Marketplace - American Public Media
The Fed stopped buying bonds to help the economy recover from its worst disaster since the Great Depression. So we're taking this opportunity to remember what happened 85 years ago today.
October 29, 1929, or Black Tuesday, was the most devastating crash in the United States stock market history.
The number of shares trading hands on the New York Stock Exchange that day set a record not broken for 40 years. And they were trading by hand!
If you live in a swing state, chances are you’ve seen a political ad or two in the run-up to this year’s midterm elections. And there’s also a pretty good chance that ad talked about the economy.
Which brings us to this question: if those ads were your only source of information, what would you think about the state of the economy? What kind of picture are the ads painting? It’s not always what you’d expect.
Check out these two ads, for gubernatorial races.
In his ad, the Republican governor of Michigan, Rick Snyder, says we’re on the road to recovery.
And the Democratic candidate for governor of Wisconsin, Mary Burke, talks about bleak job prospects and layoffs.
“We would expect Democratic candidates to trumpet the success of the economy and for Republicans to be on the attack," says Vincent Hutchings, political science professor at the University of Michigan. "But at the state level, especially if we’re talking about gubernatorial contests, that logic gets turned on its head.”
Hutchings says incumbents, whatever their political stripe, have to defend their handling of the local economy.
Challengers blame economic problems on the incumbent.
But in national, congressional races, political ads focusing on the economy are more predictable.
“It’s all doom and gloom,” says Erika Franklin Fowler, co-director of the Wesleyan Media Project.
Listen to ads from Republican congressional candidates, she says, and you think the economy will never pick up.
“So, a lot of ads will make references to the squeeze on the middle class in particular," she explains. "I’ve seen ads on recent college graduates and frustration over spending a lot of money on a college education and not being able to find a job.”
Franklin Fowler says, for congressional Democrats, it’s morning in America.
Or it would be if it weren’t for the Republicans.
“Democrats will often go after Republican incumbents and/or wealthy challengers who own businesses for shipping jobs overseas or for job losses,” she says.
In fact, Franklin Fowler says, about 20 percent of ads for all Senate candidates mention jobs, with very different takes on the jobs picture.
I wondered – who’s right?
I turned to Richard DeKaser. A corporate economist at Wells Fargo.
“I’d give the economy a B-minus,” he says.
DeKaser says we’re creating about 250,000 jobs a month, and GDP is growing at about three percent. That’s pretty good.
But it’s an uneven recovery. Not everyone is benefiting.
So politicians can cherry pick economic data, to make a point.
“You can pick and choose from the data and tell pretty much any story you’d like," DeKaser says. "And more often than not, that’s the case. It’s just a matter of biased presentation rather than dishonest presentation. Though there is some dishonesty as well.”
And when the economic picture is a bit ambiguous like it is now, it’s that much easier to manipulate.
The Red Cross claimed to deliver 17 million meals and stacks, 74,000 shelter stays and 7 million blankets and flashlights to victims of Hurricane Sandy. But a joint investigation from ProPublica and NPR not only casts doubt on the organization's own tracking, but shows a pattern of prioritizing public relations over aid after hurricanes Sandy and Issac.
The investigation found the Red Cross was unprepared for the disasters and botched the delivery of meals, supplies and other aid. Response was slow and meals were wasted, and in one case an official reportedly ordered volunteers to drive around empty trucks to give the appearance of relief.
In other news: More earnings are on the way today and there will be an official announcement from the Fed on quantitative easing. For now, here's what we're reading - and the numbers we're watching - Wednesday.$1.7 trillion
That's what the Fed has spent on bonds in just the third round of quantitative easing, or QE3. That's according to the New York Time's Upshot, which has seven charts laying out the program's history and future.74,829
As of Wednesday morning, that's how many people follow SugarString on Twitter. The site posits itself as a slick tech/lifestyle news site "presented" by Verizon, but the Daily Dot reported that corporate "presenters" have handed down a big restriction: no writing about domestic surveillance or net neutrality, two topics Verizon is very involved in.4
The number of meals in a day, according to Taco Bell. The restaurant is the first fast-food joint to offer nationwide mobile ordering via a new app launched today. Taco Bell made the announcement through a bit of social media jujitsu, the Verge reported, seemingly erasing its popular Twitter account to push users toward the app. In reality, the restaurant's tweets and 1.4 million followers are hiding the protected account @totallynothere.
