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Updated: 10 min 54 sec ago

That perfect 'Seinfeld' episode about cable companies

Thu, 2014-07-17 03:00

Even though I got it, I never really got the "Seinfeld" Plaza Cable gag fully until I moved to New York City.

In my first apartment, I remember that even getting the cable installed and trying to start to pay the cable guy real money every month felt like an epic right of passage. That 1996 episode of television -- airing a decade before I even came to the city -- became, like so many "Seinfeld" depictions, a chrystalized experience in an ever-changing city. Watching it now nearly ten more years later, it remains pitch perfect. Just watch this and tell me you can't relate. I dare you. 


The weird 4-hour appointments, the long hold times on the phone, the grumpy dude in the van -- it's all there. Kramer as the everyman is exactly as he should be: Incredulous at a seemingly arbitrary and faceless bureacracy, righteous in his indignation, and happy to "stick it to the man," even when the man is of course a real person with real feelings.

It is actually really elegant how the roles are flipped. The cable guy becomes the powerless person waiting around as his blood is brought slowly to boil. Kramer is what we percieve the cable company to be: Snickering behind a peephole and messing with us while taking advantage because there's really not much we can do about it.

This has been an interesting week for media and cable companies. Rupert Murdoch's $80 billion bid for Time Warner is almost just a rumble behind the awkward sound of that customer service call between an Engagdget editor and a Comcast customer service agent. In a veritable monster mix of smash hits, it's the latest and greatest viral example proving the cable company is pretty much the worst at dealing with its customers.

Comcast is currently on a full court press for its unprecedented merger with Time Warner Cable -- Which, by the way, just sent me the most rediculous letter congratulating me on my newly-reduced-but-still-more-than-I've-been-paying rate. And at the same time from Reddit to The New Yorker, the company is also this week's modern stand-in for Seinfeld's Plaza Cable. 

The fact that the jokes are still relevant is what's really disturbing. In "Seinfeld," the cable guy apologizes through the door, and Kramer, moved, rolls back the deadbolt. They hug. What could be better? A truce between customer and company, a promise to do better, and a regonition of the humanity and hardships on both sides.

I think I prefer the TV show to real life. "Seinfeld," at least, has a happy ending.

Students experiment in zero-gravity

Thu, 2014-07-17 02:00

This week, a group of students are heading to NASA's Reduced Gravity Education Flight Program. True to its name, the program puts particpants in a plane that flies up and down, approximating zero gravity so the young scientists can do their work. 

Ish Sanchez, who is studying Mechanical Engineering at San Jose State University, is one such student participating in the program. He says being in an environment without gravity is profoundly different from the typical human experience.

“Your whole outlook on life -- up until the point when you experience zero gravity -- is completely shifted,” says Sanchez. “There’s no up and down, there’s no side walls. The mere act of pushing a button can send you off in another direction.”

The group wants to study particles created in potential in-space manufacturing or asteroid mining operations — The experiment will cut some carbon fiber rods and observe the different particle trajectories from cutting in zero gravity.

Though after this round of experiments, there may be a failure to launch -- The program is being cancelled due to budgetary constraints after this flight.

Students experiment in zero-gravity

Thu, 2014-07-17 02:00

This week, a group of students are heading to NASA's Reduced Gravity Education Flight Program. True to its name, the program puts particpants in a plane that flies up and down, approximating zero gravity so the young scientists can do their work. 

Ish Sanchez, who is studying Mechanical Engineering at San Jose State University, is one such student participating in the program. He says being in an environment without gravity is profoundly different from the typical human experience.

“Your whole outlook on life -- up until the point when you experience zero gravity -- is completely shifted,” says Sanchez. “There’s no up and down, there’s no side walls. The mere act of pushing a button can send you off in another direction.”

The group wants to study particles created in potential in-space manufacturing or asteroid mining operations — The experiment will cut some carbon fiber rods and observe the different particle trajectories from cutting in zero gravity.

Though after this round of experiments, there may be a failure to launch -- The program is being cancelled due to budgetary constraints after this flight.

Don't blame millennials. Blame the middle-aged!

Thu, 2014-07-17 02:00

There's a common refrain about the sluggish housing market these days that goes something like: "Those darned young folks just aren't buying houses like they used to."

Well, that diagnosis isn't quite right, according to a new study from Trulia, the online real estate firm.

Trulia Chief Economist Jed Kolko says if you look at the data, "18-to-34-year-olds today look about as likely to own a home as 18-to-34-year-olds did 20 years ago, once we adjust for the big changes in demographics."

