Marketplace - American Public Media

The Tale of the City Service Station

Mon, 2014-08-25 01:00

Before there was Exxon, there was ESSO. Before there was CITGO, there were Cities Service stations. That brand is long gone, but this summer marks the return of something you might call “City Service.” Sick and tired of high local fuel prices, a town in Kentucky in recent weeks opened up its own gas station. It is a filling station owned by the town of Somerset. 

The mayor, in what’s been described as a Republican stronghold, says residents have been complaining for years that gas prices in Somerset tend to run higher than in surrounding areas, and spike when vacationers come in for boating and fishing on a nearby lake. Somerset already owned a 60,000 gallon gasoline storage facility. Jazzing up the place to take cash and credit cards required a modest investment of  $75,000. Somerset also lucked into having an independent wholesaler in the neighborhood that is willing to supply the gas to the town little station.

The city is charging per gallon based on an average regional price. The mayor is quoted saying the idea isn’t necessarily to sell gas, but to help bring gas prices down. The strategy appears to be working in the early weeks of the venture. Local drivers are delighted, but private sector gasoline sellers are not. Some say it smacks of socialism, even communism, and see the idea as an assault on the free market.

I looked around for some precedents and they are interesting. Some cities have long had municipal public utilities. The power company in San Francisco is owned by the city and county, for instance. In North Dakota, there has been a state-owned bank that for 95 years has been serving as a kind of mini-Federal Reserve for the region to target cheaper loans to projects deemed in the public interest, like nurturing local entrepreneurs.

There are precedents in the retail sector as well. The town of Kotzebue, Alaska owns its own liquor store. In Minnesota, 207 municipalities own their own booze emporiums. 

More typically however, the response to high prices or other perceived market failures has not been ownership of the retail outlet by a municipality. Instead, the solution is more often local citizens banding together. Heating fuel co-ops are common, in which locals pool resources to get a better price on oil by buying in bulk. In Powell, Wyoming, there is even a department store called Powell Mercantile owned by a group of 500 local shareholders. The store is popular enough to have become a tourist destination. 

Foot Locker profits jump, thanks to basketball and Nike

Fri, 2014-08-22 13:21

Today, Foot Locker reported its fiscal second quarter profits jumped 39 percent. And ‘jumped’ is the operative word, because those figures have a lot to do with basketball shoes and Nike.

Foot Locker’s net income for the quarter was $92 million. Equity analyst Sam Poser with Sterne, Agee & Leach says the company is doing a lot of things right.

Plus, he says, “athletic shoes are on fire. Basketball shoes specifically.”

Nike, he says, controls 95 percent of the basketball shoe business. The buzz largely surrounds its marquee names: Air Jordan. Kobe. LeBron. Kevin Durant.

The buzz persists, says Morningstar equity analyst Paul Swinand, because athletic companies and especially Nike, “do a fantastic job of limiting who gets what colors, what sizes and how many pairs.”

He says Foot Locker is a valuable partner to Nike, so it gets the most popular styles … in moderation.

“That ensures that supply is not quite meeting demand,” he says. “And it means that if the shoes are popular, they’re gonna be a little bit rare.”

Swinand says the two companies need each other … but Foot Locker might need Nike a little bit more.

Foot Locker profits jump, thanks to basketball and Nike

Fri, 2014-08-22 13:21

Today, Foot Locker reported its fiscal second quarter profits jumped 39 percent. And ‘jumped’ is the operative word, because those figures have a lot to do with basketball shoes and Nike.

Foot Locker’s net income for the quarter was $92 million. Equity analyst Sam Poser with Sterne, Agee & Leach says the company is doing a lot of things right.

Plus, he says, “athletic shoes are on fire. Basketball shoes specifically.”

Nike, he says, controls 95 percent of the basketball shoe business. The buzz largely surrounds its marquee names: Air Jordan. Kobe. LeBron. Kevin Durant.

The buzz persists, says Morningstar equity analyst Paul Swinand, because athletic companies and especially Nike, “do a fantastic job of limiting who gets what colors, what sizes and how many pairs.”

He says Foot Locker is a valuable partner to Nike, so it gets the most popular styles … in moderation.

“That ensures that supply is not quite meeting demand,” he says. “And it means that if the shoes are popular, they’re gonna be a little bit rare.”

