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A letter to the President warns of history repeating itself

Thu, 2014-03-20 01:00

Formed in 1975 to examine the possible overreach of national security investigation and intelligence, the Church Committee - named after the chairman of the committee, Frank Church - was responsible for the creation of the Federal Intelligence Surveillance Act. At the time, the committee investigated when and how the NSA had overstepped its bounds, including the opening of people's mail without notification.

Former members of the group sent President Obama a letter this week sighting similarities between their findings during the original investigation and the current situation with NSA surveillance. In fact, they pointed out that this time around, the technology available has made the offenses much worse and larger in scope. Cyrus Farivar, senior business editor at Ars Technica, points to the increase in personal technology that the average American carries on their person.

"Typically in those days people had one phone at a fixed location: their office, their home. Nowadays, nearly all of us carry around mobile phones in our pockets which act as a really good proxy for showing where we are [and] when we are in time...I think that that’s really incredible to see these veterans of looking at some of these abuses from 40 years ago saying now that what’s going on today is far worse than what they saw previously."

Short-selling: A step-by-step guide.

Wed, 2014-03-19 13:51
Thursday, March 20, 2014 - 04:00 Warner Brothers Inc.

People have been shorting stocks since the early 1700s. It’s basically a way of betting against a company. It’s extremely common, and part of the fabric of Wall Street. But how, exactly, does it work?

Step 1:  You've got to be pretty sure that a company’s stock is gonna go down. Let’s say it’s ACME stock, and you suspect that the bad publicity from Wiley Coyote’s interminable failure is going to soon take its toll.

Step 2:  Before you think the stock is going to go down, you (technically, your stock broker) will borrow some of that stock. 

Step 3:  Sell it. That’s right – sell the stock that’s not even yours. So, let’s say ACME stock is at $1,000 a share, you now have $1,000. 

Step 4:  Wait for the stock price to tank. During this time, you can count your $1000. Or smell it. Or perhaps you prefer to roll in it. But remember it’s not yours to keep.

Step 5:  Does the stock actually tank? Congratulations.  Proceed to Step 6. Does the stock....rise? You might want to sit down before you proceed to Step 7.

Step 6:   Now that the stock has sunk like you (wisely) knew it would – let’s say to $1 a share – you buy it back for $1. You keep the remaining $999 you had before. Go ahead.  Smell it again. This time with passion. 'Cause all that cheddar is yours, baby!

Step 7:  Well, the stock has risen. Let’s say to $1,500. Unfortunately, you have to return the stock that you borrowed. And the only way to get it is to buy it back. At the new, higher price. I know, I know. So you take the $1,000 you made when you sold it, and then shell out $500 more, you buy the stock, and return it to whoever you borrowed it from, and it sucks.  This is your life and these are the choices you’ve made.

Step 8:  But wait! Wait! Are you a billionaire with a large personality? Are you convinced that ACME stock is worthless and the continued failure of Wiley Coyote must eventually drive the stock price over a cliff? OMG are you the ROAD RUNNER?? If you answered yes to any of those, you have a final option. Do everything you can to take ACME down. Lobby our own government and foreign ones, take out ads, fund non profit groups. Make it your mission in life. Seriously! People actually do this!

Some interesting notes about shorting: If a lot of people are shorting a company, say ACME, well, that doesn’t look good for ACME. It’s like wearing a scarlet letter. People start asking questions. The stock price can go down, in a sort of self fulfilling death spiral.


Sabri Ben-Achour

 

On the other hand, there are some investors who really like a challenge.  They might actually swoop in to rescue a company whose stock is at risk of being shorted to death, because they sense an opportunity to fix it. If they do fix it, and things start looking up for the company, all the people who shorted it will sprint to the market to buy back the shares they owe various other people and entities. Then that creates a spiral up in price. What is that called? A life spiral? Technically, it’s called a “short squeeze.”

Marketplace Morning Report for Thursday, March 20, 2014by Sabri Ben-AchourPodcast Title: Short-selling: A step-by-step guide.Story Type: News StorySyndication: Flipboard BusinessSlackerSoundcloudStitcherBusiness InsiderSwellPMPApp Respond: No

How have you lived gentrification?

Wed, 2014-03-19 13:51
Wednesday, March 19, 2014 - 14:44 Scott Olson/Getty Images

A wrecking crew begins the demolition of the last remaining high-rise building from the infamous Cabrini-Green housing project March 30, 2011 in Chicago, Illinois. The complex once housed 15,000 residents and was notorious for its crime, gangs and drugs. 

