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PODCAST: B-list social media stars

Thu, 2014-07-10 03:00

More on what can be learned from the minutes report released by the Federal Reserve from a recent meeting. Plus, tens of thousands of disability claims by vets are going nowhere, as some suspect there is a misunderstanding of how to complete a claim through the VA's online filing system. And with ads popping up on Instagram and Twitter feeds everywhere, a look at how users with modest followings are earning money through their social media accounts.

The long road to doing better business in India

Thu, 2014-07-10 02:00

India’s new Prime Minister Narendra Modi outlined his first budget for the country today. Following his landslide election in May, expectations are high for Mr. Modi's plans to help revive India’s economy and jumpstart development.

But can he do enough to make India a more attractive place for foreign companies and investors? Case in point: remember when those floor-vacuuming robots came out back in 2002? Scott Miller led iRobot’s R&D in India, where he says he navigated bad roads, corruption, and time-consuming piles of paperwork.

"Working in the consumer electronics industry, schedule is everything," Miller explains. "If you miss the main holiday season you have to wait another year and that can have a profound impact on your revenue."

Now, Miller is CEO of Dragon Innovation, which guides hardware companies from prototype to high-volume manufacturing. He says he’d love to go back to India if it gets easier to make things there.

"Having as many people as India does, it could be a very credible alternative to China," he says.

Many analysts are optimistic the Modi government will be able to attract more foreign investment.  

"We’ve definitely seen the financial markets react very positively to his election," says  John Derrick, Director of Research at U.S. Global Investors. "So I think we’re just waiting to see if he can, you know, walk the walk as well as talk the talk."  

Derrick adds that for Prime Minister Modi, it could be a long walk.

 

How much are social media followers worth?

Thu, 2014-07-10 02:00

Tamara Peterson stands on a Manhattan street, peering into the screen of her iPhone as she waits for a woman carrying a “I love New York” bag to pass in front of a Brownstone.

“These shadows are beautiful,” she says, composing the shot.

Later, she posts it to her Instagram feed, where hundreds of people like it within just a few minutes. Her photos of New York cityscapes have attracted roughly 70,000 followers.

Social media sites like Twitter and Instagram are increasingly placing ads in users’ feeds – and so, too, are the people who have built large followings on those sites. YouTube’s top star has reportedly earned over $4 million dollars from ad sales. But companies are also interested in more modest followings.

Peterson earns between $500 and $1,000 per sponsored post from big companies like Home Depot, as well as smaller ones like Blue Apron, a subscription meal delivery service. She’s represented by two companies that help her broker deals with advertisers: Niche and Mobile Media Lab.

But Peterson maintains that Instagram is just a hobby and she doesn’t want to leave her full-time job as a professional organizer.

“I’m picky about the jobs I take because I want my feed to look a certain way,” she says, nixing alcohol brands and visible logos.

She’ll often take down sponsored posts if the company doesn’t require her to leave them up.

On the other hand, Sara Hopkins, aka SayHop, could imagine social media eventually becoming a full time gig. She also uses Niche to book ads and has a bigger following – roughly 350,000 followers across a handful of different social networks. Her posts range from selfies (half goofy, half glam) to videos featuring an eerily accurate dolphin voice.

Hopkins is a local TV reporter, but she doubles her salary by posting ads to her followers, whether it’s a six-second video on Vine or a photo on Instagram.

“For Coke, I’m doing two Vines and I think one Instagram post, and it’s about $2,800,” she says. “And for Old Navy, I did one Vine and one Tweet for $2,000.”

So what do her followers say?

 “It varies between people saying, you know, ‘if you’re going to make money off of it, cool,’” she says. “As long as you don’t do it every day, all the time.”

 On one of her recent paid posts, only one person commented that he was unfollowing her because of the ad, but the rest of the nearly 40 comments defended her right to post it.

Thousands of disability claims in limbo at the VA

Thu, 2014-07-10 02:00

The Veterans Affairs Administration is being pounded over scandalous delays for veterans seeking health care.

Now comes a new concern about tens of thousands of veterans' disability claims that are going nowhere; possibly the result of the agency shifting its claims process online.

About a year and a half ago, the VA launched a web portal for submitting disability claims. Since then, vets have initiated nearly 450,000 claims electronically. But about 300,000 claims have sat idle. Some have even expired.

Once applicants start a claim, they have a year to wrap it up.

"What we worry about is that some of these people, having started a claim, may be thinking they've submitted something to the VA, and the VA is just taking their time to take action on it, when in fact they haven't completed the application process," says Gerald Manar, ‎Deputy Director of the National Veterans Service with the Veterans of Foreign Wars.

Disability payments can range from about $100 a month to several thousand dollars a month.

