Marketplace - American Public Media

Banks seek profits in credit cards

Tue, 2014-10-14 02:00

When J.P. Morgan Chase and Citigroup announce earnings Tuesday, many analysts will be looking for profits in a traditionally less-than-exciting place: credit cards.

Unlike a few years ago, consumers are being smart with their cards, which means low delinquency rates, and they’re also starting to feel comfortable enough with the state of the economy to spend a bit more.

Credit cards look pretty good compared with mortgages or other low-interest bank products, says Jim Sinegal, who covers banks and credit card companies for Morningstar. They generally charge rates of “12 percent plus, up to 20 percent in some cases," he says.

He says banks also like the steady income from merchants each time people use their cards.

Overall, the economy is stronger and the industry is reaping the rewards of tighter lending standards.

“That made for really good results in the way of losses,” he explains. “Banks aren’t losing much money at all because of those two factors.”

Ironically, the industry may also be benefitting from regulation. The CARD Act of 2009 sought to limit certain fees and simply interest rates.

“Obviously, the card industry did feel it had increased costs as a result of the regulation,” says Andrew Davidson, a senior vice president with Mintel Comperemedia. “They, I think, in the long term, benefit from this better consumer behavior in terms of paying back their bills.”

Davidson says card issuers are feeling confident enough to again pitch cards to mid- and sub-prime borrowers.

But Madeline Aufseeser, a senior analyst with Aite Group, cautions that credit cards are also a very competitive business.

“It’s bullish compared to where we’ve been over the last couple of years,” she says, though she notes that recent security breaches could be costly. “But in the credit card business, it’s a very tight rope that we walk on balance between expense and  revenue. It’s a low margin business.” 

 

How do cemeteries make money?

Mon, 2014-10-13 11:51

At Washington Cemetery in Brooklyn, a weed-whacker sends a spray of grass clippings into the air, as the ground crew weaves in between black and grey tombstones packed so tightly they almost touch.

Manager Michael Ciamaga stumbled into a summer job here in the late '90s, when plots were selling for $2,800. A few years ago, they’d climbed to $16,000.

And now?

“People come in [and say] ‘I’ll give you $30,000 if you give us a grave,’” he says. “You could give us $1 million, we don’t have nothing to sell you.”

Washington Cemetery is sold out, though not all of its plots are occupied yet. It has already squeezed out every single possible plot – shrinking the parking lot, tearing up roads, even offering up a small lawn in front of the office.

“It’s an odd business setup, you know,” Ciamaga shrugs, surveying a stretch of newer glossy-black graves etched with portraits of the deceased. 

State laws require that many cemeteries put a certain amount of their proceeds from the sale of plots into an endowment to support it once it’s sold out – much like a 401(k). But while a retirement plan has to support a person for a few decades, this money is supposed to fund the cemeteries forever. 

“Forever is a pretty big promise,” says John Llewellyn, the chairman of the board of the Forest Lawn Memorial-Park Association and author of a book called, “A Cemetery Should Be Forever.

Llewellyn worries that many cemeteries won’t be able to keep that promise.

“Not all cemeteries put aside enough money,” he says. “Some are not required by state law to put aside money. In other instances, the state sets certain minimums are that inadequate.”

Just like people need to sock away as much as possible in their prime earning years, Llewellyn thinks cemeteries, many of which are non-profits, should be saving more. He says the best time from cemeteries is two or three generations into its life, when the high start-up costs of land, roads, and irrigation systems are behind it and revenue from sales starts really flowing.

Celebrating its 150th anniversary this year, Woodlawn Cemetery in the Bronx already houses 300,000 people and there’s space for tens of thousands more on its rolling hills.

“We are going to cater to every case, whether it be an individual on social security or somebody that’s a multi-millionaire,” says Woodlawn’s executive director David Ison. “We have to have pricing structures to fit all needs.”

Options range from cremation to a private mausoleum available for $4.6 million.

Density is key, says Ison. On a little less than an acre of new space, Woodlawn be able to fit 2,500 new people, a mix of burials and cremations.

