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Another day, another corporate breakup

Mon, 2014-10-06 03:40

Another day, another corporate breakup. Hewlett-Packard confirmed today it will split into two companies. One will focus on personal computers and printers, and the other will focus, among other things, on the enterprise space of the cloud. It turns out HP is not the only old tech company that's been refocusing in a divergent tech landscape.

PODCAST: William Dudley on regulation and interest rates

Mon, 2014-10-06 03:00

It's the job of the Federal Reserve Bank of New York to regulate powerful Wall Street banks. It's not the only regulator, of course, yet it's a crucial one. But has the New York Fed become too deferential to the financial institutions it watches over, too cozy? This question moved to the foreground after the public radio program This American Life with news organization ProPublica obtained audio recordings made secretly inside the New York Fed. The recordings were made by a then–New York Fed employee who would later sue for wrongful dismissal. William Dudley, president and CEO of the Federal Reserve Bank of New York, joins us to discuss. He'll also talk about one of the most consequential economic decisions of the decade: when, at long last, to raise interest rates. That determination, which will have the effect of tapping the brakes of the economy, will revolve around how strong the labor market has become and whether prices are threatening to rise too quickly.

LinkedIn gives college ratings a big data twist

Mon, 2014-10-06 02:00

LinkedIn is entering the crowded field of college rankings and giving it a big data twist. 

When you join LinkedIn, you tell the site where you went to school, your field and where you work. The job site ran the numbers on its more than 313 million members to see where they went to college and what they’re doing now, says spokesperson LinkedIn Crystal Braswell.

They used it to “narrow down the list of top schools that are really launching their students into successful, desirable jobs,” Braswell says.

LinkedIn defined “desirable jobs” by crunching the numbers to find companies that are good at both attracting and retaining employees.

Mark Schneider of the American Institutes for Research says the list is limited.

“Right now, only the top 25 schools in any of the fields is displayed,” he says.

And so it’s mostly the usual colleges that top the lists. Still, Schneider favors this data-driven approach, especially in the current economy.

“I think the 2008 financial crises scared the life out of everybody,” Schneider says. “You go to college and now you’re not even guaranteed good employment.”

And with college tuition rising, Schneider says students are increasingly interested in what their college degree will get them in the job market.

William Dudley on interest rates and regulatory scrutiny

Mon, 2014-10-06 02:00

As Marketplace celebrates its 25th birthday this year, we are looking at the surprising, sometimes delightful and sometimes destructive ways that prices have changed during that quarter century. And that means an examination of our old friend inflation.

William Dudley, president of the Federal Reserve Bank of New York, thinks a lot about inflation. He joined Marketplace Morning Report host David Brancaccio to talk about when to raise interest rates to thwart inflation, and why he thinks it's good to let the economy run "a little hot" before taking action.

Among the topics discussed, Dudley also addresses concerns that the New York Fed has become too deferential to the financial institutions it watches over. This question moved to the foreground after the public radio program This American Life—along with news organization ProPublica—obtained audio recordings made secretly inside the New York Fed. The recordings were made by a former New York Fed employee who later sued for wrongful dismissal. 

Click on the media player above to hear William Dudley, president of the Federal Reserve Bank of New York, in conversation with Marketplace Morning Report host David Brancaccio.

DB: From APM in NY, I’m David Brancaccio. It’s the job of the Federal Reserve Bank of New York to regulate powerful Wall Street banks. It’s not the only regulator, of course, yet it’s a crucial one. But has the NY Fed become too deferential to the financial institutions it watches over? Too cozy?

This question moved to the foreground after the public radio program This American Life with news organization ProPublica obtained audio recordings made secretly inside the New York Fed. The recordings were made by a then NY Fed employee who would later sue for wrongful dismissal. Marketplace talked to the president and CEO of the NY Fed about this. William Dudley, thanks for joining us.

WD: Happy to be here.

DB: We all heard some tapes on the radio that make it sound like your team went soft on at least one big Wall Street firm that you’re supposed to be regulating. Is that not what you hear on the tapes?