Kolko points to demographic changes like the fact that today's young adults are much less likely to be married or have kids than their counterparts 20 years ago. When you look at the young adults today who still are married with kids, he says they are buying homes at the same rates as they did in 1997.

But there is a generation where homeownership really has declined since the rise and fall of the real estate market in the 2000s, even when you adjust for demographics.

"The 35-to-54-year-old group was more affected both by the housing bubble and by the foreclosure crisis," Kolko says.

Graphics from Trulia, depicting adjusted homeownership rates for 18-to-34 year olds and 35-to-54 year olds compared to a demographic baseline. The demographic baseline is a depiction of we'd expect to happen with those demographic if the recession, or any other behavioral changes, didn't occur. (Graphics courtesy of Trulia)

Of course, even that generation might not be gone from the housing market forever. Amy Gerrish, 36, lost her home outside of Phoenix, Ariz. to foreclosure in the early days of the real estate crash, and then reluctantly became a renter.

She knew it would take at least three years after the foreclosure to be considered for a home loan again.

"As soon as that date started coming up, we started looking," she says.

She now is a homeowner once more.

We reached out to listeners on Twitter to ask about their experience with the housing market. Here are some of the responses:

[<a href="//storify.com/Marketplace/middle-age-homebuyers" target="_blank">View the story "Middle-Age Homebuyers" on Storify</a>]

Facebook wants to know what you're watching

Thu, 2014-07-17 02:00

Let’s face it, we use our smart phones for just about everything, including watching television.

This fall, TV ratings giant Nielsen and Facebook will join forces to follow what we watch on our mobile devices.

Dorie Clark teaches corporate and personal branding at Duke University's Fuqua School of Business. She says the new tracking system is a "necessary evolution."

“People are consuming far more video on their smart phones, on their I-Pads,” says Clark. “And if we want to make smart decisions about how to allocate marketing dollars, we need to know what they’re watching and where.” 

But there could be privacy concerns.

A Facebook spokesperson says the new system can’t be used to identify individuals. Even though Facebook and Nielsen announced the partnership last year, recent controversy over Facebook manipulating content to influence users’ emotions as part of a survey worries privacy advocates.

Jeff Chester, Executive Director of the Center for Digital Democracy, for example.

“It’s just one piece of a much more disturbing picture that’s emerging as Facebook links with these powerful market research companies to understand what we do and when we do it,” says Chester. 

 

That perfect 'Seinfeld' episode about cable companies

Thu, 2014-07-17 01:00

Even though I got it, I never really got the "Seinfeld" Plaza Cable gag fully until I moved to New York City.

In my first apartment, I remember that even getting the cable installed and trying to start to pay the cable guy real money every month felt like an epic right of passage. That 1996 episode of television -- airing a decade before I even came to the city -- became, like so many "Seinfeld" depictions, a chrystalized experience in an ever-changing city. Watching it now nearly ten more years later, it remains pitch perfect. Just watch this and tell me you can't relate. I dare you. 


The weird 4-hour appointments, the long hold times on the phone, the grumpy dude in the van -- it's all there. Kramer as the everyman is exactly as he should be: Incredulous at a seemingly arbitrary and faceless organization, righteous in his indignation, and happy to "stick it to the man," even when the man is of course a real person with real feelings.

It is actually really elegant how the roles are flipped. The cable guy becomes the powerless person waiting around as his blood is brought slowly to boil. Kramer is what we percieve the cable company to be: Snickering behind a peephole and messing with us while taking advantage because there's really not much we can do about it.

This has been an interesting week for media and cable companies. Rupert Murdoch's $80 billion bid for Time Warner is almost just a rumble behind the awkward sound of that customer service call between an Engagdget editor and a Comcast customer service agent. In a veritable monster mix of smash hits, it's the latest and greatest viral example proving the cable company is pretty much the worst at dealing with its customers.

Comcast is currently on a full court press for its unprecedented merger with Time Warner Cable -- Which, by the way, just sent me the most rediculous letter congratulating me on my newly-reduced-but-still-more-than-I've-been-paying rate. And at the same time from Reddit to The New Yorker, the company is also this week's modern stand-in for Seinfeld's Plaza Cable. 

The fact that the jokes are still relevant is what's really disturbing. In "Seinfeld," the cable guy apologizes through the door, and Kramer, moved, rolls back the deadbolt. They hug. What could be better? A truce between customer and company, a promise to do better, and a regonition of the humanity and hardships on both sides.

