National / International News

BP Back In Court For Final Phase Of Gulf Oil Spill Trial

NPR News - Tue, 2015-01-20 12:26

The third and final phase of the civil trial against BP opened on Tuesday. The last segment will determine the amount of fines BP will pay in the 2010 oil spill in the Gulf of Mexico.

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Thaw Begins On U.S.-Cuba Relationship Frozen In Time

NPR News - Tue, 2015-01-20 12:26

U.S.-Cuba talks start Wednesday to revive a relationship that has been frozen in time. Cuba policy is likely to feature prominently in President's Obama's State of the Union address.

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Political Turmoil Threatens To Derail Haiti's Delicate Recovery

NPR News - Tue, 2015-01-20 12:26

Haiti's President Martelly has formed a new government that he rules by decree. He's appointed some new ministers and a prime minister but hasn't said when new elections will happen. The U.S. has pledged it's backing of Martelly, but many are worried that the continuing political turmoil is hurting reconstruction efforts.

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Oil traders are hedging their bets

Marketplace - American Public Media - Tue, 2015-01-20 12:18

Delta Airlines reported a fourth-quarter loss Tuesday because the company’s fuel-hedging contracts overshot the falling price of oil.

Some energy traders and banks seem to think that they might have better luck than Delta. With the forecast for crude starting to trend upward, investors are buying cheap oil and storing it in the hope of turning a profit in the future.

One preferred storage method: Parking the oil on so-called “VLCC’s,” or very large crude carriers, capable of carrying millions of tons of oil in a single delivery. Normally that’s what these tankers would be doing, except almost no one wants to ship oil when the price is so low. 

U.S. is a bright spot in slowing global economy

Marketplace - American Public Media - Tue, 2015-01-20 12:10

The International Monetary Fund has revised downward its global economic projections. The IMF predicts China will grow 6.8 percent in 2015 (the October 2014 estimate was more than 7 percent, compared to growth topping 10 percent in recent years) as it tries to deflate an investment bubble. The eurozone is projected to grow 1.2 percent. Japan is expected to grow just 0.6 percent. 

The United States is the bright spot in this forecast. The IMF now predicts higher growth for the U.S. than it did in October – 3.6 percent in 2015. The U.S. economy is benefiting from declining oil prices and low inflation. Plus, says Paul Ashworth at Capital Economics in Toronto, the U.S. is relatively insulated from troubles in Europe, Asia and other developing countries because of its size and its relatively low dependence on exports.

“Exports are a fairly small part – 11 to 12 percent – of U.S. GDP,” says Ashworth. “And within that, the U.S. main trading partners are Canada and Mexico, which have actually been doing quite well.”

Overall, the IMF expects global growth of 3.5 percent this year. 

Courtesy of: International Monetary Fund

 

Auction houses filled with high-end art – and drama

Marketplace - American Public Media - Tue, 2015-01-20 12:07

The business side of the high-end art world is as dramatic as a Baroque masterpiece – lots of light and shadow.

"Where insider trading is against the law in the financial markets, it is completely legal and actually frequently practiced in the art world," says Michael Plummer, a founder of Artvest Partners, an art advisory firm. Previously, he was COO of Christie’s Financial Services, and also worked with Sotheby’s for years.

 "That’s kind of the game of playing in the art world is that if you are an insider, and you have inside information, then you tend to capitalize on it," he says. And dramatic life events cause works of art to end up at auction houses in the first place.

 “Death, divorce and debt. These are the main consignors,” says David Nash, a co-owner, with his wife, of the Mitchell-Innes & Nash galleries in Manhattan. Before the gallery, Nash spent 30 years at  Sotheby's overseeing paintings, so he well knows how that same drama can trickle down, or up, to the staff.  

"It was pretty high pressure when I left. Now it’s 10 times worse," he says. "Soon as you’ve had one $400 million dollar sale, you’ve got to take the phone call the next morning for the next one.”