WD: I completely stand behind the work and integrity of our staff. They’re operating completely in the public interest. That’s the first point I’d make. The second, improving supervision has been and remains a priority for me. When I became president of the bank in 2009, soon after that I commissioned Professor David Beim of Columbia to come in and do an evaluation of supervision.

DB: He did that big internal report that you got a look at that came out in some filings.

WD: That’s correct. And I basically told him, "Go anywhere you want, ask any questions you want, and tell me what you think about the state of play in supervision of the bank." And I think the record will show that we were actually quite responsive to the recommendations in the Beim report. We’ve had a significant reorganization within our supervision groups in terms of how we do supervision. We do a lot more horizontal and quantitative reviews. Examiner independence is completely paramount to how we run supervision. We try to ensure that independence by rotations, so people don’t stay within the same institution indefinitely. We rotate them every couple of years, but the real key is to look at what we’ve done. Is the banking system safer and sounder today than it was five years ago? And I think when you look at that you’ll see a whole bunch of things that the Federal Reserve system has done to make the banking system much safer and sounder. Higher cap rate requirements, higher liquidity requirements, capital surcharges for systemically important financial institutions…

DB: Here’s the thing though, we study it in poli-sci class, the tendency of government regulators to adopt the values of those they regulate. The watchdogs can become, what were we taught, captured. Now avoiding capture, it seems to me that it’s something that you don’t achieve once and for all. Isn’t it something that you have to continually fight against?

WD: In terms of the bank culture, this is something that you’re always… you never arrive at the destination of the culture you’re trying to strive for. We continue to work to have the best culture in the bank that we can possibly have. When I became president of the bank in January of 2009, I came back to the bank after an FOC meeting. We had a town hall. And I made it very clear then, in fact, the primary mantra of that address was “best idea wins.” And we continue to strive to make sure that is embedded in the culture of the bank.

DB: You saw what Senator Elizabeth Warren said in this statement, “When regulators care more about protecting big banks from accountability than they do about protecting American people from risky and illegal behavior on Wall Street it threatens our whole economy.” She and Senator Sherrod Brown have called for a congressional investigation. What do you think of the idea of an investigation given the stakes are quite high in this area?

WD: It’s the Congress' prerogative to investigate. If they want to investigate, we’re going to completely cooperate because we think the facts are very much on our side.

DB: Mr. Dudley is a regulator, but he’s also one of the guardians of America’s interest rates as a member of the Federal Reserve’s open market committee. In that regard, Dudley told me there is room to be patient before he would recommend raising interest rates to thwart inflation.

WD: We’re going to be assessing the progress towards our dual mandate objectives, maximum sustainable employment in the context of price stability. Right now we’re missing on both of our objectives. The unemployment rate is high and inflation is low relative to a target of 2 percent. It calls for a very accommodative monetary policy. Now, if the economy evolves as most people are hoping over the next year, hopefully we’ll get to a point where we actually can raise interest rates in 2015, and I would be delighted if that could be the case.

DB: You would be delighted to raise interest rates if that’s the case? Why?

WD: In other words, if the economy is strong enough and we’re closer to our objectives, raising interest rates would be a sign of success. So it would actually be good news.

DB: I saw you said that you would be willing to let the economy run a little hot, those were your words, in the interest of the economy being healthy. What did you mean by that?

WD: A lot of people that are currently long-term unemployed, they’ve been out of work for a very long time. This is obviously very bad for them, but it’s also very bad for the economy as a whole. Allowing the economy to run a little hot would make it more likely that inflation would actually move up towards the 2 percent objective. And two, it would pull some of these long-term unemployed back into the workforce. Getting these people employed is critical to the long-term health of the economy, because if they’re not employed over the next year or two, they’re going to lose their job skills and become unemployable.

DB: Does this make you a dove, sir? On the question of inflation.

WD: I don’t think so. I’m reacting completely to the Fed's mandate objectives. We’re trying obviously to hit 2 percent, but we’re not going to hit it precisely. We should be spending some time a little below it and a little above it. It’s not a ceiling.

