National News

How the VIX index tracks investor fear

Marketplace - American Public Media - Mon, 2014-05-05 12:52

Let’s talk about the Chicago Board Options Exchange Volatility Index -- luckily it’s also known as "the VIX".

"Basically it’s just a fancy name for what the market views in terms of risk, going forward,” says Eric Augustyn, head of options strategy group for Wells Fargo Private Bank.

So when markets are going down, the VIX is going up.

"The VIX,  well I sometimes look at it a little bit as a temperature," says Augustyn.

That would be the temperature of fear.  When things are uncertain -- like when U.S. credit was downgrading, the whole debt ceiling debacle, or when Russia was becoming a presence in Ukraine --  the VIX jumps. It’s a measurement of the price of calls and puts, a complicated way investors try to hedge their bets. This week, it’s around 13, but in 2008, during the financial crisis Augustyn notes "the VIX went from 14 to 80.”

So the VIX looks at the price of the insurance that investors are buying.

To understand why that matters just think back to the beginning of the Wizard of Oz when Dorothy's house, with her in it, gets picked up by a tornado and blown away. The VIX is like a weather report, and Chris Geczy, Academic director of the Wharton Wealth Management initiative and adjunct associate professor of finance at Wharton, says if Auntie Em or Uncle Henry had been able to check it, they might have known tornado season was coming up.

“If you think about the situation with Dorothy," says Geczy, "Dorothy really cares about insurance when the wind is blowing. And the VIX gives us a picture, and a forecast, for how the wind is going to blow.”

Remember, says Geczy, the VIX is forward looking. Most methods of measuring the markets use data from the past.  So if Auntie Em and Uncle Henry had know the twister was coming they could have bought insurance on their house?
“That’s a possibility," says Geczy, though "they’d have to work very fast though, because the weather was coming in.”

Which means last minute insurance would be a lot more expensive. But Geczy says, if Dorothy had been watching the VIX, she would have known what the weather was going to do. And at least she would have had some options.

Failure Of Steel D-Ring May Have Caused Circus Accident

NPR News - Mon, 2014-05-05 12:49

Eleven people, including nine acrobats, were injured on Sunday in Providence, R.I., when support equipment failed and the performers fell to the ground.

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Sinn Fein Leader's Questioning Dredges Memories Of 'Troubles'

NPR News - Mon, 2014-05-05 12:25

Gerry Adams, a leader of Sinn Fein, was questioned in Northern Ireland in connection with an infamous murder 42 years ago. The investigation threatens to impact the fragile peace agreement there.

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Max Planck Goes To Florida, Invites Brain Scientists To Join

NPR News - Mon, 2014-05-05 12:25

Germany's famous Max Planck Society has opened a brain research institute in Jupiter, Fla. It's another move in the international competition to attract the best brain researchers.

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Boats Carrying Migrants Capsize Off Greece; At Least 22 Dead

NPR News - Mon, 2014-05-05 12:05

The two boats, one a 6-foot dinghy, were carrying dozens of illegal migrants hoping to reach the Greek coast. Four of the dead are children.

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In Venezuela Protests, Report Condemns Police's 'Pattern Of Abuse'

NPR News - Mon, 2014-05-05 12:02

A Human Rights Watch report documents brutal force used by Venezuelan security forces against peaceful demonstrators — including beatings, shootings and, in some cases, torture. The report also shows how security forces work in cahoots with pro-government armed gangs, calling the abuses the worst they have seen in years.

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Remembering Economist Gary Becker, Who Described 'Marriage Market'

NPR News - Mon, 2014-05-05 12:02

The University of Chicago economist won the Nobel Prize in 1992 for broadening the horizons of economics, using economic analysis to explore social issues. Becker died Saturday at the age of 83.

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To Fight Polio Outbreaks, WHO Lays Down New Rules

NPR News - Mon, 2014-05-05 12:02

The World Health Organization is warning that recent outbreaks of polio in the Middle East, Africa and Asia mark a setback to the decades-long effort to eradicate the disease. In response, the WHO has declared a world health emergency. It's asking Syria, Pakistan and Cameroon — current polio hotspots — to require all travelers leaving those countries to show proof of vaccination.

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A Narrow High Court Win For Prayer Before Government Meetings

NPR News - Mon, 2014-05-05 12:02

The Supreme Court ruled 5 to 4 that the government can use Christian prayers to start town meetings, so long as legislators don't discriminate against non-Christians. It's a new chapter in the long-running fight over prayer in public places and on public occasions. NPR's Carrie Johnson explains what happened in the town of Greece, New York.

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Target's Top Executive Steps Down, Brought Low By Data Breach

NPR News - Mon, 2014-05-05 12:02

Target is ousting its CEO, months after a massive data breach and amid some other business issues.