By expanding, Woodlawn gives itself more inventory – more time in this middle, lucrative selling phase.

Back in Brooklyn, Washington Cemetery looks at a lot different from the Bronx. It’s under a subway line in a much more urban area, but it’s still popular with local residents.

“I couldn’t, like, emphasize enough to you how people desperately want to be buried here,” says Michael Ciamaga.

He’s hoping a new section the cemetery’s opening will help it emerge from its forced retirement.

“With the Staten Island section that we’re opening, we’ll be good for, you know, anywhere from 10 to 15 years,” he explains. “After that, I have no idea.”

It’s relatively rare, but cemeteries can fail. On average, eight cemeteries have been abandoned in New York State each year since 2001, according to the state’s Division of Cemeteries. They generally become the responsibility of the town, though they may also be taken over by another cemetery.

Ciamaga says if Washington runs out of money, they’ll close the office, cut the maintenance staff, and maybe just keep on a gravedigger until all its “reservations” have been filled.

The Internet is not big enough for political ads

Mon, 2014-10-13 11:48

Whoever said "there’s plenty of room for everyone on the Internet" was wrong - at least if you’re looking for advertisement space for your political campaign.

"There’s a finite amount of inventory on premium video sites like on YouTube or Hulu," says New York Times reporter Ashley Parker.

There are two types of online video ads, and they are priced differently. Skip-able ads give you the option to skip the ad onto the music video or clip that you went on the Internet to watch in the first place. But these are also usually… skipped.

"Those ads do not sell out, but they are sold via an auction system," says Parker. "Closer to Election Day more people are demanding them, so the price goes up."

The other type of ad is called “reserved by ads.” These are normally 15 to 30 seconds long.

"Those are more expensive, often, but they can be reserved in advance which is a big advantage for campaigns that think ahead," says Parker.

The rise of Germany's 'euro-skeptics'

Mon, 2014-10-13 11:42

The IMF recently claimed that there’s a 40 percent chance of a triple dip recession in the eurozone, and a 30 percent chance of deflation. This grim picture has not been improved by developments in the currency bloc’s biggest economy – Germany.

There’s a political tornado brewing in that country that could blow the euro off course and reignite the debt crisis. Germany’s newest political party – Alternative for Deutschland (AfD) - which wants to pull out of the single currency - is on the rise.

“I think we are becoming a real force in German politics, ” says party worker Friedrich Hilse. “ We have broken through into the European parliament, we have won seats in three regional assemblies, and we’re likely to get into the Bundestag (the German parliament) at the next election.”

But the party has the support of only 7  percent of the electorate. How much of a threat to the euro does the AfD really pose?

"The rise of the AfD is unusual because it seems to break the German consensus," says Pavel Swidlicki, an analyst with the Open Europe think tank in London. “This is the consensus across all political parties – that European integration is the best way forward.”

That does not mean Germany is anywhere close to ditching the euro. Far from it: The country would suffer huge political as well as financial damage if it pulled the plug on monetary union.

But the rise of a euro-skeptic party in the eurozone’s most powerful economy could weaken the single currency and trigger another wave of market unrest. The German government may now be less willing to bailout heavily-indebted member states like Greece or Italy.

“Berlin could dig in its heels much more to try to appeal to those voters that it lost to its new party... and that of course would make the coordination of eurozone-wide policies even harder than it is anyway,” says Dr. Moritz Kraemer of the Standard and Poor’s credit rating agency in Frankfurt . Kraemer claims that the German government – goaded by the AfD – is likely to be even more critical of any special measures by the European Central Bank to stave off deflation. This could mean that if the ECB embarks on U.S. Fed- style money printing, its effectiveness would be undermined.

Can J.C. Penney's new CEO make the brand popular again?

Mon, 2014-10-13 11:29

J.C. Penney's new President and CEO, Marvin Ellison, moves to the legendary retailer from Home Depot. He'll be the third CEO in less than four years and he’s got a tough job in front of him: Making J.C. Penney relevant again.  

