Marketplace - American Public Media

Syndicate content
Updated: 35 min 21 sec ago

President Obama makes the rounds stumping for ACA

Thu, 2014-03-20 12:40
Thursday, March 20, 2014 - 16:37 Warner Brothers Inc.

President Barack Obama on the Ellen DeGeneres show, joking about selfies and stumping for the ACA.

This month the Commander-in-Chief became the Promoter-in-Charge.

With less than two weeks before the deadline to sign up for insurance under the Affordable Care Act, President Barack Obama is making the rounds.

Today’s appearance on the Ellen DeGeneres show is just the latest stop on the president’s barnstorming tour.

Now here’s the deal with these quick presidential cameos: In exchange for a few minutes to talk up health insurance, President Obama has to deal with questions about shopping trips to the Gap and exchanges with comedian Zach Galifianakis.

Here’s just one question from that Q and A:

Galifianakis:  I have to know, what’s it like to be the last black President?

President Obama: Seriously. What’s it like for this to be the last time you ever talk to a President?

The president has taken some heat for using pop culture to promote his ACA campaign -- but here’s the thing: Federal health officials at the Centers for Medicare and Medicaid – the people overseeing the ACA rollout - are expected to spend $52 million promoting the new health law over the first three months of the year.

All these Ellen and Zach Galifianakis interviews don’t cost the federal government a dime.

Marketplace for Thursday, March 20, 2014What's the deal with presidents and comedy shows?by Dan GorensteinStory Type: News StorySyndication: PMPApp Respond: No

What's the deal with presidents and comedy shows?

Thu, 2014-03-20 12:11

President Barack Obama appeared on yet another television show on Thursday, this time talking all things healthcare on the Ellen DeGeneres Show. Some (including media pundit Bill O'Reilly) may have been confused when they saw the President of the United States appear on the internet show Between Two Ferns with Zack Galifianakis only days prior, but it’s not as if presidents haven’t appeared in strange places before (anything to get a message to the people).

Richard Nixon was on Laugh In... 

... and George W. Bush guest-starred on Deal or No Deal:

 

But Obama has truly gone out of his way to poke fun at himself, appearing on more late-night talk shows than any other modern Commander-In-Chief, which, according to some calulations, makes him more likable to the public. A short list of President Obama appearances on comedy-related television shows: 

- Ordered General Odierno to shave Stephen Colbert’s head 

- Wore a Barack Obama mask on SNL during the 2008 campaign

Slow-jammed the news with Jimmy Fallon

Helped say goodbye to Jay Leno

- Counted down a Top Ten list for David Letterman

To be fair, every politician tries to encourage media coverage of themselves and Obama is no exception... though he might be the first to get Five Guys with Brian Williams. But as omnipresent as Barack Obama has been on late night, First Lady Michelle Obama has him beat for off-the-beaten-path TV appearances. She’s been on iCarly, Sesame Street, and Iron Chef.

Walmart's "Black Friday" of garden supplies: More than a marketing ploy

Thu, 2014-03-20 11:50

Yesterday was the official start of Spring and to mark the occasion, Walmart is launching a “Black Friday”-like sale for outdoor items. Black Friday, of course, kicks-off the Christmas shopping season and it’s when retailers make most of their profits. But is there really a Black-Friday-like demand for gardening and outdoor supplies in the spring? 

"The spring selling season is the most important season for homecenters when you talk about Lowes and Home Depot," said Drew Reading, a homecenter analyst at Bloomberg Industries.

"Last year, Home Depot’s seasonal business was about 30 percent of their total sales for the year," Reading said. People are buying "things like outdoor power equipment, you know lawn mowers, live plants, patio sets and bar-b-ques."

Laura Kennedy, an analyst at Kantar Retail, said consumers spent about $30 billion dollars on these items last year. She adds that Walmart’s Spring sale isn’t new, Lowes and Home Depot have had similar sales for years now. And they have a loyal base.

"I believe Home Depot said that they’re top garden customers visit four times as often as their other shoppers and so they’re really in with the serious gardeners," she said. 

Kennedy doesn’t think Walmart wants to be a heavy weight in the home improvement business. Instead, it wants to pick off customers, who come in for the Spring deals, and hopefully get them hooked on buying other stuff.