Swinand says the two companies need each other … but Foot Locker might need Nike a little bit more.

This was the lightest trading day of the year so far

Fri, 2014-08-22 13:20

Consider this a testament to:

A) August.

B) Computerized trading.

According to CNBC, this was the lightest trading day of the year so far on the New York Stock Exchange.

Just 2 and a quarter billion shares changed hands.

Just.

Today was the lightest volume day of the year at the NYSE, with just 2.29 billion shares traded. (via @HumOnTheMarkets)

— CNBC Newsroom (@CNBCnow) August 22, 2014

 

And the Emmy goes to... Monday!

Fri, 2014-08-22 13:20

The Primetime Emmy Awards take place next week, but for the first time in nearly 40 years, the Emmys won't air on Sunday night TV. Instead, Emmy fans will have to wait until Monday to get their annual Emmy celebrity fix. 

The Emmys rotate from network to network, and this year it's NBC's turn. So why is NBC eschewing Sunday? Because Sunday is the most watched night of the week, with more than 124 million viewers, and that means lots of competition for the Emmys. Moreover, some some of the hottest shows on television air on Sunday nights: Downton Abbey, True Detective, Game of Thrones, Girls.

Last year CBS made the canny move of airing the Emmys right after a football game. The NFL audience mostly stuck around, which netted the Emmys its biggest audience in years. You might think NBC would use the same tactic. It owns Sunday Night Football, after all, but media analyst Jack Myers says the competition is just too intense. First, there are all of those hit shows to contend with (True Blood's season finale is on Sunday). And then there's the other awards show that will be airing Sunday night – The MTV Video Music Awards are that night, and last year we had the twerking with Miley Cyrus," says Myers. "So there’s a lot of interest this year in the program, and it’s that 18-34 audience."

NBC doesn't want to lose that key demographic to twerk-gate, so it's rolling the weekday dice.  

"It’s actually pretty interesting to see this kind of experimentation happening on a big scale," says Rick Ducey, Managing Director at BIA/Kelsey, a media research firm. "There’s a lot of economics at stake here."

Advertisers often pay as much as 50 percent more for ads around live events like the Emmys. If NBC's Monday night Emmys pulls in a big audience, Ducey says we’ll likely see more special event TV creeping out over the week.

But that’s a big "if."

"The difficulty is, of course, corralling everybody in the way you can on a Sunday for something like the Oscars or the Superbowl, where they’ll give up seven or eight hours quite happily," says Toby Miller, a professor emeritus of media and cultural studies at the University of California-Riverside. He says those leisure hours are key for the tweeting and Facebook posting people do around awards shows – and the ad possibilities that come with that.

A $10,560 bachelor's degree?

Fri, 2014-08-22 12:50

Chalk up another threat to higher education as we know it.  California's state legislature has passed a bill that will allow a small number of community colleges to offer bachelor's degrees.

If democratic Governor Jerry Brown signs the bill, the state will be the 22nd to expand the reach of community colleges.

But students who are looking for degrees in philosophy or literature on the cheap are going to be disappointed. Part of the agreement is that community colleges won't compete with traditional four-year schools. 

"We’re not going to see bachelor's programs in English, math, history, sociology, chemistry and all of those fields that are traditional liberal arts fields," said Constance Carroll, Chancellor of the San Diego Community College District, and a member of the California Community College Baccalaureate Degree Study Group. "What we will see are baccalaureate programs in workforce fields where there is high demand."

Fields like dental hygiene, information technology, and automotive-technology management.

"They are degrees that are intended to help put people to work," said Deborah L. Floyd, professor of higher education at Florida Atlantic University and author of "The Community College Baccalaureate: Emerging Trends and Policy Issues".

In many cases, these are fields that didn’t require a four-year degree in the past. "Employers are expecting a more educated and trained work force," said Floyd.

Compared to a traditional college education, a community college BA can be a steal. In California, Carroll said tuition will be $10,560. Total.

It’s gotta make traditional four-year schools nervous, right?

"We’re not duplicating anything that the University or California or Cal State offers," said  California State Senator, Marty Block .

The schools facing real competition, he said, will be for-profit colleges, who offer these specialized degrees at much higher prices.