DB: Inflation is an odd thing though. It’s often in the eye of the beholder. The consumer price index is telling us there’s hardly a dram of inflation, but if you have medical bills or you’re sending a kid to college, prices might be going up and your household budget might be under pressure even now.

WD: That’s absolutely correct. I think people experience inflation in different ways depending on their particular circumstances and what people are experiencing. Inflation is also relevant to what’s happening on the income side of the ledger. If your income is rising at a decent clip, then 1.5 percent inflation is very manageable, but if your incomes are stagnant or declining then 1.5 percent inflation is a problem for individuals.

DB: William Dudley, president and CEO of the Federal Reserve Bank of New York, thank you very much for the time.

WD: Thank you.

Charitable giving not keeping up with highest incomes

Mon, 2014-10-06 02:00

Are the rich getting less generous? A new report from the Chronicle of Philanthropy finds that while overall giving is up, the wealthiest Americans are giving a smaller share of their wealth to charity. Meanwhile, the less well-off are giving away more of what they earn.

The Chronicle looked at tax returns for those who itemized deductions in 2012. Those earning more than $200,000 a year gave 4.6 percent less of their income to charity than they gave in 2006, before the recession. Americans making less than $100,000 gave 4.5 percent more.

As the rich have grown richer—partly from stock market gains—their giving hasn’t kept pace, says Chronicle of Philanthropy editor Stacy Palmer. Meanwhile, those closer to poverty have been more willing to dig deeper.

“People realize that they themselves are just one step away from possibly being homeless or jobless,” she says. “The more affluent people just aren’t as close to those folks.”

The biggest decline was in North Dakota, where residents gave away 16 percent less of their income in 2012.

That’s largely because incomes have grown so dramatically from the state’s oil boom, says Kevin Dvorak, president of the North Dakota Community Foundation.

For the newly wealthy, he says, it takes time “to kind of wrap your mind around, 'Yes, all of my needs are going to be met and beyond, and now I have the ability to give as I never did before.’”

Overall, though, he says most charities in the state will tell you they’re faring much better.

Life under ISIS rule

Fri, 2014-10-03 14:12

As you may know, the U.S. and its partners are bombing ISIS targets in Syria and Iraq.

One story you don't often hear is what all this means for people's lives in the war zone, their abilities to feed their kids, run their businesses, and get through the day.

With our partners at the BBC, we have the story of Saed Toma Sliwa, a Christian who was living in the Northern Iraqi town of Bartella, when he heard ISIS was approaching.

Saed and his faily now sleep on the floor of an abandoned building in suburb of Irbil, which is in the Kurdistan Region of Iraq. It's crowded with other people who've fled ISIS, And he has to fight for basic necessities like ice, which gets delivered on the back of truck.

Saed and his family abandoned their livelihoods, both he and his wife left businesses ... and thousands of dollars in savings.

One in seven U.S. homes is food insecure

Fri, 2014-10-03 13:52

That latest job report shows one of the most persistent disconnects in the economy.

The unemployment rate fell below 6 percent for the first time since July 2008, but people are still struggling. They're either dropping out of the labor force or can only get a part-time job.

Here's an interesting trend. That share of the population, what's known as the U6 rate, tracks pretty closely with the share of Americans who receive food assistance through the Supplementary Nutrition Assistance Program, or SNAP.

(via USDA)

More than 45 million Americans are a part of SNAP, but the gains in the jobs report don't seem to make that budge at the ground level.

And how people spend their SNAP money is just part of the debate in Washington over food stamp spending. In January, Congress voted to cut 8.6 billion dollars from SNAP over the next ten years, despite a new report from the agriculture department saying one in seven Americans is food insecure.

That means, in those households, at least one family member goes without the recommended number of meals.

We visited a food pantry in the Bronx in New York to put food insecurity in context. Click play above to hear more about food insecurity in the U.S.

Have you cut out the middle man?

Fri, 2014-10-03 12:43

Buying ... selling ... when have you skipped the middle man, and just done it yourself? Your car, house, or ... Self-publishing your novel?

