National / International News

Innovation: Smart Yoga Mat Could Help You Find Your Zen

NPR News - Wed, 2014-11-12 11:02

The SmartMat is an intelligent yoga mat that records the user's movements and makes adjustments to improve yoga practice. The creators have a prototype and plan to ship the final product in July.

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Big banks get fined in foreign exchange rigging

Marketplace - American Public Media - Wed, 2014-11-12 11:00

The big banks had a fine time on Wednesday – as in they had to pay $4.3 billion worth of fines to financial regulators in the United States, the United Kingdom and Switzerland.

Traders at several big banks – including UBS, JPMorgan Chase and Citigroup – manipulated foreign exchange rates over a five-year period starting in 2008. Essentially, they banded together to get rich at the expense of their clients.

Foreign exchange, or forex, is by far the biggest market in the world in terms of the amount of money that changes hands. According to Carol Osler, a professor at the Brandeis University International Business School, forex is “easily 10 or 20 or 30 times bigger than any other single market you could imagine.”

Every day, more than $5 trillion moves through the market.

“Trading is literally 24/almost-7,” Osler says. “Over the weekends, very little happens, but there is trading almost any time you want to trade.” 

Companies trade currencies to import and export products, and to buy and sell bonds. Banks want to be sure they have enough yen or euros to buy or sell something at a moment’s notice.Because currency trading happens all the time, there is no closing price.

“There was a need for some sort of formal price that institutions could use to value their portfolios,” Osler says.

And so the “fix” was born.

“They had to find an arbitrary time to grab off a rate, and they just decided to do it at 4 p.m.,” says Kathryn Dominguez, a University of Michigan professor of public policy and economics.

Every day, for one minute around 4 p.m. London time, Reuters takes the average exchange rate and that becomes the “fix.”

According to Darrell Duffie, who teaches finance at the Stanford Graduate School of Business, if you are buying and selling currencies, sometimes you do it in real time, “but sometimes you tell the bank, well, never mind giving me a price now, I’ll just pay whatever the 4 p.m. fixing price is.”

And because of that, currency dealers had an easy time colluding to drive that price up or down. Brandeis’ Carol Osler says that, in private chat rooms, traders told each other how much they had to buy and sell to move the price.

“The dealers are thinking, 'Well, gosh, if almost all of us are going to be buying, then we know the price is going to go up,'” Osler says. “Well, it would be helpful to know what is going on with everyone else.”

When they announced the fines, regulators called on banks to change their corporate culture – and left the door open for criminal prosecution.

Big banks get fined for fixing the forex fix

Marketplace - American Public Media - Wed, 2014-11-12 11:00

The big banks had a fine time on Wednesday, as in, they had to pay $4.3 billion worth of fines to financial regulators in the United States, the United Kingdom, and Switzerland.

Traders at several big banks, including UBS, JPMorgan Chase, and Citigroup, manipulated foreign exchange rates over a five-year period starting in 2008. They, essentially, banded together to get rich at the expense of their clients.

Foreign exchange is the biggest market in the world, by far, in terms of the amount of money that changes hands. According to Carol Osler, a professor at the Brandeis University International Business School, forex is “easily 10 or 20 or 30 times bigger than any other single market you could imagine.”

Every day, more than $5 trillion moves through the market. “Trading is literally 24/almost-7,” Osler says. “Over the weekends, very little happens, but there is trading almost any time you want to trade.” Companies trade currencies to import and export products, and to buy and sell bonds. Banks want to be sure they have enough Yen or Euros to buy or sell something at a moment’s notice.

Because currency trading happens all the time, there is no closing price. “There was a need for some sort of formal price that institutions could use to value their portfolios,” Osler says.

And so, the “Fix” was born.

“They had to find an arbitrary time to grab off a rate, and they just decided to do it at 4:00 p.m.,” says Kathryn Dominguez, a professor of public policy and economics at the University of Michigan. Every day, for one minute around 4:00 London time, Reuters takes the average exchange rate and that becomes the “Fix.”

According to Darrell Duffie, who teaches finance at the Stanford Graduate School of Business, if you are buying and selling currencies, sometimes you do it in real time, “but sometimes you tell the bank, well, never mind giving me a price now, I’ll just pay whatever the 4:00 p.m. fixing price is.”

And because of that, currency dealers had an easy time colluding to drive that price up or down. Brandeis’s Carol Osler says that, in private chat rooms, traders told each other how much they had to buy and sell to move the price.

“The dealers are thinking, 'Well, gosh, if almost all of us are going to be buying, then we know the price is going to go up,'” Osler says. “Well, it would be helpful to know what is going on with everyone else.”