Businesses take advantage of lax regulations on drones

Thu, 2014-03-20 11:07

The Washington Nationals baseball team got into a bit of trouble with the Federal Aviation Administration a couple of weeks ago. They were using a drone to take aerial pictures of spring training -- the kind of shots that are pretty much impossible for a human to capture.

The FAA said that nobody can do anything commercial with drones until it says so. The FAA has since lost a round in court on that issue, but while it works on new regulations, there are loopholes -- and business opportunities.

Josh Ziering runs a San Francisco-based company called QuiQui, which delivers pharmaceuticals via drone 24 hours a day. Ziering said he knows he has a battle on his hands.

“I would describe myself as a trouble maker,” said Ziering. “So we’re going to cause as much trouble as possible until they’re ready to create regulation and make this industry happen.”  

We asked Ziering what he would do if the regulations mapped out by the FAA prohibit him from running his business.

“We would love for the FAA to have regulations that allowed for drones,” said Ziering. “And if it unfortunately excluded us from those regulations that would be tragic. But at the same time, the FAA is only for America. So there is literally an entire world of people that we can deliver things to.”

Happy International Gary Oldman Day

Thu, 2014-03-20 10:30

Here's what's coming up on Friday, March 21, 2014:  

  • Actor Gary Oldman, known for roles in Sid and Nancy, The Dark Knight and Dracula, turns 56, so we should send up the bat signal and call for champagne. 
  • Jeweler Tiffany is scheduled to release its quarterly earnings.
  • The infamous Alcatraz penitentiary closed its doors in 1963. At any time, “The Rock” housed less than one percent of the total federal prison population, and more than one million tourists visit every year.

 

AirBnB got 99 problems but going public ain't one

Thu, 2014-03-20 10:22

AirBnB is the enormously popular company that lets you rent out your home, apartment, or room to complete strangers.   It's not clear that it's technically always legal in every city, or even permitted by most leases.  The hotel industry is none too enthused either.  But the company is still considering going public, and may end up being valued as high as $10 billion.  In fact, such pressures are common for startups.  In the pharmaceutical industry, for example, companies will go public even before a drug is approved by the FDA.  As for any investment, there's always an amount of risk.  If the problems aren't an existential threat, it's all part of the game.  

AirBnB got 99 problems but goin' public ain't one

Thu, 2014-03-20 10:22

AirBnB is the enormously popular company that lets you rent out your home, apartment, or room to complete strangers.   It's not clear that it's technically always legal in every city, or even permitted by most leases.  The hotel industry is none too enthused either.  But the company is still considering going public, and may end up being valued as high as $10 billion.  In fact, such pressures are common for startups.  In the pharmaceutical industry, for example, companies will go public even before a drug is approved by the FDA.  As for any investment, there's always an amount of risk.  If the problems aren't an existential threat, it's all part of the game.  

Drought-resistant gardens can be more than gravel

Thu, 2014-03-20 10:19

As the California drought continues, it’s hard to look at all the lush lawns without thinking about the water that goes into keeping them green. In Los Angeles, the city will actually pay you to rip up your grass.

But a gravel-covered yard isn’t that appealing, unless you are a toddler with a taste for rocks.

“I think that the biggest myth that should be dispelled is that native plant gardens are wild and ugly and look dead during part of the year,” said Lili Singer, with the Theodore Payne Foundation for Wild Flowers and Native Plants. With drought-resistant natives, you can have lush gardens with flowers.

But it takes time for them to grow in, and it takes some work. You can’t just pop a plant in the ground and walk away.

“When you first put in a drought-tolerant garden,” Singer said, “it isn’t drought tolerant the day you put it in. These are coming from a nursery, they’re little babies."

At Theodore Payne’s nursery, garden designer Wynne Wilson looks at buckwheat, sage, and heuchera, “I’m like a chocoholic in Candyland."

Low-impact gardens can be quite sophisticated.  You have to think about the soil, the sun, the plants, the texture, the time of year they’ll bloom, and how to get them water.

“It’s extremely important how we water these new gardens,” Wilson said.

Modern irrigation systems have moved well beyond sprinklers on timers. They waste less water and they have a lot of moving parts. There are computers, ground sensors, even a 6-inch satellite dish you put on your house that communicates with weather satellites about humidity and temperature.

“We just did a 2,000 square foot front garden, completely new, with the irrigation we did all of our beautiful systems, and that was approximately $3,500,” Wilson said. 

