National News

This country has a weight problem, which has created a disease problem. Namely, diabetes. And that, in turn, has created an economic problem. A new study by the American Diabetes Association says the disease cost the economy an estimated $245 billion last year, a 41 percent increase since 2007.

And that big jump spending can’t be blamed on runaway medical costs. In fact, the cost of treating diabetes is actually rising slower than health care inflation in general. The big increase is the number of folks with the disease; five million people have been diagnosed with diabetes in the last five years.

“This is the heart of the health care crisis in terms of expenditures,” says Robert Ratner, chief scientific and medical officer at the American Diabetes Association.

His study found that one of every five health care dollars in the U.S. goes to treating diabetics.

“Individuals with diabetes are recommended to see a physician four times per year. They are on average taking anywhere from three to nine medications per day,” says Ratner.

Taxpayers pick up some of those costs.

“Already, one in three Medicare dollars is spent on people with diabetes. It’s an enormous cost to our health care system and to our economy,” says Cynthia Rice with Juvenile Diabetes Research Foundation International.

Treating the disease is big business for drug-makers.

“Two of the top 20 drugs sold in the country are drugs that treat diabetes,” says Ira Loss, executive vice president of Washington Analysis, a federal policy research group.

According to Genetic Engineering and Biotechnology News, a diabetes drug called Januvia, for instance, saw its sales jump 22 percent year to year. Lantus, another huge seller, was up almost 20 percent over the year before.

But diabetes also exacts high a high price in terms of absenteeism, reduced productivity and unemployment due to disability. According to the American Diabetes Association, that cost the economy $69 billion last year.

What can be done?

Robert Ratner believes the key to reducing diabetes is reducing obesity.

“Clearly we have a food industry that is out to sell food that people want to eat, not necessarily looking at the health qualities of those foods,” says Ratner.

Americans are attracted to restaurants that offer big portions because we’re looking for value. But to save money in the long run, it’s better to minimize, rather than Super-Size.

Facebook has had its ups and downs since it went public last year, and today it announced another tweak to the design of its main page. CEO Mark Zuckerberg unveiled a new and, according to him, improved, newsfeed that will display photos better and offer users a better way to interact with news and information about their "friends."

He likened it to a "personalized newspaper." The news feed will be broken down into sections so you can have a file for your friends, your close friends, you music, and so on.

"We believe that the best personalized newspaper should have a broad diversity of content -- high-quality content from world renowned sources and socially and locally relevant updates from family, friends and those around you," Zuckerberg said. "It should also enable you to be able to drill into an topic that you want to discuss."

It is designed to make us happier and, not coincidentally, to make Facebook more money. As usual, Facebook did not address the money question directly. Recent data suggest that Facebookers are using the site less -- and with all the tweaking going on, some analysts have expressed concern that Facebook is worried about losing customers.

Then again, if Facebook wasn't making changes, analysts would probably be second-guessing the company as well.

The Dow is still in record territory in early trading this morning. The surge comes on the heels of strong jobs data from the Labor Department, which show applications for unemployment benefits have fallen to a five-year low.

As home prices rise, more owners are preparing housing for sale -- and construction companies and building supply chains are hiring again.

And here’s a little mystery, Wall Street style. What gives with the NASDAQ? The Dow Jones Industrial Average and the S&P 500 are at or near historic highs. But the NASDAQ -- the index that tracks mainly tech stocks -- isn’t reaching the same height. It’s true the NASDAQ did reach a 12-year high this week. It’s just nowhere near its historic level. And given the stratospheric height it reached during the 1990’s tech bubble,  some analysts think that’s a long time off.

The president dined Wednesday with Republicans. He has lunch today with the 2012 GOP vice presidential nominee. Next week: More discussions with Republicans over a meal.

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"Swan Lake." It’s one of the most well-known ballets of all time. And it may be at the heart of the attack on the Bolshoi Ballet’s artistic director. There’s speculation the attack was instigated by the boyfriend of a spurned ballerina -- who had hoped for the lead role.

Dancing as Odette/Odile is the sort of role that young ballerinas dream of.

