National / International News
The impact of low oil prices is juicing American families’ pocketbooks in a way similar to a stimulus package, especially if crude stays low. Call it what you want: crude oil dividend, discount, energy quantitative easing.
Oil is 25 percent cheaper since the summer. And for drivers, the stimulus is instant.
“Every additional dollar or two you save at the pump you can use as disposable income right away,” says economist Ed Hirs of Hillhouse Resources and the University of Houston. “ Now you have more money for fast food. Or the six-pack of beer that you've been foregoing the past year or two.”
If oil prices stay low, and many bet it will, the savings will add up to a $200 billion domestic annual stimulus, estimates Citigroup. That’s about the size of the congressional stimulus in 2008. Citi figures the global economic boost is $1.1 trillion – again, annually.
Economist Stephen Brown at the University of Nevada-Las Vegas figures the typical American family saves $40 a month with today’s prices.
“Consumers in Washington D.C., New York and California, among a variety of areas in the United States will all see benefits,” Brown says.
But, he says, fortunes flip for energy producers. States like North Dakota, Wyoming and Oklahoma had benefited from high prices.
Similarly, global petro-states like Venezuela are also hurting from low prices.
“It limits the ability to be able to spend on the more expensive social programs you have within Venezuela,” says global oil analyst Jamie Webster of consultancy IHS-CERA. “It just puts additional pressure on the government there.”
So there has been all kinds of volatility on Wall Street lately — triple digit ups and downs.
Well, consider this:
27 years ago yesterday, October 19, 1987, was 'Black Monday.' The Dow was off 22 percent that day which came out to 508 points. The next day, known as 'Terrible Tuesday,' nearly caused the New York Stock Exchange to collapse.
A similar drop today? 3607 points.
All this to say: context truly is everything.
Monday was a dark day for IBM investors. The company's stock price fell by more than 7 percent after it released a disappointing quarterly earnings report.
But alongside that announcement came a more unconventional one: IBM is selling its chipmaking business to GlobalFoundries. But in this "sale," GlobalFoundries is collecting the check: $1.5 billion in cash over the next three years.
"It’s the deal of a century," says Dan Hutcheson, who follows the industry for VSLI research.
The key is to look beyond the headline number. While IBM is paying GlobalFoundries in cash over the next three years, GlobalFoundries will supply chips for IBM servers for the following ten years--inputs that are key for IBM's legacy hardware.
"I know a billion and a half sounds like a lot, but it’s probably a deal for IBM, too," says Hutcheson.
"If you only look at the headline cash number, you are missing a lot of the story," says Rob Saloman, professor at the NYU Stern School of Business.
Acquisitions are complicated, and those complications can make payments to the acquirer economically sound.
"As a matter of fact, there’s another example where this happened, which is Daimler-Chrysler’s spin-off of Chrysler. In effect, Daimler paid Cerberus to take Chrysler off its hands," Saloman says.
In this case, there were tax benefits to be had, and the ire of the U.S. government to be avoided. Such deals are rare--Saloman doesn't believe there's been another this year--but aren't unheard of.
"They’re almost always manufacturing-type businesses, right?" says Peter Cowen, adjunct professor at UCLA Anderson School of Management. "Ones that have heavy overhead, certain amount of infrastructure, certain amount of scale of things that need to unwind if they can’t find a buyer."
In other words, costly businesses — that would be even costlier to shut down.
Doctors need to look at the eyes to diagnose disease, but the machines they use are big and expensive. An iPhone or tablet may do as well, scientists say, bringing eye care to the underserved.
A checkpoint near Kirkuk marks the line between Kurdish-controlled territory and the world of Islamic State extremists. Some 5,000 civilians stream across daily, lives and families divided.
On the plane to Monrovia, our NPR correspondent saw the best of human nature in the passengers on board. Almost all of them were headed to Liberia to lend a helping hand.
Apple Pay launches today, and many are predicting the company - at an advantage with millions of existing iPhone users - could bring mobile payments into the mainstream. Many banks are aggressively advertising the service, the Verge reported, as part of a race to become the default card on users' lock screens.
Apple will report earnings after markets close today. In the meantime, here's what we're reading - and the numbers we're watching - Monday.43 people
At the 21-day mark since Thomas Duncan was admitted to a Texas hospital and diagnosed with Ebola, 43 of the quarantined contacts have been released, among them Duncan's fiance and her son. Officials pleaded for compassion as their reintegrations began, the Washington Post reported. Additionally, Senegal and Nigeria were both cleared of Ebola over the weekend.20 seconds
The length of Snapchat's very first ad, a commercial for a movie based on a board game. Snapchat, which is valued at $10 billion, hasn't made money yet, but that could change with the introduction of ads. Universal didn't actually use Snapchat's camera to make a "native" video, AdAge reported, but it did edit the trailer for "Oujia" to look like the app's "stories."1
That's how many albums have gone platinum this year. Only the soundtrack to Disney's "Frozen," which has moved 3.2 million copies, has the distinction. Every other record has floated under 1 million in sales. By this time last year, Forbes reported, five albums had passed the 1 million mark.10 percent
The approximate percentage of American Indian and Alaska Natives who have earned a bachelor's degree or higher, compared to about 30 percent of all U.S. adults. Natives have the lowest educational attainment rates of all ethnic and racial groups in America. The American Indian College Fund, founded 25 years ago, was created to assist the country’s more than 30 tribal colleges and universities. These are federally-funded schools located on or near native lands.1 billion
The tech industry likes to talk about "The Next Billion." It's shorthand for the next billion people that will become online consumers and that makes them the target of tech giants like Google, Facebook and Samsung. This new, targeted market lives in emerging economies like China, India, Brazil and Africa, and have very different needs than the American smartphone user.
Locals and international tourists are among at least 39 people known to have died in blizzards and avalanches throughout the foothills of Nepal's Himalayan mountain range last week.