Did it work or was it a disaster?

We want to hear from you on marketplaceweekend.org, email or on Twitter @MarketplaceWKND

Yahoo thinks disappearing images are here to stay

Fri, 2014-10-03 12:12

Yahoo CEO Marissa Mayer has apparently figured out what she wants to do with some of the billions her company made from the Alibaba IPO a couple of weeks ago.

There are reports today that Yahoo is going to take a stake in Snapchat, the app that lets users send messages that disappear after a couple of seconds.

No word on exactly how much, but it values the start-up at $10 billion.

And yes, Yahoo is a company on the ropes, buying a company that makes things disappear... fill in the blank on your own joke here.

Giving authors a shot at writing the movie script

Fri, 2014-10-03 12:06

It’s a big weekend for novelists-turned-screenwriters.

There's "Gone Girl" from writer Gillian Flynn.

 "The Drop," a crime drama from author Dennis Lehane.

And "This Is Where I Leave You," a star-studded story about a dysfunctional family, from author Jonathan Tropper.

 

"Adapting your own book for a film is kind of like doing surgery on your own child,” says Tropper.  He says adapting his novel for the screen was a long and painful process.  But one, he says, he wanted to do himself. “You get really protective of these characters, these stories,” says Tropper, “Even with good writers you don’t want to see them take your stuff apart.”

Authors often want the job. They know the story best, and there can be big money in writing the screenplay if the movie is a hit. 

But, Hollywood typically shrugs them off.

“The studio or the production company will frequently prefer to have it adapted by a well known, proven screenwriter,” says Robert Zipser, a Hollywood entertainment attorney. He says writing for print is a different skill than writing for the screen. Also, says Zipser, with a known writer there’s a better chance the movie will actually get made.

“The involvement of an A-list screen screenwriter can also help attract cast and director to the movie.”

If authors still want to elbow their way onto the set, literary agent Rebecca Friedman says it helps to write a best-seller or several. “The more successful the book is the more likely it is that the author will get to write the screenplay,” says Friedman.

It also doesn’t hurt if you know your way around a script. Tropper and Lehane both have TV credits.

But at the end of the day, studios want to minimize risk. And the success of a few movies using authors as screenwriters  isn’t going to change that script.

Weekend Brunch: Ebola Drug? Netflix moving into movies, Tetris!

Fri, 2014-10-03 11:55

This week, Lizzie O'Leary sits down for brunch with Ben Walsh from the Huffington Post, and Celine Gounder, doctor and freelance medical journalist, to discuss the economic news of last week and what's on their plate this week (get it?).

Topics:

Meet the drug companies fighting Ebola

Wealth Rankings: Today's Winners and Losers

Here’s Why Netflix Wants Adam Sandler Even Though Critics Trash His Movies

Tetris! The Movie

 

 

How do you perceive time? Jump off a building and see

Fri, 2014-10-03 11:36

David Eagleman is a scientist who asks people to jump off of buildings. 

No, he's not an evil villain (as far as we know). He's a neuroscientist at the Baylor College of Medicine who studies time. 

As a boy, Eagleman fell off his roof, and had that classic film-reel experience of time slowing down, even though the fall took less than a second. Ever since, he has been interested in how the brain perceives time. 

In the experiment, Eagleman built what he calls a "perceptual chronometer," essentially giant flashing numbers that subject saw as they fell 150 feet toward a giant net. 

"I can measure the speed at which you're seeing the world, so I could figure out if people were actually seeing in slow motion, like Neo in The Matrix, or whether it was just a trick of memory, retrospectively." 

As it turns out, it was a trick of memory. People falling, or in the midst of a car crash, lay down memory more densely than in the average moment, Eagleman concluded.

"So when you read that back out you think, 'wow, that must have taken a really long time.'" 

It's not only freak accidents that pass in milliseconds. Super-speedy automated systems have become staples of our economy, from high frequency trading to commercial airplanes to the profuse streaming video libraries online.