I think I prefer the TV show to real life. "Seinfeld," at least, has a happy ending.

California farms pumping water to make up for drought

Wed, 2014-07-16 13:27

This is the third-driest year in California in at least 106 years. The drought has led state officials to clamp down on water waste, like open hoses. Fines can hit $500. 

The drought is having its biggest effect on California’s mammoth agriculture industry. A report from UC Davis’s Center for Watershed Sciences pegs losses at $2.2 billion this year. 

“There will be some pockets of deprivation, poverty,” says Josué Medellín-Azuara, a UC Davis researcher who worked on the report.

Four hundred square miles of farmland has been fallowed—mostly lower-value crops like alfalfa. More than 17,000 seasonal farm workers are affected.

“It takes people to provide nutrients for those crops. It takes people to even insure those crops. It takes people to truck those crops to market,” says Bruce Blodgett, executive director of the San Joaquin Farm Bureau.  

The drought’s impact could be far worse, though. 

Farmers in the Central Valley have managed to find another source for 75 percent of the water they normally get from state and federal reservoirs. They’re drilling deep into underground aquifers, pumping out enough water to cover 7,800 square miles a foot deep.  

“I’m fortunate enough to have a well for groundwater, but it’s caused our electric rates to probably triple,” says Thomas Ulm, a farmer in Modesto. 

Ulm’s farm is getting only half the reservoir water it’s usually allocated, so he’s relying on his own well to keep his almonds, walnuts and grapes growing. 

His neighbor just drilled a well, too. All this drilling and pumping is unregulated and, “Eventually, of course, you run out of water,” says Robert Glennon, a professor at the University of Arizona, and the author of “Unquenchable: America’s Water Crisis and What To Do About It.” 

If the state’s groundwater is like a giant milkshake glass, “what California is allowing is a limitless number of straws in the glass,” he says. “That’s a recipe for disaster. It’s utterly unsustainable.”

Especially when this drought could last another year, or another 50.

 

Pardon my (economic) language

Wed, 2014-07-16 13:27

Apparently, and this kind of stands to reason, the use of profanity by CEOs varies with economic conditions.

Bloomberg actually went through and did a word search of earnings call transcripts for the past 10 years. Profanity peaked in 2010, dipped a bit, shot up again in 2012 and has been declining ever since.

I know you want to know what the words are, but I really need my job.

There's a chart that'll give you the details, though:

A screenshot of Bloomberg's graphic on CEO cursing. For more detail, see the full graphic. (Courtesy of Bloomberg)

Dallas Fed Chair: Time to lose monetary "beer goggles"

Wed, 2014-07-16 12:35

"The punch in that punch bowl is still 108 proof," says Dallas Federal Reserve Bank Chair Richard Fisher. "Things look better when you have a lot of liquidity in your system."

He's calling on Washington to end the taper and rasie interest rates, something he believes will happen by October.

Chairman Fisher gave a speech on monetary policy today at USC Annenberg and stopped by Marketplace to chat afterwards.

Here is a link to his full speech, titled " Monetary Policy and the Maginot Line (With Reference to Jonathan Swift, Neil Irwin, Shakespeare’s Portia, Duck Hunting, the Virtues of Nuisance and Paul Volcker)".  Listen to his full conversation with Kai Ryssdal in the audio player above.

Apple-IBM deal shakes up workplace tech

Wed, 2014-07-16 11:29

Apple and IBM were once rivals but the two companies announced a plan Wednesday to work together. They will collaborate on software and cloud services, and IBM will distribute Apple products to some of its biggest customers – big business, universities, and the government.

This deal is a way for Apple,  maker of the iPhone and the iPad, to get more of those mobile devices into the workplace – historically BlackBerry’s and Microsoft’s turf. According to Norman Young, an analyst with Morningstar, this deal may have caught them by surprise.

“They didn’t really think that Apple would really compete in this space, because they never really had,” he says.

For a long time, Apple’s focus has been on consumers, but according to Stacy Crook of the market research company IDC, Apple has been making inroads. The workplace has seen more of what she calls “B.Y.O.D.”

“We just use the same device for our business use and our personal use these days,” she says.

IT guys and gals have tolerated that – sometimes grudgingly. These days, when we bring our own devices, odds are they are not BlackBerrys. 

“You know, from a BlackBerry’s perspective, this is pretty significant,” says tech analyst Sharon Cross, of Cross Research. She says BlackBerry made its name selling its devices to big business, and the security of its network was a huge selling point. With this new partnership, Apple and IBM say they will give corporate clients the assurance their apps and devices will be just as secure.

