Marketplace - American Public Media
One of last year’s Silicon Valley darlings has already reached its demise. The social networking app Secret is shutting down. In its less than 18-month run, the company raised $35 million from investors. And early on, it surpassed 15 million downloads.
“It’s certainly been sort of a moonshot, at the speed of the rocket ship ride that is modern internet virality,” says Max Wolff, chief economist at Manhattan Venture Partners, which researches and values tech companies before they go public.
Secret allowed users to blast an anonymous message or picture to friends and connections, to their delight or dismay. Wolff says it was especially popular among high school and college kids.
“There was everything from, “Everyone be careful, there's a dangerous person who's picking fights,’ to ‘Yeah, I have a crush on him or her,’” he says.
But the app quickly ran into issues — cyberbullies took unseemly advantage of the anonymity it offered. Wolff says a redesign made the app look too much like competitors Whisper and Yik Yak. Interest fizzled. Key employees jumped ship.
David Byttow, Secret's co-founder and chief executive, wrote in a Medium post Wednesday that the company no longer matched his vision and he would shut it down.
“I believe in failing fast in order to go on and make only new and different mistakes,” he wrote.
Byttow added that Secret still has a significant amount of capital, which he will return to investors.
“I believe the right thing to do is to return the money rather than attempt to pivot,” he wrote.
Even if Secret had stayed afloat and tried to change course, it would’ve been hard to renew the initial buzz and investor interest, according to Matthew Wong, research analyst at CB Insights, which tracks private company financing.
“The chances of success aren't as high as they definitely were earlier,” he says.
Manhattan Venture Partners’ Max Wolff says successful turnarounds are rare in this start-up app space. He likens the app economy to the music industry, where you might have a hit single.
“And you put together a really expensive tour, and by the fifth week of the tour, you're playing to no one,” he says. “Do you really need to spend all the money you were advanced by the record company and finish the next 20 cities?”
Kim Peace was a young girl in April 1968, when Baltimore erupted after the death of Martin Luther King, Jr.
“I seen people looting and tearing stores up and stuff,” she says. “I really didn’t understand what was going on, but now I know.”
Fifty years later, Peace lives in the neighborhood where Freddie Gray was arrested, and where the violence broke out this week after Gray’s funeral. Afterward, she and her granddaughter helped the cleanup effort.
Today, Mayor Stephanie Rawlings-Blake promised justice, even as the wait continues for answers about how the young black man died in police custody. Baltimore police have turned their investigation over to prosecutors, who will decide whether to bring charges in the case.
The turmoil in Baltimore has led to comparisons to the much larger riots of 1968. Some of the same neighborhoods in Baltimore were affected, and in many ways those neighborhoods never really recovered.
The ’68 riots were far more widespread than what happened this week, says Michael Higginbotham, a law professor at the University of Baltimore, but the roots are the same.
“We're talking about high unemployment, we're talking about poverty, homelessness, drugs, crime and hopelessness,” he says. “That’s what were the causes in 1968 and they’re the same causes, and the problem is we haven't dealt with that.”
In fact, Higginbotham says, the 1968 riots only made those conditions worse, because some businesses were reluctant to invest.
Patricia Fernandez-Kelly, who wrote “The Hero’s Fight” about West Baltimore, doesn't buy that fear keeps businesses away. She blames generations of neglect.
“It is because we have not invested in those neighborhoods,” she says. “Those are folks who really do not have a loud political voice.”
One teacher in Baltimore is trying to give his students more of a voice. At Mount Royal Elementary and Middle School, Baba Olumiji’s 7th and 8th graders spent this morning writing letters to their City Council members. Many of the students live in neighborhoods where stores were looted and burned this week.
“We wanted the children to actually start to learn how to positively advocate for their needs,” Olumiji says.
When school reopened after the unrest, Olumiji used the legacy of the ‘68 riots to teach non-violence.
“We thought it was important for the children to see that neighborhoods don't always get restored,” he says. “A community has been damaged, perhaps — hopefully not — irreparably.”
Now, the hope is that West Baltimore won’t be forgotten again.
I know I was a bit rough on Microsoft yesterday, saying they didn't do anything cool anymore.
Well, it's amazing what a difference a day can make, huh? They're working on a new facial recognition tool that lets upload a picture of yourself — or anyone else — and it tells you how old it thinks you are.
