared first on…

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3 Travel Stocks For Your Watchlist Now

As we’re approaching Independence Day, travel stocks may seem attractive for investors today. Since parts of the world are already moving towards the endemic phase, consumers could be increasingly keen on traveling. Moreover, with summer vacations continuing, families are excited to enjoy a vacation somewhere in the world. According to an estimate by the American Automobile Association, 42 million Americans are likely to travel for the long weekend ahead. Therefore, it would make sense that investors are considering travel stocks now.

On top of that, China has just cut the quarantine period for international travelers. This would make for a milestone in its loosening of Covid restrictions in the past two years. According to the revised government protocol, international travelers only have to quarantine at centralized facilities for seven days, and an additional three days spent at home before venturing out. This decision is made as Chinese officials continue to get a hold of the pandemic locally.

The slash in quarantine times has benefited many companies, and Wynn Resorts (NASDAQ: WYNN) and Las Vegas Sands (NYSE: LVS) are some of them. Since both companies operate casinos in Macau, both companies are gaining in the stock market today. Evidently, both LVS stock and WYNN stock are now gaining by over 7% at the opening bell today. With a great weekend coming ahead, here are three more travel stocks for your watchlist today.

Travel Stocks To Watch Today

Trip.com Group Ltd.

First up on our list today we have an international online travel agency, Trip.com. In short, the company offers hotel reservations, flight tickets, package tours, corporate travel management, and train ticketing services. All of which are readily available to consumers via its one-stop mobile app. With hotel and transportation information given, leisure and business travelers can make reservations. Travel packages and guided tours are also offered for corporate clients to manage their travel needs. For independent leisure visitors, Trip.com also provides package trips, including those for tour groups, semi-tour groups, and private groups.

TCOM
Source: TD Ameritrade TOS

Yesterday, Trip.com released its first fiscal quarter financial results. Among its highlights, net revenue was $649 million, remaining stable year-over-year. The reason is because of the impact of the latest wave of Covid in China. However, staycation travels have been a major contributor to the recovery of the Chinese domestic market. In particular, local hotel bookings are up by over 20% year-over-year. At the same time, Trip.com’s air-ticket bookings on its global platforms are also up by 270% over the same period.

Despite China’s strict lockdown measures in most of the first half of 2022, Trip.com is maintaining its overall growth. According to CEO Jane Sun, the company’s “results demonstrated our resilience amidst a confluence of challenges and uncertainties.” Sun also adds, “While we may continue to see short-term fluctuations, demand for travel is still strong and shows a bright outlook in the long-term.” Pair all this with China loosening its restrictions and TCOM stock could be an attractive buy amongst its travel stock peers. Would you say the same?

[Read More] Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing

Spirit Airlines Incorporated

Next, we have Spirit Airlines, an ultra-low-cost carrier. The company operates across the U.S., Latin America, and the Caribbean. In fact, it is a leader in providing customizable travel options that start with an unbundled fare. Its Fit Fleet is one of the youngest and most fuel-efficient in the U.S. as well. In recent weeks, the company has been locked in a fierce battle as companies like JetBlue (NASDAQ: JBLU) and Frontier Group (NASDAQ: ULCC) have been trying to bid for Spirit.

The saga could be heading towards a climax this week as Spirit shareholders will vote on fellow budget airline Frontier’s acquisition offer on Thursday. However, JetBlue has been on the offensive, even boosting its offer price for Spirit on Monday evening. Diving in, JetBlue’s new offer raises the reverse break-up fee to $400 million from $350 million if regulators do not approve the deal. It also includes a dividend to Spirit shareholders of $2.50 a share, up from its previous offer of $1.50. On Frontier’s end, however, the company dismissed JetBlue’s claims that its acquisition of Spirit will lead to lower airfares.

Separately, TIG Advisors, an investment adviser that owns a stake of approximately 2 million Spirit Airlines shares, says that it has just sent a letter to the board of directors at Spirit regarding its intention to vote against the company’s proposed merger agreement with Frontier Group. It believes that its merger with JetBlue is the far superior outcome for Spirit shareholders due to its all-cash bid. This would also eliminate execution risk and maximize certainty of value. All things considered, should investors be looking at SAVE stock right now?

SAVE stock
Source: TD Ameritrade TOS

[Read More] 5 Top Leisure Stocks To Watch This Summer

Airbnb Inc.

