National News

Sen. Tim Scott's Mission: Build Wealth Among 'The Most Vulnerable'

NPR News - Thu, 2014-06-26 09:47

U.S. Sen. Tim Scott has become a leading conservative voice focused on building wealth among people of color. Scott tells host Michel Martin about his ideas for growing the economy.

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Political Chat: Primary Results, Boehner's Obama Lawsuit

NPR News - Thu, 2014-06-26 09:47

Several primary elections wrapped up this week. Host Michel Martin speaks with two seasoned political analysts to learn more about the primary results and the races to watch later this year.

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U.S. steelmakers battle against cheap imports, again

Marketplace - American Public Media - Thu, 2014-06-26 09:47

Inside U.S. Steel's plant in Lorain, Ohio, steel tubes are cast, trimmed, and threaded. The freshly-cast tubes are a dazzling, neon orange -- like a light saber from "Star Wars" -- you can feel their heat from more than 20 feet away.

"Here at Lorain Tubular, we've made significant investments over the last three to four years, to about $200 million,” says plant manager John Wilkinson.

Wilkinson says that's largely in response to the oil and gas boom from the Marcellus shale development. But another big reason was China had backed off from dumping its steel into the market. That happened in 2009, after several trade cases were filed. Wilkinson says after that, the company was feeling pretty good about things.

But since then, he says, “we have now seen the Korean imports start to take the place of the Chinese, and actually exceed the levels of where they were during that timeframe."

In other words, it's now South Korea that's doing the dumping.

And the oil companies are all too willing to buy this cheap steel. Wilkinson says because of that, production at U.S. Steel's Lorain plant is just a third of what it could be. There's just not enough demand for its steel tubes.

"This facility here would usually run around the clock, 24-7,” he says. “A lot of these countries that are dumping into our market, I can't even make the product for what they're selling." 

The Economic Policy Institute looked at this trend, and saw that steel imports shot up 26 percent in the first three months of 2014. Right now, there are nearly 34,000 steel jobs in Ohio. But if this dumping continues, there's concern that plants will close.  

"China, South Korea, India, and others, have been investing in surplus steel capacity,” says Rob Scott, an economist with the EPI. “We now have over half a billion tons of surplus steel production capacity, much of that is generating steel that's being dumped on the United States. And as a result, steel producers have begun to lay off workers."

U.S. Steel blames dumping for its decision to idle plants in Texas and Pennsylvania.

"Once you lose a steel mill and it shutters, it's pretty hard to bring it back,” says Ned Hill, an economist at Cleveland State University.

Hill says not only are foreign companies selling cheap steel here in the U.S., there are claims that they're also making knockoff steel for global buyers.

"Every piece of tube that comes out of a U.S. steel plant, has a stamp that indicates the quality, and there have been charges that those stamps have been forged internationally. And if you have a weak piece of pipe, that can cause problems,” says Hill.

Meanwhile, U.S. Steel has filed suit against South Korea for circumventing fair trade laws, with the U.S. Department of Commerce expected to hand down a ruling by mid-July.

Former Senate Majority Leader Howard Baker Dies At 88

NPR News - Thu, 2014-06-26 09:42

Baker, of Tennessee, also served as President Ronald Reagan's chief of staff from 1987-88 and later as ambassador to Japan.

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Ebola's Surge Requires 'Drastic Action' To Stop

NPR News - Thu, 2014-06-26 09:29

Cases of Ebola continue to mount in West Africa in the largest outbreak of the disease ever recorded. Public health officials are concerned the viral disease could spread farther.

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FIFA: Unsanctioned underwear is "incidental exposure"

Marketplace - American Public Media - Thu, 2014-06-26 09:26

Three items from the 2014 FIFA World Cup caught our eye on Thursday.

1. The U.S. men's national soccer team lost to Germany, yet still advanced to the next round of the tournament.

2. Uruguay's Luis Suarez is gone for the rest of this year's World Cup and has been banned for four months for his bizarre biting incident.

3. And finally, Brazil's star player Neymar whipped off his shirt after a game earlier this week revealing some colorful undershorts. Unsanctioned underwear, apparently. Brazilian media report the underwear did not come courtesy of the Brazilian team's sponsor, Nike, or FIFA's  official sponsor, Adidas, but from a design house called Blue Man, which sent a pair to everyone on the team. 

John Horan, the publisher of Sporting Goods Intelligence, says sponsors spend millions of money in exchange for brand visibility at sporting events. And sports associations are zealous about making sure players wear sanctioned clothing and equipment.

"They've all been read the riot act about this stuff," Horan says.

A couple years ago, a Danish soccer player also caught flak for flashing non-sanctioned undies at a match. He got fined more than $100,000.

Reports swirled that FIFA, the World Cup's governing body, is conducting an investigation into Neymar's underwear reveal. But in an email, a spokesman waved off the matter, saying the organization "is not in a position to provide detailed individual feedback on every potential ambush marketing incident."

It regards Neymar's slip as "incidental exposure."

Unsanctioned underwear: the new wardrobe malfunction?

Marketplace - American Public Media - Thu, 2014-06-26 09:26

Three items from the 2014 FIFA World Cup caught our eye on Thursday.

1. The U.S. men's national soccer team lost to Germany, yet still advanced to the next round of the tournament.

2. Uruguay's Luis Suarez is gone for the rest of this year's World Cup and has been banned for four months for his bizarre biting incident.

3. And finally, Brazil's star player Neymar whipped off his shirt after a game earlier this week revealing some colorful undershorts. Unsanctioned underwear, apparently. Brazilian media report the underwear did not come courtesy of the Brazilian team's sponsor, Nike, or FIFA's  official sponsor, Adidas, but from a design house called Blue Man, which sent a pair to everyone on the team.