I tried it with a couple of pictures of me, and let's just say I really really like the results.
Tomorrow China introduces something the U.S. has had since the Great Depression: deposit insurance. You know if a bank goes under, your money stays safe. It’s reassuring.
Except in this case, China’s government is trying to reassure people in order to make them more nervous. Or at least more cautious.
How does that work? Well, many people there don’t need to be reassured.
“Right now, everybody in China already assumes their deposits are 100 percent guaranteed,” says Douglas Elliott, fellow at the Brookings Institution. He says everyone knows, and has observed, that “the government and Communist Party believe strongly in social stability.”
This all-but-written-out guarantee is known as an implicit guarantee, and it’s a problem. Baizhu Chen, professor of clinical finance and business economics at the USC Marshall School of Business, says “the government does not want to have this extra financial burden on them every time the banks have some problems.”
Another problem: laziness. If banks know they’ll get paid back by the government, they won’t care as much about what kinds of loans they’re making.
“When investors think all this stuff is implicitly guaranteed, nobody’s doing credit analysis, nobody’s kicking the tires,” says Jennifer Carpenter, associate professor at NYU's Stern School of Business. This is, it’s worth noting, is not a problem only in China.
But if people are already too reassured that the government will bail banks out, why have deposit insurance to reassure people that banks will get bailed out?
“The role of deposit insurance is actually to tell people what’s not insured,” says Carpenter.
Deposit insurance has limits. Very clear limits. It only covers bank accounts of the equivalent of about $80,000 or less. It only applies to real banks. So deposit insurance is a real thing, not a vague expectation that the government will take care of everything. And it’s part of something much larger taking place in China’s economy.
“The country is moving towards market-based solutions,” Chen says.
Deposit insurance is just part of China’s policy of slowly taking the training wheels off its financial system. One closely-watched step has been to relax control over what interest rates banks can offer to account holders. The Chinese government will most likely relax that control further in the coming years. That means banks will have to compete over the interest rates they offer to account holders, and they will have to make loans to back them up. Some may fail. The introduction of deposit insurance lets that happen with a safety net – just not one that’s too big.
In New York City, a town that loves takeout, apps are replacing the telephone and paper menus as a way to place an order.
The biggest app around is Seamless. That company so dominates online ordering that many restaurants feel they’re forced to do delivery by Seamless’ rules. But that could be changing, as billions of dollars are invested in new online ordering systems.
Seamless, with its partner Grubhub, handles orders for 30,000 restaurants, from Boston to Chicago to Los Angeles. Abby Hunt, a company spokeswoman, said that fact alone shows the services are providing value.
“Grubhub and Seamless together process more than 200,000 orders a day," she says. "So we’re able to connect restaurateurs to people who wouldn’t otherwise know that they exist."
While Seamless really is seamless for customers, restaurants pay a high price for the service through commissions that can go as high as 20 percent on each order.
“The problem is that if it doesn't translate into more actual revenue or profit for us, then there’s no upside to us” said Lukus Hasenstab, a co-owner of Penelope, an American comfort food spot in Midtown. “We’re just working harder for less.”
For every abstainer, though, there’s a restaurant that sees Seamless as indispensable. When Burger Heights launched in Upper Manhattan last year, it quickly listed with Seamless and GrubHub.
Co-founder Mike Vinocur scanned a spreadsheet of orders on a recent Saturday night, and quickly calculated Seamless and GrubHub’s impact.
“Maybe a third of our business could be through their service,” Vinocur said.
Can’t live with it. Can’t live without it. That’s how much power Seamless has over New York restaurants.
But Seamless only looks invincible, according to Steven Jacobs. He writes about e-commerce for the website Street Fight.
“The reality is these markets are changing extremely quickly,” Jacobs says, “and as companies like Yelp and Google look at the home delivery and food delivery market, the status quo for Seamless right now could change in a matter of a few years.”
Rosenheim Advisors reports $2.4 billion in private capital flowed into food tech and media in 2014, a 42 percent increase from 2013.
This year, Yelp bought the online ordering company, Eat24, and started taking orders directly through its website. Google is taking baby steps in this direction as well, by giving better results when you search food and restaurants.