Robert Reynolds directs the benefits assistance service with the VA. He says the agency made a big push to move the whole claims system online. Vets may be confused about the process.

"This is a huge transformational business change," Reynolds says.

Reynolds says the VA is meeting with veterans service organizations to figure out who opened disability claims online and needs help finishing them.

Shhh! It's time for Formula E!

Thu, 2014-07-10 02:00

The new international championship for fully-electric racing cars just held its first major test session at the Donington Park circuit in Leicestershire, England.

The series kicks off with a race through the streets of Beijing in September. It will include events in 10 cities, concluding with an "E-prix" around London's Battersea Park next June.

Organizers hope it will transform the way we think about electric cars, as well as providing a test-bed for new technologies, which can help to improve their performance.

The Donington test marks the first time the cars have run in anger - and the first time members of the public have been able to see how they compare to more traditional racing machines.

The BBC's Theo Leggett went to see how the new cars look - and sound. Watch his report above.

Text and video courtesy of the BBC.

Companies: stop making your employees use tablets

Thu, 2014-07-10 01:00

I followed the bank branch manager into one of those little offices to set up a recurring payment from my account. While I pulled out my ID and my bank card, I watched her pull aside tangled cords and guide her tablet through a clumsy re-docking process. The tablet itself - an Android - had a heavy-looking cover with oddly shaped handles and a plug for the dock.

"Is that thing helpful?" I asked. Her bright, officious bank manager expression slid away and was replaced by a rueful grin.

"Ehh..." She sighed. Then she brightened again. "It's much more portable," she said. 

"But are you doing stuff where you need it to be portable?"

"Honestly, not really." 

This is a perfect example of how companies are misreading the mobile revolution. They see that tablets are a hot item, and they want to be part of that hotness. It's why Microsoft still believes its powerful Surface tablets can get a leg up against the iPad and various Android options. It's why PC sales have taken a nosedive in the last few years. It's why, even though tablets are often only really being used for entertainment, companies are buying in. 

But it's not always the right move. At a fundamental level, tablets do the same things computers do, just usually with less powerful software and hardware. They are way more mobile - and that's a significant difference - but they're often less capable. Or we are less capable at using them for certain tasks. 

It's almost like companies are trying to mimic the television commercials showing how a certain company is totally revolutionizing the way you do business. The story boards write themselves:

The guy in America invents a product. He sends the designs from his tablet to a guy in China who looks at them on his tablet, which he also uses to deliver instructions to the production line. Then the shipping company guy in Germany uses his tablet to organize the process of filling orders.

Boom. Awesome. Isn't technology amazing? 

Look, I get it - in some cases, introducing tablets to your business helps your business do better. I have carried my tablet to Marketplace's morning editorial meeting and other workplace huddles. And from boardrooms to factory floors, people are using them to try to be faster, more "nimble." Maybe as a customer, I'm impressed sometimes when the person on the other side of the transaction is using a tablet. We're all wrapped up in how consumer electronics are all the rage these days, and if you squint your eyes and blur your vision enough, putting a tablet or a smartphone in every representatives' hands makes a company look more innovative. Really, it makes a company look cooler. There's value in that. But how much?

This week, Gartner released its latest estimates for tablet and PC sales. While PC sales continue to dip and tablet sales continue to grow, there is some leveling out in the data. That is partly about the cycle of upgrades for businesses and consumers, and the maturing of early adopter markets like the US. But part of it may also be that some companies are discovering more tablets don't always mean better, faster, stronger business. 

I told my bank manager story to someone, and they told me a similar story about going to a brick-and-mortar store for a major wireless carrier. The associate began to input the information into a tablet and started having problems. He threw up his hands, and said "I'll be right back." He disappeared into the back office and returned a few minutes later with all the data input for the transaction done. What magic was in the back room? An old fashioned PC. 

New device aims for paranoid-parent market

Thu, 2014-07-10 01:00

The electronics-maker LG is, like many of its competitors, making a foray into wearable technology. However, this device has a distinctly different purpose — not to keep the wearer informed, but to keep a parent informed on their child.

The device, the KizON, is a child-tracking wristband — paired with the band is a smartphone app, where parents can look on a map and see where their kid is.

They can also call the wristband and talk to the child — if the child doesn’t answer, it will still connect to the child and hear surrounding sound.

While the device may reduce parental paranoia, it could be hard to get kids, especially older ones, to wear it

“It’s still think it’s going to have a steep climb for total acceptance, and probably easier is something that’s built into something your child already wants,” says Lindsey Turrentine, Editor in Chief of reviews at CNET.

Keeping paperwork from blocking the road to college

Wed, 2014-07-09 13:41

Yvaunna Brown just graduated from Hazelwood West High School and feels like the future is wide open.