So what about Microsoft?

“This agreement is good for Apple, it’s good for IBM, it’s bad for BlackBerry, and it’s really not that impactful to Microsoft,” Cross says, noting companies will still buy PCs running Windows.

IBM could have partnered with Google. After all, Android phones remain popular. But according to Roger Kay, the head of Endpoint Technologies Associates, Apple’s trademark simplicity may have given it an edge.

“IT managers don’t have to deal with a hugely complex environment,” he says. “They know kind of what they’re getting.”

There are hundreds of different types of phones and tablets that run the Android operating system. With Apple, there’s just a handful.

 

Why Murdoch wants Time Warner: leverage

Wed, 2014-07-16 11:27

As chairman of 21st Century Fox, Rupert Murdoch owns many things: cable networks, a broadcast network and a big movie studio. As head of News Corp. he also owns some newspapers and a book publishing house. Now he’s also made a bid for Time Warner, which owns HBO, other cable networks and another big movie studio. Time Warner has turned him down, for now, but it’s worth asking what he wants with it.

Analysts say Time Warner has finally shrunk itself to the exact right size and shape for someone like Rupert Murdoch to be interested in it.

“Time Warner used to have AOL as part of its portfolio— that’s no longer true,” says Jim Goss, managing director of Barrington Research. “It obviously had Time Inc., the magazine publishing group, but as of about a month ago, that’s no longer true.”

Most importantly, Comcast's proposed takeover of Time Warner Cable creates a huge potential adversary on the other side of the bargaining table: Distribution. That’s Murdoch’s adversary too.

Together, the two media companies gain clout. “Fox with Time Warner would have incontestable leverage against any distributor in terms of audience demand,” says Porter Bibb, managing partner at Mediatech Capital Partners. “People would go beserk if they couldn’t get what Fox would own.”

Think: Game of Thrones. And sports: Turner Broadcasting has a lot of NBA games.

Conventional wisdom holds that this marks the beginning of a long campaign. Over a decades-long career, Murdoch has pursued other deals relentlessly.

“He likes to win,” says Samuel Craig from NYU’s Stern School of Business. “I think he’ll persist.”  

Craig says Murdoch may find allies on the other side of the table. “I think when the shareholders of Time-Warner look at it — and the price goes up a bit — they may say, ‘This is a pretty good deal, and we should do it.’”   

PODCAST: Unlikely tech friends

Wed, 2014-07-16 03:00

Once notorious enemies, IBM and Apple have announced a partnership, with IBM developing more than 100 business apps for Apple. Plus, with Bank of America's disappointing earnings report, a look at what banks are dealing with this profit reporting season. Also, more on how campaign strategists maximize the effectiveness of email.

Apple and IBM: from flipping the bird to partnership

Wed, 2014-07-16 03:00

There’s a famous picture of Steve Jobs flipping the bird at an IBM sign:

Andy Hertzfeld, one of the original members of the Macintosh team, first published the photo to his Google page.

Then there was an Apple TV commercial depicting IBM as Big Brother from the book, 1984.

An annoucer intones, “On January 24, Apple computer will introduce Macintosh. And you’ll see why 1984 won’t be like 1984.”

But that was when Apple and IBM hated each other, and competed for the desktop computer market. 

Now, Apple needs IBM’s expertise as it tries to get companies to order more iPhones and iPads. Apple and IBM say IBM will develop more than 100 business apps for Apple.

Apple hopes the partnership will answer security concerns, and give CEOs one more reason to buy Apple.

“It's not just - hey the employees prefer it. But it also means, hey, the business advantages might even  be stronger if I go with the Apple solution," says Forrester analyst Frank Gillett.

As for IBM, it gets to be part of a winning team. Plus, IBM’s app designers will have greater access to Apple software. 

 

The challenge of funding a community college education

Wed, 2014-07-16 02:30

Federal student loans -- widely regarded as the safest form of education financing because of their low, fixed interest rates and flexible repayment plans -- are out of reach for one million community college students nationwide. That’s according to a new report from The Institute for College Access & Success.

The report says that while community colleges are generally a low-cost way to get a degree or certificate, students can still face roughly $15,000 in annual costs, with tuition and living expenses combined.

The majority of community colleges do offer federal student loan programs. But the report cites big regional differences, with 250,000 students shut out from the programs in California alone.

David Baime with the American Association of Community Colleges doubts the situation needs to change, noting that only 17 percent of community college students take out loans.