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The Intra-Party Landscape, Seen From The Edge Of Primary Season

NPR News - Mon, 2014-05-05 12:02

Three states go to the polls Tuesday, starting what will be an eight-week stretch of primaries in the U.S. For a look at the intra-party political landscape, NPR's Charlie Mahtesian has this overview.

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Extremist Group Claims Credit For Mass Kidnapping In Nigeria

NPR News - Mon, 2014-05-05 12:02

Nigerian Islamist terrorist group Boko Haram claimed credit for abducting more than 200 schoolgirls. The girls remain missing, and parents are pressing the government to find and bring them home.

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Drone Journalism Can't Fully Take Flight Until Regulators Act

NPR News - Mon, 2014-05-05 12:02

Unmanned aircraft offer spectacular bird's-eye views, and news organizations are eager to deploy them to get that perspective. But U.S. regulators currently prohibit drone use for commercial purposes.

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Colorado Redraws Insurance Map To Cut Sky-High Ski-Town Rates

NPR News - Mon, 2014-05-05 11:47

The Affordable Care Act sets a lot of limits on what insurers can do. They can't charge sick people more, for instance. But one thing that still counts is location, location, location.

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Iranian Activist Says Her Release Is A Gesture, Not A New Era

NPR News - Mon, 2014-05-05 11:44

Nasrin Sotoudeh, one of Iran's most prominent human rights lawyers, says President Hassan Rouhani has opened a space for dissident voices, but the country is still a "big prison."

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NSA's Encrypted Tweet: We're Hiring Code Breakers

NPR News - Mon, 2014-05-05 11:30

The National Security Agency sent out a tweet that looked like gibberish. It turned out to be a job advertisement disguised in simple cipher.

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Your parents met on Match.com?

Marketplace - American Public Media - Mon, 2014-05-05 11:28

Match.com, the dating website, is celebrating its upcoming 20th anniversary with a college scholarship program for the kids it... made... if you take my meaning.

It's like "Hey cool!" and "Too much information" all at the same time. One grand prize winner will collect $50,000 in scholarship money, and their parents will win a bonus $5,000 for a "getaway". 

According to the website, "MatchMade.com," students must:

1) Tell your parents' love story. Create a 1-2 minute video that explains how your parents met on Match

2) Make us laugh…and cry! Only the most creative, heartfelt and emotional videos will make the finals

3) Let us see it. Submit your entry to MatchMade.com no later than June 30, 2014

In other news, Match.com's been around for 20 years?

 

 

Your parents met on Match.com? Try MatchMade.com

Marketplace - American Public Media - Mon, 2014-05-05 11:28

Match.com, the dating website, is celebrating its upcoming 20th anniversary with a college scholarship program for the kids it... made... if you take my meaning.

It's like "Hey cool!" and "Too much information" all at the same time. One grand prize winner will collect $50,000 in scholarship money, and their parents will win a bonus $5,000 for a "getaway". 

According to the website, "MatchMade.com," students must:

1) Tell your parents' love story. Create a 1-2 minute video that explains how your parents met on Match

2) Make us laugh…and cry! Only the most creative, heartfelt and emotional videos will make the finals

3) Let us see it. Submit your entry to MatchMade.com no later than June 30, 2014

In other news, Match.com's been around for 20 years?

 

 

The Energy Behind Repealing Obamacare May Be Ebbing

NPR News - Mon, 2014-05-05 11:15

Republicans may not be as focused on Affordable Care Act repeal as before, but that doesn't mean the law has turned the corner in terms of public support.

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Sports agent Leigh Steinberg on pro football's rise

Marketplace - American Public Media - Mon, 2014-05-05 11:09

As the NFL draft begins later this week, a lot of attention will be on the players. But there's another figure to keep in mind throughout the process: the sports agent.

Leigh Steinberg, the author of the new book "The Agent," knows the process all too well. He got his start back in 1975 while working as a dorm counselor at UC Berkeley. One of his freshman residents, Steve Bartkowski, was his first client. He says negotiating contracts then was much different than it is now.

"Bart asked me to represent him, and there was a World Football League competing with the NFL then," Steinberg said, "so we had leverage, and we were able to get the largest rookie contract in NFL history."

Since then, Steinberg has secured over $2 billion for over 100 clients, and has represented the number one draft pick in the NFL draft eight times.

Steinberg has seen many of the changes in pro football throughout his 40-year career, thanks in part, he says, to the growth of television.

"There were weeks last year where three out of the five Nielsen-rated shows were nighttime NFL football," he said.

That's to say nothing of how the concussion discussion has changed over the last couple of decades. Steinberg said he held seminars so his players could hear what doctors had to say.

"I had a crisis [of] conscience in the '80s. We'd go to the doctors, and they couldn't tell us how many was too many," he said. "What makes this different than any other injury is it affects rationality, consciousness, memory, and what it means to be a human being."

But if you ask the players, he says, they would do it all over again.

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