Opponents of the Federal Reserves policy of buying bonds to stimulate the economy always worried about the end game: what happens to markets when the stimulus ends. With that time now upon us, it appears the turmoil has come and gone. So as central bank stimulus draws to a close, when will the economy be healthy enough for higher interest rates? Plus, good news for college seniors and their parents: The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings are from Michigan State University's annual survey of employers. How ever, economists say the good news doesn't trickle backwards to people who graduated during the down years. More on that. And surveys show that many people choose a new car based on how connected the vehicle is to the internet (forget about zero-to-sixty, or initial quality or EPA mileage). We take a test drive to see how manufacturers are taking this information on board.
New college grads will find jobs more easily, according to a Michigan State survey of 5,700 companies.How much is hiring of new grads with bachelor’s degrees expected to rise in 2015?
One of China's largest electronics companies, Xiaomi, has a plan. They want to sell 100,000 phones in India every week. But there's a problem. A privacy problem.
Chinese smartphones have notoriously been banned or even put on a trade restriction lists because people are concerned that they might be carrying spyware installed by the Chinese government.
To combat this stigma, Xiaomi announced that they will be building a data center in India to ensure customers that they will not be storing their data on Chinese servers.
Molly Wood, Technology columnist at the New York Times, brought up an interesting point in this regard. She wonders if at some point, some country will declare themselves as the "Switzerland of data storage," in that this country will not honor requests from anyone to sift through your data.
However, there's only one slight problem with that, she says. What if we don't trust the manufacturers of the product either? What then?
Click on the media player above to hear Molly Wood in conversation with Marketplace Tech host Ben Johnson.
Male or female, you were once a teenager and so will likely remember how, for the longest time, personal care products were all about removing oil from our faces, hair and skin.
“Oils were a product that historically consumers have been told to take off," says Karen Grant, a beauty industry analyst for the NPD group.
But now, oil is having a moment. You might say it's getting a chance to shine. Especially when it comes to the haircare industry, where brands are advertising their ability to make your healthy, nourished and moisturized — with oils.
“You’ll see oils on the shelf at Target. You’re seeing them in Walmart, you’re seeing it in Walgreens, you’re seeing it in CVS,” says Grant.
And at Ricky's, a chain of beauty supply stores in New York, where you can see the slick display from the sidewalk. Behind the cash register, there is a giant wall of hair products, all with the same color turquoise packaging. And in the center aisle, you'll be confronted with even more.
Says Richard Parrott, president of Ricky's, about the nose-high shelves packed with products, “It’s a hero display. This is basically our hero products. These are the products that people, they come in with their iPhones and they have pictures. They just say do you have this?”
The brand Parrot is talking about is Moroccanoil. That's the brand. But it's core ingredient is a product called Argan oil. Pure Argan oil retails for about $12 an ounce. Mohamed Omer, an industry analyst with Mintel, says the oil is difficult to produce.
"Argan oil can only be extracted from the argan fruit, which can only be found in Morocco. It can only be collected by hand. And the kernels have to be taken out by hand. It’s not an easy oil to get," he says.
And a lot of it is grown on cooperative farms run by women.
Argan oil's rarity and exotic story make it a best-seller. And when it comes to best-sellers, says Richard Parrott, the beauty industry moves in cycles.
“Curly hair is in. Straight hair is in. Curly hair is in. Straight hair is in. This is not new. Right? They were using this stuff in ancient Egypt," he says.
In ancient Egypt, Argan oil might have been as common as regular shampoo — we don't know. But today it's like the truffle of the beauty industry. Because it’s so expensive and scarce, very few consumers can afford the pure ingredient. But they’re still willing to pay for a bottle of shampoo that contains just a few drops.
Car companies have been slow to adapt to a connected world. But they're starting to catch up, putting out cars that increasingly work like huge smartphones on wheels.
Qualcomm is a company built on smartphone chips. But lately, they've also been trying to get their chips inside cars.
