The Fed stopped buying bonds to help the economy recover from its worst disaster since the Great Depression. So we're taking this opportunity to remember what happened 85 years ago today.
October 29, 1929, or Black Tuesday, was the most devastating crash in the United States stock market history.
The number of shares trading hands on the New York Stock Exchange that day set a record not broken for 40 years. And they were trading by hand!
NK-33 engines, originally destined for a Soviet-era moon shot that never got off the ground and later used in the Antares, are suspect, some scientists say.
The Fed has been buying up bonds by the trillions since the financial crisis started in 2008. Today, it affirmed that it was going ahead with plans to end its third round of stimulus.
If you live in a swing state, chances are you’ve seen a political ad or two in the run-up to this year’s midterm elections. And there’s also a pretty good chance that ad talked about the economy.
Which brings us to this question: if those ads were your only source of information, what would you think about the state of the economy? What kind of picture are the ads painting? It’s not always what you’d expect.
Check out these two ads, for gubernatorial races.
In his ad, the Republican governor of Michigan, Rick Snyder, says we’re on the road to recovery.
And the Democratic candidate for governor of Wisconsin, Mary Burke, talks about bleak job prospects and layoffs.
“We would expect Democratic candidates to trumpet the success of the economy and for Republicans to be on the attack," says Vincent Hutchings, political science professor at the University of Michigan. "But at the state level, especially if we’re talking about gubernatorial contests, that logic gets turned on its head.”
Hutchings says incumbents, whatever their political stripe, have to defend their handling of the local economy.
Challengers blame economic problems on the incumbent.
But in national, congressional races, political ads focusing on the economy are more predictable.
“It’s all doom and gloom,” says Erika Franklin Fowler, co-director of the Wesleyan Media Project.
Listen to ads from Republican congressional candidates, she says, and you think the economy will never pick up.
“So, a lot of ads will make references to the squeeze on the middle class in particular," she explains. "I’ve seen ads on recent college graduates and frustration over spending a lot of money on a college education and not being able to find a job.”
Franklin Fowler says, for congressional Democrats, it’s morning in America.
Or it would be if it weren’t for the Republicans.
“Democrats will often go after Republican incumbents and/or wealthy challengers who own businesses for shipping jobs overseas or for job losses,” she says.
In fact, Franklin Fowler says, about 20 percent of ads for all Senate candidates mention jobs, with very different takes on the jobs picture.
I wondered – who’s right?
I turned to Richard DeKaser. A corporate economist at Wells Fargo.
“I’d give the economy a B-minus,” he says.
DeKaser says we’re creating about 250,000 jobs a month, and GDP is growing at about three percent. That’s pretty good.
But it’s an uneven recovery. Not everyone is benefiting.
So politicians can cherry pick economic data, to make a point.
“You can pick and choose from the data and tell pretty much any story you’d like," DeKaser says. "And more often than not, that’s the case. It’s just a matter of biased presentation rather than dishonest presentation. Though there is some dishonesty as well.”
And when the economic picture is a bit ambiguous like it is now, it’s that much easier to manipulate.
The Red Cross claimed to deliver 17 million meals and stacks, 74,000 shelter stays and 7 million blankets and flashlights to victims of Hurricane Sandy. But a joint investigation from ProPublica and NPR not only casts doubt on the organization's own tracking, but shows a pattern of prioritizing public relations over aid after hurricanes Sandy and Issac.
The investigation found the Red Cross was unprepared for the disasters and botched the delivery of meals, supplies and other aid. Response was slow and meals were wasted, and in one case an official reportedly ordered volunteers to drive around empty trucks to give the appearance of relief.
In other news: More earnings are on the way today and there will be an official announcement from the Fed on quantitative easing. For now, here's what we're reading - and the numbers we're watching - Wednesday.$1.7 trillion
That's what the Fed has spent on bonds in just the third round of quantitative easing, or QE3. That's according to the New York Time's Upshot, which has seven charts laying out the program's history and future.74,829
As of Wednesday morning, that's how many people follow SugarString on Twitter. The site posits itself as a slick tech/lifestyle news site "presented" by Verizon, but the Daily Dot reported that corporate "presenters" have handed down a big restriction: no writing about domestic surveillance or net neutrality, two topics Verizon is very involved in.4
The number of meals in a day, according to Taco Bell. The restaurant is the first fast-food joint to offer nationwide mobile ordering via a new app launched today. Taco Bell made the announcement through a bit of social media jujitsu, the Verge reported, seemingly erasing its popular Twitter account to push users toward the app. In reality, the restaurant's tweets and 1.4 million followers are hiding the protected account @totallynothere.