She’s thinking about community college, or maybe the University of Missouri-St. Louis is a better fit. Brown is dead set on one thing, though: becoming the first person in her family to go to college.

“And that’s pretty exciting,” Brown said. “That’s a big deal for me.” 

It’s also daunting. Loads of paper work must be completed and the deadlines will start coming fast.

“You try to figure it out for yourself,” Brown said.  “Then again, you do always need help from someone to give you some guidance.”

So, on a recent morning she stopped by the High School to College Center on St. Louis’ Delmar Loop. There’s not much to the place, just some folding tables and a couple of cubicles. Modest accommodations aside, the center is part of a growing effort across the nation to help more low-income and first generation students like Brown find their way to campus in the fall.  

“A majority of the students, they’re afraid so they don’t do anything,” said Kristine Alphin, a counselor at Northwest High School in Cedar Hill, Missouri. “The deadlines pass and they’re in a position where they don’t end up going.”

What Alphin’s describing are the leaks in America’s high school to college pipeline. The phenomenon is called summer melt. While it affects kids from all backgrounds, the highest rates are among poor and first generation students.

Nationally, about one in five poorer students don’t end up enrolling even after they’ve received acceptance letters. Drill down into the data and that number could be as high as 40 percent for students who plan to attend a community college.    

Researchers think students get tripped up on all the steps that come after receiving an acceptance letter. The summer can be especially tricky if poor or first-generation students lack a network of family who’ve successfully charted a course to college. On top of that, after graduation most students no longer have watchful high school counselors and have yet to come under the wing of university advisors. 

Many of the obstacles are related to poverty. For a student in an unbanked household, for instance, something as small as sending a deposit to reserve university housing can prove difficult.              

Most of the snags, though, are related to financial aid. There’s a dizzying web of master promissory notes, public loans, private loans and fast approaching deadlines. Just handing over proof of income to qualify for a need based loan can be a hurdle, Alphin said.   

“You know, even a letter saying that 'your family doesn’t have any means, so we need to verify that you have no means',” Alphin said. “Well that process can be very intimating for families.”

St. Louis Graduates, a network of local corporations, nonprofits and educators, runs the center. The group’s mission is for half of St. Louis area residents to have a postsecondary degree by 2020. With that in mind, the coalition pulled together $52,000 in grants and donations to hire staff like Alphin for the summer.

Yvaunna Brown (left) works with counselor Kristine Alphin (right) at the High School to College Center. One of the goals is to help students learn to advocate for themselves.

Tim Lloyd/St. Louis Public Radio

Money is also available to help with things like covering a family’s travel expenses so they can attend a freshman welcome event. There’s cash for small expenses, too. For example Brown needed $15 to order extra copies of her high school transcripts.     

The center is only open during the summer months, when students are most likely to run into problems. Faith Sandler, co-chair of St. Louis Graduates, said potential funders like to see resources focused on a clearly defined area of need.  

“Sometimes something simple happens over the summer that derails their plans,” Sandler said. “The last thing we want as a community is to do all that work to support and encourage our young people and then let them down between June and August.” 

When the center first opened its doors last year, organizers hoped to provide onsite counseling to 100 students. They wound up doubling that number, and by the end of the summer the staff helped 214 students.

Sandler said most of them stopped by more than once.     

“Once they got accustomed to what we’re doing and knew the faces, they’d walk back through the door with another question,” Sandler said.  

Organizers were able to keep tabs on 124 students, of which 86 percent ended up taking classes on either a full- or part-time basis. St. Louis Graduates figures it can build on that momentum this year and tucked flyers advertising the center in the diploma covers of more than 10,000 St. Louis area graduates.        

But as in business, a big chunk of the center’s marketing efforts are built on a time-honored axiom: location, location, location.

Sandler said having office space donated by Washington University on the Loop puts counselors near a popular hangout for teens. That ups the potential for curious students to walk into the center.  Close proximity to mass transit doesn't hurt, either. But she said word of mouth and social media remain the best ways to advertise the center.

“Students who are low income and first generation are just trying to make it through,” Sandler said. “Coming in here is the first step.”

The next may very well include an introduction to something called Bridgit.

Hey – U on track?

Teenagers spend a whole lot of time on their cell phones, that’s hardly a revelation. In fact, a study by the Pew Research Center found that 63 percent of teens send text messages on a daily basis as compared to only 6 percent who email every day.

In the digital age it stands to reason that successfully communicating with teenagers means getting on their phones. That’s the basic premise behind Bridgit, a new software platform being tested at the counseling center in St. Louis, a similar center in Kansas City and five high schools in Tennessee.

Developed by the St. Louis-based nonprofit College Bound with $750,000 in funding from the Michael and Susan Dell Foundation, Bridgit’s job is to construct extra scaffolding around efforts to build up college enrollment. 