And there are smaller upstarts doing weird and wacky things, Like Push for Pizza, which had a hit with a web video, advertising pizza that could be ordered with the tap of a single button.
In time, Jacobs says, one or more of these companies will get popular, and offer real competition to Seamless and Grubhub. And that, in turn could bring down the hefty commissions that only a dominant player can demand.
“I think it’s in a way anathema to the very culture of the internet,” Jacobs says.
How will Seamless and Grubhub respond? The company is already thinking about it. Part of the answer may be re-positioning the company as a true friend of restaurants.
“We actually have an in-house restaurant in our Chicago office and our New York office as well that helps put our employees in the shoes of the restaurateurs,” says spokeswoman Abby Hunt.
It’s hard to say what app we’ll be using to procure our pizzas and hot-and-sour-soups, even a year from now. But one thing’s pretty clear: with more people ordering takeout online, restaurants will have to get used to working with the tech middlemen that now stand between them and their customers.
Marketplace listener Carol Thompson received a birthday present from her husband Ted – a necklace with the etching “Heaven Has In Store What Thou Hast Lost.” It was a comforting message referring to a daughter who had passed away a few years before. The necklace arrived in the mail just days after her husband died unexpectedly, but receiving the necklace gave Carol a sense of peace.
Wednesday at Rent the Runway’s Secaucus warehouse is its busiest day of the week. The company offers designer clothing as short-term rentals to its customers, at a fraction of the cost it would take to purchase the item. But since most of their customers are renting for events that take place on Saturday, Wednesday becomes the key day when items that have been rented are returned and need to be sent out again for the following weekend.
“You have to turn it around with essentially a zero day turn around time” says Rent the Runway’s co-founder and CEO, Jenn Hyman.
“If you go into any woman’s closet throughout the United States you’ll see that when you open the doors, most of the closet is black. It’s filled with black dresses and black tops. Why is that? Is that because women’s favorite color is black? No, it’s because it’s the most rational option,” explains Hyman. “The whole point of Rent the Runway is to leave some of your common sense at home and actually try something printed or pink or sequined or fun, just because you can.”Tobin Low
And sure enough, printed, pink, and sequined dresses fill the warehouse.
When the pre-stamped envelopes that the company provides to renters for returns begin to filter in to the warehouse, they’re scanned and sorted based on their contents.Tobin Low
If an item inside needs to be sent out that same day, it’s put into one bin; if it’s not needed just yet, it goes into another. The urgent envelopes are opened and the dresses and accessories inside are sent to be cleaned.
This is a huge undertaking. Luckily, Rent the Runway’s warehouse happens to be conveniently located near a dry-cleaner: their own. When Rent the Runway opened this Secaucus warehouse late last year, they became the largest dry cleaner in the United States.Tobin Low
And if a stain or a spot needs to be removed, they have experienced workers like Nick, The Stain Guy, to help out.
Click below to hear Nick, The Stain Guy at work.
The dresses are dry cleaned, and then sent on to a pool of about 50 seamstresses to mend anything that might be amiss. Some dresses are altered to fit the height of the customer who ordered them.
“One of the key insights that we had when we started the business was that women felt like they had to wear a new outfit for every occasion” says Hyman. She explains, “they had been photographed and that photograph was now up on Facebook and they couldn’t repeat their outfit.”
The company also offers a subscription service similar to Netflix. Users pay a flat monthly fee and receive three items at a time from their queue of dresses, accessories, and jewelry.
Many customers order multiple items – a dress in two sizes, and accessories. The company’s software helps keep track of what’s missing from an order and when an order is complete, ready to be packaged and sent out. At the end of the day, at about 8pm, UPS picks up stacks of Rent the Runway boxes, ready to be shipped out.Tobin Low
A large portion of the Secaucus warehouse is vacant but Hyman expects she’ll be expanding in to that area son enough. She has a grand vision for the Rent the Runway’s future.
“I believe that every woman in this country and later every woman in the world should have a subscription to fashion, just like you have a subscription to music or to entertainment and via that subscription, you would be able to just have fun with this amazing industry that we’re in.”
Hadfield spent more than 150 days living in space, the bulk of it during a three-month stint at the International Space Station where six astronauts from countries all over the world live and work.