Plus, Baime says some schools might be reluctant to offer the loan programs because they fear defaults. High student loan default rates could hurt a college’s ability to secure other forms of federal aid, such as Pell Grants.

The numbers behind a community college education

1 MILLION

The number of community college students nationwide who lack access to federal student loans.

64 PERCENT

The number of African-American community college students lacking access to federal student loans in Alabama, compared to 35 percent of their white peers.

$3,300

The average tuition and fees for a full-time, full-year community college student, as estimated by the American Association of Community Colleges.

$15,000

The full cost of one year of attendance at a community college, including tuition, fees, books and supplies, living expenses and transportation, as estimated by The Institute for College Access & Success.

1 IN 5

The number of community college students defaulting on loans within three years of beginning their repayment, according to the American Association of Community Colleges.

17 PERCENT

The share of community college students who take out loans, according to both groups cited above.

Acid rain aftermath: damaged ecology, damaged politics

Wed, 2014-07-16 02:00

Karen Roy was in grad school in the early 1980s when two things made her realize acid rain was a big deal. The first was the decline of the forest on Camel’s Hump, a mountain in Vermont. The second was learning about dying lakes in the Northeast.

“There were people talking about the record fish that were no longer found,” she says.  

Roy now manages the Adirondack Long Term Monitoring program. When I visited, she and her team were heading to a pond near Lake Placid, New York. They were going to check how acidic the water is these days; a process repeated in dozens of lakes monthly. But first we have to hike through a forest.  

“What affects the forests, ultimately affects lakes and streams as well,” Roy says. 

Forests and lakes are connected, but how they recover from acid rain is very different. 

Since the bad old days of the 1970s and '80s, there has been a whole lot less acid falling on the Northeast. That’s mostly thanks to the 1990 Clean Air Act, which has made a big difference to lakes and streams. Many are now coming back to life, with fish and other fauna reviving. But that’s not the whole story. 

“It’s just like everyone [said], 'Whew, that problem is solved, now we can think about something else,'” says Gene Likens, co-founder of the Cary Institute of Ecosystems Studies, and one of the first people to discover acid rain in the U.S. 

He says forests are having a much tougher time. Years of acid rain falling on their soils has leached away calcium and other minerals that used to neutralize the acid. So, even though today’s rain is far less acidic, sensitive forests are less able to deal with it. 

“The system is more sensitive. And one could argue that the impact is as bad as it was in 1990 when we passed the Clean Air Act amendments,” he says. 

Trees like sugar maple and red spruce are suffering the most. They need a lot of calcium and the soils are depleted. Forests are on a completely different timeline than lakes. 

“Some will recover on the order of decades. But others will not recover for many, many, many decades,” says Charles Driscoll, university professor of environmental systems engineering at Syracuse University.  

That’s why, despite all the progress made since 1990, Likens and Driscoll would like to see lawmakers reduce smokestack emissions even more.

That’s unlikely. The political environment has changed so much since the 1990 Clean Air Act was passed with bipartisan support. That bill included the acid rain provisions, the first widescale use of cap and trade. 

Back then, cap and trade was an idea nearly everyone could get behind. Democrats and environmentalists liked that it could slash pollution. Republicans liked that it used market forces and gave industry choices.

“What had been for decades a bipartisan issue has evolved into what is now a highly polarized, partisan issue,” says Robert Stavins, a Harvard professor who studies emissions trading programs.

The 1990 Clean Air Act was championed by both President George H.W. Bush and northeastern Democrats. The cap and trade program helped cut acid rain-causing sulfur dioxide and nitrogen oxides by more than 70 percent -- faster and more cheaply than planned. 

“It was decidedly a success,” Stavins says. 

But critics say it had one flaw.  

“Congress never put a provision in there to make changes to the program in the future,” says Gary Hart, owner of Clean Air Markets, and former manager of emissions trading at Southern Company, the large utility. 

By the 2000s, the bipartisanship was gone. Democrats killed Republican acid rain proposals because the bills didn’t do what they wanted about climate change. Democrats tried to apply cap and trade to carbon dioxide, which Stavins says led a new breed of Republicans to turn on their own idea, “because it was the mechanism on the table.”  

Critics labeled it "cap and tax." Meanwhile, the public became skeptical of markets after the financial crisis.

With no help from Congress, Presidents Bush and Obama started trying to change the acid rain rules through regulation. Hart says that caused more damage.  

“When the government comes in and changes the program in the middle of the game, and sort of changes the rules, it really impacts investors and the players in the market. It impacts their confidence,” he says. 