"Fundamentally, the car is turning into a smartphone," says Qualcomm's senior vice president of business development Kanwalinder Singh. He's speaking from the passenger seat of an Audi A3, the first car with its own 4G connection.
With the help of Qualcomm chips, the A3 features more detailed Google maps, internet radio, and Netflix streaming for the kids in the backseat. Drivers can dictate Tweets using voice command, and the car reads incoming text messages out loud.
Singh says Qualcomm is giving drivers the features they want, and they're doing it in a safe way.
"We believe that driver distraction would actually be alleviated by providing these services," he says. "When all of this is embedded, like it is in this Audi, phone calls destined to you and your smartphone would actually come through the car's antenna, and play through the car's audio-visual system. You would interact through the car."
But some driving safety researchers say moving these features from the phone to the car won't make drivers any safer.
"I think they're really ignoring the powerful effect of cognitive distractions," says Linda Hill, who leads a team of driving safety researchers at the UC San Diego School of Medicine.
Hill admits voice command might cut down on visual distraction, preventing phone-handling drivers from staring down into their laps. But eye-tracking studies have shown that even when drivers have their hands free and their eyes on the road, their minds can still be elsewhere.
"A recent study looking at that found that voice-to-text increased driving errors more on a closed driving course than text-to-text did, shockingly," Hill says.
Hill does like the idea of building one bit of technology into cars, though: An app that disables phones in moving vehicles.
Good news for college seniors (and their parents): The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings from Michigan State University’s annual survey of employers are in accord with other statistics showing that the job market has gotten stronger since the recession.
However, economists say the good news doesn’t trickle backwards to people who graduated during the down years. For instance, the Michigan State numbers show salaries for new engineers will be about $6,000 higher than they were for 2009 graduates.
"There is no way that those people who came in at 2009 are going to be at that salary," says Michigan State’s Philip Gardner, who conducted the survey. "It would take some pretty nice wage increases."
The Michigan State findings echo other recent data, says Brookings Institution economist Gary Burtless. So does the bad news for earlier graduates.
"There’s no doubt that entering the job market—either as a new college graduate or a new high-school graduate—at a time of high unemployment is not the best career move," says Burtless.
Those workers can see their wages stay relatively low for 10 years or more.
Shu Lin Wee, an economist at Carnegie Mellon University, has studied the process by which recession-era grads lose out, in a paper titled "Born Under a Bad Sign: The Cost of Entering the Job Market During a Recession."
Her numbers show that when jobs are scarce, young people don’t get to hop around from career to career as much. Finding the first job is enough challenge.
"Even if you manage to find a job," she says, "and you realize that you’re not very good at that particular career, now you have problems switching jobs.
So you develop fewer skills and don’t get experience with other fields that might be a better fit.
Southern California’s huge port complex has been making headlines lately over congestion and shipping delays. But ports all over the world are experiencing traffic jams, and they all have one thing in common: megaships. Some container vessels are now three and a half football fields long and they’re overwhelming ports.
Just five years ago, ocean carriers calling on global ports typically could handle 5,000 20-foot containers.
“Now, they are bringing in ships that can handle three times that amount,” says Peter Friedmann, counsel to Pacific Coast Council of Customs Brokers and Freight Forwarders Associations. “And there are some ships that have already been built that can carry 18,000 on one ship.” Even the expanded Panama Canal won't be able to handle a ship that big.
Hacegaba says these megaships came on line faster than expected. They’re straining capacity at many global ports, where authorities are scrambling to build bigger terminals and bigger cranes to unload them.
Companies like Maersk and MSC are forming alliances to share these vessels, a move that gives shippers more leverage over the world’s ports.
Banking is old.
Roots in Mesopotamia old.
Some of the oldest banks are still operating today. But as the European Central Bank's latest "stress test" shows, not all are in the greatest of health.
Here's a look back at the origin story of the five oldest established banks - where they’ve been, and where they are today:
Just as the Salem Witch Trials were beginning in New England, the sixth oldest bank was being established across the pond in Old England, in 1692. The bank itself, needless to say, went through some tough times during the two World Wars, but in 1963 it became the first British bank to be fully computerized. Today, the Royal Bank of Scotland is its parent company, and like many kids, they’ve found themselves in a lot of trouble lately. In 2012, Coutts was fined for not taking sufficient and necessary measures to detect money laundering activities.