Hadfield's time in space coincided with a change in social media and communications. During his first space voyages in 1995 and 2001, there was no way for Hadfield to relay information about his experiences while in space. But, by the time he got to the ISS in 2013, improvements in technology and huge leaps in social media interaction made it possible for him to keep in touch: on Twitter, Facebook and YouTube.
Hadfield says when it comes to living in space, there has been significant change. People from 15 different countries left Earth in November of 2000.
"For the last 14 years, we have permanently been living off the planet, and when I say we, I mean humanity," he says. "Once you start permanently settling somewhere, then it really just becomes a new part of human culture."
That culture is still in early development, but it is growing as more stories start coming back from space. The ISS, for instance, is now home to a guitar and an espresso machine. Astronauts are becoming more accustomed to sending videos home, and telling people on Earth about their out-of-this-world lives. Soon space culture will include an album of folk music Hadfield recorded in space.
He compares space exploration to early settlers of undiscovered continents.
"When the first settlers came across the Bering Strait 20,000 years ago from Asia, their culture changed the place and defined the people themselves, and we're just getting into that stage of leaving Earth in space," he says.
So where to next from the ISS?
"It will go eventually from the space station to the moon, over the next few generations, and from the moon eventually to Mars, just as we've spread over the whole surface of the Earth," Hadfield says.
The number of people signing up for unemployment benefits hit a 15 year low in the last week. More on that. Plus, more on the efforts to get aid to Nepal with AmeriCares CEO Michael Nyenhuis. And former Fed Chairman Ben Bernanke is joining PIMCO as an advisor. We look at what this means.
On Thursday, Chi-Town becomes Draft Town — the NFL Draft, that is.
It’s the first time since 1964 the draft has been anywhere other than New York, and Chicago officials are ecstatic to host the three-day “fan festival." The city won its bid to host this year’s NFL draft, and it's going big.
There’ll be football clinics for kids, a replica of an NFL locker room, and Buckingham Fountain will reflect team colors during the draft. Over the top?
“I don’t believe that the term 'over the top' is something that could apply to the NFL, because everything they do is over-the-top,” says Todd Jewell, who teaches finance at Texas State. He adds that the payoff for Chicago is lots of buzz.
But having won the bid, the city will spend $3 to $4 million on this extravaganza. Robert Baade, who teaches economics at Lake Forest College calls it the "winner’s curse.”
He says even though the city promised not to spend public money on this, it will hit taxpayers one way or another. The real winner, he says, is the NFL, especially if cities start bidding for the draft every year.
Former Federal Reserve Chairman Ben Bernanke has scored his second advisory gig in the past month. He recently announced he’d advise hedge Citadel LLC. Now he’ll also offer his economic expertise to money management giant Pacific Investment Management Company, or Pimco.
It manages about $1.6 trillion in assets for public and private retirement plans, among other customers.
Bernanke will advise Pimco following a period of turmoil at the firm. Investors pulled money from Pimco funds after co-founder Bill Gross left last year.
Bernanke is the second high-profile economist the firm has recently hired to burnish its macroeconomic forecasting credentials. And Bernanke’s familiarity with Fed personalities and decision-making could be an added benefit.
"All markets, all security prices, are impacted by what the Fed does, what the Fed may do, and what it’s thinking,” says Jim Paulsen, chief investment strategist at Wells Capital Management, a Pimco competitor.
Paulsen says Bernanke could give Pimco especially pertinent insights into the conditions under which officials would raise interest rates.
“It would be very important information flow for asset managers that are going to lay down bets on what the direction of interest rates is,” Paulsen says.
But Bernanke's advisory role at Pimco makes Russell Campbell uncomfortable. He's the chief executive of Your Second Opinion LLC, which consults with small asset management companies.
“It raises policy implications about who's influencing who and who has direct access,” he says. “He can probably pick up the phone and call the president. There's only so many people that can do that.”
The Securities Exchange Commission, not the Fed, oversees Citadel and Pimco. Bernanke could not be reached for comment about his pay at either appointment.