And both auction houses seem like they're giving in to some of that pressure, considering Christie’s is replacing its CEO, Stephen Murphy. Sotheby’s CEO, William Ruprecht, who served for 14 years, is also stepping down. Both companies want to become more profitable.

“What is making them less profitable is the intense competition between both houses,” Nash says.

While there are plenty of high-end pieces of art, only two auction houses can handle works of a certain worth. That means there’s often an auction before the auction when the two houses are bidding against each other as they try to offer better deals and land the customer.

"How far are you willing to go to get something that you have to have?” asks Michael Plummer. “Same psychology that’s in the auction room, that puts two people bidding against each other to drive something up to $140 million is the same psychology that puts two auctioneers bidding against each other to get that piece to the auction itself."

And it can seem worth it, for either Sotheby’s or Christie's to do what whatever is needed to lock down a deal to sell a headliner work of art, except it’s not, Plummer says.

“They just don’t make the kind of money that you think they do. When you see those hundreds of millions of dollars of sales, they’re not bringing in the money that people expect that they are, and that I know is a shocking thing to a lot of people.”

Even if you sell a $140 million painting, most of the commission may be given away to the client. Auction houses also offer guarantees that can sound an awful lot like gambling. To secure high-ticket items, the house may guarantee a minimum sale price. But if that sale doesn’t go through, the house is stuck buying that very same, and very pricey, piece of art. One of the problems Sotheby’s is facing, Plummer says, is too much focus on high end sales – the kind that often come with guarantees.

Still, both auction houses say they’re coming off of three years of record-setting sales. while it may seem counter intuitive, this could be the right time to make a bid for new leadership. While it may seem counterintuitive, this could be the right time to make a bid for new leadership, according to David Schick, a luxury industry analyst at investment banking firm Stifell.

"Making a change – I wouldn’t say getting rid of – making a change is easier when times are good," he says.

Auction houses filled with high-end art – and drama

Marketplace - American Public Media - Tue, 2015-01-20 12:07

The business side of the high-end art world is as dramatic as a Baroque masterpiece – lots of light and shadow.

 

"Where insider trading is against the law in the financial markets, it is completely legal and actually frequently practiced in the art world," says Michael Plummer, a founder of Artvest Partners, an art advisory firm. Previously, he was COO of Christie’s Financial Services, and also worked with Sotheby’s for years.

 "That’s kind of the game of playing in the art world is that if you are an insider, and you have inside information, then you tend to capitalize on it," he says. And dramatic life events cause works of art to end up at auction houses in the first place.

 “Death, divorce and debt. These are the main consignors,” says David Nash, a co-owner, with his wife, of the Mitchell-Innes & Nash galleries in Manhattan. Before the gallery, Nash spent 30 years at  Sotheby's overseeing paintings, so he well knows how that same drama can trickle down, or up, to the staff.  

"It was pretty high pressure when I left. Now it’s 10 times worse," he says. "Soon as you’ve had one $400 million dollar sale, you’ve got to take the phone call the next morning for the next one.”

And both auction houses seem like they're giving in to some of that pressure, considering Christie’s is replacing its CEO, Stephen Murphy. Sotheby’s CEO, William Ruprecht, who served for 14 years, is also stepping down. Both companies want to become more profitable.

“What is making them less profitable is the intense competition between both houses,” Nash says.

While there are plenty of high-end pieces of art, only two auction houses can handle works of a certain worth. That means there’s often an auction before the auction when the two houses are bidding against each other as they try to offer better deals and land the customer.

 

"How far are you willing to go to get something that you have to have?” asks Michael Plummer. “Same psychology that’s in the auction room, that puts two people bidding against each other to drive something up to $140 million is the same psychology that puts two auctioneers bidding against each other to get that piece to the auction itself."

 

And it can seem worth it, for either Sotheby’s or Christie's to do what whatever is needed to lock down a deal to sell a headliner work of art, except it’s not, Plummer says.

 

“They just don’t make the kind of money that you think they do. When you see those hundreds of millions of dollars of sales, they’re not bringing in the money that people expect that they are, and that I know is a shocking thing to a lot of people.”