Back in 1690 on London’s Lombard Street, John Freame and Thomas Gould began trading as "goldsmith bankers." This made them cutting-edge: Goldsmith banking in the late 1600s and early 1700s was, in many ways, the predecessors of the banking industry today. They would store gold in their vaults and issue promissory notes on deposits that even collected interest. In 1967, Barclays was one of the first of the UK’s “high street” banks to offer ATMs. Today, however, Barclays continues to be in the spotlight. Recently, a former British senior banker became the first person to plead guilty to, "a single count of conspiracy to defraud in connection with manipulating the London interbank offered rate, or Libor,” according to the New York Times.
Before street numbers existed, businesses were identified by street signs. Richard Hoare, the founder of the bank, traded at the “Sign of the Golden Bottle” in Cheapside, London. Eighteen years later, he moved the offices to Fleet Street, within London city limits, where it still stands today. Back in 1897, the bank had temporary balconies erected to allow customers and workers at the bank to view Queen Victoria’s Diamond Jubilee parade. Today, for the first time in its history, the bank is being run by its first non-family Chairman in over 300 years, Jeremy Marshall.
This bank was established by a pair of Dutch Protestant brothers, Hans & Paul Berenberg, who were forced to flee Antwerp for their religious beliefs. They settled in Hamburg in 1590, where they would go on to establish a business that is still around today. In order to survive World War II, the bank became a holding company and withdrew from the business of active banking. The Chairman of the bank at the time rejected national socialism and wrote in his journal:
“Better a small and decently led state than such a huge empire which Germany is today, lawless, without integrity and governed by robbers and murderers.”
He helped other businesses and anti-Nazis escape. Eventually, he wrote once again on May 3, 1945, when English soldiers entered Hamburg:
“Now the task is to deal with the consequences of the war and gradually try to help the children in building their future."
Today, Germany’s oldest private bank has now expanded into the UK. And many people continue to be uneasy about the future of economic growth throughout the eurozone, with Germany at the front and center of the stage.
This picture shows the headquarters of the Monte Dei Paschi di Siena bank in Siena, in the Italian region of Tuscany.(Giuseppe Cacace/AFP/GettyImages)
The goal of the oldest bank in the world was, as originally stated: “To form loans to the poor or miserable or needy persons,” according to their company history.
By those standards, I would certainly qualify for a loan from them, but this also may be the reason their books aren’t quite up to par according to the European Banking Authority. Monte dei Paschi di Siena, the oldest bank in the world (think: 1472!), failed their stress this past weekend and were subsequently hit yesterday with major losses on its shares. Now they need to come up with 2.1 billion Euros to meet the ECB’s stress test requirements. Whether or not the Italian public will step in and help prop up the bank’s capital shortfall remains unknown.
Americans plan to spend about $7 billion dollars on Halloween this fall. A good chunk of that change will be spent at spooky attractions.
The creep-out factor starts at the entrance to Dark Hour Haunted House’s Halloween Show in Plano, Texas, as a 9-foot-tall furry bat sneaks up on a woman buying tickets. In a dark corner, an animatronic witch tells a scary story and stirs a steaming cauldron.
More than one in five Americans plans to visit a spooky attraction this year, according to the National Retail Federation. They’re looking for an adrenaline rush.
“It’s easy to scare one person,” says Allen Hopps, the artistic director at Dark Hour. “When you have to scare 10,000 people, or 20,000 people, that gets very hard.”
Hopps tries to make Dark Hour different by not relying on the standard themes – think movies like "The Texas Chainsaw Massacre" and "The Hills Have Eyes."
“Haunted houses will always have a redneck, cannibal and inbred theme,” he says. “That’s the easiest and cheapest to do because all your costumes are thrift stores, all of your makeup is blood and dirt, and you’re covered. So you’re going to see that everywhere.”
So instead of chainsaw sounds and clowns, Dark Hour has tunnels that spin as you walk through, and werewolves with fangs that glow.
Hopps also mixes in the quiet buzzing sound of bees to add to the creepy music.