Topping our list today, we have Airbnb, a travel company that offers an online marketplace for lodging and tourism activities. It mainly earns its income through commissions from each booking. Today, it has over 4 million hosts who have welcomed more than 1 billion guests across the globe.

Today, the company announced that it is officially codifying the ban of all parties and events in its listings as part of its policy. This follows a temporary ban that was initiated in August 2020 on all parties and events. In that time since the company says it saw a direct correlation between the implementation of its policy in August 2020 and a 44% year-over-year drop in the rate of party reports. The ban has also been well received by its host community and it has also received positive feedback from community leaders and elected officials.

On June 27, 2022, the company also reported that family travel and long-term stays will trend across the U.S. this Independence Day. For instance, from February 2022 to March 2022, searches for stays over July 4th have increased by nearly 50%. Also, hosts could stand to earn a lot during the holiday. After all, last year’s Independence Day yielded the biggest payout for U.S. hosts in 2021 compared to other holiday weekends, a major moment for hosts to earn. All things considered, is ABNB stock worth investing in right now?

ABNB stock
Source: TD Ameritrade TOS

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The post Best Stocks To Buy Today? 3 Travel Stocks in Focus appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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New study: COVID-19 may cause or accelerate neurological diseases

Danish researchers published a study suggesting that COVID-19 increases the risk of neurodegenerative diseases such as Alzheimer’s and Parkinson’s…

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New study: COVID-19 may cause or accelerate neurological diseases

Danish researchers published a study suggesting that COVID-19 increases the risk of neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease.

They presented the research at the European Academy of Neurology (EAN) Congress in Vienna, and the results were published in Frontiers in Neurology.

Specifically, after analyzing data from health records in Denmark, they found that people who tested positive for COVID-19 were more likely to suffer from Alzheimer’s disease, Parkinson’s disease and ischemic stroke.

Courtesy of BioSpace

“COVID-19 has had a disproportionate impact on people with dementia, their carers and their families,” Sara Imarisio, Ph.D., head of research at Alzheimer’s Research UK, said of the study. “The risk of developing Alzheimer’s disease, the leading cause of dementia, is caused by a complex mix of age, genetics and other environmental factors. This research suggests that having COVID-19 is linked to an increased risk of being diagnosed with Alzheimer’s disease, however, this was no stronger than the link to other respiratory diseases like the flu.”

She noted that diseases such as Alzheimer’s develop in the brain over many years, but COVID-19 has only been present outside China since early 2020. “It may be that people in the very early stages of Alzheimer’s are more susceptible to catching diseases like COVID-19,” Imarisio added.

The study analyzed 919,731 people who tested positive for COVID-19. Of them, 43,375 had a 3.5 times increased risk of being diagnosed with Alzheimer’s disease, 2.6 times higher risk of Parkinson’s disease, 2.7 times higher risk of ischemic stroke and 4.8 times higher risk of intracerebral hemorrhage. It’s possible that neuroinflammation increased the development of neurodegenerative disorders. The patients evaluated were in- and outpatients in Denmark between February 2020 and November 2021. It also included influenza patients from the corresponding pre-pandemic period.

“More than two years after the onset of the COVID-19 pandemic, the precise nature and evolution of the effects of COVID-19 on neurological disorders remained uncharacterized,” Dr. Pardis Zarifkar, M.D., lead author, department of neurology, Rigshospitalet, Copenhagen, Denmark, explained. “Previous studies have established an association with neurological syndromes, but until now it is unknown whether COVID-19 also influences the incidence of specific neurological diseases and whether it differs from other respiratory infections.”

The risk of most neurological diseases was no higher in COVID-19 patients than in people diagnosed with the flu or other respiratory diseases, although COVID-19 patients over 80 had 1.7 times higher risk of ischemic stroke compared to influenza and bacterial pneumonia. The researchers found no increase in other neurodegenerative diseases like multiple sclerosis, myasthenia gravis, Guillain-Barre syndrome and narcolepsy for any of the viral diseases.

Zarifkar added, “We found support for an increased risk of being diagnosed with neurodegenerative and cerebrovascular disorders in COVID-19 positive compared to COVID-negative patients, which must be confirmed or refuted by large registry studies in the near future. Reassuringly, apart from ischemic stroke, most neurological disorders do not appear to be more frequent after COVID-19 than after influenza or community-acquired bacterial pneumonia.”