Opponents of the Federal Reserves policy of buying bonds to stimulate the economy always worried about the end game: what happens to markets when the stimulus ends. With that time now upon us, it appears the turmoil has come and gone. So as central bank stimulus draws to a close, when will the economy be healthy enough for higher interest rates? Plus, good news for college seniors and their parents: The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings are from Michigan State University's annual survey of employers. How ever, economists say the good news doesn't trickle backwards to people who graduated during the down years. More on that. And surveys show that many people choose a new car based on how connected the vehicle is to the internet (forget about zero-to-sixty, or initial quality or EPA mileage). We take a test drive to see how manufacturers are taking this information on board.
New college grads will find jobs more easily, according to a Michigan State survey of 5,700 companies.How much is hiring of new grads with bachelor’s degrees expected to rise in 2015?
One of China's largest electronics companies, Xiaomi, has a plan. They want to sell 100,000 phones in India every week. But there's a problem. A privacy problem.
Chinese smartphones have notoriously been banned or even put on a trade restriction lists because people are concerned that they might be carrying spyware installed by the Chinese government.
To combat this stigma, Xiaomi announced that they will be building a data center in India to ensure customers that they will not be storing their data on Chinese servers.
Molly Wood, Technology columnist at the New York Times, brought up an interesting point in this regard. She wonders if at some point, some country will declare themselves as the "Switzerland of data storage," in that this country will not honor requests from anyone to sift through your data.
However, there's only one slight problem with that, she says. What if we don't trust the manufacturers of the product either? What then?
Click on the media player above to hear Molly Wood in conversation with Marketplace Tech host Ben Johnson.
Male or female, you were once a teenager and so will likely remember how, for the longest time, personal care products were all about removing oil from our faces, hair and skin.
“Oils were a product that historically consumers have been told to take off," says Karen Grant, a beauty industry analyst for the NPD group.
But now, oil is having a moment. You might say it's getting a chance to shine. Especially when it comes to the haircare industry, where brands are advertising their ability to make your healthy, nourished and moisturized — with oils.
“You’ll see oils on the shelf at Target. You’re seeing them in Walmart, you’re seeing it in Walgreens, you’re seeing it in CVS,” says Grant.
And at Ricky's, a chain of beauty supply stores in New York, where you can see the slick display from the sidewalk. Behind the cash register, there is a giant wall of hair products, all with the same color turquoise packaging. And in the center aisle, you'll be confronted with even more.
Says Richard Parrott, president of Ricky's, about the nose-high shelves packed with products, “It’s a hero display. This is basically our hero products. These are the products that people, they come in with their iPhones and they have pictures. They just say do you have this?”
The brand Parrot is talking about is Moroccanoil. That's the brand. But it's core ingredient is a product called Argan oil. Pure Argan oil retails for about $12 an ounce. Mohamed Omer, an industry analyst with Mintel, says the oil is difficult to produce.
"Argan oil can only be extracted from the argan fruit, which can only be found in Morocco. It can only be collected by hand. And the kernels have to be taken out by hand. It’s not an easy oil to get," he says.
And a lot of it is grown on cooperative farms run by women.
Argan oil's rarity and exotic story make it a best-seller. And when it comes to best-sellers, says Richard Parrott, the beauty industry moves in cycles.
“Curly hair is in. Straight hair is in. Curly hair is in. Straight hair is in. This is not new. Right? They were using this stuff in ancient Egypt," he says.
In ancient Egypt, Argan oil might have been as common as regular shampoo — we don't know. But today it's like the truffle of the beauty industry. Because it’s so expensive and scarce, very few consumers can afford the pure ingredient. But they’re still willing to pay for a bottle of shampoo that contains just a few drops.