Of course, you don’t need a satellite or a $3,500 irrigation system to have a lovely drought-resistant garden.

Just some knowledge about plants, a $10 garden hose, and the time to water each plant one at at time. 

Everyone’s first tweets are boring

Thu, 2014-03-20 10:02
Friday, March 21, 2014 - 04:00 FRED TANNEAU/AFP/Getty Images

Twitter's logo

The tech world is full of big birthdays it wants you to celebrate in 2014: The World Wide Web turned 25, Facebook turned 10, and to celebrate its 8th birthday, Twitter wants you to find your first tweet.

Unlike Facebook's Look Back videos, a 62-second "life story" pulled from your account pictures, likes, friend posts, and status updates set to the most optimistic elevator music you've ever heard, Twitter is inviting tweeters to find and collect their own content. All of it to encourage users to take a deep sigh and nostalgically ask, "remember when?"

But 25, 10, and 8-years-old? It's just not that old in the scheme of things, and a look back tool for a short period of time has limited value. Twitter’s first tweet tool turns up mostly painfully boring results across the board. Even top executives, business leaders, and entrepreneurs didn’t have their social media strategy together when they first joined.

A review of these first tweets shows most top executives joined to express their pride about the very act of using Twitter, and less about the self-promotional aspects the network is well-known for today: 

Jack Dorsey, co-founder, Twitter:

Sheryl Sandberg, chief operating officer, Facebook:

Steve Case, former chief executive officer and chairman, America Online:

Martha Stewart, businesswoman, entrepreneur, and television personality:

Although, it appears some caught on quickly....

Donald Trump, businessman, television personality:

Twitter has seen an extraordinary rise tied to its exponential user growth of 140 percent over the last three years. While that growth has slowed down recently, not many companies can boast having 241 million potential clients at the tender age of eight. 

by Tobin LowStory Type: BlogSyndication: PMPApp Respond: No

Oprah and Starbucks are teaming up to make tea.

Thu, 2014-03-20 07:35

Starbucks and Oprah are teaming up to make tea.

This would appear to be the corporate version of those comic books where The Penguin teams up with The Joker, Two-Face and The Riddler, and it just doesn't seem fair to the people of Gotham (until Batman shows up, of course... but until that moment, NOT COOL). We've got evil hench-penguins, very flexible, knife wielding circus ladies, and very difficult trivia questions. Before you know it, the entire subway has shut down and no one can get to work.

For a caffeine addicted female like myself, not only am I certainly in the "target audience," I probably won't be able to *not* buy this tea. Together, Oprah and Starbucks will probably activate a long-dormant chip in my brain, and, (again) before you know it, I'll be building fortresses out of boxes of this tea. And talking enthusiastically about it to all of my friends. And "liking" it on Facebook unironically.

"Teavana Oprah Chai" was personally developed by Oprah. It is said to feature strong notes of cinnamon, ginger, and cardamom with a hint of clove.

This already makes me want to start crying and talking about my feelings at what was supposed to be a book club meeting, until everyone had one too many of the signature Love In the Time of Cholera cocktails I made in an attempt to one-up last month's annoyingly perfect "Middlesex homemade sushi" event, and the conversation devolved into how difficult it is to find love when nobody has cholera, and how maybe it would be easier if everyone had cholera, because that might really put things into perspective and how long should you wait to reply to a kind of meh text some guy sent after a date without seeming like the kind of girl who only demands meh texts, but also not seeming unavailable or, worse, like you're playing games, which, of course, you are, but everyone plays games and so you, genuine game-hater that you are, really have no choice.

Does anyone else feel like tea?

Tragically, no Teavana for us until April 29th.

 

The Making of Teavana Oprah Chai

 

Oprah and Starbucks are teaming up to make tea.

Thu, 2014-03-20 07:25
Thursday, March 20, 2014 - 10:35 Oprah.com

Oprah and Starbucks CEO Howard Schulz announcing their partnership.

Starbucks and Oprah are teaming up to make tea.

This would appear to be the corporate version of those comic books where The Penguin teams up with The Joker, Two-Face and The Riddler, and it just doesn't seem fair to the people of Gotham (until Batman shows up, of course... but until that moment, NOT COOL). We've got evil hench-penguins, very flexible, knife wielding circus ladies, and very difficult trivia questions. Before you know it, the entire subway has shut down and no one can get to work.