This week on the show, Marketplace Money will be tackling gentrification. Tell us about your experience!

(function(){var qs,js,q,s,d=document,gi=d.getElementById,ce=d.createElement,gt=d.getElementsByTagName,id='typef_orm',b='https://s3-eu-west-1.amazonaws.com/share.typeform.com/';if(!gi.call(d,id)){js=ce.call(d,'script');js.id=id;js.src=b+'widget.js';q=gt.call(d,'script')[0];q.parentNode.insertBefore(js,q)}})()by Marketplace Money StaffStory Type: BlogSyndication: PMPApp Respond: No

A letter to the President warns of history repeating itself

Wed, 2014-03-19 13:43
Thursday, March 20, 2014 - 04:00 NICHOLAS KAMM/AFP/Getty Images

Civil liberties activists hold a rally against surveillance of US citizens by the National Security Agency (NSA) at the Justice Department in Washington on January 17, 2014. The NSA's activities are at the center of legislation that internet companies are hoping to influence.

Formed in 1975 to examine the possible overreach of national security investigation and intelligence, the Church Committee - named after the chairman of the committee, Frank Church - was responsible for the creation of the Federal Intelligence Surveillance Act. At the time, the committee investigated when and how the NSA had overstepped its bounds, including the opening of people's mail without notification.

Former members of the group sent President Obama a letter this week sighting similarities between their findings during the original investigation and the current situation with NSA surveillance. In fact, they pointed out that this time around, the technology available has made the offenses much worse and larger in scope. Cyrus Farivar, senior business editor at Ars Technica, points to the increase in personal technology that the average American carries on their person.

"Typically in those days people had one phone at a fixed location: their office, their home. Nowadays, nearly all of us carry around mobile phones in our pockets which act as a really good proxy for showing where we are [and] when we are in time...I think that that’s really incredible to see these veterans of looking at some of these abuses from 40 years ago saying now that what’s going on today is far worse than what they saw previously."

Marketplace Tech for Thursday, March 20, 2014Marketplace Morning Report for Thursday, March 20, 2014by Ben JohnsonPodcast Title: A letter to the President warns of history repeating itselfStory Type: News StorySyndication: Flipboard BusinessSlackerSoundcloudStitcherBusiness InsiderSwellPMPApp Respond: No

Where Obamacare is shunned, insurance brokers step in

Wed, 2014-03-19 13:39

Uninsured people only have until the end of the month to buy coverage under the Affordable Care Act if they want to avoid the new penalty for not having health insurance.

In states where politicians are dead set against Obamacare, the task of getting people enrolled is falling to a group that's only too happy to help – private insurance agents.

Despite having one of the highest rates of uninsured people in the nation, Georgia is no friend to the Affordable Care Act. Recently, the state House passed the “Georgia Health Care Freedom and ACA Noncompliance Act” by Republican State Rep. Jason Spencer.

Among other things, Spencer’s bill would nix an already modest program administered by the University of Georgia. It pays 11 people called “navigators” to help almost 2 million uninsured in Georgia buy coverage through the federal exchange.

There are, however, many more people like Helen Grove, a private insurance broker in Warner Robins, Ga.

Grove recently helped veterinary technician Andrea Wallace sign up for coverage – something she’s done for a living for almost a decade, though the process has changed of late.

“Alright, so we’ll just go to Healthcare.gov,” Grove says as she types in the web address on Wallace’s computer. The online marketplace offers a much smaller range of plans, and one of them was the clear winner for Wallace – one that comes with a reduced deductible of $3,250.

Back in her office, Grove acknowledges that just about anybody can do this on the website by themselves.

“But first of all, do you really want to? I mean some people, they are just intimidated by the whole thing,” she says.

And the best part is that brokers do this at no cost to the consumer. The insurance company pays their commission.  Except, that’s also the worst part, says Rick Chelcko, president of a health benefits consulting firm in Cleveland.

“Insurance companies give brokers not only commissions for the products they sell, but they give them lots of incentives, ‘bonuses’ or what have you,” Chelcko says. “That motivates brokers to concentrate business with a particular favored carrier.”

Officials in Florida are investigating a brokerage firm for allegedly holding “Obamacare Enrollment Team” events without disclosing ties to particular insurers. But any broker who shoves clients toward the company with the best bonuses isn’t going to last long, Grove says.