 

Even if you sell a $140 million painting, most of the commission may be given away to the client. Auction houses also offer guarantees that can sound an awful lot like gambling. To secure high-ticket items, the house may guarantee a minimum sale price. But if that sale doesn’t go through, the house is stuck buying that very same, and very pricey, piece of art. One of the problems Sotheby’s is facing, Plummer says, is too much focus on high end sales – the kind that often come with guarantees.

 

Still, both auction houses say they’re coming off of three years of record-setting sales. while it may seem counter intuitive, this could be the right time to make a bid for new leadership. While it may seem counterintuitive, this could be the right time to make a bid for new leadership, according to David Schick, a luxury industry analyst at investment banking firm Stifell.

 

"Making a change – I wouldn’t say getting rid of – making a change is easier when times are good," he says.

What's Going On In Yemen?

NPR News - Tue, 2015-01-20 11:54

Yemen has once again been plunged into chaos as rebels reportedly have taken the presidential palace. The U.S., Saudi Arabia and Iran all have an important stake in the troubled country.

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Parents Who Shun Vaccines Tend To Cluster, Boosting Children's Risk

NPR News - Tue, 2015-01-20 11:45

Parents who refuse to have their children vaccinated live near others who do the same, a study finds. That increases the risk that children will become infected, even if they've had their shots.

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Obama to set out US vision in speech

BBC - Tue, 2015-01-20 11:30
US President Barack Obama will propose tax hikes on the rich to help working families, in his annual State of the Union address to Congress.

Supreme Court Rules For Muslim Inmate In Prison Beard Case

NPR News - Tue, 2015-01-20 11:30

The court said a ban on beards violated the prisoner's religious freedom. The state of Arkansas had argued that the beard presented security concerns and that it could be used to hide contraband.

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Folk rock musician 'abused girl, 11'

BBC - Tue, 2015-01-20 11:29
A folk rock musician who found fame in the 1970s goes on trial accused of sex offences against an 11-year-old girl.

Obama Joins Ike, The Gipper, Bill And George II In A Club No One Wants To Be In

NPR News - Tue, 2015-01-20 11:15

Clinton began his seventh year with a unique if dubious distinction: He was the only president ever to give a State of the Union speech with impeachment charges pending against him in the Senate.

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Bosses ‘less optimistic’ on economy

BBC - Tue, 2015-01-20 11:13
Chief executives are less optimistic about the economy this year than last, a survey unveiled at the World Economic Forum by PwC suggests.

Game-show winner pulls back the curtain on prizes

Marketplace - American Public Media - Tue, 2015-01-20 10:56

That's me, at the red position, talking to Pat Sajak on "Wheel of Fortune," during an episode in April 2014. I've taken my fair share of cash and prizes from three different game shows, $77,421 worth of stuff by my count. 

After doing my fair share of winning – and losing – I started to wonder where all the money come from, in the off-chance that this bit of trivia shows up in my question stack when I inevitably try my hand at "Who Wants to be a Millionaire." 

Art Alisi, president of Promotional Considerations, Inc., offers an answer. The network "may give them, let's say, $50,000 a week for their prize budget," he says. "And the show wants to give away $150,000, so they have to use the fee spots, and that brings them the extra revenue that they're looking for." 

These fee spots are usually shown at the end of the show, and the revenue from these spots is funneled into the weekly prize budget. 

Because "Wheel of Fortune" and "Jeopardy!" have been the top two game shows in syndication since roughly forever, they command a high price for these 10-second promotions. The typical going rate for one of those spots is $15,000, Alisi says.

While that money is used to pay for any cash prizes given away, the show can also use the funds to buy other material prizes, like cars. Buying prizes is common on "The Price is Right," which made it difficult for Alisi to secure cars when he worked for the original "Hollywood Squares" in the '60s and '70s, he says. In those days, shows could easily obtain cars for free from dealers, he says. After "The Price is Right" debuted in 1972, other shows had a hard time obtaining cars, because it was more lucrative for the dealers to sell a car to "The Price is Right," which typically offers two or three cars per show, instead of contracting out a car to another show. 

