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"After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry," the 85-year-old pontiff says.

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Also: Manhunt continues for ex-Los Angeles police officer suspected in three murders; Northeast and New England continue to dig out from weekend blizzard; Medal of Honor to be awarded at White House.

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There are less than three weeks to go until Washington's latest budget deadline. It's called the sequester and it involves $85 billion dollars in spending cuts.

Julia Coronado, chief economist with the investment bank BNP Paribas shares her thoughts on the economic impact of the sequester. 

A surprise announcement out of the Vatican this morning that Pope Benedict is resigning later this month.The 85-year-old Pope says he doesn't have the strength to continue his official duties.

Pope Benedict took office in 2005, as the Catholic Church was reeling from a sex abuse scandal. So has he been effective in restoring the Church's brand around the world?

The BBC's longtime Vatican correspondent David Willey joins Marketplace Morning Report host Jeremy Hobson to discuss the pope's legacy, religion and public relations.

Pope Benedict XVI announced Monday that he will resign at the end of the month, due to health issues.

As the head of the Catholic Church, Pope Benedict has been the leader of a troubled brand, as the church was hit hard by the clergy-sex-abuse scandals.

What many people will remember about Pope Benedict, like his predecessor, is the way the church handled those incidents.

“So in that respect, I don’t think he handled his brand -- his corporate brand -- very well,” says Magali Tardy-Guyot is the head of strategy at FutureBrand Paris.

She says one of the golden rules in brand management is reacting to a crisis quickly and openly. She doesn’t think the church didn’t that and many unhappy Catholics left as a result.

Bernard Beatty is with the School of Divinity at University of Saint Andrews in Scotland. He says Pope Benedict made clear he didn’t want to run the church like a business.

“Bascially, he thinks the only thing you can do is what Christians can always ever do,” says Beatty. “You’ve got to return to the idea of living by faith, not living by managerial ideas or semi-political ideas of how you increase your membership, how you control your membership.”

The Vatican says it hopes to have a successor in place by Easter.

Also: our pick of the best books coming out this week; the 50th anniversary of Sylvia Plath's death; and the real identity of a popular romance novelist.

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Citing his age (85) and diminished strength, the pontiff plans to step down effective Feb. 28. It's likely that a conclave to elect a new pope will be held by mid-March. A pope hasn't stepped down this way since 1415.

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The Vatican says Pope Benedict will resign as head of the Catholic Church on Feb. 28.

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It's international quiz time on the Marketplace Morning Report. Stephan Richter, editor-in-chief of the online international affairs magazine, The Globalist, brings us the question below. 

Which of the following major world economies have the highest proportion of exports as a share of GDP?

a. United States
b. China
c. Germany
d. South Korea

Click on the audio player above to hear the answer and learn more about exports around the world.

One of  Europe’s top officials has issued a stern rebuke to U.S. companies like Google and Facebook that operate in Europe. The European Union’s Commissioner for Justice, Viviane Reding, says these companies must accept a planned new European law on data protection and stop trying to water it down. 

If the tough new law on data security and privacy comes in to force it will have global repercussions for  any company that operates in Europe. They will have to apply these new European rules everywhere else in the world that they do business.  Chris Green of the Davis Murphy consulting firm says big U.S. corporations like Google and Facebook have been lobbying hard against the measure:

“It’s going to be more expensive for them, more red tape for them, it's more oversight for them," Green points out. “There’s going to be far too many people -- in their opinion -- taking a very, very close look at how they do business.”

Any company that breaks the new law would risk a fine of up to 2 percent of their total annual revenues. U.S. government sources have warned that if American corporations are forced to implement the new law globally,  it could trigger an US/EU trade war. 

The secret service is investigating a hacker who may have gained illegal access to emails between members of the George W. and H.W. Bush family, reportedly getting access to photos, phone numbers and private addresses.

So how do you avoid that sort of thing -- whether or not you're a former president. Marketplace Tech contributor Chester Wisniewski of the computer security firm Sophos says do yourself a favor: Get rid of that password you chose during the Pleistocene Era.

"Change those passwords. I talked to a couple friends about this recently, they were using the same password as when they created their hotmail account in 1998."

Aside from switching up passwords, Wisniewski recommends falsely answering security questions or filling in an unrelated term. For example, when asked the name of your first pet, answer "green." Lest you forget your false answers, Wisniewski suggests keeping a cheat sheet somewhere in your house as a back up.

U.S. military commanders are emphasizing their readiness to defend the nation against cyberthreats from abroad. What they do not say is that they are equally prepared to launch their own cyberattacks against U.S. adversaries.

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Texas Governor Rick Perry (R) is in California this week trying to poach business away from the Golden State. Texas boosters have been running a radio ad where Perry says, “Building a business is tough. But I hear building a business in California is next to impossible.”

So what is the business climate really like in California? It depends on the business. High-tech start-up companies in the Bay Area are booming, according to Stephen Levy, director of the Center for Continuing Study of the California Economy.

“California still gets over 50 percent of the venture capital funding and Texas gets 5 percent,” says Levy.

California has a huge consumer base and the state has infrastructure and skilled labor for the tech and entertainment industries. But Levy suggests manufacturers might want to consider Texas.

“The companies that move are moving because they need a low-cost labor force, or lower cost land and housing,” he says.  Others see additional incentives offered by Texas.

Joseph Vranich owns Spectrum Locations Solutions, based in Irvine, California. He helps companies relocate.

“My business is booming. It’s good for me. But it’s bad for California,” says Vranich. “Texas is the number one destination for relocating California companies. Followed by Arizona, Nevada, Utah and Florida.”