“People can see that,” she says. “You build a reputation.”

And in Grove’s politically conservative market, insurance brokers are often the only source of real information, she says.

“I did have one person, I had spoken with his wife at length, and then when I went out to speak he said, ‘Whoa, I didn’t know this was gonna be Obamacare,’” Grove recalls. 

Grove had to break it to the guy – all insurance is Obamacare now.

Where Obamacare is shunned, insurance brokers step in

Wed, 2014-03-19 13:39

Uninsured people only have until the end of the month to buy coverage under the Affordable Care Act if they want to avoid the new penalty for not having health insurance.

In states where politicians are dead set against Obamacare, the task of getting people enrolled is falling to a group that's only too happy to help – private insurance agents.

Despite having one of the highest rates of uninsured people in the nation, Georgia is no friend to the Affordable Care Act. Recently, the state House passed the “Georgia Health Care Freedom and ACA Noncompliance Act” by Republican State Rep. Jason Spencer.

Among other things, Spencer’s bill would nix an already modest program administered by the University of Georgia. It pays 11 people called “navigators” to help almost 2 million uninsured in Georgia buy coverage through the federal exchange.

There are, however, many more people like Helen Grove, a private insurance broker in Warner Robins, Ga.

Grove recently helped veterinary technician Andrea Wallace sign up for coverage – something she’s done for a living for almost a decade, though the process has changed of late.

“Alright, so we’ll just go to Healthcare.gov,” Grove says as she types in the web address on Wallace’s computer. The online marketplace offers a much smaller range of plans, and one of them was the clear winner for Wallace – one that comes with a reduced deductible of $3,250.

Back in her office, Grove acknowledges that just about anybody can do this on the website by themselves.

“But first of all, do you really want to? I mean some people, they are just intimidated by the whole thing,” she says.

And the best part is that brokers do this at no cost to the consumer. The insurance company pays their commission.  Except, that’s also the worst part, says Rick Chelcko, president of a health benefits consulting firm in Cleveland.

“Insurance companies give brokers not only commissions for the products they sell, but they give them lots of incentives, ‘bonuses’ or what have you,” Chelcko says. “That motivates brokers to concentrate business with a particular favored carrier.”

Officials in Florida are investigating a brokerage firm for allegedly holding “Obamacare Enrollment Team” events without disclosing ties to particular insurers. But any broker who shoves clients toward the company with the best bonuses isn’t going to last long, Grove says.

“People can see that,” she says. “You build a reputation.”

And in Grove’s politically conservative market, insurance brokers are often the only source of real information, she says.

“I did have one person, I had spoken with his wife at length, and then when I went out to speak he said, ‘Whoa, I didn’t know this was gonna be Obamacare,’” Grove recalls. 

Grove had to break it to the guy – all insurance is Obamacare now.

Smith College president talks affordable education

Wed, 2014-03-19 12:53
Wednesday, March 19, 2014 - 15:51 Wikimedia Commons

A postcard of Smith College back in 1923.

What’s  it like to run the institutions that are on the front lines of the debate we're having in this country over higher education and its merits?

Kathleen McCartney, who  just took over as the president of Smith College a little less than six months ago, says cost is a big part of her thinking.

She said one of her main focuses is making a college education affordable for low-income students. McCartney comes from a middle-class family and is the oldest of five children.  She attended Tufts University because of generous financial aid, and says the country needs to make sure students from a background like hers can go to the best schools, no matter the cost.

“We have students who are going to be enrolling at Smith next year who went to charter schools, just from the lowest of low families,” said McCartney. “So we’re doing as much outreach as we can, and I know that other colleges are doing the same.”

 McCartney said one thing students and families need to do is think past the “sticker price” of a college education.

"I think we have to educate families, because some colleges are not a good bargain," said McCartney.  "What parents and students need to do is find things out like ‘How much debt does the average student leave this college with?'"

 

Marketplace for Wednesday March 19, 2014Interview by Kai RyssdalPodcast Title: Smith College president talks affordable educationStory Type: InterviewSyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Smith College president talks affordable education

Wed, 2014-03-19 12:51

What’s  it like to run the institutions that are on the front lines of the debate we're having in this country over higher education and its merits?

Kathleen McCartney, who  just took over as the president of Smith College a little less than six months ago, says cost is a big part of her thinking.