A 2021 study described a potential link between COVID-19 and the onset of Parkinson’s disease. The study out of the University of Twente in The Netherlands showed in laboratory assays that the SARS-CoV-2 N-protein interacts with alpha-synuclein, a protein in the brain, and increases the speed of the formation of amyloid fibrils, which is a defining feature of Parkinson’s disease. Interestingly, one of the predominant features of both early Parkinson’s disease and COVID-19 infection is the loss of sense of smell.

It has been clear for some time that COVID-19 is more than a respiratory disease, with a broad range of symptoms including “brain fog,” blood clots and strokes, possible gastrointestinal and other issues. In addition to links to neurological diseases, an increase in new-onset diabetes has been tied to COVID-19 infections.

Recent research from Osaka University in Japan suggests the association has to do with the insulin/IGF signaling pathway, a key pathway in energy metabolism regulation and cell survival. COVID-19 infection appears to impair insulin/IGF signaling by increasing IRF1 expression, which disrupts blood sugar metabolism.

In light of these discoveries, researchers will likely dig deeper to discover how and why COVID-19 is associated with a higher risk of other seemingly unrelated diseases. 

Source: BioSpace

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#CannesLions2022: Pharma and health marketers lose spotlight at creativity ad fest, but does it matter?

Pharma advertising has long been considered second-tier when compared to the rest of the advertising industry. And there are some legitimate reasons why….

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Pharma advertising has long been considered second-tier when compared to the rest of the advertising industry. And there are some legitimate reasons why. Nike sneakers and Coca-Cola soda ads will likely always be more entertaining or exciting than regulated campaigns for diabetes and heart disease.

Still, the Cannes Lions advertising festival of creativity was pharma and healthcare advertising’s annual chance to shine. For the past eight years, pharma agencies and clients stood side by side with consumer companies and agency hotshots on the biggest advertising award stage in the world at the Palais in Cannes, France.

However, something changed this year. While the awards for pharma and health and wellness were handed out to widespread applause on the first night of the show, for much of the rest of the time, healthcare marketing was relegated to the back of the room and mostly off the main stages.

The pharma and health and wellness category award finalists, for instance, were tucked in the back corner of the basement of the main building. Even people who wanted to see the work complained that they had to search for them. Only three Cannes Lions official sessions this year covered health or pharma advertising topics and were mostly general topics about creativity, diversity or empathy.

There were no pharma and health case study dissections or deep dives into the unique challenges in health and pharma advertising — and, maybe more importantly for the industry, there were no pharma executives on the Cannes stages as they have been in the past. Patricia Corsi was the lone pharma-connected executive; she is the chief marketing officer of Bayer Consumer Health and served as both a speaker and health and wellness jury president.

Patricia Corsi speaks on a judge’s panel (Clara Bui/Endpoints News)

Click on the image to see the full-sized version

Even among this year’s health and wellness award winners, no gold prizes went to pharma companies. Unexpected winners like Heineken and Harley Davidson did, however, take home the gold for their respective vaccination and “Tough Turban” campaigns.

There are two schools of thought about the disappearance of Cannes Lions Health as an official programmed track. On one hand, it signifies the parity of the industry with big consumer brands, but on the other hand, it also meant fewer conversations, less networking opportunities and an overall dimming of the industries’ presences at Cannes Lions.

Rich Levy

“I would be lying if I didn’t say that I was disappointed so far,” said Rich Levy, chief creative officer of Klick Health on the first day of the show. “When you’re talking about a multibillion dollar industry in the US, I thought that 31 short list for pharma was remarkably small … I don’t think it’s an accurate view of the work that the industry is doing.”

Pharma and health and wellness entries both were way down this year. Total pharma entries dropped to 298, down from 509 last year with 11 total Lion awards given out. In health and wellness, there were 1,213 entries, down from 1,300 last year. There were Grand Prix awards given in both categories, but this was the first year it was required — in the past, judges could pass over a category for the top award if they thought it didn’t rise to the level of Grand Prix.

For the second year in a row, the Grand Prix in the pharma category went to a non-pharma company. Dell Technologies and Intel snagged the top prize for their voice app for people with motor neuron disease. The entry — created by VMLY&R New York and called “I Will Always Be Me” — helps people with MND bank a digital copy of their voice by reading a story book.