"It's happening at a scale we can't perceive," Eagleman said, pondering an ever-more sci-fi future. "Maybe someday we'll fight our wars that way. We'll have drones fighting. World War III will be over in a tenth of a second... and we'll see who won."

Listen to the full interview in the audio player above.

How a bank knows it has been hacked

Fri, 2014-10-03 09:43

Hackers got into JPMorgan Chase’s network over the summer, and according to the bank, that breach compromised 76 million households and seven million small businesses. The bank says there is no evidence hackers got a hold of account information, just names and addresses, e-mails and phone numbers, but those data are valuable. 

Companies often learn their systems have been breached from third parties. According to Anton Chuvakin, a vice president in Gartner’s security and risk management group, law enforcement will call if they spot stolen data on underground forums.

“Oh, by the way, we are seeing your data here," might be the message from law enforcement, he says. "What’s up with that?”

These days, big banks spend big on their own security. JPMorgan has allocated $250 million.

When a bank discovers a breach, “you’re going to have a big senior management powwow,” says Julie Conroy, research director for the Aite Group’s retail banking practice, who covers data security. Management will put into place a “security incident response plan,” “and the forensic analysis is very much like what you see at a crime scene,” she says.

It’s methodical, and according to Martin Lindner, a cybersecurity specialist at Carnegie Mellon University’s Software Engineering Institute, banks keep logs of everything that happens on their servers. “So, in theory, they can go back to all those logs, replay them, and see what happened that was the thing that appears to be nefarious,” he explains. That is a lot of information, and going through that is time consuming.

Forensics is just one part of a “security incident response plan.” There is also remediation and communication. With this breach, tens of millions of people are at risk. Lawrence Baxter, the William B. McGuire Professor of the Practice of Law at Duke University, says hackers could use what they have gathered to phish for more information using, say, an official-looking e-mail message.

“You may only get a half of one percent of the customer base fooled by it, but that’s enough,” he says, to cause more damage to customers’ bank accounts, and also to the bank’s reputation.

Why lower unemployment doesn't mean higher inflation

Fri, 2014-10-03 09:42

The September employment report from the Bureau of Labor Statistics — with 248,000 jobs created, and unemployment declining to 5.9 percent — heightened speculation that the Federal Reserve will begin raising interest rates in early 2015, rather than waiting until later in the year.

That is in part because many Fed-watchers anticipate that Fed governors will begin to see signs of accelerating wage and price inflation, as unemployment continues to fall toward the level economists call the ‘natural rate of unemployment,’ or in technical terms, the ‘non-accelerating inflation rate of unemployment’ (NAIRU). Right now, the Congressional Budget Office has pegged that level at 5.7 percent, according to Capital Economics.

That rate of unemployment is generally considered the level below which wage pressures begin to build, because the labor market has tightened enough that employers have to compete for workers by outbidding each other, explains economist Michael Strain at the American Enterprise Institute.

“If there are fewer unemployed workers around, then workers are relatively more scarce, and companies have to be more competitive to attract workers,” said Strain. “And the way that they compete is by offering higher wages.”

Strain said a parallel dynamic also puts upward pressure on wages: workers who have jobs feel like they have more bargaining power with their bosses, because they know they will be more difficult and costly to replace. So they take the risk of asking for a raise, and may even be ready to jump ship and look elsewhere if they don’t get one.

Dallas Federal Reserve Bank president Richard Fisher was quoted by Reuters last month saying that “Declines in the unemployment rate below 6.1 percent exert significantly higher wage pressures than if the rate is above 6.1 percent.”

But so far, economists are hard-pressed to find any acceleration in inflation. Price pressures are muted, and average hourly wages actually fell one cent in September.

“There are currently no signs of wage inflation reemerging,” said UCLA economist Roger Farmer.

One possible reason is that there are a lot of people who have dropped out of the workforce. Labor force participation is at 62.7 percent, the lowest level since 1978. Those people aren’t counted as unemployed, but many do want jobs. Others are working part time but want full-time work, explained Douglas Holtz-Eakin at the American Action Forum.