That's the version of Windows that Microsoft showed off Wednesday, skipping Windows 9 and what tech correspondent Molly Wood called "a bit of a prom king moment." Between the new operating system and HoloLens, the tech giant could finally be delivering on the comeback it's been promising for years, earning back some cool to go along with its resilient pile of cash.$1.6 trillion
That's the worth of assets in public and private retirement plans directed by money management giant Pacific Investment Management Company, or Pimco. And who is advising them on how to manage those assets? Former Federal Reserve Chairman Ben Bernanke.1,265
The number of earnings calls from 2007 to 2014 in which analysts told companies they had a "great quarter, guys," according to an analysis by Bloomberg. Turns out a "great quarter, guys" doesn't always mean things are going all that great. In fact, 66 companies heard they were coming off a "great quarter, guys" at the start of 2008, just a few months before the economy tanked.$50 million
That's how much money Goldman Sachs, along with a Chinese investment firm, is committing to Circle Internet Financial, a start-up focused on the technology behind Bitcoin. As the NY Times reports, it's a significant vote of confidence for the digital currency's potential legitimacy.$21 billion
That's the size of the Swiss watch market, as of last year, and it's a market Apple has to tap into with its new smart watch. While tech coverage has been exhaustive, we've heard relatively little from the other world Apple is straddling with the Watch. The Verge sat down with John Tarantino, head of the mechanical watchmaker Martenero, getting his impressions of the Watch and whether he considers it a threat to his business.$100 million
Once valued at $100 million, anonymous phone app Secret will soon be no more. Founder David Byttow said the app has drifted from his original vision, and so he has decided to call it quits. As reported by BBC Tech, the company will return some of its $35 million in funding to investors.
Growth of the U.S. gross domestic product, a broad measure of the economy, ground almost to a halt in the first three months of the year, growing just 0.2 percent, even lower than expected.
A number of temporary factors, economists and analysts say, account for the first quarter slowdown, including: a West Coast port slowdown that caused a backlog of exports, a slowdown in exports themselves due to a strong dollar, and reduced consumer spending, which might be at least partly accounted for by a second year of bad winter weather.
"Spending on mining, exploration and wells, a.k.a energy, is down 48.7 percent — that is a big number," says Guy Lebas of Janney Montgomery Scott. The reason for that is oil prices. They are down, and so is investment in that sector.
Weather is another big culprit for slowing GDP growth, Jim O'Sullivan of High Frequency Economics says. "The weather was unusually severe this winter, as it was last year, so that's part of what's happening," he says.
Bad weather affected consumer spending, which grew 1.9 percent in the first quarter, compared to the previous quarter's 4.4 percent growth.
But the effects of winter weather, aside from unusually severe weather, are supposed to be accounted for in the GDP numbers, says Justin Wolfers, a senior fellow at the Peterson Institute for International Economics.
"Government statisticians actually seasonally adjust the data," Wolfers says.
Wolfers examined that adjustment of the last 30 years, and found a pattern. "The estimate of GDP growth in the first quarter has consistently been lower than on all the other quarters," he says, adding that could mean the seasonal adjustment is off.
Statisticians haven't significantly changed the seasonal adjustment algorithm (although they've tweaked it) in decades, he says. In fact, Wolfers says there is a lot more consistency in yearly GDP numbers.
"The yearly numbers have been remarkably consistent," he says. "They've suggested that this is an economy that keeps growing."
Jim O'Sullivan says to put the first-quarter GDP numbers in context, he is also watching jobless claims. "Over time, if there is significant slowing in the trend in GDP, invariably you see an uptrend in claims." So far, he says, such an uptrend has not occurred.
Two things: one, the rich really are different. And two, Coca-Cola had its annual shareholder meeting today.
At the meeting, a Coke shareholder named Warren Buffett sang the soda giant's jingle "I'd like to Buy the World a Coke" while playing the ukulele, which you can watch below:
How great is that? Buffett was piped in via video, by the way—he wasn't live.
Buffett's own annual shareholder meeting for his holding company Berkshire Hathaway is this weekend in Omaha.
Get this: 50,000 are expected to show up. Oracle of Omaha, indeed.
Sometimes it takes a few years — or even a few decades — to figure out what you want to do.
But deciding on a career was never really a problem for Richard Stolley, who got his first job as a journalist at the age of 15 and would go on to become a founding editor of People magazine.
During World War II, a friend of Stolley’s joined the Navy. His job — sports editor at the Pekin Daily Times — would be left vacant. So the newly enlisted friend asked if Stolley was interested in the position.
“Of course, not knowing any better, I said I would be very interested,” Stolley says.