She said one of her main focuses is making a college education affordable for low-income students. McCartney comes from a middle-class family and is the oldest of five children.  She attended Tufts University because of generous financial aid, and says the country needs to make sure students from a background like hers can go to the best schools, no matter the cost.

“We have students who are going to be enrolling at Smith next year who went to charter schools, just from the lowest of low families,” said McCartney. “So we’re doing as much outreach as we can, and I know that other colleges are doing the same.”

 McCartney said one thing students and families need to do is think past the “sticker price” of a college education.

"I think we have to educate families, because some colleges are not a good bargain," said McCartney.  "What parents and students need to do is find things out like ‘How much debt does the average student leave this college with?'"

 

The only thing the Fed has left is words. And dots.

Wed, 2014-03-19 11:51

Short term interest rates have been near zero for a while, so the Fed can't really lower them any further.  Monetary policy isn't pushing up inflation, as many had feared it would.  And while the Fed is still employing the bond-buying program formerly known as Quantitative Easing to push down interest rates on bonds and assets, it's beginning to ramp that down.  

In other words, the Fed has now employed all of its tools it usually uses to influence interest rates. All it's got left? Words. Specifically, something called "Forward Guidance," which is really just telling the American people what it plans to do in future. That may sound obvious, but it's a real departure from the opaque world that the Fed used to inhabit.

Also, in referencing a chart of the guidance made with dots, Yellen said we "should not look at the dot plot as the primary way in which the Committee is speaking to the public at large."

"These dots are going to move up or down over time."

The Fed's words of the day (in dot form, of course):

 

How have you lived gentrification?

Wed, 2014-03-19 11:44
This week on the show, Marketplace Money will be tackling gentrification. Tell us about your experience!

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Amazon Prime could be too popular?

Wed, 2014-03-19 11:44
Thursday, March 20, 2014 - 04:00 Kevork Djansezian/Getty Images

Shipping orders go by on a conveyor belt at Amazon's San Bernardino Fulfillment Center October 29, 2013 in San Bernardino, California.

There's been speculation that Amazon may drive away customers by jacking up the price of its Prime service, which includes free two-day shipping and amenities like streaming video. In a survey, about 40 percent of Amazon Prime customers told Consumer Intelligence Research Partners (CIRP) that, yes, they might ditch the service if the price went up twenty bucks. 

However, CIRP partner and co-founder Josh Lowitz doesn't believe them. He says Prime is still a good deal: Free shipping, plus the video streaming, and word of more to come, like free streaming music.

"We think people will figure it out. In fact, we think when people make the $99 commitment to Amazon Prime, they’re going to be even better Amazon customers.  Because they’re going to want to get their money’s worth out of the shipping."

Which could be the real problem for Amazon. That’s how Colin Gillis, a tech analyst at BGC Partners, sees it. He points out that Amazon already loses billions of dollars a year on shipping, and those losses are growing fast.

"If you look at their shipping losses, it’s about 4.7 percent of total revenue. And that’s about the margin that a decent retailer makes."

Worst-case scenario, Amazon becomes a big-scale version of an old joke:  Sure, I lose a penny on each one, but I sell a ZILLION of them!

*CORRECTION: An earlier version of this story misstated the name of a CIRP partner and co-founder. He is  Josh Lowitz. The text has been corrected.

Marketplace Morning Report for Thursday, March 20, 2014Marketplace Tech for Thursday, March 20, 2014by Dan WeissmannPodcast Title: Amazon Prime could be too popular?Story Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

After combat, a battle for job-hunting veterans

Wed, 2014-03-19 11:35
Thursday, March 20, 2014 - 04:00 Kevork Djansezian/Getty Images

A brochure by Disney Corporation is placed on a table during a jobs fair for veterans called 'Serving Those Who Have Served' on the campus of University of Southern California on March 20, 2013 in Los Angeles, Calif.

The Labor Department is expected to release its annual report on the job situation for veterans soon. The jobless rate for those who served after 9/11 has tended to be higher than the overall unemployment rate.

Though typically highly skilled, disciplined and hard-working, veterans of recent conflicts often have more difficulty than civilians in finding work. Companies love to hang yellow ribbons and run ads about supporting America’s veterans. But veterans say they aren’t always as quick to hire them because civilian managers don’t understand how to evaluate military experience.