Students who get services at the center are asked to fill out a survey before they leave and the information is handed over to Bridgit. After that, Bridgit sends students text messages about all the things they need to do to stay on track. By getting specifics about each student, the virtual nudges can be individualized. Messages can be sent to remind students to submit their immunization records or to stay on top of financial aid deadlines.     

Apps that help kids keep on track:

  • Bridgit - Used by counseling centers and high schools. Students complete a survey, and Bridgit keeps them on track by sending automated reminder texts for financial-aid and other deadlines.
  • BuzzMob - This tool can creates a private social-media network for teachers, parents and students to share news, photos and notifications.
  • Course Signals – This is one of several educational platforms where college professors or teachers can track student progress and engagement, and alert students by text messages or email if they are not performing well.
  • FutureBound - Researchers at USC turn the college-application process into a game, by giving students virtual deadlines for applications, scholarships, and financial aid. The game also shows the consequences for missing deadlines.
  • Google Apps for Education – Teachers can monitor kids in the cloud, during class forums, essay writing and other activities. They can then send text notifications.
  • Remind 101 - This simple app lets teachers text students and parents directly with announcements and reminders. Added benefit, there’s no way to text back.

 

After the first 10 days of its rollout this spring, Bridgit’s database had information on more than 2,000 students. And because Bridgit has the ability to track when a student completes a step toward enrollment, it also serves as an early warning system. 

Should a student start to slide off the rails, Bridget can send up a flare.      

“And counselors can use the Bridgit system to pinpoint those students and focus their attention on those students in particular,” said Lindsay Page, an assistant professor of education at the University of Pittsburgh.

Page and Ben Caslteman, her research partner and University of Virginia assistant professor of education, have studied the causes and possible solutions for summer melt among poor and first generation students since 2009.  The two plan to put Bridgit through its paces, crunching student data to get a feel for how well the software works.

“This is the kind of strategy that can move the needle,” Page said.

Similar experiments with texting are underway around the country. For example, state education officials in West Virginia are piloting a text message program to reduce summer melt at 14 high schools and four colleges. New York City and Minnesota are experimenting with similar systems. The strategy is also finding its way into other public information campaigns geared toward teens, including an anti-smoking project by the National Cancer Institute.  

While not a surefire solution, previous research by Page and Castleman suggests targeted text messaging systems can be successfully woven into efforts geared toward reducing summer melt. And with a price tag of about $7 a student, the idea is relatively cheap when compared to the amount of taxpayer money that gets poured into ensuring students are ready for college.       

To reach their conclusion, the pair looked at data from text message campaigns in four cities: Dallas, Tex.; Boston, Lawrence and Springfield, Mass. At three out of four locations, the texting programs cooled off rates of summer melt.

In Lawrence and Springfield -- where the poverty rate in each city is just north of 28 percent and collectively fewer than one in five residents have a bachelor’s degree -- combined enrollment rates for students who received text messages were seven percentage points higher when compared to students who did not receive texts.

In Dallas, enrollment rates for students who received text messages increased by four percentage points. A text messaging system in Boston -- where school- and community-based counseling services already help students transition from high school to college -- did not bolster student enrollment rates. 

Page said the possible applications for texting systems extend beyond the summer between high school and college. 

“We’ve started to investigate using similar strategies to help student persist in college,” Page said.  

The pair has also looked at data from a pilot program that sent text message reminders to first-year students in Boston and Springfield, Mass. about refiling their federal aid paperwork. The program didn’t have a significant impact on the number of students at four-year schools who moved on to their sophomore year. But for community college students -- for whom rates of summer melt are the highest -- the number of students who moved on to their second year was 12 percentage points higher than those who did not receive the text messages.  

“It’s very encouraging to us,” Page said. “These kind of low-cost strategies not only can help students get into the doors of college, but they can also help students persist in college several semesters later.”

Ripple effects

Jazmin Hoey sat at a folding table near the front of the High School to College Center and hammered out an email to her financial aid advisor. The bubbly 19-year-old is studying early childhood education at Southeast Missouri State University and just wrapped up her first year of college. 

“If it wasn’t for them I probably wouldn’t be able to go to school,” Hoey said. “I thought I had everything together, but I guess I was wrong.”

Getting started wasn’t easy. Hoey said she was filled with anxiety when she walked into the center for the first time. 

She had an acceptance letter and completed her federal aid application, but she wasn’t sure about what would come next. At the same time, opening up to an authority figure can be tough for kids in her situation, Hoey said. 

“It was a lot of pressure,” she recalled.

Now, as an intern at the counseling center this summer, part of her job is to make sure students walking through the door don’t get cold feet.  

“If I see someone my age I’m like, ‘Oh, well maybe they were in my shoes before me,’” Hoey said.  “’Maybe it wasn’t so hard.’”