Extending the female athlete spotlight past Mo'Ne Davis

Fri, 2014-08-22 12:26

It's been a particularly cruel week – month – of news.

Ferguson. Ukraine. The murder of journalist Jim Foley.

I found a small glimmer of solace in a fastball. One pitched by an extraordinary 13-year-old kid from Philadelphia. Standing 5'4", not much over 100 pounds, throwing at 70 miles per hour, at the heart of a remarkable little league team.

Oh yeah, and she happens to be a girl.

Of course, I'm talking about Mo'Ne Davis. She's on the cover of Sports Illustrated, on TV, held out both as a sensation and maybe a pioneer for girls and women in sports.

On the one hand, hell yes. On the other, she's just, you know, an athlete.

I'm terminally allergic to the phrase "throw like a girl," even if it's being reclaimed and adopted as a badge of pride. Because it's always a reminder of second class citizenship in the realm of athletics.

Of that fact that there is a law, Title IX, to ensure that girls get equal treatment and equal funding (indeed, though Title IX is mostly associated with athletics, it's actually much broader).

Davis has spoken of her desire to play basketball for the University of Connecticut's famed program when she's older. I hope she gets a chance to do that.

Maybe her rise can also be a chance to talk about the continuing inequities in sports funding, for women and for men. The Women's Sports Foundation notes that, "even though female students comprise 57 percent of college student populations, female athletes received only 43 percent of participation opportunities which is 56,110 fewer participation opportunities than their male counterparts."

There are legitimate, thoughtful arguments to be had about whether revenue-generating college sports (usually men's football and basketball) should help cover the bills for other sports. And whether the NCAA should compensate its athletes (as a judge recently ruled they must, in part).

After the camera lights are off the dazzling Mo'Ne, let's keep talking about this, so another girl gets the chance to pitch, or run, or play.

Tech IRL: Apps to get lost in familiar places

Fri, 2014-08-22 11:34

With the increasing reliance on smartphones and technology to get around, it's easy to fall into routines -- taking the most efficient route to get to work or walking to the same corner coffee shop at lunch. 

But a few new apps are hoping to force us to get lost and discover more of the cities around us:

Drift 

From Broken City Lab, the Drift app "helps you get lost in familiar places by guiding you on a walk using randomly assembled instructions. Each instruction will ask you to move in a specific direction and, using the compass, look for something normally hidden or unnoticed in our everyday experiences." Drift is free and is currently only available on the iOS store

Dérive 

Dérive (named after an interesting Parisian movement in the 1940s, by the way) was created as a "simple but engaging platform that allows users to explore their urban spaces in a care-free and casual way. Too often in urban centers we are controlled by our day to day activities thus closing off urban experiences that exist around us. Dérive app was created to try to nudge those people who are in this repetitive cycle to allow the suggestions and subjectivities of others to enter into their urban existences." Dérive is available through their website.

What's your favorite way to explore a city? Let us know in the comments

A tale of two Fergusons

Fri, 2014-08-22 11:34

The story in Ferguson, Missouri, where an unarmed black teenager was shot and killed by the police, is one that can change a lot depending on where you stand, and how you look at it. 

Noel King and Lindsay Foster Thomas from Marketplace's Wealth and Poverty Desk reported from Ferguson this week, and discuss their experience there. 

The city has made efforts to attract new businesses to this part of town, and the efforts seem to be paying off. South Florissant Street boasts a new wine bar, a bike shop, and a handful of new restaurants. On the outdoor patio of the Ferguson Brewing Company, diners chatter over their meals. 

This economic revival, however, doesn't define Ferguson. Like a lot of cities across the U.S., it also has neighborhoods presently experiencing little or no financial investment. Here, those areas have been characterized by different types of protests. 

Noel King, Lindsay Foster Thomas/Marketplace

Read more: The emotional and economic toll on Ferguson, Missouri

Beyond ad clicks: using 'Big Data' for social good

Fri, 2014-08-22 11:32

There is a growing interest in “big data,” the science of collecting large amounts of information and making sense of it.

For a long time, this was the provenance of companies. Why? Because they have collected so much data – about what we buy, what we spend, and what ads we respond to, among other things. But the field is evolving. In 2008 and 2012, data science became a major part of political campaigns. Now, governments and nonprofits are beginning to see it as a way to tackle social problems.