“The hardest part for me when I first got out of the military was figuring out what to write on a resume,” says Marine veteran Michael Wersan, who served in Iraq as an infantry assaultman. “Nobody cares that I did 700 patrols in seven months. That doesn’t compute for a civilian.”

But he translated his skills into a civilian resume and picked up new ones studying at the City University of New York. He’s now a construction supervisor.

Former Marine Tireak Tulloch did two tours in Iraq and had advanced training in network engineering. His skills are in demand, but at first, he says he couldn’t get past initial phone interviews. A reservist when he was job searching, he felt managers wouldn’t hire him because they feared he’d be sent back to Iraq. But he kept at it and his civilian career in technology has since taken off.

Those who speak for veterans say there's a great deal of mistunderstanding amongst employers. 

“I think there are a lot of misconceptions that every veteran is a ticking time bomb,” says Derek Bennett, an Army veteran, who is chief of staff of the advocacy group Iraq and Afghanistan Veterans of America.

Post-traumatic stress disorder is a reality after combat. But veterans groups say employers need to understand that PTSD is managable. Overall, they want employers to look beyond stereotypes and do more to reach out to veteran communities, where they may find men and women with the skills they’re looking for.

Marketplace Morning Report for Thursday, March 20, 2014Veterans' jobs programs close unemployment gap

Mark Garrison: Companies love to run ads about supporting the troops. But former Army officer Derek Bennett, of Iraq and Afghanistan Veterans of America, says that doesn’t always mean hiring them.

Derek Bennett: Finding employment can be difficult. Translating what you’ve done in the military into something that is recognizable by an employer can be difficult as well.

Marine veteran Michael Wersan says combat experience is hard to explain on a resume.

Michael Wersan: Nobody cares that I did 700 patrols in seven months. That doesn’t compute for a civilian.

He’s now a construction supervisor. Iraq Veteran Tireak Tulloch found job hunting frustrating at first.

Tireak Tulloch: I really couldn’t get past the phone interview.

But he kept at it and now works in network engineering. Apart from misunderstanding military skills, Derek Bennett says some employers misunderstand vets.

Bennett: I think there are a lot of misconceptions that every veteran is a ticking time bomb.

Not all veterans have PTSD. And it’s manageable. Vets want employers to look beyond stereotypes and do more to find the veterans who might have the skills they’re looking for. I'm Mark Garrison, for Marketplace.

by Mark GarrisonPodcast Title: After combat, a battle for job-hunting veteransStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Will tablets replace waitresses and store clerks?

Wed, 2014-03-19 11:32

We’ve seen this pattern before, everywhere from elevator operators to ATMs: Technology takes jobs. So what about tablets? Sales are skyrocketing. Does that mean an equivalent dip in work for humans?

If you’re a retailer, Joe Skorupa, editor in chief of Retail Info Systems News, points out that you actually have to buy equipment, and expensive equipment at that, to allow you to take money from customers. In other words, it takes money to make money.

“For every cash wrap station in a store, you have to have a table scanner which is built into the table and is fixed. You have to have a mobile scanner that’s handheld. You have to have a printer,” he says.

Registers cost a lot of cash. Between $1,500 and $2,000 each, says Skorupa. But he says there’s a cheaper way.

Tablets and other new mobile technology can run credit cards, display menus, and they’re only about $500 each. Skorupa calls them a Swiss army knife of digital capability. So there’s an understandable concern – why pay a human cashier every day, when you can pay for a tablet, once?

But even though the Apple store doesn’t have a cash register in sight, and is the birthplace of the tablet, it still seems to be swarming with sales people.

“I don’t think we can say that it’s taking jobs away,” says Dan Shey, a practice director with ABI Research.

Mobile technology, like tablets, says Shey, allow employees to be more flexible. Like the roving workers at the Apple store – they could potentially stock shelves, answer questions, or take your payment.

“Certainly if you have a product in your hand you’re going to see more sales associates approaching you,” he says, “so you can buy that product as soon as possible.”

Retailers are worried – if you see a long line, or can’t find a register, you might just leave the store, and take your money with you. Shey says tablet sales are growing fast. Last year, 160 million were shipped around the world. But tablets don’t always mean more efficiency.

Dacotah Rousseau and her husband own Flute, a chain of Champagne bars in Manhattan. She says she tried to embrace tablets, but they didn't return her love. Her bar sells, and occasionally spills, liquids. And of course, the occasional table gets knocked over. All of which can be tough on electronics.