Part of the center’s mission is not only to advocate for students, but to give them the skills they need to advocate for themselves. That’s especially important for students from low-income high schools, who according to national data are about 7 percentage points less likely to enroll in a second year of higher education when compared to their counterparts from wealthier families.        

“It’s not like they need the center to do everything for them,” Hoey said. “Just to give them a little nudge, a little push.”    

The center’s also giving another, perhaps unexpected, nudge to local educators.  

"Based on what we did here last summer, we were more proactive at my high school,” said Kristine Alphin,  the guidance counselor. “One of my co-workers sent me a list of at-risk kids who we’re not 100 percent sure are going to make it from high school to college so we can contact them this summer.  And just say, ‘hey, is there anything you need? We’re available for you.’”

Alphin said the hands on experience she’s getting from working at the counseling center means she can make good on that offer.

“We’ve talked about it, but it’s always just been talk,” Alphin said. “Now, hopefully we can take the things we’ve learned here and put it in place at Northwest.”

An earlier version of this article was published on St. Louis Public Radio.

Alcoa wants to be known for more than aluminum

Wed, 2014-07-09 13:19

It’s not hard to hear the air quotes Morningstar analyst Andrew Lane uses when he describes the conference call in which Alcoa executives discussed the company's earnings yesterday. "CEO Klaus Kleinfeld referred to the company numerous times as a 'lightweight multi-material innovation powerhouse,'" says Lane, who thinks the company will keep making money by making aluminum for a long time. 

However, Lane also says, yes: A lot of Alcoa’s profits come from new lines in metals like titanium. And special alloys in the aluminum body for the new Ford F-150 truck coming out next year.

The company also has a substantial aerospace business, which is why it has a spot on Josh Sullivan's list. Sullivan, an analyst at Sterne Agee, generally covers the aerospace business, not raw materials companies. When did a company known for mining and smelting metal turn itself into an aerospace company?  

"Well, Alcoa’s actually always been an aerospace company," says Sullivan. Because to build an airplane to fight World War II -- or, later, a rocket ship, or a 737 -- required the strongest, lightest metal available. "We don’t think of aluminum as an advanced metal," says Sullivan, "but at one point it was the most advanced metal out there."

In fact, Alcoa "was always a high-tech company," says business historian George David Smith from New York University. Through the first half of the 20th century, Alcoa maintained a major R&D department. "Like many new technologies of the late-19th and early-20th centuries, there wasn't much academic wisdom about these materials," he says. "Alcoa had to set up a scientific laboratory, really, to learn about the properties of the metal and how it could work with it."

The company's strategy shifted after it lost a big antitrust case to the U.S. government after World War II. Among the outcomes, says Smith: "They had to provide their patent rights to their new competitors -- namely Kaiser and Reynolds Corporations -- free of charge."

With job vacancies up, employers take longer to hire

Wed, 2014-07-09 13:19

According to the Bureau of Labor Statistics, the number of job vacancies is back to where it was before the recession. In May, there were some 4.6 million open positions.

You might think that has to be good news for out-of-work Americans, but hiring is still moving slowly. “The mean duration of U.S. job vacancies rose to 25.1 working days in May,” the Dice-DFH Vacancy Duration Measure reports. 

A lot of experts blame this on something called “the skills gap.” Since 2007, there has been this narrative, that employers aren’t hiring, or they are taking their time hiring, because they can’t find enough qualified candidates.

“The skills mismatch is kind of like the zombie explanation of the labor market that just won’t go away,” says Sylvia Allegretto, with the Institute for Research on Labor & Employment.

It is true that, during the downturn, employers could be choosy if they chose to hire at all, but the economy has improved, the unemployment rate has been coming down steadily, and Allegretto says that is not because all of a sudden people have all the right skills.

“If we had severe mismatches throughout the labor market, we would be seeing more wage growth than we are seeing,” says Barry Hirsch, W.J. Usery Chair of the American Workplace at Georgia State University. Qualified workers would be able to demand more money, and employers would have to meet that demand.

There is a bigger reason why hiring is not happening faster, according to Matt Freedman, an associate professor of economics at Cornell University: “Employers still have a lot of lingering uncertainty about the durability of this recovery.” 

They’re cautious, and Freedman says, there is no reason for them to hurry. 

“There is little cost to posting a vacancy, but potentially a lot of upside if you can find a really qualified person who is willing to work for you for very little money.”

For employers, that may be something worth waiting for. 

The number of job vacancies is back up to where it was *before the recession.  You’d think that’s gotta be good news for out-of-work Americans…  But *hiring is still moving *slowly, even though *employers posted more than four-and-a-half *million jobs in May.  A lot of experts blame something called “the skills gap.” But that doesn’t tell the *whole story.  Marketplace’s David Gura reports.