“If, as the unemployment rate goes down, some of those people flood back in, that slack takes some of the pressure off the inflation process.”

Also, said economist Mark Kuperberg at Swarthmore College, employers could pay workers more, without raising the prices they charge for goods and services, because of productivity increases. Higher productivity has saved employers money, which they have mostly not passed on in workers’ paychecks.

“It’s like I became twice as productive, I started producing twice as much per hour, but I was only paid 50 percent more, not 100 percent more,” said Kuperberg. “I could in principle be paid that other 50 percent and there would still be no inflation pressure.”

The Phillips Curve and jobs numbers, explained

Fri, 2014-10-03 09:36

With the jobs numbers out today, we’ve been hearing a lot about this thing called the Phillips Curve.

What is the Phillips Curve?

It’s a theory, developed by an economist called A.W.H. Phillips, that says when unemployment is high, wages increase slowly; and when unemployment is low, wages rise rapidly.

Why am I hearing about it today?

Because unemployment has dropped to 5.9 percent. That is much lower than people expected, and so, if you believe the Phillips Curve, you’d expect wages to be rising fast right now.

Rising fast? I’m not seeing my wages rise at all!  

And neither are most Americans. The BLS says wages are up about two percent compared to last year. That is slightly higher than inflation, which is running about 1.6 percent. That’s the slowest rate of wage growth since the Second World War. And it’s not making anyone rich.

So the Phillips Curve is bogus?

Well, let’s just say it has been "adapted" since Phillips came up with the model in the late '50s. His theory has been tweaked by everyone from Paul Samuelson to Milton Friedman, and what we have now is a rule of thumb (ie not strictly accurate rule) that says when unemployment falls past a certain level, inflation will start to increase.

How would inflation increase?

A shrinking pool of unemployed workers means there’s more demand for labor. Theoretically, in this high demand, low supply situation, workers should be able to negotiate higher wages. Companies would pay for those wage increases by raising prices for their goods, which means inflation.

Why isn't the Philips curve doing its thing, then?

Part of the reason is because of why the pool of unemployed workers is shrinking. Some are being hired. But others are simply giving up. Labor force participation is now the lowest since 1978, at 62.7 percent. That means there is a huge pool of workers out there who have given up looking for work, but who could conceivably come back into the market as the economy improves. And then there’s the type of job that people are getting: part-time and temporary gigs.

Those jobs come without benefits. Or those unskilled service jobs that can’t support an individual, and certainly not a family. They’re not the kind of jobs that workers were competing for back in the '50s, when Phillips came up with his curve.  Or in the '80s, when Friedman came up with his tweaks to Philips’ theories.

Does anyone know what’s going on?

Not really! This economy is flummoxing everyone. It’s certainly not behaving in accordance with existing economic models. Much of the reason is that work in America has changed radically in the last decade. The way companies hire and pay workers has shifted the balance in employers’ favor, so that companies look very strong and healthy right now, while workers do not. Companies are earning more, while most workers are making less than or the same as before. Companies are hoarding cash, while workers are pinching pennies. And in many cases, companies are getting more protection from the state, while offering less protection and fewer benefits to workers.

So are these jobs numbers just a smokescreen for a bad economy?

No. Any time you see 248,000 people hired, that’s a good thing (assuming that number isn’t revised downward). And the economy is improving. But because of the way work has changed in the U.S., the numbers we’re getting these days aren’t the same as the numbers we got in 2005. The jobs aren’t the same, in terms of the type of jobs that there are out there, and the pool of unemployed isn’t the same, in terms of the type of workers who are looking for jobs. Things are getting better, but the fact that the Federal Reserve is nervous about rolling back stimulus when unemployment is this low is proof that the economy isn’t as healthy as it might appear.

Why are North Dakota's oilfields so dangerous?

Fri, 2014-10-03 07:05

North Dakota is the most dangerous state in the country for oil and gas workers.

But that fact hasn't gotten a lot of attention until now. Governor Jack Dalrymple announced to Inside Energy that he's planning to bring together the state’s top safety officials to look into fatalities in the industry, and to see what they can do better.