Car companies have been slow to adapt to a connected world. But they're starting to catch up, putting out cars that increasingly work like huge smartphones on wheels.
Qualcomm is a company built on smartphone chips. But lately, they've also been trying to get their chips inside cars.
"Fundamentally, the car is turning into a smartphone," says Qualcomm's senior vice president of business development Kanwalinder Singh. He's speaking from the passenger seat of an Audi A3, the first car with its own 4G connection.
With the help of Qualcomm chips, the A3 features more detailed Google maps, internet radio, and Netflix streaming for the kids in the backseat. Drivers can dictate Tweets using voice command, and the car reads incoming text messages out loud.
Singh says Qualcomm is giving drivers the features they want, and they're doing it in a safe way.
"We believe that driver distraction would actually be alleviated by providing these services," he says. "When all of this is embedded, like it is in this Audi, phone calls destined to you and your smartphone would actually come through the car's antenna, and play through the car's audio-visual system. You would interact through the car."
But some driving safety researchers say moving these features from the phone to the car won't make drivers any safer.
"I think they're really ignoring the powerful effect of cognitive distractions," says Linda Hill, who leads a team of driving safety researchers at the UC San Diego School of Medicine.
Hill admits voice command might cut down on visual distraction, preventing phone-handling drivers from staring down into their laps. But eye-tracking studies have shown that even when drivers have their hands free and their eyes on the road, their minds can still be elsewhere.
"A recent study looking at that found that voice-to-text increased driving errors more on a closed driving course than text-to-text did, shockingly," Hill says.
Hill does like the idea of building one bit of technology into cars, though: An app that disables phones in moving vehicles.
Good news for college seniors (and their parents): The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings from Michigan State University’s annual survey of employers are in accord with other statistics showing that the job market has gotten stronger since the recession.
However, economists say the good news doesn’t trickle backwards to people who graduated during the down years. For instance, the Michigan State numbers show salaries for new engineers will be about $6,000 higher than they were for 2009 graduates.
"There is no way that those people who came in at 2009 are going to be at that salary," says Michigan State’s Philip Gardner, who conducted the survey. "It would take some pretty nice wage increases."
The Michigan State findings echo other recent data, says Brookings Institution economist Gary Burtless. So does the bad news for earlier graduates.
"There’s no doubt that entering the job market—either as a new college graduate or a new high-school graduate—at a time of high unemployment is not the best career move," says Burtless.
Those workers can see their wages stay relatively low for 10 years or more.
Shu Lin Wee, an economist at Carnegie Mellon University, has studied the process by which recession-era grads lose out, in a paper titled "Born Under a Bad Sign: The Cost of Entering the Job Market During a Recession."
Her numbers show that when jobs are scarce, young people don’t get to hop around from career to career as much. Finding the first job is enough challenge.
"Even if you manage to find a job," she says, "and you realize that you’re not very good at that particular career, now you have problems switching jobs.
So you develop fewer skills and don’t get experience with other fields that might be a better fit.
Southern California’s huge port complex has been making headlines lately over congestion and shipping delays. But ports all over the world are experiencing traffic jams, and they all have one thing in common: megaships. Some container vessels are now three and a half football fields long and they’re overwhelming ports.
Just five years ago, ocean carriers calling on global ports typically could handle 5,000 20-foot containers.
“Now, they are bringing in ships that can handle three times that amount,” says Peter Friedmann, counsel to Pacific Coast Council of Customs Brokers and Freight Forwarders Associations. “And there are some ships that have already been built that can carry 18,000 on one ship.” Even the expanded Panama Canal won't be able to handle a ship that big.
Hacegaba says these megaships came on line faster than expected. They’re straining capacity at many global ports, where authorities are scrambling to build bigger terminals and bigger cranes to unload them.
Companies like Maersk and MSC are forming alliances to share these vessels, a move that gives shippers more leverage over the world’s ports.
Banking is old.
Roots in Mesopotamia old.
Some of the oldest banks are still operating today. But as the European Central Bank's latest "stress test" shows, not all are in the greatest of health.