When they announced the fines, regulators called on banks to change their corporate culture, and they left the door open for criminal prosecution.

Why the U.S.-China climate deal isn't crazy ambitious

Marketplace - American Public Media - Wed, 2014-11-12 11:00

The agreement between President Barack Obama and his Chinese counterpart, Xi Jinping, committing both countries to major reductions in greenhouse-gas emissions in the next 10 years, has been widely hailed as a political and diplomatic breakthrough. Until now, one big point of contention in debates about reducing U.S. emissions has been, “What’s the point? China’s the biggest emitter now. Without their participation, world emissions barely budge.”

Less-discussed has been the size of the undertaking itself. President Obama is committing the U.S. to dialing back emissions to less than 75 percent of 2005 levels. That sounds tough. 

But here’s the secret: Essentially, these are reductions the Obama administration has already committed to. 

"If you’re in the clean energy industry in the U.S., and you’ve been keeping up on these developments already, then this announcement probably doesn’t represent a major game-change for you," says Ethan Zindler, an analyst with Bloomberg New Energy Finance.

If you’re not in the clean-energy industry, you may wonder what developments Zindler is talking about. One should be familiar: The Environmental Protection Agency’s Clean Power Plan, proposed in June, is designed to decrease emissions from existing power plants. That’s big.

A less well-known rule — still getting finalized — would strictly limit emissions from any new power plants. Old-style coal plants, the biggest emitters — effectively, new ones would be forbidden.

Then there’s a rule that’s already in force: fuel-efficiency standards for cars.  "The average car that’s sold this month is about 25 percent more fuel-efficient than the one that was sold about five years ago," says Zindler.

The power-plant rules are still proposals, and a new president could eventually undo them. But this agreement makes the whole framework a little stronger. "Any time two major leaders reach an agreement, it has some level of authority to it," says Dan Bakal, director of the electric-power program at the non-profit group CERES.

Finally, a diplomatic partnership opens the door wider to cooperating on the how of reducing emissions. "There will continue to be really advanced technologies that we will cooperate on together," says Susan Tierney, an energy consultant with The Analysis Group. "We need to figure out how to deal with the carbon emissions associated with coal."

Right now, technology for cleaning up emissions from coal generators is experimental and costly. Tierney thinks teaming up with China could help.

At a Starbucks near you: Chestnut Praline Lattes

Marketplace - American Public Media - Wed, 2014-11-12 11:00

Just in time to satisfy your holiday sweet tooth, Starbucks announced its first new holiday beverage in five years: the Chestnut Praline Latte.

In the lineage of holiday flavor trends, Starbucks is throwing chestnut into the ring. 

The drink, according to Starbucks is, "a blend of fresh espresso and flavors of caramelized chestnuts, with freshly steamed milk, topped with whipped cream and spiced praline crumbs."

Which ultimately just sounds like a delicious cup of caffeinated ice cream. So why not just eat ice cream?

Twinkies: brought to you by private equity

Marketplace - American Public Media - Wed, 2014-11-12 11:00

Private equity saved the Twinkie by buying up its manufacturer, Hostess Brands, and reportedly tripling its value in the process.  

Hostess’ owners, Apollo Global Management and Metropoulos and Co. bought the company for $410 million almost two years ago.  Today, there’s speculation it’s worth almost $2 billion.  How do private equity firms do it?

“They buy the company’s assets and then they start looking for inefficiencies,” says David Robinson, a finance professor at Duke University's Fuqua School of Business.

In the case of Hostess, that meant outsourcing delivery of Twinkies and Ding Dongs, slashing the labor force, and closing some plants.

But the private equity buyers also capitalized on nostalgia for Hostess snacks, and the panic that they would soon disappear. 

Their social media campaign featured stars like Snoop Dogg tweeting about a special delivery of Twinkies. 

Even Wall Street analysts weren’t immune.

“I’m a Ding Dong man,” says Bruce Cohen, senior partner at Kurt Salmon.   He did some panic-buying for his office. “We went on Amazon and we bought Twinkies and Ding Dongs and apple pies and the small doughnuts and we had a big celebration.”

With Hostess’s value apparently soaring, other private equity firms are trying the same thing. 

“Just because a company is financially a wreck, it doesn’t mean there’s not a loyalty and it symbolizes a certain thing and it  brings a certain joy and a deliciousness,” says Peter Cowen, managing director of  Clear Capital Advisors.

Cowen says there are other examples of money being made from nostalgia.  Just look at the turnarounds of  Pabst Blue Ribbon beer and Old Spice cologne.