Moving, swan like, delicately, across the stage. “I would think that being the lead in 'Swan Lake' would have to be the highlight of a classical dancer’s career,” says Alice Pascal Escher, a dance professor at Tulane University.

She says it’s the quintessential role for a ballerina. “From the earliest days when you take ballet, when you go to ballet class, whether you have recorded music or an accompanist playing the music,” she says, “you hear the music from 'Swan Lake.' You dance to the music from 'Swan Lake.'” Dancers learn the variations from their very earliest ballet classes, starting with the four little swans, slowly working up to the evil, perfect, black swan.

It’s technical. It’s dramatic. It’s poetic. “It’s just a beautiful ballet start to finish,” says Septime Webre, artistic director of the Washington Ballet. He says it can also be pretty beautiful for a ballet company’s ticket sales. “When you’ve got something like Swan Lake,” says Webre, “that really helps at the box office, it’s a really important vehicle for financial stability for an arts institution.”

Ballet is an expensive art form. "Swan Lake" helps pay the rent by drawing new audiences into the world of ballet, with its intrigue, magic and its lovely lead ballerina.

"Swan Lake." It’s one of the most well-known ballets of all time. And it may be at the heart of the attack on the Bolshoi Ballet’s artistic director. There’s speculation the attack was instigated by the boyfriend of a spurned ballerina -- who had hoped for the lead role.

Dancing as Odette/Odile is the sort of role that young ballerinas dream of.

Moving, swan like, delicately, across the stage. “I would think that being the lead in 'Swan Lake' would have to be the highlight of a classical dancer’s career,” says Alice Pascal Escher, a dance professor at Tulane University.

She says it’s the quintessential role for a ballerina. “From the earliest days when you take ballet, when you go to ballet class, whether you have recorded music or an accompanist playing the music,” she says, “you hear the music from 'Swan Lake.' You dance to the music from 'Swan Lake.'” Dancers learn the variations from their very earliest ballet classes, starting with the four little swans, slowly working up to the evil, perfect, black swan.

It’s technical. It’s dramatic. It’s poetic. “It’s just a beautiful ballet start to finish,” says Septime Webre, artistic director of the Washington Ballet. He says it can also be pretty beautiful for a ballet company’s ticket sales. “When you’ve got something like Swan Lake,” says Webre, “that really helps at the box office, it’s a really important vehicle for financial stability for an arts institution.”

Ballet is an expensive art form. "Swan Lake" helps pay the rent by drawing new audiences into the world of ballet, with its intrigue, magic and its lovely lead ballerina.

An Egyptian scientist says some 20 swarms have invaded the country in the past three months and more are waiting in the wings.

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The Senate Judiciary Committee takes up four proposals. They include a new ban on assault-style weapons. While the bills are likely to get the committee's OK, they face opposition after that.

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As many eyes turn to Friday's employment report, new data offer a somewhat conflicting picture.

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Julio Acevedo, who had eluded authorities since the hit and run on Sunday, turns himself in at a Pennsylvania convenience store.

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Also: Obama looks for "spring thaw" with Congress; Chávez's final words; Berlusconi's conviction; and winter storm moves into New England.

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The Dow is still in record territory in early trading this morning. The surge comes on the heels of strong jobs data from the Labor Department, which show applications for unemployment benefits have fallen to a 5-year low.

Adolfo Laurenti, deputy chief economist with Mesirow Financial, joins Marketplace Morning host Jeremy Hobson to discuss the U.S. job market and what to make of the political situation in Italy.

The senator said he "would speak, until I can no longer speak," and he hit that wall early Thursday. His goal was to get the Obama administration to pledge it won't use drone attacks against American citizens on U.S. soil. He's put a bright spotlight on the issue.

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Also: Self-portraits of famous authors; why two major spring novels have the same title; and literary statues from around the world.

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Also: Self-portraits of famous authors; why two major spring novels have the same title; and literary statues from around the world.

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Time Warner is going to spin off its magazine namesake. In fact, the company is getting rid of all of its magazines.  Time Inc. will become an independent company.

Time Warner says it wants to focus entirely on its TV and film businesses -- and it’s pretty easy to see why. Magazines are expensive to run, sales at newsstands are down, and advertising is down.