Latinos Pledge Allegiance To More Than One Soccer Team

NPR News - Thu, 2014-06-26 08:12

For many Hispanics cheering on Team USA and a Latin American team is a win-win. Univision taps into this double patriotism by referring to the U.S. team as "el equipo de todos" — everybody's team.

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U.S. Advances In World Cup Despite 1-0 Loss To Germany

NPR News - Thu, 2014-06-26 08:06

The U.S. advances to the round of 16 after a tight loss to Germany, 1-0, and a 2-1 win by Portugal over Ghana. This is the team's second consecutive trip to the knockout round.

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FDA Warns Of Life-Threatening Reactions With Acne Products

NPR News - Thu, 2014-06-26 07:06

Many people use products using benzoyl peroxide or salicylic acid to treat acne. The Food and Drug Administration says rare but dangerous allergic reactions have landed people in the hospital.

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Supreme Court Strikes Down Abortion Clinic 'Buffer Zone' Law

NPR News - Thu, 2014-06-26 07:01

The justices said Massachusetts' law mandating a 35-foot buffer zone around clinics providing abortion services violates First Amendment rights.

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Facebook's Diversity Numbers Are Out, And They're What You Expect

NPR News - Thu, 2014-06-26 06:42

As the industry grapples with a gender gap, major tech firms are starting to release the gender and racial breakdowns of their staffs. Facebook's workers are mostly male and white.

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In Narrow Ruling, Supreme Court Invalidates 3 Obama Appointments

NPR News - Thu, 2014-06-26 06:34

The court says the 2012 appointments to the National Labor Relations Board are invalid because they weren't approved by the Senate, which was in pro forma session at the time.

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FIFA Bites Back: Uruguay's Luis Suarez Suspended 9 Games

NPR News - Thu, 2014-06-26 06:16

The suspension comes two days before Uruguay faces Colombia in the round of 16 on Saturday. It begins immediately, FIFA says.

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Will Ferrell, Teddy Goalsevelt Pump Up U.S. Fans

NPR News - Thu, 2014-06-26 05:48

"I'm not going to lie to you – I'm not in the best shape," Will Ferrell told American soccer fans in Brazil last night, after being announced as U.S. Soccer's "secret weapon" in the World Cup.

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Why bank loans are getting riskier

Marketplace - American Public Media - Thu, 2014-06-26 04:25

The Office of the Comptroller of the Currency has issued a new report that says banks are taking bigger risks when they lend. They're doing that in two ways: lending more in auto loans to individuals, and lending more in leveraged loans to companies. And, increasingly, they're making those corprate loans "covenant-lite." Stopped you in your tracks, huh? Let me explain:

Q. First, what's a leveraged loan?

A "leveraged loan," also often known as a high-yield loan (if you're talking dirty, a junk loan), is a risky loan, borrowed by a company that's heavily in debt. Because of the risk, leveraged loans come with high interest rates. They also usually come chock-full of covenants.

Q. Which raises the question: What's a covenant?

A covenant is a requirement that the borrower has to meet every month. Perhaps is a certain debt-to-earnings ratio, or a minimum amount of gross income.  It can be anything the lender decides on. Covenants act like canaries in the coal mine for lenders, giving them early warnings that a company might run into trouble and possibly default on the loan.

Q. Got it... so what's a covenant-lite loan?

A covenant-lite (cov-lite, in the jargon) loan is like a coal mine with few or no canaries. So there will be little or no advance warning of problems in these loans: the first the lender hears about any issues is when the loan is on the brink of default.

Q. So why would anyone want a covenant-lite loan?

Well, borrowers love cov-lite loans, because they're easier to live with. There are fewer pesky rules and regulations to follow, and in some cases the loans are just pure money, with no strings.  Lenders don't really like them, for obvious reasons, but right now they're over a barrel. They're stuffed full of cash that they have to put to work in a very low-interest rate environment. There are precious few investment opportunities out there that will make the much money. And that allows the borrowers to force the lenders' hands. If you want a real estate analogy, it's a buyer's market. The buyers are the borrowers, and they're getting pretty much anything they want in these loans.

Q. Finally, then, why should I care?

Because all this means that risk is being baked into the system again. Leveraged loans are already risky.

When they're structured with few covenants, they're even riskier.

And when banks are loaded down with risky investments, well, we all remember how dangerous unfettered risk can be... don't we?

'We Welcome' Syrian Airstrikes On ISIS, Iraqi Leader Maliki Says

NPR News - Thu, 2014-06-26 04:17

Iraqi Prime Minister Nouri al-Maliki says that he didn't ask for the airstrikes along the border — but he doesn't have a problem with them, either.

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Reports Of New Fighting Rattle Ukraine's Truce As Kerry Urges Russia To Help

NPR News - Thu, 2014-06-26 03:23

Russian state news media report explosions in the eastern Ukrainian city of Kramatorsk. Secretary of State John Kerry says Russia could face sanctions if it doesn't help end the violence.

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Oil Off The Coast Of Ibiza? Protesters Don't Want To Know

NPR News - Thu, 2014-06-26 03:15

Spain is weighing a plan to allow oil exploration near the party island of Ibiza. Opponents fear the move could threaten the environment and tourism, but finding oil could also be an economic boost.

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In Flanders Fields, Europeans Still Learning How To Get Along

NPR News - Thu, 2014-06-26 03:03

On the 100th anniversary of the start of World War I, EU leaders will meet at Flanders Fields Museum. They'll have an opportunity to reflect on what can happen when nations fail to find common ground.

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