Stolley was tasked with filling stories and editing the sports section, but he also got to read news about the war well before most Americans.
“This was during WWII and a lot of unusual things were taking place,” Stolley says.
The day before the invasion of Normandy, the Pekin Daily Times’ teletype received an alert that a major news break was coming.
“I felt very privileged that a 15, 16-year-old could walk over to the teletype and find out things about WWII that almost nobody else in the world knew,” Stolley says. “Pretty heady stuff.”
Stolley remembers the excitement of hearing the presses turn on every afternoon. The roar resonating from the basement of the newspaper offices invigorated him too.
“I had this feeling, well, whatever I wrote is going out to 15,000 readers — can’t call it back now,” Stolley says.
For Stolley, his first job was more than just a paycheck. It set the tone for his entire career.
“I mean, it cemented my life,” Stolley says. “There was no way after working as a professional journalist at the age of 15 that I was ever going to want to do anything else.”
Residents of Baltimore are still cleaning up from Monday’s riots. The unrest came at the start of the tourism and convention season, and just after Baltimore had just launched a new ad campaign earlier in the month, featuring celebrities like baseball Hall of Famer Cal Ripken, Jr.
Now, Visit Baltimore, which handles the city’s tourism and convention marketing, is pulling the new ad campaign. They're working on a different message, reassuring tourists they’ll be safe.
“And the second thing we want is to make sure they understand the city’s in great shape,” says Visit Baltimore CEO Tom Noonan.
But that could be a hard sell. Two conventions scheduled for this week in Baltimore were cancelled, and the city’s 10 p.m. curfew is scheduled to stretch into next week. Restaurants and bars have already taken a hit, and things will just get worse because they'll have to close early this weekend.
“Especially for the waiters and waitresses and bar staff who rely on tips. That’s like having probably two thirds of your income just reduced overnight," says Bernard Lyons, bar manager at Bertha’s, in Baltimore’s touristy Fell’s Point neighborhood.
And the economic damage from a riot can last a long time — just ask Los Angeles. Of course, its 1992 riots dragged on and Baltimore’s only lasted about a day, but still, the city's economy is suffering. And outside aid isn't likely to pour in, like it does when a community is hit by a natural disaster.
“It’s almost as if people are saying you fouled your nest, you fix it,” says Rob Baade, an economics professor at Lake Forest College who co-authored a study that says the losses from LA's riots totaled at least $3.8 billion.
CEO pay is one of those issues that really gets people's blood boiling. That's especially true since the financial crisis. CEOs of big banks take home millions, even though, in several cases, their companies tanked and nearly took our economy with them.
One piece of the Dodd-Frank financial reforms of 2010 was supposed to address that. It said investors should have better information about publicly traded companies and how executive pay relates to corporate performance.
Five years on, the SEC is proposing new rules to actually make that happen.
But publicly traded companies already have to disclose what their top executives make. Peter Crist, chairman of Crist Kolder Associates, says investors can usually work out how a CEO’s pay relates to a company’s performance from information it already sends to shareholders.
The SEC knows this, of course: it just wants companies to preset that information in a uniform way that investors can easily understand.
That might sound simple enough, but Stanford professor David Larcker says standardization can be a headache. Executives are often compensated with stock options that stretch over years, and could vary widely in value over that time. The SEC now wants companies to count that money only once the options vest.
Measuring a company’s performance can also be tricky, says Nora McCord, the managing director of Steven Hall & Partners, an executive compensation consulting firm. She says metrics such as total shareholder returns don't necessarily give a complete picture of how a company is doing.
But the SEC is determined to make these changes happen. It says it hopes these measures will improve transparency and make investors better informed when they vote on executive compensation.
Can you trace the way CEO pay corresponds to performance? We looked at a couple companies to see.
Tony Wagner and Raghu Manavalan/Marketplace
Ben Bernanke has a new job at Pimco, the private investment management firm headquartered in Newport Beach, California. Bernanke, the former Federal Reserve Chairman, will serve as an adviser, a role he also holds at Chicago-based hedge fund Citadel LLC.
But why doesn’t moving from a regulatory organization like the Fed to a private organization like Pimco account for a conflict of interest?
Well, Bernanke’s new job is perfectly legal, because, as Marketplace Senior Editor Paddy Hirsch says, “The Federal Reserve regulates banks and neither Pimco nor Citadel are banks.”