 

GURA1:

Since 2007,

There’s been this narrative:

 

That employers aren’t hiring,

Or they’re taking their *time hiring,

Because they can’t find enough *qualified candidates.

 

Sylvia Allegretto is with the Institute for Research on Labor and Employment

At U-C Berkeley:
ALLEGRETTO1:

The skills mismatch is kind of like the zombie explanation of the labor market that just won’t go away.

 

GURA2:

It’s *true

That during the downturn,

Employers *could be *choosy.

*If they *chose to hire at all…

 

But the economy’s gotten better.

The unemployment rate’s been coming down *steadily,

And Allegretto says that’s *not because

All of a sudden

People have all the *right skills.

 

Barry Hirsch is a professor of economics at Georgia State:

 

                HIRSCH1:

If we had severe mismatches throughout the labor market, we would be seeing more wage growth than we are seeing.

 

GURA3:

*Qualified workers

Would be able to *demand more money,

And *employers would have to meet that demand.

 

Matt Freedman is a labor economist at Cornell,

And he says there’s a *bigger reason why

Hiring is not happening *faster:

 

                FREEDMAN1:

                Employers still have a lot of lingering uncertainty about the durability of this recovery.

 

GURA4:

They’re *cautious. 

And really,

Freedman says,

There’s *no *reason for them to *hurry:

 

                FREEDMAN2:

There is little cost to posting a vacancy, but potentially a lot of upside if you can find a really qualified person who is willing to work for you for very little money.

 

GURA5:

And for employers
*that may be something worth waiting for.

 

SOC:

In Washington, I’m David Gura, for Marketplace.

What's in a settlement?

Wed, 2014-07-09 13:19

Word on the street today is that Citigroup is close to settling with the Department of Justice over mortgage bonds it issued before the housing crash. Rumor has it, Citi will pay $7 billion to settle allegations of wrongdoing. That’s a lot of money, to be sure, but it’s a far cry from the $13 billion JPMorgan paid last year to settle similar allegations.

Turns out, there's an art and a science to figuring out a settlement like this. "They begin by looking at what’s actually underwritten by Citibank and the next things is trying to compare that with what happened before," says James Cox, professor of corporate and securities law at Duke University. What happened before being JPMorgan’s settlement.

"Their total global settlement was about $13 billion on $460 billion of residential mortgage backed securities underwritten. That represented about a 3 percent penalty" says Charles Peabody, a partner at financial research firm, Portales Partners.

Using that formula, Citigroup should only owe about $2.5 billion, not $7 billion. Citi sold about $90 billion worth of mortgage backed securities. But, Peabody says, Citi played a more active role in its investments. "Most of Citigroup’s losses were in bonds that they underwrote themselves, where a lot of the losses that came from JP Morgan came from firms they acquired during the financial crisis." Namely, toxic mortgage machines Bear Stearns and Washington Mutual, which JP Morgan acquired, under the supervision of the government.

And then there’s the element of negotiation.

Citigroup may have floated the $7 billion dollar figure to see how shareholders would take it.

"They may resist and push back more if they’re getting a very negative reaction from the market," says John Coffee, director of Columbia University’s Center on Corporate Governance.

So far, Citigroup investors are holding pretty steady. Coffee says that could tempt Citi execs to approve the $7 billion settlement and hope the news moves on quickly. After all, next on the chopping block is Bank of America, the biggest mortgage underwriter of them all. Its fine is expected to be as high as $20 billion. 

NCAA president advocates "scholarships for life"

Wed, 2014-07-09 13:19

This final note on the way out today, in which the president of the NCAA tries to have it both ways. Mark Emmert told a Senate panel today that college athletes ought to receive "scholarships for life."

I'm guessing he means getting the skills to succeed in life, because he went on to say that athletic scholarships ought to cover the whole cost of being in school, not just the bare bones.

He also said - and this is the having it both ways part - that he figures the current model of amateurism is working well for most people.

Google deleted a BBC reporter's article. Is it right?

Wed, 2014-07-09 13:10

Google decided to do some summer cleaning, removing some unwanted links from their search engines. They're taking their cue from the European Union's highest court's "right to be forgotten" ruling, put in place a few months ago.

One of the articles removed was written by BBC Economics editor Robert Peston in October 2007, about Stan O'Neal, the former Merrill Lynch boss. However, the subject of the article was not the cause of removal.

"These restrictions have been put in place because somebody who left a comment underneath my article no longer wants the world to see his or her comment," Peston says.

The ruling says Google can remove information from its search engine if it's inadequate, irrelevant, no longer relevant or excessive. Peston says there was nothing in the article that met the criteria - and he calls the removal an assault on freedom of the press.