But before we get into J.C. Penney’s future, it’s worth remembering its past. Once upon a time, department stores were where you went for a bargain, says Ira Kalb, a marketing professor at UCS’s business school.

“I know that when I was in high school, my friends went there to buy underwear,” Kalb says. “So they went to J.C. Penney to buy things [that] were not fashionable items but items where they could save money.”

J.C. Penney still fills that niche and still has a loyal following of mostly older, female bargain hunters, Kalb says. So what's the problem? Well, the world of bargain retailing has radically changed since Penney’s heyday.

“Now there’s a lot of competition at that low-end,” Kalb says.

He says JC Penney needs to re-brand itself because Wal-Mart and Target now dominate that market.

Finding a niche to attract new low-to-middle-income consumers is difficult, says Richard Church, of Discern Investment Analytics.

“The obvious challenge is how do you retain a customer in a slower growth economic world,” he says.

Consumers are buying more online and they’re shifting their spending to gadgets from clothes. While Church admires the new CEO, he’s skeptical about whether Ellison can bring sexy back to Penney’s.

“Anybody who says that Penney needs to be sexy, I believe is not looking at the picture correctly,” says Gilford Securities retail analyst Bernie Sosnick. Penney’s went searching for sexy and it nearly destroyed the company, he says. Now, after a rough couple of years, it’s rediscovering its identity and getting its footing again.

Your boss doesn't care about Columbus Day

Mon, 2014-10-13 11:00

The bond market closes for Columbus Day, and so does the federal government.

But a study by the Society for Human Resources Management says 14 percent of organizations and businesses close for the federal holiday.

On top of that, Seattle and Minneapolis have opted to ignore Columbus altogether, replacing the second Monday in October with with Indigenous People's Day.

As it turns out, no one really cares about Columbus Day.

A conversation with Jean Tirole, Nobel Prize winner

Mon, 2014-10-13 10:15

If you are a researcher in economics and you miss a call from Sweden on your cell phone, you might have missed something significant. That was the case for Jean Tirole, a French economist and professor, and recipient of the 2014 Nobel Prize in Economic Sciences.

“I missed the call and then I noticed that my phone was vibrating and I went to see and it was a call from Sweden. So I was a bit surprised, but then I learned the great news,” he said to Marketplace host David Gura.

Tirole’s research deals with market power and regulation, an area of study that first interested him as a student at MIT, where he received a doctorate of economics before returning to France.

There’s already been an outpouring of national pride in response to Tirole’s win — French Prime Minister Manuel Valls tweeted that the victory was a “thumb in the eye for French bashing.” Tirole is one of only three French citizens to have won the Nobel Prize in Economic Sciences. 

For his part, Tirole doesn’t see being based in France as having a huge impact on his work, as he feels that aside from having to understand individual country’s economic structures, a lot of his research applies globally. 

“In the end, it’s really an international field nowadays," he says. "I probably would have put less emphasis on debt crisis or labor market reforms if I had stayed in the U.S., but most of my work is completely independent of that.”

While his research has directly influenced the formation of policy, Tirole says he prefers to focus on his work as a researcher and professor, instead watching his recommendations be implemented from afar.

“My main role is to be a researcher and to be with colleagues and students. I’m very happy when, of course, recommendations are adopted. That goes without saying," he says. "But there’s only 24 hours a day.”


Explaining the theory that got Jean Tirole his Nobel

Mon, 2014-10-13 10:04

French economist Jean Tirole won the Nobel Prize in Economic Sciences Monday, and it's been reported that much of his work was in government regulation. But what did he actually figure out? 

"If Jean Tirole can be said to make one idea, it's that the world is complicated," says economist Alex Tabarrok. "And a lot of things can change depending upon small differences in who knows what information."

Here's an analogy: the world is like a classroom, full of kids of different skills and abilities and ethnic groups and genders. Very complicated, as any teacher can attest. Applying a single standard or teaching methodology across the board in the classroom isn't fair to the kids. Nor is it efficient in terms of getting the best out of the class.