"So now we have to buy the cars, unless we do a special promotion with somebody," Alisi says. "Most of the time we have to buy the cars, we have to figure that as a cost. And we work with the different dealers, so we usually get it at their cost." 

But the shows don't buy every prize you see on the air. Trips, for example, are almost never purchased but are obtained via contract, as former "Wheel of Fortune" prize coordinator Adam Nedeff explains. That involves cold-calling hotels and airlines and making a detailed sales pitch. "At the time, we would contract them for two trips. The first trip was for the 'Prize Puzzle,' a guaranteed win," he says. The second would go to a viewer who played along from home.

Accepting a prize, or not, is up to the contestant. 

Shows give contestants the option to forfeit prizes, and I took advantage of that after I had my "Price is Right" showcase handed to me on a silver platter.

My big prize was a five-hour private jet flight, valued at $25,000, that came with all sorts of stipulations — the plane would only take me 2½ hours outside of Los Angeles, then 2½ back. I had to spend at least two days in my destination before returning home and any expenses incurred in my destination city were my responsibility.... 

To save myself the headache, I just forfeited the prize. I didn't get anything in return, and I couldn't have sold the plane ticket even if I did accept it. But I also didn't have to pay taxes on that prize. 

Prizes that aren't accepted are a good deal for the show. That five-hour private jet trip I forfeited went back in the show's inventory. If the show wants to, the prize can be offered again, although it might be packaged differently.

"Maybe then, next time they do it, they’ll give you a hotel in Vegas. So now the prize becomes $30,000 — and they already have the credits since you forfeited the prize," Alisi says.

Then again, if you can't use the prize (as long as it's not a trip, where you have to be one of the two people taking it),  you might know someone who can — as eight-time game show contestant Dan Avila did after he won six pairs of women's shoes on "Sale of the Century" in the '70s. 

Forecasting Tuesday's State of the Union address

Marketplace - American Public Media - Tue, 2015-01-20 10:38

President Barack Obama is scheduled to deliver his sixth State of the Union address Tuesday night at the Capital. It will be the first time Obama has delivered a State of the Union address to a Republican-led Congress.

"What he can be proudest of and what he’s probably going to point to tonight is the job market," says Marketplace’s David Gura. "Last month, the economy added 252,000 jobs. The unemployment rate is at 5.6 percent, these are good metrics – metrics that the American people like."

In the past few weeks, President Barack Obama has previewed some of the main ideas that will be presented in Tuesday night’s State of the Union address: tax reform, income inequality, and paid parental leave, to name a few.

"I was struck as he gave these speeches by how much he’s focused on what the administration has done already," says Gura. "His hands have been tied over these last few years, he has not done a lot with Congress. So a lot of what we’ve heard are things he’s talked about a lot, I don’t expect he’s going to stop talking about them. I think he’s hoping that American’s appetites for things like that will grow now."

Tonight will be the second-to-last time President Obama will take part in the annual presidential address to Congress, plus the millions of people watching at home. 

X-rays 'read' burnt Vesuvius scroll

BBC - Tue, 2015-01-20 10:36
An X-ray scanning technique allows physicists to read letters from a fragile, burnt scroll dug from beneath Mount Vesuvius - without unrolling it.

Allenby withdraws after 'kidnapping'

BBC - Tue, 2015-01-20 10:29
Australian Robert Allenby pulls out of the Humana Challenge event after apparently being kidnapped and assaulted in Hawaii.

Ukraine accuses Russia of attack

BBC - Tue, 2015-01-20 10:26
The Ukrainian military accuses Russia of attacking its forces with regular troops as fighting in eastern Ukraine spreads towards the Russian border.

VIDEO: Treasury Committee

BBC - Tue, 2015-01-20 10:24
MPs question Chancellor George Osborne on more powers for Scotland.

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