“Scaring people has become a global industry,” says Larry Kirchner. He builds terror attractions across the world, including Creepyworld -- the largest haunted attraction in the Midwest. On a good year, his creations bring in around $4 million to $5 million dollars.
Kirchner designed his first haunted house in 4th grade. Back then cold spaghetti for guts and peeled grapes for eyeballs would do. Today, he says there are high-tech ghost tours, paintball zombie attacks, even extreme haunts where actors tie you up and pretend to torture you.
“Halloween used to be this holiday where you would carve a pumpkin, watch a horror movie and go trick or treating,” Kirchner says, “Now you’ve got everyone trying to exploit it.”
And, in the past, a 10-minute adventure was just fine, visitors today expect a haunted house to be a full evening’s entertainment.
At Dark Hour in Texas, the maze takes nearly 40 minutes to walk through. And after you’re done, you get a music performance: Zombies, on stage, performing Michael Jackson’s Thriller.
Now that’s scary.
Wall Street today is lost and searching for its role, according to author Michael Lewis.
"Technology has created a world that's very hostile to intermediaries in most industries. And Wall Street has fought to preserve its position as an intermediary where it's really not necessary in a lot of cases," he says. "It's actually, probably, in decline."
Lewis — perhaps best known for two books later adapted to film, "Moneyball" and "The Blind Side" — used to be a financial trader. He left after three years and wrote a tell-all, his first book, "Liar's Poker."
Twenty five years later, the book has been reissued. And while he's continued his deep look at finance with his recent book "Flash Boys," it's strange how the world Lewis depicted in the late '80s feels oddly familiar.
Listen to the full interview in the player above or read the transcript, which has been edited for clarity.
Kai Ryssdal: This book was not received the way you thought it would be... you thought it would be a cautionary tale.
Michael Lewis: It had the opposite effect of what I expected. I didn't think of it as a moralistic tale about Wall Street ... but I did think that for someone who had some other idea of what to do with their lives, it would demystify it, and maybe they could go on and do what they were supposed to do.
Instead, I swear after six months, I had a thousand letters from kids saying, "I'm a junior at Ohio State and I've read your how-to book about how to get ahead on Wall Street. Is there anything you left out? Because you made me even more interested in doing it."
KR: And you know why, right? Because you talk about making money come out of a telephone.
ML: Not only do I make money come out of a telephone, but I clearly have no idea what I'm doing. The combination is like catnip for a male in college. He has no idea what he can do, he has no sense of himself in the marketplace, and then there's this thing... they give you lots of money even though you don't know what you're doing? It created a stampede.
KR: And you say "male" intentionally because at the time this book was written, females in this business were few and very far between.
ML: True. I would say that even now, [women are] kept far from the risk taking. It's still a very male-dominated business. At the time, yes, my training program at Salomon Brothers was 85 to 90 percent guys.
KR: And very fraternity house-like, I mean, the description of some of the guys sitting in the back row of that training class throwing spitballs.
It was considered normal and acceptable to order a stripper up on the trading floor.
KR: It seems like very little has changed. The essence of what happens on Wall Street, 25 years later, seems sort of to be the same.
ML: There's a timelessness about it isn't there? There are a couple of things that I think are a little different, but it's by degree, not kind. I think that the street has gotten much, much better at disguising what it does because it's gotten so much more complicated. All of a sudden, you're looking at a truly opaque black box when you're looking at something that used to be as simple as the stock market.
The other thing is this idea of "too big to fail." That did not exist when I wrote the book. There was a sense that even my firm, Salomon Brothers, could fail. And now, if you're in the equivalent of Salomen Brothers today, you're in a place that, basically, you sense, won't be allowed to fail.
KR: You say that these guys are working harder at establishing a public persona, but I wonder if that doesn't lend itself to a real difference, actually, between Wall Street then and now. Wall Street then was sleazy, with strippers on the trading floor, as you said. Now, it just seems a little sinister, because we're supposed to believe that they're out for the common good.
ML: I think there has been much more attention paid to how things seem, rather than how things are, then there was then. There are phalanxes of corporate PR people. People inside these firms, no way are they going to talk to a journalist. You've got a much slicker corporate exterior now and a much more careful presentation of self.