Here's a look back at the origin story of the five oldest established banks - where they’ve been, and where they are today:
Just as the Salem Witch Trials were beginning in New England, the sixth oldest bank was being established across the pond in Old England, in 1692. The bank itself, needless to say, went through some tough times during the two World Wars, but in 1963 it became the first British bank to be fully computerized. Today, the Royal Bank of Scotland is its parent company, and like many kids, they’ve found themselves in a lot of trouble lately. In 2012, Coutts was fined for not taking sufficient and necessary measures to detect money laundering activities.
Back in 1690 on London’s Lombard Street, John Freame and Thomas Gould began trading as "goldsmith bankers." This made them cutting-edge: Goldsmith banking in the late 1600s and early 1700s was, in many ways, the predecessors of the banking industry today. They would store gold in their vaults and issue promissory notes on deposits that even collected interest. In 1967, Barclays was one of the first of the UK’s “high street” banks to offer ATMs. Today, however, Barclays continues to be in the spotlight. Recently, a former British senior banker became the first person to plead guilty to, "a single count of conspiracy to defraud in connection with manipulating the London interbank offered rate, or Libor,” according to the New York Times.
Before street numbers existed, businesses were identified by street signs. Richard Hoare, the founder of the bank, traded at the “Sign of the Golden Bottle” in Cheapside, London. Eighteen years later, he moved the offices to Fleet Street, within London city limits, where it still stands today. Back in 1897, the bank had temporary balconies erected to allow customers and workers at the bank to view Queen Victoria’s Diamond Jubilee parade. Today, for the first time in its history, the bank is being run by its first non-family Chairman in over 300 years, Jeremy Marshall.
This bank was established by a pair of Dutch Protestant brothers, Hans & Paul Berenberg, who were forced to flee Antwerp for their religious beliefs. They settled in Hamburg in 1590, where they would go on to establish a business that is still around today. In order to survive World War II, the bank became a holding company and withdrew from the business of active banking. The Chairman of the bank at the time rejected national socialism and wrote in his journal:
“Better a small and decently led state than such a huge empire which Germany is today, lawless, without integrity and governed by robbers and murderers.”
He helped other businesses and anti-Nazis escape. Eventually, he wrote once again on May 3, 1945, when English soldiers entered Hamburg:
“Now the task is to deal with the consequences of the war and gradually try to help the children in building their future."
Today, Germany’s oldest private bank has now expanded into the UK. And many people continue to be uneasy about the future of economic growth throughout the eurozone, with Germany at the front and center of the stage.
This picture shows the headquarters of the Monte Dei Paschi di Siena bank in Siena, in the Italian region of Tuscany.(Giuseppe Cacace/AFP/GettyImages)
The goal of the oldest bank in the world was, as originally stated: “To form loans to the poor or miserable or needy persons,” according to their company history.
By those standards, I would certainly qualify for a loan from them, but this also may be the reason their books aren’t quite up to par according to the European Banking Authority. Monte dei Paschi di Siena, the oldest bank in the world (think: 1472!), failed their stress this past weekend and were subsequently hit yesterday with major losses on its shares. Now they need to come up with 2.1 billion Euros to meet the ECB’s stress test requirements. Whether or not the Italian public will step in and help prop up the bank’s capital shortfall remains unknown.
Kansas City piled up seven runs in the second inning and forced San Francisco starter Jake Peavy out of the game. The big lead left both teams resting their go-to bullpen arms.
The comic juggernaut announced Tuesday that one of its upcoming films will have a female lead, and another will be headlined by a black man.
Orbital's Cygnus cargo spacecraft was carrying 5,000 pounds of supplies and experiments to the International Space Station.
Announcing the deal today, the company said it would expand its service and raise the annual fee to $149 for its New York customers. Alta also operates in other large cities.
The Federal Protective Service will enhance its presence at some buildings in Washington. Homeland Security said public calls by terrorists to attack the U.S. spurred the new measures.
The area of land no longer suitable for farming because of salt degradation is rising quickly. Scientists argue the private sector should help fund efforts to reverse it since it relies on the crops.
The Ebola screening of airline passengers departing from Monrovia was not operating like well-oiled machine Monday.