After a decade digging through corporate data, Rayid Ghani wanted to do something different. “I decided one day just to arbitrarily pick a date to quit,” he says.

Ghani, an expert on information retrieval and machine learning, gave himself three months to find a job – a position with the potential for what he calls “social impact.” A few weeks later, he became the chief scientist on President Obama’s re-election campaign. “It was a fairly random detour,” he says. Ghani and his team did pioneering work on fundraising and analytics.

For now, Ghani is done with politics, but he says that detour was eye-opening. It showed him that data science has other applications. Today, Ghani teaches at the University of Chicago, where he runs The Eric & Wendy Schmidt Data Science for Social Good Fellowship. “The reason I started the program was really looking back at myself and saying, 'I would have loved to be in a program like that.'"  

Rayid Ghani directs The Eric & Wendy Schmidt Data Science for Social Good Fellowship at the University of Chicago.

David Gura/Marketplace

Forty-eight of the world’s brightest data scientists – students from more than 30 universities – have spent 12 weeks in Chicago. They have worked with community organizations, nongovernmental organizations and governments to tackle social problems, including maternal mortality and homelessness.

“They had no idea that those problems have data, and that their skills can be helpful in solving those problems,” Ghani says.

The fellows set up shop in an unfinished office space in downtown Chicago, and started programming in Python and R.  Those are the hammer and hacksaw in a data scientist’s toolbox. The fellows made themselves at home. In the kitchen, behind a stack of boxes, there is coffee and a half-eaten pie, and tucked in a corner, there is a ping-pong table.

The outside groups – the Sunlight Foundation, WikiEnergy, Chicago Public Schools, to name a few – gave the fellows two things: problems to tackle and data. Lots and lots of data.

This week, participants in the program gathered at 1871, a tech incubator high above the Chicago River, to show off what they accomplished.  One group devised a new way for the World Bank to look for corporate collusion in development projects. Right now, that organization has to rely on whistleblowers. The fellows found a way for the Bank to flag contracts where corporate collusion is most likely to occur.

Another group helped the Chicago Department of Public Health to pinpoint homes where children are at the highest risk of lead poisoning. Right now, the Department has a list of tens of thousands of housing units where kids could be at risk. The fellows narrowed that down considerably, creating a model that suggests the Department could focus its attention on 378 units where the risk is highest. That would take just two months, and it would cost the city less than $200,000.

After the presentations, the data scientists fielded questions. Sam Zhang, who worked on a way to improve outreach to Americans who don’t have health insurance, said he and his fellow data scientists had a lot to learn about the organizations they partnered with. “I came, and I didn’t know what Medicare, Medicaid, what the health care subsidies were,” he admitted. “The first few weeks were 'print out a bunch of papers about it, and just read.'”

And those organizations, he says, had a lot to learn about big data – what it can do, and what someone trained in analytics or econometrics can do with it.  Zhang went to Swarthmore College, and he acknowledged he could have wound up in Silicon Valley. “The thing is Rayid is trying to steal us away from the people optimizing ad click,” he said. “And I think he’s pretty successful.”

Some fellows will return to Ph.D. programs, and a handful will remain in Chicago, where they will continue to work on these projects. Ghani’s hope is all of them will leave with a new sense of what data can do.

Beyond ad clicks: using 'Big Data' for social good

Fri, 2014-08-22 11:32

There is a growing interest in “big data,” the science of collecting large amounts of information and making sense of it.

For a long time, this was the provenance of companies. Why? Because they have collected so much data – about what we buy, what we spend, and what ads we respond to, among other things. But the field is evolving. In 2008 and 2012, data science became a major part of political campaigns. Now, governments and nonprofits are beginning to see it as a way to tackle social problems.

After a decade digging through corporate data, Rayid Ghani wanted to do something different. “I decided one day just to arbitrarily pick a date to quit,” he says.

Ghani, an expert on information retrieval and machine learning, gave himself three months to find a job – a position with the potential for what he calls “social impact.” A few weeks later, he became the chief scientist on President Obama’s re-election campaign. “It was a fairly random detour,” he says. Ghani and his team did pioneering work on fundraising and analytics.