Tirole says the same goes for companies: you have to regulate each company differently. Just as one child might be motivated by detention, another by a reward of a bag of sweets and a third by praise, so individual companies, even those in the same sector, will be motivated by different things. The challenge for regulators is to determine what the best incentive is for each company and use that knowledge to regulate them.

It gets particularly tricky when there isn't much competition. The government might tell an electric company it can only make 10 percent more than its capital investment, Tabarrok explains, but then that electric company might not have any incentive to keep costs down. Instead, Tirole proposes a more complex regulation that includes a price cap, letting the firm keep more profits below the cap.

The difficulty Tirole's theories point out are in the interpretation of the message that regulators transmit to their target companies. Just as teachers have to be cognizant of how a statement to the class will land with each individual student. Put very simply, this all really boils down to communication within the financial sector.

Tirole found that by offering a menu of more complex, precise options, Tabarrok says, regulators can learn more about the real incentives at play in the industry they're policing. That notion can be applied elsewhere, from defense contracts to CEO compensation, but it has limits.

"Precisely because different rules are optimal in different circumstances, the regulator — even a sophisticated regulator — might not be able to pull off the trick which Tirole recommends that they try," Tabarrok says.

Just like teachers, who can find it tough to pull off the trick of keeping an entire class engaged, challenged and disciplined all the the same time.

The numbers for October 13, 2014

Mon, 2014-10-13 08:28

Sentencing is underway for Olympic runner Oscar Pistorius, who was convicted last month of culpable homicide — equivalent to manslaughter — in the shooting death of his girlfriend Reeva Steenkamp. Pistorius' defense team asked for leniency, the New York Times reported, citing the athlete's anguish over the killing. One witness suggested house arrest and community service, which prosecutors rejected.

Pistorius could face up to 15 years in prison and the trial will resume Tuesday morning. In the mean time, here are the stories we're reading — and other numbers we're watching — Monday.

200,000

That's how many sensitive photo and video messages — some of minors — that were stolen in the latest hack into the self-destructing message app Snapchat. The images began appearing on 4chan over the weekend, Business Insider reported, and users set up a system to search for specific usernames. The unofficial app SnapSaved has taken responsibility for being hacked, but experts say the blame could be on Snapchat's own security, which is open to third-parties like SnapSaved.

29

The list of globally, systematically important banks maintained by the international Financial Stability Board. U.S. and U.K. regulators will simulate the failure of two big lenders and their impact on the global economy as part of a "war game" Monday, Bloomberg reported.

$29.31 billion

The National Institutes of Health's budget for fiscal year 2013, which has been on a steady decline for a decade, when adjusted for inflation. NIH head Francis Collins told the Huffington Post a lack of funding has inhibited the organization's research on an Ebola vaccine.

After J.C. Penny closure, retail 'flatline' in Montana

Mon, 2014-10-13 08:22

J.C. Penny has (another) new CEO, and a renewed focus on its Middle America stores.

While the company does not plan additional store closures at the moment, one left Butte Plaza Mall in Butte, Montana earlier this year.

Manager Alana Ferko shared her disappointment when that decision was announced back in January.

"I'm very grateful for the mercy J.C. Penny showed, by not coming in and closing the doors. They gave us time to prepare," Ferko said.

Even so, she said, "I miss them terribly."

After a strong tourism and back-to-school season, Ferko is looking ahead to the Christmas shopping season. Despite strong economic indicators, she said, it feels like retail is still "flat-lining."

But that Christmas spirit is infecting the mall, even before Halloween.

"Maybe that's what I need just to pop me out of this," Ferko said. "The cinnamon pine cones, it's pretty exciting."

Railroads profit from energy boom

Mon, 2014-10-13 04:00

The railroad business has been heating up, thanks in part to the energy boom underway in parts of the United States. Now there’s word that Canadian Pacific Railway approached U.S. rail company CSX Corporation about a merger. CSX reportedly declined.  

