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Businesses close ranks against Obama energy policies

Fri, 2014-01-31 13:16

The Partnership for a Better Energy Future may be the first group to bring together the American Knife Manufacturers Association, the National Cattleman’s Beef Association, and the Myrtle Beach Chamber of Commerce.  

Led by the U.S. Chamber of Commerce and the National Association of Manufacturers, the business coalition says it wants to work with the Environmental Protection Agency, as the agency looks beyond coal in its efforts to limit greenhouse gas emissions.

Translation: Members say they’re going all out to limit the EPA's impact on their business.

The 70-plus members of the Partnership for a Better Energy Future all have one thing in common, says Karen Harbert, CEO of the Institute for 21st Century Energy at the U.S. Chamber of Commerce: "All of these members utilize energy."

The EPA is moving forward with regulations on coal-fired power plants. Harbert says the partnership’s members see more energy regulations coming down the line. "We recognize that and we support that," she says. "But what we aren’t seeing on the other side, at the EPA is a fair, balanced and open process."

From Harbert’s perspective, the EPA’s coal regulations have been rushed, and she thinks they’ll hurt the energy industry more than necessary. She says her members worry that broader regulations could hurt the overall economy.

That is why the Myrtle Beach Chamber of Commerce is on the member list. "If our economy’s succeeding, people have more money and more wherewithal to travel," says the group's president, Brad Deen. "So we’ve found that what’s good for the American economy is good for tourism." 

The National Fertilizer Institute sees a big threat. "This is a bet-the-farm situation for the industry," says the insitute's president, Christopher Jahn. 

That means pooling resources to lobby both regulators and Congress. And public advocacy. The National Association of Manufacturers says the budget is in the millions, and TV ads are a possibility.  

The partnership’s members say they want to take part in a serious conversation. Pete Altman, director of the Climate and Clean Air Campaign at the Natural Resources Defense Council, isn’t buying it. "The only time when we hear from this crowd, 'Oh we really need talk this through!' is when they're afraid something might actually happen," he says.

He thinks the real goal is delay. He sees the partnership pursuing "a strategy of, 'Well let's drag this out and maybe we'll have a better president.'" If final regulations aren’t in place before President Obama’s term ends, a new president could reverse course.  

Karen Harbert from the Chamber of Commerce denies that her group simply wants to stall.  "We're not saying run out the clock," she says.  "We’re saying, take the time that is necessary to do the analysis."  


Amazon Prime: an expensive cash cow

Fri, 2014-01-31 13:16

Not a great day for retail giant Amazon. The company announced 4th quarter earnings and, although revenue was up 20% over the year before, it did not meet expectations.

Amazon might be fast becoming a ubiquitous market force, but its profits have been hit or miss. The company said it might raise fees for its Amazon Prime service from the current cost of $79 dollars a year to $99 or more. Amazon Prime members get free shipping, free access to streaming movies and other perks.

The service is one of the company’s most profitable aspects and one of the cornerstones of its business strategy.

Brad McCarty is director of content for software company Full Contact. He’s a tropical fish man and an Amazon Prime member.

"I have loads of fish. We have primarily angelfish, gouramis, betas and a salt water reef tank as well. I have a few sites that I go to and I do research, but I always end up going back to Amazon to buy them, because I’m a Prime member. And I’m going to get free shipping on that and it's going to be there in 2 days."

Amazon uses data it has on McCarty’s past fishy purchases to get him to buy more. And he does. McCarty says he epitomises the business model for Amazon Prime.

"Amazon is, for the most part, kind of like a perpetual Black Friday sale, right? You bring people in the door with the hopes that they’re going to buy more stuff when they get there."

There are more than 20 million Prime members and the $79 they pay pretty much covers the cost of the free shipping they get. The rest is gravy.

And there’s a lot of gravy. Amazon Prime customers spend twice what regular customers do.

"You start buying everything through Amazon," says Scott Galloway, professor of marketing at NYU's Stern School of Business. Galloway says Amazon has purposefully sacrificed short term profits to get more customers and more pricing muscle. "It's going to have tremendous pricing power and, at a certain point, it will be able to flex that muscle and become a very profitable company."

Still, Galloway says Amazon considering a price hike for Prime could be a sign its investors are getting restless. "Amazon is acknowledging that the cocktail of huge growth and low profitability may be becoming a bitter cocktail for investors," he says.

But the rationale for raising prices, may not be fast cash, speculates Michael Levin, co-founder of Consumer Intelligence Research Partners in Chicago.

"At Amazon, nothing is ever what it seems," he laughs. "If they charge more, I think customers are probably going to spend more. So quite ironically, by raising the price of this membership, they may end up getting people to shop there even more."

A more expensive Prime membership equals a customer who is all the more motivated to get his or her free-shipping’s worth.  

Weekly Wrap: Derivative fight!

Fri, 2014-01-31 13:16

This week's wrap was one of our most Marketplace-esque yet. The New York Times' Catherine Rampell and Reuters' Felix Salmon joined us to talk:

Emerging markets:

Rampell: "Confidence feeds on confidence, and if you have a lack of confidence elsewhere, and so many markets are interlinked, then that's problematic."