What tasks will Bernanke likely take up at his private sector gigs?
“He’s managed to lock himself into a situation where he’s going to be, basically, making speeches at luncheons for Citadel and Pimco,” Hirsch says.
Bernanke’s move into the private sector might be characterized as just another example of the “revolving door” between government and Wall Street, but it’s nothing new.
“It’s business as usual,” Hirsch says. “Alan Greenspan did it… he actually became a consultant at Pimco. As long as it doesn’t cause a conflict of interest, I don’t really see there’s that much wrong with it.”
Silicon Valley developers gathered for a conference on Wednesday. Energy was high, and when tickets went on sale, they sold out in under an hour.
And no, it was not hosted by Apple.
"It definitely seems like it would be the least interesting tech event of possibly the entire year, but Microsoft is having a little bit of a prom king moment," says Marketplace tech correspondent Molly Wood.
Microsoft CEO Satya Nadella introduced the company's new operating system, Windows 10, at its Build 2015 conference. For those keeping score, there is no Windows 9, perhaps to avoid any association with Windows 8, which, as Wood put it, "bombed."
Windows 10 will run across Microsoft devices: desktop computers, laptops, the Windows phone, tablets — even the XBox.
The conference was intended to stoke excitement among developers to build apps using Windows 10, even though sales of Windows phones have largely been disappointing. The prom king moment was brought to you by Nadella, who took over from longtime CEO Steve Ballmer in 2014.
"Microsoft, for a long time, has had this problem where it was very divided," Wood says. "So even though they've been promising a unified Windows experience for at least a decade, it seems like Satya Nadella is actually breaking down the walls."
Beyond Windows, the most excitement today came from a new augmented reality headset the company is calling HoloLens — "Microsoft's sort of new, cool attempt to be future-sexy," Wood called it. "Augmented reality headsets are almost like the next step after virtual reality because they project images onto the real world."
One demonstration of HoloLens showed medical students examining holograms of cadavers, looking at broken bones and beating hearts.
Despite Microsoft's reputation as being generally lackluster compared with shiny consumer offerings from Apple and Google, it's still wildly profitable. It's worth $400 billion and has annual revenue of $93 million.
"We should all be 'failing' like the rumors of Microsoft failing," Wood says.
The real strength of its business, what Nadella spent 90 minutes discussing at Build 2015, is Microsoft's cloud offerings.
"Most of that [revenue], is on those cloud services that Amazon just announced it makes so much money on," she says. "And so, even if Windows 10 and Windows Phone don't totally take off, they're still going to be okay."
All the talk these days is about the likelihood of the U.S. Congress avoiding a fiscal cliff. You know who’s not worried? Warren Buffett.
"Sure. Yeah, they will," Buffett said in an interview with Marketplace host Kai Ryssdal this morning, refering to a likely deal by Congress to avoid steep budget cuts and an increase in taxes.
"They've danced around it for quite a while," he said. "I think the American people, with their opinion of Congress that they've expressed -- I think the message has gotten through that we've got to get serious about this."
Buffett -- the so-called Oracle of Omaha has a net worth of $46 billion as of September 2012, placing him in the No. 2 spot on the Forbes 400 list -- answered questions on everything from JPMorgan Chase CEO Jamie Dimon as Treasury Secretary ("I just think he'd be the guy I'd pick for that job"), to the future of Democratic capitalism (not worried), to tax rules and class warfare.
On Jamie Dimon as Treasury Secretary:
Ryssdal: You went on "Charlie Rose" last night and you said Jamie Dimon, the CEO of JPMorgan Chase, would make a fine Secretary of the Treasury when Timothy Geithner steps down. Why do you think so?
Buffett: I think he knows more about markets than probably anybody you could find in the world. And I think that if in the next four years we run into some kind of a chaos in markets some place -- and who knows when that can happen -- that he would think better about it, he would command the respect of foreign leaders that he might have to coordinate with. I just think he'd be the guy I'd pick for that job.
Ryssdal: Let's say the president picks him and he gets confirmed. Is that not a vote then for a little bit less regulation in the financial markets? He is no friend of regulation, as you know.