For a caffeine addicted female like myself, not only am I certainly in the "target audience," I probably won't be able to *not* buy this tea. Together, Oprah and Starbucks will probably activate a long-dormant chip in my brain, and, (again) before you know it, I'll be building fortresses out of boxes of this tea. And talking enthusiastically about it to all of my friends. And "liking" it on Facebook unironically.

"Teavana Oprah Chai" was personally developed by Oprah. It is said to feature strong notes of cinnamon, ginger, and cardamom with a hint of clove.

This already makes me want to start crying and talking about my feelings at what was supposed to be a book club meeting, until everyone had one too many of the signature Love In the Time of Cholera cocktails I made in an attempt to one-up last month's annoyingly perfect "Middlesex homemade sushi" event, and the conversation devolved into how difficult it is to find love when nobody has cholera, and how maybe it would be easier if everyone had cholera, because that might really put things into perspective and how long should you wait to reply to a kind of meh text some guy sent after a date without seeming like the kind of girl who only demands meh texts, but also not seeming unavailable or, worse, like you're playing games, which, of course, you are, but everyone plays games and so you, genuine game-hater that you are, really have no choice.

Does anyone else feel like tea?

Tragically, no Teavana for us until April 29th.

 

The Making of Teavana Oprah Chai

 

Marketplace Morning Report for Thursday, March 20, 2014by Stacey Vanek SmithStory Type: BlogSyndication: PMPApp Respond: No

PODCAST: Veteran unemployment

Thu, 2014-03-20 06:55
Thursday, March 20, 2014 - 07:25 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 benchmark interest rate in America is higher now than it was before the new chair of the Federal Reserve's briefing yesterday. 2.77 percent is the 10 year yield versus 2.67 percent. We get our own briefing from Diane Swonk, chief economist at Mesirow Financial in Chicago.

And, 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.

Meanwhile, more than two years after a 5.8-magnitude earthquake damaged the Washington Monument, the U.S. National Park Service is readying to reopen it to tourists this spring. Examining and repairing the monument’s more than 30,000 stone pieces cost $15 million, but that work is being paid for in a novel way. The government split the tab with billionaire David Rubenstein.

Marketplace Morning Report for Thursday, March 20, 2014by David BrancaccioPodcast Title: PODCAST: Veteran unemploymentSyndication: All in oneApp Respond: No

PODCAST: Veteran unemployment

Thu, 2014-03-20 04:25

The benchmark interest rate in America is higher now than it was before the new chair of the Federal Reserve's briefing yesterday. 2.77 percent is the 10 year yield versus 2.67 percent. We get our own briefing from Diane Swonk, chief economist at Mesirow Financial in Chicago.

And, 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.

Meanwhile, more than two years after a 5.8-magnitude earthquake damaged the Washington Monument, the U.S. National Park Service is readying to reopen it to tourists this spring. Examining and repairing the monument’s more than 30,000 stone pieces cost $15 million, but that work is being paid for in a novel way. The government split the tab with billionaire David Rubenstein.

PODCAST: Veteran unemployment

Thu, 2014-03-20 04:25

The benchmark interest rate in America is higher now than it was before the new chair of the Federal Reserve's briefing yesterday. 2.77 percent is the 10 year yield versus 2.67 percent. We get our own briefing from Diane Swonk, chief economist at Mesirow Financial in Chicago.

And, 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.

Meanwhile, more than two years after a 5.8-magnitude earthquake damaged the Washington Monument, the U.S. National Park Service is readying to reopen it to tourists this spring. Examining and repairing the monument’s more than 30,000 stone pieces cost $15 million, but that work is being paid for in a novel way. The government split the tab with billionaire David Rubenstein.

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

Thu, 2014-03-20 01:00

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.”

After combat, a battle for job-hunting veterans

Thu, 2014-03-20 01:00

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.

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.

Amazon Prime could be too popular?

Thu, 2014-03-20 01:00

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.

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

KBBI is Powered by Active Listeners like You

As we celebrate 35 years of broadcasting, we look ahead to technology improvements and the changing landscape of public radio.

Support the voices, music, information, and ideas that add so much to your life. Renew here or visit KBBI by April 21 to enter to win one round-trip airfare with Era between Homer and Anchorage. Thank you for supporting your local public radio station.

ON THE AIR

FOLLOW US

Drupal theme by pixeljets.com ver.1.4