For now, Ghani is done with politics, but he says that detour was eye-opening. It showed him that data science has other applications. Today, Ghani teaches at the University of Chicago, where he runs The Eric & Wendy Schmidt Data Science for Social Good Fellowship. “The reason I started the program was really looking back at myself and saying, 'I would have loved to be in a program like that.'"  

Rayid Ghani directs The Eric & Wendy Schmidt Data Science for Social Good Fellowship at the University of Chicago.

David Gura/Marketplace

Forty-eight of the world’s brightest data scientists – students from more than 30 universities – have spent 12 weeks in Chicago. They have worked with community organizations, nongovernmental organizations and governments to tackle social problems, including maternal mortality and homelessness.

“They had no idea that those problems have data, and that their skills can be helpful in solving those problems,” Ghani says.

The fellows set up shop in an unfinished office space in downtown Chicago, and started programming in Python and R.  Those are the hammer and hacksaw in a data scientist’s toolbox. The fellows made themselves at home. In the kitchen, behind a stack of boxes, there is coffee and a half-eaten pie, and tucked in a corner, there is a ping-pong table.

The outside groups – the Sunlight Foundation, WikiEnergy, Chicago Public Schools, to name a few – gave the fellows two things: problems to tackle and data. Lots and lots of data.

This week, participants in the program gathered at 1871, a tech incubator high above the Chicago River, to show off what they accomplished.  One group devised a new way for the World Bank to look for corporate collusion in development projects. Right now, that organization has to rely on whistleblowers. The fellows found a way for the Bank to flag contracts where corporate collusion is most likely to occur.

Another group helped the Chicago Department of Public Health to pinpoint homes where children are at the highest risk of lead poisoning. Right now, the Department has a list of tens of thousands of housing units where kids could be at risk. The fellows narrowed that down considerably, creating a model that suggests the Department could focus its attention on 378 units where the risk is highest. That would take just two months, and it would cost the city less than $200,000.

After the presentations, the data scientists fielded questions. Sam Zhang, who worked on a way to improve outreach to Americans who don’t have health insurance, said he and his fellow data scientists had a lot to learn about the organizations they partnered with. “I came, and I didn’t know what Medicare, Medicaid, what the health care subsidies were,” he admitted. “The first few weeks were 'print out a bunch of papers about it, and just read.'”

And those organizations, he says, had a lot to learn about big data – what it can do, and what someone trained in analytics or econometrics can do with it.  Zhang went to Swarthmore College, and he acknowledged he could have wound up in Silicon Valley. “The thing is Rayid is trying to steal us away from the people optimizing ad click,” he said. “And I think he’s pretty successful.”

Some fellows will return to Ph.D. programs, and a handful will remain in Chicago, where they will continue to work on these projects. Ghani’s hope is all of them will leave with a new sense of what data can do.

Your Wallet: The rising cost of school supplies

Fri, 2014-08-22 09:51

We are creeping up to the end of summer. Which means it's back to school time across the country.

This week, we've been talking with parents about what they buy for their kids' classrooms. Marketplace's Adriene Hill joins the show to discuss how more and more parents are expected to chip in for supplies in the classroom.

 

Scottish independence and the finance sector

Fri, 2014-08-22 09:34

In about a month, Scotland will decide whether it wants to become an independent country, or remain as part of the United Kingdom.

In 2008, the UK government had to step-in and bailout the Edinburgh-based Royal Bank of Scotland. It injected more than £46 billion into the bank, which had so many customers across the UK that it was considered too big to fail.

BBC Scotland's economics correspondent Colletta Smith has been finding out what Scottish independence could mean to one of the country's most lucrative sectors.

Twitter wants to choose what you see

Fri, 2014-08-22 08:16

Twitter wants to grow its user base by exposing its users to new content. Their strategy, if you haven't heard already: Inserting tweets into your feed from people you don’t follow. 

"For example, I may not follow CNN, but I may start seeing tweets from CNN in my feed because people that I do follow like CNN, and they’re engaging with those tweets," says Kurt Wagner, who covers social media at Re/code. "It enables them to target you more efficiently with ads," says Wagner.

Judging from a somewhat scathing initial response, Twitter could risk losing some users. Many people enjoy using Twitter because they’re able to filter the content that they’re most interested in seeing, says Wagner.

