Single moms have faced a tough time in Mexico for generations. But as in the U.S., the number of households headed by a woman has been rising, and now accounts for a quarter of all families in Mexico.
You may have noticed your bank acting strangely as of late. At the ATM, when opening your mail (snail or digital), or just couch-sitting, watching TV. Wherever you are, your bank seems to follow, trying to offer you perks and rewards.
In my case it’s offers for 5 percent cash back, when and if I use my credit card. But since I already get 1 percent back on all my purchases, I can’t help but wonder, "Why is my bank offering me more money?"
Greg McBride, a senior analyst with Bankrate.com, says there’s a simple answer: “They want as much of your business as they can get.”
McBride says even though the economy is recovering, banks are not in the mood to take on risky loans. And he says the credit card industry is intensely competitive -- it’s dominated by only nine companies.
“So often times, bringing in new customers means bringing someone in at the expense of your competitor,” he says.
Which is why, if your credit rating is good, your mailbox may be stuffed with many offers right now. Banks think your credit rating is hot. And so, McBride says, if you have good credit it’s likely your bank wants to spend more time with you.
“These are also the type of customers that financial services want in the fold for their other products and services”
Chris Murray, director of client services at New Control, a digital and direct response ad agency, says for a company like Visa or Capital One to steal customers with good credit from each other is pretty tough to pull off.
“The reality is, people like that, already have a credit card," he says. "They make it very difficult for you to switch, mentally to say, I’m going to walk away from the 500,000 miles I’ve got on American and all the sudden start using a cash back card."
Which is why Murray says it can cost up to $500 to win a new customer. Banks measure marketing success in tenths of a percentage. If a bank sends out one thousand pieces of mail and gets three people to sign up, the campaign has been a success. For consumers -- it’s like the prospect of dating again when you already have a trusted, special someone in your life. Who wants to re-read all that small print?
Not Lynwood Hines.
“Where there’s bait there’s a hook,” Hines says.
Hines works for an engineering company in South Carolina and he notes his credit rating is just under 800. Which may explain the thirteen offers Hines says he’s gotten in the last six weeks from card issuers like Capital One, American Express, Citibank, Chase and American Airlines.
Hines says the offers he’s receiving are typical, but he’s not interested in changing cards. Ever since he sent in a late payment on his American Express bill and his interest rate was raised to 30 percent his attitude towards credit has changed.
“And that was enforced forever. I had to cancel the card to get rid of it," he says.
So how does he feel about about these new cash-back, free miles, zero-percent offers that have been showing up?
“They’re not going to get me. There’s nothing they could offer me that frankly, that they could afford that’s going to get me to switch. And I don’t think of it as cynical. I think of it realistic.”
And that attitude is exactly what will keep the offers from credit card companies coming in.
A bill making its way through the Louisiana Legislature would let Cajun citizens celebrate their ancestry by customizing their driver's license, adding the phrase "I'm a Cajun" below their photograph.
Young entrepreneurs are revitalizing parts of the city, starting up businesses in what were once empty warehouses. They're creating buzz and enthusiasm. But in a city where the population is declining and the tax base is crumbling, there are doubts about how much impact their efforts will have.
By the time I got to bankruptcy lawyer Barbara Braziel's office near downtown Savannah that Wednesday night, I'd already put about 250 miles on my rental car chasing down predatory lenders out at Fort Stewart Army Base. Now I was back in Savannah for interviews on a related story: high-interest installment loans that get regular civilians into a world of financial hurt.
It was going on 7 p.m. and I was worried that Braziel would have closed up legal shop for the day.
Not a chance.
Braziel presides over a warren of offices piled high with bankruptcy filings and law books. The computer network had gone down during the day.
"They call it 'the cloud,'" she quipped in her slow Southern drawl. "But the girls call it 'the fog.'"
Braziel is a different class from her low-income clients; she's a professional running a busy business, working long hours, making payroll. But I could sense in the way she looked at her bankruptcy client that day, the way she touched her arm gently as she urged her to tell her story, that she identifies deeply with these people who come to her in desperate financial trouble.
People who can't find an easy way out in the short-term—without getting deeper in, in the long-run.
"I too was a single mom," she told me. "You're trying to keep the lights on, you're trying not to be homeless. So you really just need to solve the problem you have in front of you. And the cost is secondary."
Read other stories from the Marketplace and Propublica joint investigation "Beyond payday loans: Installment lending and the cycle of debt." Explore the whole series here.
The SEC will meet with experts today to examine whether credit rating agencies like Moody's and Standard & Poor's should change the "issuer pays" model in which financial companies pay firms to rate their financial products. Critics of the practice say it encourages companies to pressure rating firms for favorable grades -- like the coveted AAA -- even if they don't deserve them.
"It's as if judges at a figure skating competition were being paid by a skater to give the skater all tens," said Sen. Al Franken (D-Minn). "Those triple A ratings from Standard & Poor's and Moody’s that were given to junk financial products, they were really at the heart of this meltdown."
Franken said companies should not directly pay rating agencies for their services.
"In my model, an idependent board would assign the initial rating of a financial product to a credit rating agency based on the agency's capacity, it's expertise, and, over time, it's track record," Franken said.