Trading in the acid rain cap and trade program has all but ceased.   

In the end, regulations for other pollutants like mercury and particulates have had the side effect of reducing acid rain even more. But those regulations are a final blow to one of the most successful examples of using the market to solve an environmental crisis.

11 email tips from campaign strategists

Wed, 2014-07-16 02:00

To political candidates, email is extremely important. Yes, they want us to vote, but they also want us to give early and often. 

When Barack Obama first ran for president, Steve Geer was his email director. 

“It’s a fun job,” he says. It’s also an important job. In 2012, President Obama’s reelection campaign raised more than $350 million through email.

“You have a subject line that catches your attention,” Geer explains. “You have an introductory sentence that hooks you and brings you into the narrative, and then you get as quickly as you can to ‘the ask.’”

Because our inboxes are so full, a catchy subject line is key. Geer points out, “If no one opens up your email, it doesn’t matter how good your argument is.”

Obama for America used subject lines that were casual. “Meet me for dinner,” one read. It looked like the president sent the message himself.

“Increasingly, people are doing things that will simply catch the eye,” says Patrick Ruffini, the president and founder of Engage, a political consulting firm. He oversaw digital strategy for the Republican National Committee.

 Campaigns are using animated GIFs and countdown clocks. The novelty factor is important, but it is also important to have a message, Ruffini says, and to keep it short.

 “You need to essentially get them off that email as quickly possible,” he notes. An email director or a digital strategist wants you to click a link and donate.

 Campaigns have amassed a lot of data on donors’ habits, including how much money they have given, and when they have given.

 According to Ruffini: “The amount of testing that is now going into emails, to keep people opening, to keep people clicking, I mean, it’s amazing.”

Email, compared to direct mail or TV advertising, is inexpensive, and the return on what is a relatively small investment is huge.

“Having lots of people giving $5 generates this very powerful list that campaigns can use now and in the future,” says Eitan Hersh, a professor of political science at Yale University.

 For that reason, political strategists live in fear of donors unsubscribing. 

“Good copy, good creative will always get attention, but there’s a difference between short-term attention and long-term engagement,” Geer says.

 A campaign wants you to give over and over again.

11 email tips from campaign strategists:

1. Keep it short. According to Patrick Ruffini, a Republican strategist, “You need to essentially get them off that email as quickly as possible.”

2. Spend a lot of time on the subject line. “If no one opens up your email, it doesn’t matter how good your argument is,” says political consultant Stephen Geer.

3. Try new things. Try different things. Compared to TV advertising or direct mail, email is inexpensive, and you can see what works very quickly.

4. Test different drafts of an email.

5. Because “open rates” have been declining, send more emails. But not too many! You don’t want donors to unsubscribe.

6.  Personalize emails. Campaigns have had success referring directly to a donor’s previous gifts.

7. Novelty fades. If every candidate is using a casual subject line to invite donors to enter a drawing, it’s time to devise a new strategy.

8. Try putting things in black and white.

9.  Try “the doomsday e-mail.” Warn donors an opponent may have the upper hand, or that a deadline looms.

10. Remember: Most email is opened on mobile devices these days. Your email should look good on a smart phone, and it should link to a mobile-compatible donation page.

11. Put the links high. “A link towards the top is better than a link at the bottom,” says Rayid Ghani, who was Obama for America’s Chief Scientist. “A large button that makes you click towards the top is better,” he adds.

Bank of America could shell out as much as $10 billion

Wed, 2014-07-16 02:00

Citibank just agreed to a seven billion dollar settlement with the Justice Department.

Paul Miller, Managing Director of FBR Capital Markets, says in spite of settlements, so far, the big banks are showing decent results.

“I mean, you saw JP Morgan blow numbers away," he says. "Citi beat numbers," and while Wells Fargo didn’t beat expectations, Miller calls the bank's earnings acceptable.

Then there’s Bank of America, which Miller estimates could end up shelling out well over ten billion dollars for its role in the financial crisis.

Jim Sinegal, an equity analyst with Morningstar, agrees that the bank, which he calls "the most troubled," will have to pay an enormous amount to the Department of Justice.

Legal expenses, he notes, have been going up at all the banks, like JP Morgan, which he says just paid half a billion in legal fees.

“That really eats into your earnings power and I don’t think that’s anything that’s going to go away anytime soon,” he says.

Sinegal says banks have been trying to cut costs with strategies like layoffs, but he says as long as the stock market keeps doing well, banks can manage more money and charge more fees.

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