Together the two companies would have a market value of about $62 billion, according to the Wall Street Journal, which first reported the proposed merger. Combined they have more than 35,000 miles of track across much of Canada and the U.S.

The offer comes as the railroad business is experiencing a resurgence, fueled partly by an increase in crude oil production in states like North Dakota and Texas. Major railroads operating in the U.S. made more than $2 billion hauling crude last year, according to the Journal. Meanwhile, bumper crops of grain in the Midwest and Canada and an improving economy have increased other kinds of rail traffic.

“The railroads are suffering right now from basically too much traffic that they’re having a little difficulty handling," says Steve Ditmeyer, who teaches railway management at Michigan State University. “It’s a problem, but it’s a good problem that they have.”

All the extra traffic has caused delays for Amtrak, the passenger rail service, and for farmers trying to get their products to market.  

PODCAST: Controlling the panic over Ebola

Mon, 2014-10-13 03:00

First up, more on what materials the Centers for Disease Control is telling hospitals in the midst of panic over the Ebola virus. Plus, a look at a supposed merger proposed by the Canadian Pacific Railway with CSX Corporation. And more on spacecraft Rosetta which could collect data that could tell us how to mine asteroids.

An argument for a federal robotics commission

Mon, 2014-10-13 02:00

Private companies, academic institutions, and governments are dabbling more and more with the idea that our future will be full of robots capable of completing all sorts of tasks. But does it necessarily mean that we need a Federal Robotics Commission?

Ryan Calo, Assistant Law Professor at the University of Washington and an affiliate scholar at the Stanford Center for Internet and Society, joined us to talk about his vision for a commission compromised of technologists, engineers, and scientists:

“I don’t know that we need a Federal Robotics Commission exactly as I’ve described it, but what we do need is to start thinking more systematically about robotics law and policy.”

Professor Calo brought up one example: The Department of Transportation was recently asked by Congress to investigate whether the sudden acceleration problem in Toyota vehicles was a software glitch. The DOT didn’t have the experts needed in-house to figure out the problem, so they hired people at NASA to look into it.

Ultimately, this is the argument for having a Federal Robotics Commission—To have a group of experts who understand the issues technology can bring about and properly advise different agencies and states about how to proceed with different policies.

For more information, check out "The Case for a Federal Robotics Commission" by Ryan Calo.

The lingering effect of last year's tough winter

Mon, 2014-10-13 02:00

The U.S. Energy Department says heating costs are likely to be less this winter, thanks to relatively mild temperatures and a drop in oil prices. 

The bad news in the forecast is the slight uptick in natural gas prices, which have gone up on average about 6 percent, the Energy Department’s Energy Information Administration  says. 

But thanks to milder temperatures anticipated for this winter, officials still predict less consumption of heating fuels and a drop in overall costs for households. 

Last year's severe weather and unusually cold temperatures are still having an impact, though. They are the cause of the higher natural gas prices, says Steve Piper, a natural gas analyst with SNL Financial. 

“With the widespread cold weather, we drew down storage levels of natural gas to extremely low, critical levels,” Piper says. 

While storage levels have recovered, they are still about 10.5 percent below the five-year average. The slight shortage has raised prices and is likely to continue to do so, Piper says. 

"The gas utilities are going to be in the market actively procuring gas, to prevent a repeat of last winter’s events. And that’s going to bid up the price somewhat,” he says.  

But even though more than half of the nation’s homes depend on natural gas for heat, officials still forecast less total spending on heat, because of the milder temperatures. 

"We expect a relatively mild start to the winter, especially November and into December,” says Dan Leonard, a senior meteorologist with weather forecaster WSI, which operates The Weather Channel. 

Leonard says while temperatures will get frostier in February, the expected mild start to winter will reduce the amount of heating needed. But the savings for households will not be uniform. 

The EIA says households using natural gas — which already spend the least on winter heating — will save an average of $31 this winter. That affects more than half the households in almost every region of the country except the South.

Homes using electricity, which is a majority of homes in the South, will save an average of $17. The small proportion of homes using propane, many of which are in the Midwest, will save an average of $652. And heating oil households, almost all of which are in the Northeast and account for more than a quarter of homes in that region, will save an average of $362. 