VIDEO: Window washers rescued 69 storeys up

BBC - Wed, 2014-11-12 10:56
Two window washers have been rescued after scaffolding collapsed 69 storeys above the ground at the World Trade Center in Manhattan.

Carrick ruled out of Slovenia game

BBC - Wed, 2014-11-12 10:33
England midfielder Michael Carrick will miss Saturday's Euro 2016 qualifier against Slovenia with a groin injury.

Turning Weapons Into High-End Watches

NPR News - Wed, 2014-11-12 10:27

A high-end jewelry company recycles the components of assault rifles into watches, rings and other luxe jewelry items. Each sale then funds the destruction of weapons in Africa.

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Big Banks Will Pay $4.25 Billion In Fines Over Currency Charges

NPR News - Wed, 2014-11-12 10:25

U.S. firms Citigroup and JPMorgan Chase will pay the largest fines, around $1 billion each, to settle civil charges that they colluded to manipulate the foreign exchange market.

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The numbers for November 12, 2014

Marketplace - American Public Media - Wed, 2014-11-12 10:16

Before leaving to continue his tour of Asia, President Barack Obama signed a climate change agreement with Chinese President Xi Jinping.

The announcement Wednesday was part of a nine-month planning process. The U.S. will double its current rate of carbon cuts with a target of reducing 26 to 28 percent by 2025, while China pledged to peak its emissions growth by 2030. The plan is already getting pushback from the new Republican Senate majority, the Wall Street Journal reported.

Here are some stories we're reading and other numbers we're watching Wednesday:

$9.9 billion

That's how much merchandise Alibaba sold during its 11/11 shopping event Tuesday, shattering last year's 11/11 and all online sales around Thanksgiving last year, AdAge reported. Nearly half of those sales came from mobile and Chinese brands dominated.

50 million

That's Spotify's active user base, and 12.5 million of them pay for the subscription service. Spotify has seen powerful growth, but the start-up could very well be threatened by YouTube, which is launching its own service with an invite-only beta this week. It's called YouTube Music Key, and yes, it has Taylor Swift.

732,732

The number of followers Alex Lee, a.k.a #AlexFromTarget, had on Twitter as of Wednesday morning. When a photo of Lee at work went viral earlier this month, he was bombarded with requests for photos, endorsements and television appearances as well as threats and harassment. A New York Times story published Wednesday tracked the explosion of fame from Lee's perspective.

39 grams

That's how much sugar is in Starbucks' first new holiday beverage in five years, the Chestnut Praline Latte, which debuts Wednesday. That's actually on the low side - the eggnog latte, peppermint mocha and pumpkin spice latte all hover around 50 grams. ABC News has a taste test.

VIDEO: Dental patient 'absolutely furious'

BBC - Wed, 2014-11-12 10:06
A woman whose family dentist is currently under review for poor infection control practices has told the BBC that she is "furious and horrified".

VIDEO: Warren Clarke: A life on screen

BBC - Wed, 2014-11-12 09:53
British actor Warren Clarke has died aged 67 after a short illness, his agent has confirmed.

Cancer Drugs Fund 'to be restricted'

BBC - Wed, 2014-11-12 09:45
Some life-saving cancer medicines are likely to be removed from the list of expensive drugs paid for out of a special fund set up the prime minster.

Obamacare Architect Apologizes For Remarks On The Law's Passage

NPR News - Wed, 2014-11-12 09:45

In a video, economist Jonathan Gruber says "the stupidity of the American voter" was key to the law's passage. He has apologized, but critics say his remarks are an admission of intentional deceit.

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Two US workers stuck 69 storeys high

BBC - Wed, 2014-11-12 09:39
Two workers are stuck on collapsed scaffolding 69 storeys above the ground at the World Trade Center site in Manhattan.

Afghanistan's Opium Harvest Sets New Record

NPR News - Wed, 2014-11-12 09:36

An annual U.N. report finds that more than 550,000 acres were cultivated with opium poppies this year — that's approaching the total land area of Rhode Island.

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VIDEO: 'Fantastic, fantastic, it's landed'

BBC - Wed, 2014-11-12 09:31
"It's landed - I've waited years for this", Professor Monica Grady has said, on finding out that the robot probe Philae had landed on a comet.

S.C. Same-Sex Marriage Ban Is Overturned

NPR News - Wed, 2014-11-12 09:23

Rejecting the state's argument that it, not the U.S. government, has the authority to define marriage, a federal judge overturned South Carolina's ban on same-sex marriage Wednesday.

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War crimes suspect back in Belgrade

BBC - Wed, 2014-11-12 09:17
Serbian ultra-nationalist Vojislav Seselj, on trial at the UN war crimes tribunal at The Hague, arrives in Belgrade for cancer treatment.

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