Golden Road bets big on craft beer

Wed, 2014-07-09 11:03

The craft beer industry keeps getting bigger. The Brewers Association reports that in 2013, the market share of craft beer in the United States had grown to 7.8 percent. Breweries are popping up all across the country including in Los Angeles, where Golden Road Brewing has enjoyed three years of tremendous growth.

Meg Gill and Tony Yanow launched Golden Road in 2011. Their facility now includes a large brewing space, canning line, and a pub. Their beers can be found in grocery stores and restaurants in the area. Their most recent deal puts Golden Road beer in airports across the country, rolling out this summer.

The brewery has been able to find the niche within craft beer with their Los Angeles-based business, Gil says.

“This market is enormous” she says. “We’re already too big for our boots in some accounts.”

Yanow says even with all their growth in the past three years, Golden Road is still far away from achieving the size of the Boston Beer Company, the brewers of Samuel Adams. Gill says craft brewers owe a lot of their success to Boston Beer.

“I think that Jim Cook and that company is one of the most talented businesses in America and they have brought craft beer back to America,” she says.

Yanow acknowledges the number of new breweries opening will slow. “At some point, the rate of growth, of expansion into new breweries has to stop because eventually," he says. "You have more breweries than people.”

But Yanow’s not too worried about a craft beer bubble. “The real question is, can you put the toothpaste back into the tube?... People who like our beer and people who like craft beer like our beer and they’re not going to stop liking our beer.”

How resorts ended up in those oval car decals

Wed, 2014-07-09 10:54

In 1994 Earle F. Williams was on Martha’s Vineyard when a sticker on the back of a car caught his eye. “I saw an oval decal with an MV on it,” remembers Williams.

At the time he sold sports-imprinted decals and memorabilia to colleges. His first thought when he saw the sticker was, I wonder if that thing is copyrighted. “I wanted to make sure we wouldn’t step on somebody’s toes.” Luckily for Williams, it wasn’t.

A few months later he started making his own stickers with the initials VT for Vermont. It being the Green Mountain State, he sold them in green. Since then he’s made countless versions of the white oval. This year he sold a little over a million decals, out of his house in Stowe, Vermont. That’s about half as many as he sold at the peak of his business, pre-recession. 

Though Williams markets his stickers as the Original Ovals, they were actually created by the United Nations in the 1940’s, as “Distinguishing Signs Used on Vehicles in International Traffic.” They were a way to identify the country of origin on automobiles traveling through Europe.

In the U.S., they became a status symbol. EH for East Hampton, or ACK for Nantucket, secret codes that said, the driver of this car lives or vacations in America’s most elite resorts.

“I think the temptation is to be a little disdainful when you see those,” said Cornell economics professor Robert Frank. “If people were really confident of their position in life, they wouldn’t feel a need to advertise it.”

Frank says these bumper stickers in and of themselves aren’t a big deal. But they are an indicator of larger economic trends. The wealthiest Americans are building larger and more ostentatious homes. “They’re not bad people because they do that," he says. "That’s what everyone does when they get more money. But the fact they build bigger houses shifts the frame of reference for the people just below the top, they build bigger too,” And that trickles down the income ladder. Meanwhile lower and middle class wages have stagnated. So everyone ends up spending more of their income to keep up.

There is a similar competition to get into the prestigious educational institutions, not just universities, but increasingly grade schools, even preschools. “When a parent’s child gets into a prestigious institution, the first thing that happens is a decal on the back window of the car, announcing that fact to the world,” Frank says.

As for the white oval decals, David Ewing isn’t a fan. He grew up in Swampscott, Massachusetts, just outside Boston. His father was a lawyer at a Boston law firm and his roots go way back in New England. “My dad’s ancestor was one of the founders of Northampton, Massachusetts, so it was the 1600’s,” Ewing says.

He spent his summer vacations in southern Maine and Nantucket. But he says his family would never have put a sticker on their car advertising that fact. “It was against their sensibility to show off, to the world at large anyway, he says. “There was a distaste for ostentation and a distaste for -- the term when we were growing up was status symbol.”

Today Ewing lives in California and he understands the impulse to put a sticker on your car that shows where you are from. “If you are a long way from home you’re sort of waving your hand going, 'anybody else out there?'” But he says if he saw a white oval with an MV for Martha’s Vineyard or an MH for Marblehead in his neighborhood, he wouldn’t go up to the owner of that car and strike up a conversation. “I’d avoid ‘em like the plague,” he said.

Federal prosecutors end 81 conviction win streak

Wed, 2014-07-09 06:00

A federal jury in New York found Rengan Rajaratnam not guilty of conspiracy Tuesday. While the money involved in the insider trading case was small by Wall Street standards, and Rajaratnam was not well known, the case is significant because it marks the end of an impressive win streak for federal prosecutors.