Meanwhile, the National Weather Service is preparing an updated forecast for winter, which the EIA cautioned could affect its forecast of heating costs.

Primary care staff anxious over Ebola preparedness

Mon, 2014-10-13 02:00

Ebola is increasingly on the minds of doctors, nurses and other frontline health workers around the country and the Centers for Disease Control reports a significant spike in clinical staff seeking out the agency’s guidance over the last week.

Dr. Linda Girgis, who runs her own practice in New Jersey, says she runs through ‘what if’ scenarios in her head these days.

“For example, if I have a patient who walks in to see me in the evening, the health department is closed so we really don’t have anybody to call at that time to know what to do with that patient,” she says.

Beyond that, Girgis worries EMTs who would transport that patient aren’t sure what to do, either.

“A lot of us don’t feel that we are prepared to take the precautions to contain the infection,” she says.

Various arms of the federal government have stepped up outreach efforts since the first patient was diagnosed with Ebola in the United States.

Wednesday, the CDC hosted a Twitter chat. The Monday before, Dr. Nicole Lurie, Assistant Secretary for Preparedness and Response, penned a letter addressed to “All U.S. Healthcare Professionals.”

Lurie, who herself is a primary care doctor, outlined three steps to prevent the spread of Ebola.

An Open Letter to All U.S. Healthcare Professionals Dear Colleague,

As a frontline healthcare provider, you play an essential role in protecting the health and well-being of our nation. In light of the recent presentation of an Ebola-positive patient in Texas, we wanted to remind all healthcare professionals that simple steps can be taken to prevent the spread of this disease. You can contribute to our country’s response by being ready to detect a potentially infected patient; protect yourself, your colleagues, and other patients from exposure; and respond with appropriate patient care. Specifically, you should be ready to:

  • Detect: Ask All Patients with Non-Specific Complaints About Recent Travel
    A travel history should be taken as early as possible in your encounter with all patients. Although the signs and symptoms of Ebola are nonspecific (e.g., fever, headache, muscle pain, weakness, vomiting, diarrhea, etc.), Ebola can be virtually eliminated from your differential by ruling out travel to the affected area.
  • Protect: Use Good Infection Control Practices
    Consistent and correct use of personal protective equipment (PPE), frequent hand washing, and proper decontamination of surfaces and equipment are key to reducing or eliminating the transmission of Ebola and other communicable diseases (e.g., HIV, influenza, hepatitis, and Enterovirus-D68).
  • Respond: Have a Plan
    All healthcare workers should know what to do when encountering a suspected Ebola patient. It is critical to know who to notify and to make that notification immediately. Remember, Ebola is a nationally notifiable disease and must be reported to local, state, and federal public health authorities.    

    The CDC website has many important resources for clinicians to learn more about Ebola.
    In addition, the CDC Emergency Operations Center (EOC) is always available at 770-488-7100 or eocreport@cdc.gov.

    In the last decade, our nation has made great strides in healthcare system and public health emergency preparedness. As a result of our efforts, we are confident in our collective ability to control the spread of Ebola domestically. Thank you for your continued partnership and dedication to national health security.

    Best regards,

    Nicole Lurie, M.D., M.S.P.H.
    RADM, U.S. Public Health Service
    Assistant Secretary for Preparedness and Response 

The letter included CDC emergency operation contacts.

“It takes the whole healthcare community to protect health. Everybody involved has to recognize it’s my problem, not somebody else’s problem,” she says.

Lurie understands it often takes a while for something to sink in. That’s why she says she's ready to repeat herself for as long as it takes.

What is the CDC sending out to doctors?

The CDC is sending doctors handouts like this checklist for evaluating patients for Ebola and the flowchart below on how to evaluate a returned traveler.

 

A new financial innovation in the housing market

Mon, 2014-10-13 02:00

Financial innovation in the housing market is back.