To understand why the oil and gas industry here is so dangerous, I went to the heart of the boom: Williston.

Here, the streets are crawling with trucks — semis hauling water and muddy pick-ups carrying oil field workers. DeAnn Clark watches the traffic from behind the counter at Arnie's Motorcycles, where oil and gas workers make up about a third of the business.

"They just kind of tear off out into the street," she said. "'Oh, that one will be back,' we’re thinking, all wrecked up. And sometimes they are."

This culture of risk-taking contributes to the high fatality rate in the oil and gas industry around the country. According to a recent report by the National Institute for Occupational Safety and Health, half of the oil and gas workers who died in vehicle accidents weren’t wearing seat belts. Teresa Van Deusen sees it all the time in her job as safety specialist for WPX Energy, a large oil company here.

"Workers, especially new workers, have the go-get em kind of attitude," she said. "They think, 'Oh I can do that. I can do this little shortcut.’ Well, when you’re working with the pressures and dangers that are inherent to the oil field, you can’t do shortcuts."

Learn more about how Inside Energy sorted through the data for the "Dark Side of the Boom" series.

I met Teresa at a meeting of industry safety professionals put on by the MonDaks Safety Network, an all-volunteer organization founded in Texas in 2003 by the Occupational Safety and Health Administration (OSHA)  and members of the oil and gas industry to address injuries and deaths among workers. Many people at this meeting told me inexperience played a large role in the state's high fatality rate.

"The experience level of our entry-level employee is significantly lower than the individuals or companies I visit with in Texas or Colorado," said Scott Rogers, an industrial hygienist and occupational safety consultant from Bozeman, Montana who works with oil companies in the Bakken shale formation. Rogers said the problem extends to workplace safety professionals, too.

Dennis Schmitz is the head of MonDaks, and he said another part of the problem is that most oil and gas companies are unlikely to ever have a safety inspection in North Dakota -- even though OSHA has hired more inspectors recently and created specific programs that target the oil industry.

"You probably almost have better odds of winning the lottery than getting a visit from a regulatory agency," he said.

But according to Schmitz, the root of the problem is that in onshore drilling operations, big oil companies aren’t directly responsible for workplace safety. They contract out most every dangerous jobs on an oil well to smaller companies.

When I asked Teresa Van Deusen of WPX Energy if there was there anything companies like hers could do to help smaller contractors be safer, she said she wasn't sure how to answer the question. "We do everything that we can. Obviously that is the drilling company's employee."

WPX, she said, follows all the OSHA standards and expects the contractors to do the same. But ultimately, the contractor is responsible for training its employees.

At the state level, North Dakota has many worker safety programs in place. Companies with good safety records enjoy lower premiums on their workers compensation insurance and there's grant money for safety training. According to Governor Jack Dalyrmple, these incentives are "a better approach to workforce safety" than stricter enforcement OSHA.

"We feel the programs we have in place are working," he said.

Still, in my interview with the Governor, Dalrymple said he would ask the directors of the state's Department of Health, Department of Transportation, Highway Patrol and Workforce Safety and Insurance (the state's workers compensation board) to study the worker fatality problem in North Dakota's oil and gas industry.

"It's certainly appropriate for a governor to bring focus to something like that," he said. "And the way we would do that is through my regular contact with my cabinet members. I would just turn to them and say, I want a report about what we’re doing about fatalities in the workforce and I want to know if there’s anyway we can do it better. And I think because of this interview, I will probably be doing that at our next meeting.

This is the second article in a series, "Dark Side of the Boom," produced by Inside Energy, a public media collaboration focused on America's energy issues.

The numbers for October 3, 2014

Fri, 2014-10-03 05:08

Bouncing back from August's disappointing numbers, the Bureau of Labor Statistics reported Friday the economy added 248,000 jobs in September, and unemployment fell to 5.9 percent, which is a six-year low. Several economists told the Wall Street Journal they were pleased with the reports, and in Forbes the Chief Strategist for TD Ameritrade said "Woo hoo." Indeed.