Buffett: Jamie would not be espousing that, in my view. In the end, the president would set the tone on that. I do think it would represent, on both sides, sort of a bygones be bygones, and business and administration will work together. They'll have things they disagree on -- there's no question about that -- but I think the less harsh the rhetoric and that sort of thing, the better. And I think Jamie would be a terrific Treasury Secretary.
On Ben Bernanke's Policies:
Ryssdal: We talked about Congress a little bit, we talked about the president a little bit. There's another economic center of power in Washington that I want to get your thoughts on: Ben Bernanke, his policy of quantitative easing, and how much more you think the Fed can do to help this economy -- if anything.
Buffett: Well I think they've used up their bullets pretty much. When you drive interest rates to zero and when you buy almost a trillion dollars worth of securities and how you start buying longer-term securities -- you've done your part. I mean, Ben has given up the office; now it's up to Congress.
Buffett was joined in his interview by Fortune senior editor-at-large, Carol Loomis, who compiled and edited articles about Buffett from the past 50 years into a new book called "Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book."
Ryssdal: Carol Loomis, and the question of Warren Buffett and when you knew that he was somebody we all ought to pay attention to.
Loomis: I realized that Warren was unlike anyone I had ever met. When he asked me what I did that morning at the office, I mentioned an obscure footnote that I'd seen in Coastal States Gas -- because I was working on the Fortune 500 -- he knew all about it. I thought, 'my god, this guy knows everything I'd like to know... And we bought the stock soon after that. That is kind of the key to when we knew.
Ryssdal: You put your money where your mouth was.
On being a businessman/investor:
Ryssdal: I've been trying to figure out, Mr. Buffett, through the course of reading this book, whether you are an investor or a businessman.
Buffett: Both. Both. And being an investor, you're buying pieces of a business. So you better understand business. And being a businessman, you better understand alternatives for money, in terms of allocating capital -- and therefore you are partially an investor. So I've benefitted in both roles by the fact that I was in the other one.
On tax reform:
Ryssdal: Do you think this is the time that we have an opportunity to actually do something about taxes and reform, and debt and deficit in this country, with the fiscal cliff coming?
Buffett: I think we will. We've kicked it down the road for a long time, but D-Day is here and that doesn't mean we'll get the fiscal cliff problem solved by Dec. 31st. I hope we do, but it may go over into January. But we are going to have to address important policy questions. I think Congress knows it, I think the president knows it, and certainly the American public knows it.
On Warren Buffett as celebrity:
Ryssdal: When you have your annual shareholders' meeting out in Omaha, it is something of a festival. You take questions from the shareholders, you chat with them. What's the weirdest question you've ever gotten?
Buffett: When the stock wasn't doing so well, I had one young woman that stood up and said, 'My dad bought me this stock to put me through college.' And she says, 'Now I'm afraid I'm going to have to go to correspondents' school.' I like tough questions.
On Warren Buffett as "oracle":
Ryssdal: What's the most important thing that anybody has to know about Warren Buffett?
Loomis: I think the central thing about Warren -- and people ought to understand it -- is that he is totally rational about investing. Most people are gripped by emotion when they're considering the investment; the stock goes down and they panic and they sell. Warren just buys more. Because he's got a value theory built into his first purchase... Rationality is an essential part of how he has spent his life investing and building Berkshire Hathaway.
Ryssdal: You have this reputation as the Oracle of Omaha; people hang on your every word. Do you deserve it?
Buffett: No. [laughs] Carol says I'm rational, and I am. But that's not limited to me. I'm in a business where temperament is more important than IQ. I would not do well trying to play top-notch chess; I can't play top-notch bridge, I can play reasonable bridge. I mean, there's all kinds of things I can't do. But I can think rationally about business and investments. Most people let their temperament interfere with that. They excited when other people get excited; they get depressed when other people get depressed.
Ryssdal: It's funny -- you say rational, the word that comes to my mind is cold-blooded. And you don't seem like a cold-blooded kind of guy.
Buffett: No. I have normal human emotions, believe me. But being rational means that when I decide whether a stock is worth $100 a share or $200 a share, I look at the facts and I don't care what other people say. I don't care whether that morning on television people are saying stocks are going to the moon or stocks are going to tank or whatever. I don't pay any attention to what other people are saying about something; I just look at the facts. But I can be an emotional guy too -- just watch me at a Nebraska football game.