Vranich says Texas stands out because “their taxes are lower -- and in the case of income tax, it’s none existent.” He also blames California regulations and labor laws.

For example, Vranich says, “It’s a statutory requirement that over-time be paid if someone wants to work 40 hours in a four-day work week. Well, a lot of employees these days want four day work-weeks. You can go to other states and have four-day work weeks and pay regular rates.”

A recent survey by the California Business Roundtable found that 69 percent of company executives believe it’s harder to do business in California than other states. But if historical trends continue, don’t expect a mass exodus. According to a 2010 study by the Public Policy Institute of California, company relocations accounted for a smaller share of job losses in California than in most other states. The study found that, between 1992 and 2006, only 1.7 percent of all job losses in California were due to companies leaving the state.

President Obama will lay out his second-term agenda Tuesday night in the annual State of the Union address. On the wish list of one group with ties to the Administration: expanding access to preschool. The Center for American Progress is pushing a plan to increase federal funding so that all 3- and 4-year-olds can attend pre-kindergarten.

Many studies have shown that kids who go to preschool end up better off.

“They are much less likely to end up in jail, they’re much more likely to have higher earnings over the course of their lifetime, better health outcomes,” says Michael Linden, the center’s director of tax and budget policy. “There’s all sorts of good economic and broader societal effects that come from investing in quality pre-k.”

Under the plan the government would match state funding, on average, up to $10,000 per child per year. The plan would add almost $100 billion to the budget over ten years -- a tough sell in Washington.

The government doesn’t have a great track record with preschool, says Neal McCluskey, associate director of the Cato Institute’s Center for Educational Freedom. Recent studies have shown that the federal Head Start program for low-income kids doesn’t always produce lasting benefits.

“Federal, large-scale pre-k programs are not providing the kinds of outcomes that we’re being told we should expect if it gets further involved,” he says.

The Center for American Progress proposal also recommends increasing child care subsidies for infants and toddlers, citing research that shows parents with reliable child care are more likely to hold down jobs and earn more money.

You know those “black boxes” in airplanes? They collect data and are used to determine why a plane crashed?

Well, the National Highway Traffic Safety Administration -- a regulatory body in D.C. -- plans to to require that all new cars and light trucks are equipped with them starting in September 2014.

While everybody calls it a “black box", it’s official name is event data recorder or EDR for short. And about 90 percent of cars today already have one, says Jim Harris, a traffic accident expert. He says the proposed regulation has specific requirements.

The EDR is running all the time, but it’s only required to keep the “5 seconds” of data before a crash. It also tracks, “how fast its going, steering wheel angle, accelerator pedal position, throttle position brake application, things of this nature as far as driver input,” saysHarris.  He adds EDR's don’t track location because its only interested in determining what happened in a crash.

But that’s doesn’t mean the proposed rules stop them from tracking more, says Nate Cardozo, a lawyer with the Electronic Frontier Foundation, a civil liberties group.

EDR's are valuable but the proposed regulations don’t protect consumer privacy because there are no limits to the data carmakers can collect, he said.

“It’s not required that they track location, it’s not required that they record video or audio, but it’s also not prohibited,” Cardozo says. “There’s nothing that prevent an EDR from recording five minutes or five months of data before a crash.”

According to Cardozo, information could be used against drivers. Could the police access it without a warrant? And what about insurance companies?

“So the scenarios we see are insurance companies using this data to assess risk and set rates based on what they think the EDR shows about your driving habits,” he says.

Some insurance policies already require access to EDR data -- although several states have made it illegal.

Russ Rader at the Insurance Institute of Highway Safety says carmakers rely on the data to develop new safety features. If there are too many restrictions, it may limit innovation.

“We need flexibility in rules that can accommodate safety technologies in the future that perhaps we can’t imagine,” Rader says.

Cardozo, the civil liberties lawyer, says that if automakers need that data, the law should require them to disclose it to consumers.

"Bread, freedom, social justice" -- that's the slogan Egypt protestors used during their successful uprising in 2011. Today, protestors in Egypt have been urged to use the same slogan in protests marking the second anniversary of Hosni Mubarak's fall from power.

But whatever the political situation in Egypt, one thing's for sure, the economy is in a much worse state today than it was in the immediate aftermath of the revolution two years ago. It is growing at a slower rate, unemployment has risen, and the value of Egyptian pound has plunged against the dollar -- driving up the cost of food.

To hear how Egypt aims to stabilize its economy, click on the audio player above.

Whether fighting about texting or curfew, the key to resolving parent-child disputes is by helping them understand why they're angry in the first place. It usually turns out to be another stress like trouble at school or fear of embarrassment.

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It's the entrepreneurs' dream: tapping into China's market of 1.3 billion people. That dream fueled the efforts of two Chinese-American MBAs to take the soft-pretzel franchise — a staple of U.S. shopping malls — to China. Cultural and financial barriers, however, led to a far more challenging reality.

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It's the entrepreneurs' dream: tapping into China's market of 1.3 billion people. That dream fueled the efforts of two Chinese-American MBAs to take the soft-pretzel franchise — a staple of U.S. shopping malls — to China. Cultural and financial barriers, however, led to a far more challenging reality.

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An attention researcher wanted to find out how radiologists would fare in a version of a famous study called the Invisible Gorilla study. He found that 83 percent of the radiologists failed to spot an image of a gorilla on slides they were told to inspect for cancer. It's just one more example of how when you ask someone to perform a challenging task, their attention can narrow and block things out.

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