“If you’ve ever dropped a cell phone,” says Rousseau, “it can be pretty catastrophic and it’s the same thing.”

Another problem - Wi-Fi can be spotty at her bar which mean processing payments can take a while.

“It would go down and we couldn’t run credit cards,” says Rousseau, “and when people want to get their check and leave, they want to get their check and leave. It’s something that they will go on Yelp and complain about the next day -- if it took 20 minutes to get a check, or to pay their bill.”

Rousseau says she was hoping to put her menus on tablets. But she says she’s not sure how well tablet menus would work. Something she discovered recently when she and her husband were out to dinner.

“If you have one tablet at a table only one person at a table can browse the menu at a time. And very often there is one tablet, they’re expensive, and you don’t hand one to every customer. The days when you handed a menu to the man at the table and he ordered for everyone, that’s over.”

Joe Skorupa says while we might not see a change yet, ultimately tablets will mean less human employees who are paid more for more skills. But Dacotah Rousseau says, her employees, do not have to worry about electronic competition, at least not any time in the foreseeable future. There are she notes, still a lot of issues that need to be worked out before tablets will work for her workplace, such as protecting them from theft.

“You would not believe the things that people take as souvenirs,” she says. “It’s amazing to me – they steal silverware, they steal printed menus, they steal pictures off the walls in the bathrooms. People will take anything as a souvenir.”

Did any of her tablets get stolen?

“I don’t know,” she muses. “I kind of wish they were. At least somebody would be using them.”

Who gets the revenues from Jason Collins' jersey sales

Wed, 2014-03-19 11:20

Even non-basketball fans know about basketball fan Jason Collins. He’s the first openly gay player in one of the four major professional sports. He wears jersey number 98 to honor Matthew Sheppard; the teen killed in a gay-hate crime in 1998.

Since Collins started with the Brooklyn Nets on a temporary 10-day contract a couple of weeks ago, his jersey has been among the top sellers on NBA.com. But how do the revenues from his jersey sales actually break down?

The NBA will receive 50 percent of proceeds from sales and the National Basketball Player’s Association will get the other half. The NBA has decided to donate its portion of the proceeds towards the Gay, Lesbian and Straight Education Network (GLSEN) and the Matthew Shepard Foundation

 Alicia Jessop teaches sports law at the University of Miami. She said the Brooklyn Nets will hold onto the money they make off the jersey.

"All the merchandise they sell in their own brick and mortar locations and their teams stores. They will keep all of the proceeds from those sales,” said Jessop.

 Jessop said the high jersey sales really speak to the power of sports.

"People who would never go to an NBA game are sitting front and center," said Jessop. "A guy who's averaging less than 1 point per game? He has the best selling jersey on the NBA’s website." 

A day to be neighborly

Wed, 2014-03-19 11:12

From the Marketplace Datebook, here’s a look at what’s coming up Thursday:

  • The Conference Board releases its monthly index of leading economic indicators.
  • It’s the first day of spring. One springtime activity—the National Cherry Blossom Festival. It begins in Washington.
  • And Mister Rogers fans, put on a nice sweater. Won’t You Be My Neighbor? Day is observed on the anniversary of Fred Rogers’ birthday.

Grumpy Cat gets recalled; gets grumpier

Wed, 2014-03-19 09:58

Just to show you that pretty much everything out there's trying to do you harm...

On the same day Toyota got slapped with a $1.2 billion fine from the Justice Department for how it handled that Prius unintended acceleration recall, Ganz, the plush toy manufacturer, has recalled three different models of its Grumpy Cat plushes (that's what they're called).

Two points:

1) The internet can help you out if you don't know what Grumpy Cat is.

2) Once that happens, you'll ask the same question I did: Who buys one of those things?

Our trade gap is at its lowest point in 14 years

Wed, 2014-03-19 09:53

The Commerce Department just released big news about the U.S. current account deficit, the measure of the flow of goods and services into and out of this country. The deficit has  reached a 14-year low, down to $81.1 billion.

The simplest way to think of the current account deficit is as a gap. It's the value of all the stuff and money the U.S. sends overseas, minus what it imports. Right now the U.S. is importing $81.1 billion more in goods and services than it is exporting. But this is $215 billion less than the peak in 1999.

The main reason, says economist Robert Scott at the Economic Policy Institute, is that the economy is weak and therefore interest rates are low. That means the U.S. is paying less to foreign countries that hold U.S. Treasuries. That means less cash leaving the country, headed overseas.