In the health and wellness category, Maxx Flash’s mosquito repellent campaign “The Killer Pack” took the top prize. The repellent is designed to address India’s mosquito problem, with a biodegradable packaging that kills mosquitoes outside while a nontoxic coil fights them inside.

Other health creatives and executives agreed with Levy’s award assessment, but also expressed concern about the limited health content. The health and pharma panels and award deep dives that were presented got solid reviews, but there were scant few in the official program, along with a handful of unofficial ones outside the main venues.

Several health agency networks set up off-site slates of healthcare and pharma programming — WPP Health and IPG Health both offered multiple panels and discussions at their own sites. CMI Media Group hosted a panel at the Pandora Beach pavilion on audio branding, while other agency creatives like Levy and Bernardo Romero, along with Ogilvy Health’s Adam Hessel and both panels of judges for pharma and health and wellness, attended sessions and networked with others in the health community.

Still, there just weren’t as many health and pharma people on the ground as there typically have been in the past as agencies cut back rosters of attendees and didn’t invite as many clients. That’s likely in part due to the Covid-19 pandemic recovery year of Cannes Lions this year as well as budget considerations in general.

Dana Maiman

Dana Maiman, CEO of IPG Health and a long-time Cannes Lions attendee said, “I’m hoping the changes honestly are just temporary. Because I remember when I first started coming here — I think this may be my 10th one or so — but back then it was consolidated. It was really liberating when it was focused and broken out, even though clearly there’s a lot of crossovers and all of that. But I think there is something very special about celebrating the creativity in our world because we can all agree it is more challenging.”

Hessel, chief creative officer at Ogilvy Health, said one reason for fewer entries was heavier curation down to just a few this year, but added that no matter the numbers, Cannes and other marketing award shows still are important for the industry.

“Just celebrating great work in any category is what the industry really needs and also maybe to pull back a bit — everybody’s looking for that one crown jewel, but there’s so much great work out there that should be celebrated,” he said, adding, “When clients see great work, they want that too, so that’s the bar.”

Corsi, meanwhile, said she wants to see more creativity from pharma marketers. She finds that creatives in the pharma industry are often trained to be more conservative, because if you cross the line, you face regulators — but she would like that to change.

“We really believe that there is a great opportunity for us to raise the bar in this category,” she said. “Work in health and wellness consistently across the years has not been the most inspiring.”

That doesn’t necessarily mean the work should be more complicated. According to Corsi, sometimes the simplest idea is the best. What she wants to see, though, is more outside-the-box thinking.

A handful of execs, including Corsi, noted that the Covid-19 pandemic has served as a wake-up call for pharma companies discovering what their role should be with patients. Pharma advertising is becoming more of a conversation as opposed to a one-off encounter, Corsi said. Even companies like Walgreens — which facilitated the vaccination of more than 30 million Americans — are taking a new approach to advertising.

Mel Routhier

“The pandemic, there’s no going back. You can’t unhear the bell, right? The bell’s been rung,” said Mel Routhier, chief creative officer of the WPP Walgreens team. “It’s a good thing for us to take stock and say we can have more purpose as a brand.”

One thing that hasn’t changed this year? The level of passion that pharma creatives are bringing to the conference.

Gena Pemberton

“What I’m taking away now, that I guess maybe I didn’t really expect, is how much passion people have in the work that they’re doing,” said first-time attendee Gena Pemberton, Omnicom Health Group’s diversity, equity and inclusion director. “[It’s] really impactful to be able to talk with people in different areas, understand a little bit more about the work they’ve done, and just seeing how excited everybody is to be together again.”

In the end, the questions remain. Does Cannes Lions need a separate pharma and health track? Or vice versa, does pharma and healthcare advertising need that spotlight at Cannes? The debate won’t be easily settled.

Franklin Williams, director of experience design at Area 23 and a pharma judge, said, “It doesn’t really matter who’s doing the work as long as the targets are being hit. So I think that’s what you’re starting to see almost as a trend and a theme. It doesn’t have to be, we did pharma because we’re pharma. We did pharma because we wanted to do good.”

The danger, of course, is that without broader inclusion, specific content and more awards, pharma may lose interest in Cannes.

“It becomes a self-fulfilling prophecy. And what I mean by that is fewer winners every year mean fewer entries the following year. And fewer entries mean fewer winners,” Levy said.

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