In recent years, they’ve racked up 81 straight convictions, including that of Raj Rajaratnam, the older brother of Rengan Rajaratnam. Tuesday’s verdict may signal the beginning of a period where insider trading convictions are tougher to get.

For more on the topic, click the audio player above to hear reporter Mark Garrison in conversation with Marketplace Morning Report host David Brancaccio.

Big rigs get environmental overhaul

Wed, 2014-07-09 05:03

Head on down to the Port of Long Beach on any given day, stand alongside the hundreds of big rigs meandering from harbors to Southern California's freeways and take a deep breath. Every truck that rolls by coughs out a little whiff of diesel exhaust.

"We still suffer from the worst air quality in the nation," says Dr. Matt Miyasato, Deputy Executive Officer for Science and Technology Advancement at the South Coast Air Quality Management District, "and that means that our residents are not breathing healthful air about a third of the year." 

Miyasato identifies diesel engines as a major contributor to toxic air -- not just in Long Beach, but across the country. And in addition to delivering asthma and lung cancer, old-fashioned dirty big-rigs eat up $150 billion in fuel every year.

The good news is manufacturers like Cummins and Peterbilt are working on new trucks that are 50% more energy-efficient.

Dr. Mark Duvall at the Electric Power Research Institute says companies like Staples are experimenting with electric delivery trucks. Staples can expect to pay $30,000 more for an electric truck, but recoup that expense in maintenance after about three years.

"You can actually take the combustion engine and it’s not even in the equation," says Duvall. "You get rid of the transmission, the fuel tank, all the emission systems. And so you you save quite a bit of cost and weight and you make a much simpler vehicle."

Researchers have identified various new technologies that would yield significant energy savings if implemented.

"We would be cutting the projected fuel use by 1.4 million barrels of oil per day," says Dr. Dave Cooke, a Vehicles Analyst at the Union of Concerned Scientists. "And that corresponds to about 270 million metric tons of greenhouse gasses.”

The Department of Energy is pushing truck manufacturers to bring these tech innovations to market as soon as possible, through an initiative called SuperTruck.

"I think you will see these technologies migrate to the market quite quickly," says Patrick Davis, Director of the Department of Energy’s Vehicle Technologies Office. "The cost of shipping is directly added to the cost of goods and services delivered. So as you lower the cost of shipping, you would expect the cost of those goods and services to go down."

Those savings aren’t due until 2017, when tighter emissions rules go into effect. But some truck manufacturers are already getting a jump on that deadline by rolling out small improvements one by one, three years ahead of schedule.

Big rigs get environmental overhaul

Wed, 2014-07-09 05:03

Head on down to the Port of Long Beach on any given day, stand alongside the hundreds of big rigs meandering from harbors to Southern California's freeways and take a deep breath. Every truck that rolls by coughs out a little whiff of diesel exhaust.

"We still suffer from the worst air quality in the nation," says Dr. Matt Miyasato, Deputy Executive Officer for Science and Technology Advancement at the South Coast Air Quality Management District, "and that means that our residents are not breathing healthful air about a third of the year." 

Miyasato identifies diesel engines as a major contributor to toxic air -- not just in Long Beach, but across the country. And in addition to delivering asthma and lung cancer, old-fashioned dirty big-rigs eat up $150 billion in fuel every year.

The good news is manufacturers like Cummins and Peterbilt are working on new trucks that are 50% more energy-efficient.

Dr. Mark Duvall at the Electric Power Research Institute says companies like Staples are experimenting with electric delivery trucks. Staples can expect to pay $30,000 more for an electric truck, but recoup that expense in maintenance after about three years.

"You can actually take the combustion engine and it’s not even in the equation," says Duvall. "You get rid of the transmission, the fuel tank, all the emission systems. And so you you save quite a bit of cost and weight and you make a much simpler vehicle."

Researchers have identified various new technologies that would yield significant energy savings if implemented.

"We would be cutting the projected fuel use by 1.4 million barrels of oil per day," says Dr. Dave Cooke, a Vehicles Analyst at the Union of Concerned Scientists. "And that corresponds to about 270 million metric tons of greenhouse gasses.”

The Department of Energy is pushing truck manufacturers to bring these tech innovations to market as soon as possible, through an initiative called SuperTruck.

"I think you will see these technologies migrate to the market quite quickly," says Patrick Davis, Director of the Department of Energy’s Vehicle Technologies Office. "The cost of shipping is directly added to the cost of goods and services delivered. So as you lower the cost of shipping, you would expect the cost of those goods and services to go down."

Those savings aren’t due until 2017, when tighter emissions rules go into effect. But some truck manufacturers are already getting a jump on that deadline by rolling out small improvements one by one, three years ahead of schedule.

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