A weak economy also means a weak dollar, which makes U.S. products more attractive to foreign countries, so they are buying more American goods. Another big reason for the deficit drop is the U.S. energy balance. "In recent years the U.S. has had a boom in unconventional energy production domestically, gas but also oil," says Gian Maria Milesi-Feretti , deputy director of research at the International Monetary Fund.

Oil and gas production continues to increase this year, and much of that energy will probably be exported. That growth, along with an expected decline in imports, means the deficit is likely to continue its decline.

Flight 370: Mystery, maybe tragedy, big news

Wed, 2014-03-19 09:37

 No one knows what happened to Malaysian Airlines Flight 370. That doesn’t stop news outlets from talking about theories. 

There's been speculation about the pilot, the timeline, the route.

Explanations are all over the place, sometimes bordering on the absurd:

“The problem is that when there is nothing new, you have a ton of talking heads blathering on, which gets them into speculation, which is not information,” said Judy Muller, a broadcast professor at USC’s Annenberg journalism school, “it’s blather.”

“You can’t really tell 24 hour news stations that thrive on this sort of story to only come on when they have new information, because that’s not what drives ratings,” she said.

And, CNN’s ratings are way up.  The AP reported that prime-time ratings for the news channel have risen 68 percent.

“Let me be provocative,” said Jill Geisler, who teaches at the Poynter Institute, “I’m glad CNN is giving it this much coverage.” Too often, she said, the only news that gets attention in the U.S. is news about Americans.

really? look closer? check it out @DR24 #MH370 and its like a mile away Pulau Perak, where they "last" tracked it pic.twitter.com/tqavAe4zIL

— Courtney Love Cobain (@Courtney) March 17, 2014

But this mystery transcends that. People want find the missing plane. To know what happened. There’s an element of fear that drives us.  “This is a story that involves mystery, universality, and relatibility,” Geisler said.

We just have to remember this isn’t entertainment. It’s not a movie. There are 239 missing people. 

The only thing the Fed has left is words. And dots.

Wed, 2014-03-19 08:56
Wednesday, March 19, 2014 - 14:51 Brendan Smialowski/AFP/Getty Images

Janet Yellen's first press conference as Fed Chair.

Short term interest rates have been near zero for a while, so the Fed can't really lower them any further.  Monetary policy isn't pushing up inflation, as many had feared it would.  And while the Fed is still employing the bond-buying program formerly known as Quantitative Easing to push down interest rates on bonds and assets, it's beginning to ramp that down.  

In other words, the Fed has now employed all of its tools it usually uses to influence interest rates. All it's got left? Words. Specifically, something called "Forward Guidance," which is really just telling the American people what it plans to do in future. That may sound obvious, but it's a real departure from the opaque world that the Fed used to inhabit.

Also, in referencing a chart of the guidance made with dots, Yellen said we "should not look at the dot plot as the primary way in which the Committee is speaking to the public at large."

"These dots are going to move up or down over time."

The Fed's words of the day (in dot form, of course):

 

Marketplace for Wednesday March 19, 2014by Sabri Ben-AchourPodcast Title: The only thing the Fed has left is words. And dots.Story Type: News StorySyndication: PMPApp Respond: No

Need money for school? Sue Google

Wed, 2014-03-19 08:07

Who hasn't been a student in need of money? Back in my day, we would pick up an extra shift at the library or clean petrie dishes for the biology department. But we were a simple people--easily delighted and distracted by things like carpenter pants and network TV. These days, students are much more sophisticated. 

Case in point: A group of students in California is suing Google. They claim Google's Gmail monitoring violates federal and state privacy laws. The story was written up by Mashable in fuller detail here.

The nine students who are bringing the case are focused on something called "Apps for Education." It's a collection of free, web-based education tools with around 30 million users. Many of these users are under 18 years of age. Therein lies the class action lawsuit: the Family Educational Rights and Privacy Act, or FERPA, ensures the privacy of records of students under 18. Evidently, Gmail might be in violation of this. 

That could potentially mean Google pays out millions to Gmail users.  Not sure how any of it will pan out... I have a feeling that Google's lawyers are of the pelagic persuasion.

Still, hats off to the students for fighting the good fight. And, just in case they need money next semester, the NSA might want to send them a preemptive fruit basket. But seriously, hats off to the students. 

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