Rating agencies insist that their practices are transparent and that "issuer pays" is the simplest, most easily-implemented model. Some economists say while the current model isn't perfect, it would be hard to find one that doesn't involve a conflict of interest.
"One has to have a high level of confidence that this independent board would get it right," said Lawrence Wright, a professor of economics at NewYork University's Stern School of Business, when asked about Franken's proposal. Wright said that while rating agencies might not be perfect, there's nothing to guarantee the board would be either.
Think about what happens when your phone is stolen. You have to go out and buy a new one, then you have to sign up for a new plan with your carrier.
With cell phone theft generating new sales for manufacturers, and new contracts for carriers, why would they do anything to stop it?
Kevin Mahaffey is with the mobile security firm Lookout. He says there is one incentive: Keeping customers.
“The manufacturers and the operators care very deeply about trying to improve people’s experiences," Mahaffey explains. "Because they’ve found that making people happier is profitable.”
Mahaffey says the industry has created a new database to track stolen phones, but it doesn’t work outside the U.S., and many of the stolen phones end up in other countries.
George Gascon, district attorney of San Francisco, takes this approach when he’s taken in meetings with cell phone makers and carriers, and he asks them to fight cell phone theft.
“For the people in the industry to step up and do the right thing without necessarily being dragged into court or being legislatively forced to do this,” Gascon says.
Gascon says it’s up to the industry to decide which way to go.
What can you do to prevent your cell phone from being stolen? Check out our infographic of cell phone theft stats and prevention tips.
Chances are, there's soybean in your diet. You eat it directly, down soy milk with your coffee, or more likely eat meat that fed on crushed pieces of soy.
By far the dominant maker of soybean seeds is Monsanto. This morning the company won a unanimous case before the Supreme Court that threatened to undercut its market share. In other words, Goliath beat David.
Like Intel's dominance in the chip market, almost every soybean in America has Monsanto inside. Monsanto makes some 90 percent of soybean seeds sold. And the product patent means farmers have to buy them every year.
Today's case threatened to undo that. But antitrust scholar Mark Patterson of Fordham Law School says the ruling means the company keeps its market position.
"It gives it the freedom to continue to control year by year the sales of its products to farmers," Patterson says.
Once a chemical maker, Monsanto came to dominate the seed business over the past two decades.
Agricultural economist Neil Harl at Iowa State says, first, the company patented its Roundup herbicide and Roundup-ready seeds. Then, it acquired other seed producers. And as Harl sees it, Monsanto now impedes competition.
"Beating in the heart of every good capitalist is the heart of a monopolist," Harl says. "So we have to have rules, we have to have the economic police on the beat. Or we end up with concentration and that means higher prices."
By one estimate, farmers pay double for the Monsanto product, though some say it pays for itself in higher yields.
Now, patent protections do expire after 20 years, and Monsanto's Roundup Ready product effectively goes generic in 2014.
Still, that's the original, arguably obsolete version of the product.
"You're not going to buy a Commodore 64 in today's computer market," says Indiana soy farmer Ron Moore. "They just aren't going to make it because no one will buy it. That's what's going to happen to the varieties with the Roundup 1 herbicide tolerant traits in them."
Now, Roundup Ready 2.0 seeds are on the market.
“Outrageous.” That’s what President Obama today called alleged abuses by the Internal Revenue Service. He vowed to crack down on IRS officials who may have singled out conservative groups for scrutiny when they applied for a certain kind of tax exempt status. The kerfuffle is about something called a 501(c)4. That’s tax-code-speak for a nonprofit “social welfare” organization, like the AARP, the NAACP or the ACLU.
"Technically, they exist to do issue advocacy and issue lobbying," says Jeremy Koulish, research associate with the Center on Non-profits and Philanthropy at the Urban Institute. Koulish says the organizations can be political, but that’s not supposed to be their primary purpose.
And that's part of the problem, says Sheila Krumholz, executive director at the Center for Responsive Politics.
"Their 'primary purpose' can't be political, but who decides how to define 'primary purpose?'" she asks. "The IRS, but they’ve never laid out their criteria for making their decisions."
Part of the fuzziness, Krumholz says, stems from the fact that use of 501(c)4s by political campaigns is relatively new. "This is a sea change that was brought about by Citizens United."
Citizens United was a 2010 Supreme Court decision, which removed limits on political donations and allowed 501(c)4 groups to run ads about federal candidates. Applications for 501(c)4 status have more than doubled since then and, last year, 501(c)4's spent $250 million during the election campaign, mostly on political ads.
Koulish says avoiding taxes isn’t the only perk of the 501(c)4 status. Those groups don’t have to reveal who funds them.
"Organizations can choose this tax status and take a very generic sort of name, like 'Americans for Freedom,' and basically operate in the shadows, but have a very profound impact on the public debate," he says.
Last year, 2,800 organizations applied for 501(c)4 status; only eight were rejected.
Sweden-based H&M and Inditex were joined by other brands in saying they would sign a legally binding pledge to fund safety improvements at Bangladesh garment factories.
Now we know why it takes astronauts three hours to get into their spacesuits.