One of the things that was kind of lovely about the world I described in Salomen Brothers in the '80s was that the people kind of were how they seemed. There wasn't a lot of hypocrisy. You might approve or disapprove of the gambling and the strippers on the trading floor. But there was a certain integrity to it [laughs].
KR: And what is it now? What is Wall Street now?
ML: Lost. It has a very unclear sense of its purpose in the world. Technology has created a world that's very hostile to intermediaries in most industries. And Wall Street has fought to preserve its position as an intermediary where it's really not necessary in a lot of cases. It's sort of like clawing to preserve its revenues and its profits at a time when it's actually, probably, in decline.
KR: Do you re-read your own writing at all?
ML: It's funny you ask, I got on the plane coming to New York the other day, and I thought, I gotta re-read this thing. I've never re-read it.
I opened it and thought, "I'm so bored with myself. I can't do this. I just can't."
The only other time I'd done this, I put it on my lap when the paperback came out in 1990, to re-read it before I went on my paperback tour. And the guy in the seat next to me saw it and said, "I read that. Cynical bastard." I put it away and didn't read it then.
So I have not actually re-read it, but I vaguely remember what happened to me [laughs].
If "A Tale of Two Cities"were written today and Charles Dickens chose social networkers, instead of cities, as his subject, the opening line might go a little something like this:
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of metrics.
“If you are a social network, the two most important metrics for you are your user base and the level of engagement of the users,” says Shaym Patil, Vice President of equity research at Wedbush.
The value that Wall Street places on a social network like Twitter or Facebook is primarily based on its MAU’s, or monthly active users--the more active users, the more potential for ad revenue. This is why when Twitter announced its third quarter earnings Monday, its stock took a hit.
Investors are worried that Twitter’s user base isn't growing fast enough. It’s not anywhere near the gold standard of social media companies, Facebook. Twitter’s active user base is about one fifth of Facebook’s
But Nathan Eagle, CEO of Jana, a mobile marketing platform, is skeptical of the one metric fits all approach. “Twitter and Facebook have different models and they are going after different things,” says Eagle.
Twitter, for example, doesn't just sell ads. It has a whole suite of developer tools it sells to companies like Jana. It offers tools for detecting crashes and monetizing, for example.
These are parts of Twitter’s business model that aren't reflected in the MAU numbers. As a result, Nathan Eagle thinks Twitter should have its own more sophisticated metric for assessing its value. “MAU’s are at least a proxy for success,” But says Eagle, “I do think that we will come up with more nuanced metrics.”
Until that more nuanced metric arrives, the almighty MAU will likely reign supreme. Or, as Dickens said, Twitter and Facebook will continue to live, “for good or evil, in the superlative degree of comparison only.”
CNN announced its election night plans Tuesday: the network will take over the Empire State Building to display U.S. Senate vote results.
As results come in, a vertical LED-illuminated "meter" atop the spire of the building will ascend in either red or blue.
Once a meter reaches the top of the spire, that party will take control of the Senate.
Who will win? Apparently CNN will decide.
Quantitative easing – it’s fun and accessible and all the cool kids are talking about it, right?
“Believe it or not, I tend to try not to talk about Quantitative Easing at cocktail parties,” says Ann Owen, an economics professor at Hamilton College. “But just a real brief explanation is that it’s a way for the [Federal Reserve] to increase the money supply by buying bonds.”
The Fed generally has two focus areas: employment and inflation. Historically, a main tool to keep each in check has been setting interest rates through its Federal Funds Rate. But back in 2008, the Fed decided it needed something more and QE was born.
Six years later, the Fed is widely expected to announce the end of QE after its Federal Reserve’s Open Market Committee meetings Tuesday and Wednesday.
Owen says while ending QE may sound like a giant leap, it's actually a relatively small step because the Fed now has a balance sheet worth over $4 trillion.
“That’s money that in the banking system and will hopefully finds its way into the economy, says Michelle Girard is the chief U.S. economist with RBS. “As long as those reserves aren’t taken back out, through asset sales or other methods of shrinking the balance sheet, then the reserves that have already been created are still able to boost economic growth.”
Think of the Fed as a jogger who’s not slowing down or speeding up, but keeping the same pace – and there’s still a long road ahead.