Time Warner is following a trend. News Corporation has announced plans to split off its newspaper and book division, including the Wall Street Journal and HarperCollins. It’s  part of a strategy of separating high growth areas -- like cable networks -- from traditional media. 

Dan Kennedy, who teaches journalism at Northeastern University and has been following this trend, says these magazine spinoffs will only survive if they cut way, way back.

“The Time, Inc. magazines in particular are legendary in the industry for the way they throw money around,” he explains. “I guess that’s going to have to stop.  It just means fewer bodies, less reporting.” Just look what happened at Newsweek. It’s gotten rid of its print version, and is only available online.

Kennedy says the most successful magazines will be those that find a niche.  Specializing in something that a group of readers is really interested in and willing to pay for.

North Korea's government has said it reserves the right to carry out a pre-emptive nuclear attack against the United States ahead of a U.N. vote on tighter sanctions against the communist regime.

The Security Council meets later today to approve fresh economic sanctions against Pyongyang after the country carried out an unauthorized nuclear test on February 12.

The BBC's Lucy Williamson in Seoul says the sanctions will target "the funding that the U.S. believes is going into North Korea's military program." The new set of restrictions will focus on the country's international banking operations.

Earlier this week, North Korea also threatened to scrap the 60-year truce which ended the Korean War.

The Geneva Auto Show opens in Switzerland this week. It’s usually a glitzy affair, but while U.S. carmakers are on the rebound, gloom has descended on the European auto industry. Car sales in Europe have plunged as a result of the economic crisis, and that’s a big problem for European carmakers.

In the auto business, Philippe Houchois, an analyst at UBS, says there’s a very important rule to live by: “Cars become stale after a while."

In other words, you need new models, and that’s what car shows are for.

General Motors is unveiling a new convertible Corvette in Geneva, but David Bailey of Coventry University says struggling European automakers don’t have much to show this year.

“It could cost up to a billion dollars to get a genuinely new car to market,” says Bailey. “So it's hugely expensive.”

With cars sales in Europe at a 17-year low, there’s little money to spend on innovation.

France's Peugeot and Renault have presented revamped, SUV-style models, but Houchois says the risk is that as profits drop further, European manufacturers will fall into a downward spiral -- less investment means fewer new cars. 

“And over time, you drop off the shopping list of car buyers,” says Houchois. He says that presents an opportunity for U.S. carmakers and others to snatch up European customers.

Coupa Cafe in downtown Palo Alto is a popular hangout with Stanford students and techies. So it’s no surprise that they offer free Wi-Fi. 

But when I get to my table, turn on my phone and open my browser, it takes me to Facebook. It instructs me to log in to get free Wi-Fi.  (You can bypass the sign-in but that wasn’t totally apparent to me.)

Facebook says its experimenting with a few local businesses to “offer a quick and easy way to access free Wi-Fi after checking in on Facebook.”

Rocky Agrawal, a consultant at reDesign mobile, suspects there’s more to this than good will.

“It’s a good way for Facebook to know where you’re at, they can deliver all sorts of new offers,” Agrawal says.

Companies are banking on location based advertising to bring in big money for mobile, but there are a lot of hurdles to clear before companies like Facebook can target your location precisely.

Matthew Groves created the app “Dude, Where’s My Car.” It relies on GPS and that can be problematic.

“It all depends on where you’re at, are you in a parking lot, are you around tall buildings or trees, basically do you have a clear view of the sky,” Groves says.  

Using location data from cell towers is another option, but Groves says that’s less accurate because there aren’t enough of them. To get around that problem, he says companies like Google are testing their own Wi-Fi hotspots, which offer free Internet.

As for Facebook, it gave the Coupa a wireless router, which can be tied to a location. Argawal says, you can imagine tech companies like Facebook sending out routers to millions of businesses.

“So all of the sudden you have precise locations on every business you’ve shipped that too,” Agrawal says.

And so one day soon, someone like me could get an offer for a free smoothie to go with my ham sandwich.

There have been multiple signs of a comeback in the crucial housing sector in recent weeks. It’s a sector that typically leads the way out of recession, but has lagged badly in this recovery.

In January, existing home sales were up 15.6 perecent. New home construction is expected to rise steadily this year, and home prices are climbing across the country.