The last year saw the creation of something called "REO-to-rental securities" or "rental-backed securities." It's enough to give you subprime crisis flashbacks. But in fact, it's a very different species of financial instrument. 

It does start with a house, much like that of Jess Joslin. "It's a two-story brick house with a two garage," she says. 

Joslin rents from American Homes 4 Rent, one of the largest players in the emerging market of single family rentals owned by big investors. "From what I understand, almost all their houses look like this," Joslin says. "They’re really nice."

The largest investors have purchased nearly 200,000 houses in the last several years. The purchasing peaked in 2012, and has focused on places where the subprime mortgage crisis hit hardest. 

"You’re seeing it in Phoenix, in Las Vegas, in Atlanta," says Laurie Goodman, director of the Housing Finance Policy Center at the Urban Institute. 

In many of these markets, housing prices fell by more than a third, and the plan was to buy low with cash from investors, and then reap the profits from high rents. But in many of these markets, housing prices have appreciated, while rents have remained more stagnant. "Rents haven't gone up all that much," says Goodman. "And they haven't gone up nearly as much as home prices."

This change has meant that the buy-to-rent strategy generates less return for every dollar. To make up for it, in the last year, these investors have looked for ways to put other people's dollars to work. 

Enter securitization. 

Do we call them rental-backed securities? 

"They're viewed as a hybrid," says Doug Bendt, director of research for mortgage-backed securities at Deutsche Bank. 

His bank pioneered this new financial instrument as a way of giving investors more leverage. "'Necessity is the mother of invention,' as the saying goes," he says.

Think of it as a really big loan to a really big landlord, chopped into little pieces and sold to bondholders. The landlord—like American Homes 4 Rent—gets some cash for the rising home prices, and lower borrowing costs going forward. "Just kinda like a homeowner refinancing," says Bendt. 

The bondholders get a check every month, thanks to thousands of rental payments from people like Jess Joslin.

And if some of the thousands of Joslins stop paying their rent? The landlord can kick them out of their homes and find new tenants, or sell the whole house. That, and a much smaller scale and more conservative approach, are why analysts like Goodman and Bendt see the rental-backed security as far more benign than the infamous toxic assets that led to the last housing crisis. 

"I think people think, ‘Oh this is a repeat of the excesses of the past!’ But in reality, it’s very, very different than the past," says Goodman. "It’s sort of a begin to creep back to normalcy."

A normalcy where more people are renting, and more of their landlords are multi-billion-dollar companies.

Three charts that show why your heating bill will fall

Mon, 2014-10-13 01:30

The Department of Energy is predicting lower heating costs this winter. Some homes could see a nearly 40 percent drop in their heating bill. There are a couple forces behind this, and the federal Energy Information Administration has a wealth of data. Here's what you need to know, boiled down to three charts.

The Polar Vortex took our natural gas 

Natural gas is used to heat 57 percent of homes. Prices are on the rise after last winter's bitter temperatures depleted supply. Even if this winter is 10 percent warmer than expected, the EIA projects supply still won't have recovered to prior levels in 2015.

This winter will be much warmer

Last winter hiked up natural gas prices, and electricity followed, but the EIA is predicting demand will fall faster, especially when compared to last year's bitter polar vortex conditions. Heating days — a national measure of demand, waited by population — are expected to fall sharply for winter 2014-2015, following a decades-long trend.

That means lower bills for (almost) everyone

Even if this winter is 10 percent colder than predicted, the EIA says propane and heating oil users will see drops in their bills. As it's forecast now, demand will outpace higher prices and mean discounts across the board.

Of course, needs vary across the country, the energy department has an interactive tool that lets you explore spending state-by-state.

Weekend Brunch: AIG and women in sports

Sun, 2014-10-12 09:35

ESPN The Magazine's Mina Kimes and Shane Ferro from Business Insider look back on the week's news.

This weekend's reading list:

Dealbook/New York Times: AIG Bailout, Revisionists' Version

ESPN: Lawsuits show MLB's gender problem

Quartz: Memo to Warren Buffett: Actually, women are better than men at managing money

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