The economy is clearly in a better place than it was when QE started.
But Morris Davis, a professor at Rutgers University and a former economist at the Federal Reserve Board, says he’s skeptical about how much of that is due to the bond-buying program.
“We can debate its effectiveness and we should debate its effectiveness,” he says. “But going forward, we’re going to see a lot more of this, actually, by Central Banks all around the world and I think we’ll point back to this episode as having led the pack.”
After QE, the Fed still has its more traditional tool – interest rates. Davis says it’ll probably be a while before the Fed feels comfortable enough to start raising its Federal Funds Rate in any meaningful way.
Six years and $3 trillion later, quantitative easing is coming to an end. The Federal Reserve is expected to make an announcement following a tw0-day meeting in Washington this week. The Washington Post has an interesting history of the bond-buying "experiment," noting QE was originally intended as a one-time injection into the economy, but has been used to stimulate growth in many areas.
As we await official word from Fed Chair Janet Yellen on the policy, here are some other stories we're reading — and numbers we're watching — Tuesday:3.5 million
That's how many customers have had their Internet speed slowed down more than 25 million times by AT&T since fall 2011, according to a lawsuit filed by the Federal Trade Commission Tuesday. Many of these customers are heavy data users with unlimited plans, which AT&T no longer offers, Reuters reported. The FTC called the throttling "deceptive," with some customers' speeds slowed up to 90 percent.300 million
The number of people using Alibaba's payment system, Alipay. Alibaba founder Jack Ma, fresh off a massive IPO, is set to meet with Apple CEO Tim Cook this week to talk about potential partnerships, the Wall Street Journal reported. Apple just launched its own mobile payment system last week.25
The number of times per second new RFID chips installed in NFL players' shoulder pads transmit their location. The new sensors allow for near-real-time motion tracking and player data of unparalleled depth, the Verge reported. The league is experimenting with these "next-gen stats" in games this year, with an eye toward putting more sensors on all players and, eventually, the ball.9
The number of movies Marvel Studios announced through 2019 at an event in Los Angeles Tuesday. It's a shot across the bow at DC Comics' similarly huge plan, announced earlier this month, for ten new films through 2020.
Alex Shlaferman was 11 years old when he made $10,000 by selling DVDs that taught viewers how to levitate. At the age of 16, he founded his company, Vante Toys. His venture has been so successful that he now owns his own manufacturing company in China.
Vante Toys is headquartered in Brooklyn, New York.
"I create products for the mass market," says Shlaferman. "My specialty is products that are under like 20 bucks, that’s what I’m good at. I don’t understand luxury goods or high-end fashion; I understand products that sell for like ten, twenty bucks."
There’s a traffic jam in Los Angeles, but this one’s not on the freeways. The port complex of Los Angeles and Long Beach, the nation’s busiest, is so backed up right now that some importers are avoiding the port altogether. Problems there are delaying some shipments for two weeks or more. The bottleneck is giving southern California’s ports “a black eye,” says Jock O’Connell, international trade adviser at Beacon Economics.
There’s congestion at many ports right now, but the Los Angeles-Long Beach complex handles 40 percent of U.S. imports, so the ripple effects are long and wide. If retailers are "planning on having it stocked for the Christmas holiday, it needs to be in the port now, it needs to be moving through,” says Frank Layo, a partner with Kurt Salmon Associates. “So any delays now are kind of critical. We’re running out of runway.”
Port officials say the delays at the Los Angeles and Long Beach ports are rooted in a shortage of trailer chassis, to load the containers onto. But that problem has been exacerbated by an unexpected surge in imports this year, along with the sudden rise of “mega-ships.” They can carry three times as many containers as older ships and they’re straining port capacity. Others say unresolved labor negotiations at the port are crimping efforts to ease the port’s traffic jam as well.
Some retailers are diverting shipments to other ports and a few are even flying merchandise into the U.S. But Noel Hacegaba, chief commercial officer at the Port of Long Beach, says they’re working hard to ease congestion. “At the end of the day our reputation is at stake,” says Hacegaba. “Beneficial cargo owners have choices. And we are doing everything that we can to make sure that we continue to be the gateway of choice.”
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