Now economists are mulling how these encouraging numbers — and the less encouraging average hourly wage and workforce  participation rate — will change the potential for an interest rate hike next year.

In the meantime, here are other numbers we're watching Friday.

13,054

That's the number of people who registered to organ donors online the day Facebook started letting users note their donor status on their profiles. That's 21 times more than the daily average registration, Reuters reports, and it's key to Facebook's new foray into the red-hot health tech market. Plans to formalize existing health-related communities on the site are reportedly in the works, along with new applications.

76 million

You might notice that number is somewhat higher than one million, the number of accounts JPMorgan Chase originally said were breached in a cyber attack this summer. A securities filing Thursday revealed 76 million households and seven million small businesses were affected by the hack, the New York Times reported, making it one of the largest. The Times reports the firm says no financial information was stolen, just contact info.

2

The number of times former Fed chair Ben Bernanke has refinanced his mortgage, Bloomberg reported. Bernanke tried to refinance a third time but couldn't, he told a recent conference. "The housing area is one area where regulation has not yet got it right," he said. "I think the tightness of mortgage credit, lending is still probably excessive."

PODCAST: Planes, trains, and billionaires

Fri, 2014-10-03 03:00

First up, there's news the American labor market was stronger than expected in September and payroll numbers were revised upward in July and August as well. The government said today that payrolls were 248,000 higher last month--There was a lot of hiring in retail, construction, and health care. And the unemployment rate fell from 6.1 to 5.9 percent. We'll also take a look at Brazil, where the economy's faltering, and there was civil unrest in the last year with people fed up with the quality of government services. The worst country for stocks during the month of September was Brazil, with traders selling stocks each time they saw  incumbent president Dilma Roussef, doing better ahead of the first round of elections this Sunday. The business community has generally embraced the candidacy of a rival, Marina Silva, whose fortunes have see-sawed. More on that. Plus, billionaires love trains. Warren Buffett's got the Burlington Northern, and Bill Ackman's hedge fund is the largest investor in Canadian Pacific, the second-largest railroad in Canada, which just announced a plan to double its profits in the next four years

Hedge-fund-backed Canadian railroad aims high

Fri, 2014-10-03 02:00

The humble railroad is a hot investment, thanks in part to crude oil. 

Warren Buffett's Berkshire Hathaway bought Burlington Northern Santa Fe Corporation in 2009. Bill Ackman's Pershing Square became the largest shareholder in Canadian Pacific Railroad in 2012. 

Both have profited from the rise of rail transportation of crude oil.

"Canada’s growth in ‘crude by rail’ has really been tremendous," says Sarah Emerson, managing principal at ESAI Energy. Emerson says the 300,000 barrels a day transported by Canadian rail is twice what it was in 2012. 

"I think [crude is] important," says Jeff Nelson, analyst at Edward Jones & Co. But he cautions that it's not the most important factor for Canadian Pacific's bottom line. "I mean, look, it's still small," he says. 

Crude oil is 6 percent of the railroad's cargo, according to its latest investor book. In the last two years, the railroad has done well largely by becoming more efficient, as Hunter Harrison—the CEO installed after a proxy battle waged by Bill Ackman—has closed railyards and laid off nearly 1/6 of its workforce. But this was only phase one of Harrison's plan, according to Nelson. "Phase two is about revenue growth," he says.

Doubling the company's profits will require growth throughout its business, which includes transporting grain, automobiles and fertilizer. "This plan doesn't work in a recession," says Nelson.

To handle the growing traffic while maintaining efficiency will be a challenge. 

"He doesn't have many options," says Steve Ditmeyer, professor of railway management at Michigan State University. "He can run longer trains. He can run trains faster."

In other words, for Canadian Pacific, it's full steam—or fossil fuel—ahead.

CORRECTION: The original version of this story incorrectly described Pershing Square Capital Management as having bought a majority stake in Canadian Pacific Railroad in 2012. In fact, Pershing Square became the largest shareholder in Canadian Pacific Railroad in 2012, though it did not acquire a majority stake. The text has been corrected.

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