"I think that’s going to rub some people the wrong way," adds Wagner. "They’ll feel like they’re losing control over what they see."

PODCAST: Wyoming, the financial center of the universe

Fri, 2014-08-22 07:44

We turn to Wyoming this morning, where the financial world is parsing through Janet Yellen's keynote speech for hints to when the Fed might raise interest rates. Then, famously neutral, Switzerland has not joined in sanctioning Russia and as such, they aren't included in Russia's retaliatory ban on European food imports.

Why Europe loves Yellen's moves

Fri, 2014-08-22 07:25

This week, Janet Yellen is the star of the show at the Economic Policy Symposium in Jackson Hole, Wyoming. That's where central bankers from all over the world converge to talk monetary policy...and possibly fly fishing techniques.

There aren't expected to be any major surprises from Yellen this year. The Federal Reserve is expected to stay its course with lots of stimulus and low interest rates.  

"I think everybody agrees, quantitative easing is essentially on auto-pilot," says Bill Stone, Chief Investment Strategist for PNC Wealth Management.

"Quantitative easing" is the Fed's now-famous policy of pumping billions of dollars a month into the U.S. economy. When the Fed first started the practice, central banks around the world voiced concern. But now Stone says Europe looks poised to take similar measures.

"Relative to Europe, we look like we’re kings in terms of economic growth," Stone says. "I don’t necessarily feel like anyone’s saying, 'You’ve stayed too loose too long,' anymore."

In fact, now Europe is worried the U.S. will taper the stimulus off too fast.

"There’s a real fear that the U.S. will raise rates more quickly and that they’ll see a money drain out of Europe," says Michael Farr, president of investment firm Farr, Miller and Washington

The worry is that if the Fed turns the spigot off and U.S. economic growth slows, we’ll buy fewer European goods, which would be a big blow to the struggling European economies.

Painkillers will be tougher to get this fall

Fri, 2014-08-22 06:59

Starting this fall, it will be more difficult to get commonly prescribed painkillers, such as Vicodin.

The Drug Enforcement Administration has announced a new rule that reclassifies drugs containing hydrocodone. That means most consumers will be forced to get their prescription in person — no more over-the-phone refills. 

Dr. Jeffrey Samet at Boston University says abuse of prescription painkillers is a devastating trend.

"It’s linked to addiction and transition to heroin use and people are dying from that," he says. "So, we need to do something."

The question is whether reclassifying the drug is too crude an approach.

The public health risk is clear: the CDC reports more than 16,500 people died from opioid painkiller overdoses in 2010. Mark Fleury, with the American Cancer Society’s lobbying arm, says when it’s harder to get pain pills because of addiction, it’s harder for people that really need pain pills to get them.

“A post-operative cancer patient who has some breakthrough pain from a surgery for example, you are in pain in the middle of the night and you really don’t want to get up and drive to a doctor’s office to get a prescription,” he says.

There is data that shows an increased risk for suicide when someone lives in chronic pain, Fleury says and regulators should use patient usage patterns to determine how easy it is to obtain pain pills instead.

Shocker: Rent is very, very high

Fri, 2014-08-22 04:35

The rent’s too damn high. You hear that from Los Angeles to New York.  A new report from the real estate website Zillow says the median rent in July for a condo, single family home or co-op was $1,318 per month.

Part of the problem?

“Rents really never had that reset that we saw in home values,” says Svenja Gudell, a housing economist at Zillow.  Demand increased after the housing bubble burst, she says, because many people lost their homes to foreclosure and had to rent.  

That increased demand has pushed rents up 2 to 5 percent a year, Gudell says, “and incomes haven’t kept up with that growth.”

Zillow says if you compare the national median gross income and median rent, people signing a lease in June paid almost a third of their income to their landlords.

In some places, it’s worse.

“Right now we have over 900,000 very low income households in Florida that are all paying more than half of their income for housing,” says Jaimie Ross, president of the Florida Housing Coalition.  

Ross says they’re just one step away from homelessness.

Cities with the most unaffordable rent

Map created using data from Zillow research, showing U.S. cities with the highest share of income needed to afford median rent prices. (Graphic by Shea Huffman/Marketplace)

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