Connect the dots -- and you get to Home Depot and Lowe’s. The big home improvement chains reported higher sales and predicted continuing growth when they released earnings this week. They’re also hiring up for the spring shopping season.

Debbie Kitchin of InterWorks general contractors is a steady customer of the big chains, as well as local suppliers to the professional trade. She was giving a tour of a quaint little bungalow her firm is renovating in Portland, Oregon. The house, about 1,600 square feet, recently sold for $225,000. It’s in an older residential neighborhood of streets lined with towering fir trees, where the real estate market is now brisk again after the housing slump of the late 2000s.

The rehab on this house is top-of-the-line. InterWorks and its subcontractors are installing new floors, kitchen, master suite, insulation, energy-efficient windows. The new homeowners are empty-nesters, recently retired, who sold a larger, more expensive house in the suburbs, in order to move closer to their daughter and new granddaughter in town.

But Kitchin says a lot of her clients are staying in their homes -- which now seem to be worth something again.

“People have deferred making improvements in their homes,” says Kitchin, “because of the recession and because the value of their houses was going down. Now that they see it’s starting to turn, they feel like, ‘well, maybe it’s safe to invest in my home again.’”

Meaning, InterWorks is growing again. After downsizing from 13 employees down to four employees during the recession (and they often didn’t get full-time work), the firm now has full-time work for about half-a-dozen workers, including skilled carpenters who make as much as $25/hour. The subcontractors on the job have ‘For Hire’ signs on their trucks as well.

Which also means  that InterWorks is buying a lot more stuff. “Wood, insulation, paint, tile, flooring, whether it’s carpeting or hard-wood flooring,” says Kitchin. And the list goes on.

And that is keeping the folks at construction material and home improvement suppliers plenty busy. Home Depot will hire 80,000 seasonal (i.e., temporary) employees to handle the spring sales rush in coming months. That’s 10,000 more than last year.

At a Home Depot store in a suburban mall in Vancouver, Washington, across the Columbia River from Portland, permanent employees and new temporary hires were busy setting out the spring displays this week -- including landscaping supplies and building materials for homeowner DIY projects.

“A lot of contractors that actually may have gone out of work for a while, they’re going back into remodeling,” says store manager Robert Tilton. “And they’re building spec homes, getting a lot of support through interest rates and an easier process of getting commercial bank loans.”

Tilton says more homeowners are flocking into the store too -- getting ready to sell their homes, or just to live a little.

“The biggest do-it-yourself projects right now seem to be a lot of landscaping, curb-appeal type items, interior-exterior paint jobs,” says Tilton. “It’s a very inexpensive way to add a good look and feel to your home while adding value.”

Michael Farr follows the home improvement sector at investment firm Farr, Miller & Washington. He calls this a genuine housing recovery, but not a robust one.

“It’s something of an anemic rebound, we’re limping out.” says Farr. “But you don’t want to look a ‘gift rebound’ in the face when you get it.” He points out that residential investment averaged around 4.5 percent of GDP from World War II until the end of the housing bubble in 2007-2008. It was 2.4 percent of GDP last year.

And, Farr points out, even as consumers have deleveraged through the recession, American households still have a lot of debt left on their balances sheets (debt to household income doubled from 1980 to 2000, driven in large part by inflation in home prices and the boom in home equity loans). Home prices are now on the rise, but they haven’t rebounded nearly enough to provide an equity cushion for many homeowners to borrow against, in order to fund big home-improvement projects.

But at least that kind of investment is getting less risky from a financial standpoint, Farr says.

“People want to know that if they invest more money in their homes to repair or refurbish, they’re going to be able to get that money out, that it’s going to be worth it,” he says. “You don’t want to try and repair a house that’s simply falling in market value.” Now that home prices are rising steadily in most local markets, home-improvement spending prior to putting a home on the market appears to be a better bet.

But economists warn that this renovation recovery could still falter. Home prices have to keep rising, or homeowners won’t be able to get back what they put into their homes when they sell. And interest rates have to remain low, so people can keep refinancing their mortgages, then plowing that extra money into new kitchens and fancy shrubbery.