Salmon: "Most Americans just deal with other Americans; most American companies deal with other American companies. We're not a tiny island nation like the one I come from. If something is going on in Argetina or Turkey, honestly it doesn't matter that much to the United States."

On the GDP, and on which derivative is better:

"I'm going to be optimistic on the first derivative, and you can be pessimistic on the second derivative, and I'm going to be the person going up, and you're going to be going up as well, just not realizing it."

And finally, on how we'll remember Ben Bernanke next time we're making timelines about Federal Reserve chairmen:

"I think he will probably be remembered very positively. At least for rescuing the economy from going off the brink, particularly at a time when Congress was not doing a whole lot to help."

"He didn't win any popularity contests, but given the utter inaction by Congress, he was the one who got the economy going again."

When will the Superb owl start?

Fri, 2014-01-31 12:20

This final note which comes to us courtesy of the letters SEO. As in search engine optimization. So here you go: What time is the Super Bowl? (It starts at 6:30 p.m. ET, by the way.) Turns out most people, don't know how to spell Superbowl.  Helpful hint: It's actually two words, both capitalized. A couple years back the Huffington Post published a story titled, "What time does the superbowl start?," just to game the web traffic. And, of course, it blew up. The rest of the Internet keeps trying to get a piece of that Super Bowl traffic. This year's version... the search words of choice … Superb owls.

Where will young people live when they're old and gray?

Fri, 2014-01-31 11:06

Home ownership is a venerated ideal of middle class life in America, and most Americans aspire to own a home. But homeownership rates have been declining steadily since the peak of the housing boom in 2004.

The Census Bureau reports that the homeownership rate in Q4 2013 stood at 65.2 percent -- the lowest level since 1995. Homeownership hit a peak of 69.2 percent in mid-2004, as subprime mortgages and other exotic investment products were pushed out into the real estate market, and home prices were skyrocketing in many hot markets like Florida, Nevada and the Southwest.

Economists have predicted—and even welcomed—some decline in homeownership. The level achieved in the mid-2000s wasn't considered sustainable, and was driven by risky mortgages given to people who couldn’t pass even minimal underwriting standards, let alone the strict underwriting standards prevalent today.

But economists also worry that if the decline in the homeownership rate accelerates, it could be a warning sign for the economy and for the well-being of middle class families.

In many cities these days, there’s a lot of construction going on. And a lot of that is multi-family rental buildings, as opposed to single-family homes destined for sale to individuals and families.

Economist Patrick Newport at IHS Global Insight predicts the decline in homeownership will continue, and the rate will fall by at least another 1 percent or more in coming years. He says the trend is not surprising.

"It’s much more difficult to qualify for credit," says Newport. "And you have a number of people who have lost their homes to foreclosure. Those people are now becoming renters."

Who’s being shut out of homeownership? First, says Newport, anyone with low—or unreliable—income. That’s the type of borrower who could get a sub-prime mortgage back in the bubble years, and was then foreclosed in the recession or afterward.

Young people are also not entering homeownership at the same pace as before. Many 20- and 30-somethings have delayed forming households, buying a first home, marrying, or forming domestic partnerships—because jobs are scarce and incomes are stagnant.

The problem, says real estate expert Nicolas Retsinas at Harvard Business School, is that many working-class families—with steady but moderate income—are out of luck, too.

"They’re the ones who are not able to have anything left from their paychecks so they can accumulate savings to make a down payment," says Retsinas. "They’re the ones who have a difficult time paying back a mortgage, even with these very low interest rates."

Retsinas says, for many families, owning a home turned out to be a risky, unprofitable proposition in the late-2000s. "But for 50 years prior to that, it was a primary source of wealth creation," he says. "And I think that as families look at the option now, they’re nervous that if they’re not able to buy this home, get through the underwriting criteria, they will miss out on what might be rising prices, and thus rising equity."

Retsinas says that if home values rise steadily again, but middle-class families can’t buy into that, they’ll lose a key tool for building wealth and security in the future.

Chris Mayer studies housing at Columbia Business School. He sees an aging homeowner population. It’s a population that’s been able to build wealth over decades through home-price appreciation (the Great Recession notwithstanding), tax-savings (from the mortgage-interest deduction), and investment of sweat equity in their properties.

"If you look at people who are 65 years old, 86 percent of them are homeowners," says Mayer. "If what we’ve done is just push back the age at which people become homeowners, I don’t find that particularly alarming. Young people are suffering from student debt and other issues. But if we’re really going to move to a renter society, we’re going to have a lot of problems."

Starting with: Where will today’s young people live? And what will they live on -- if not accumulated home equity—when they’re old and gray?

PODCAST: Who will lead Microsoft?

Fri, 2014-01-31 08:41

There’s a lot of chatter out there about who will be named as Microsoft’s next CEO. And there’s questions swirling about whether Bill Gates will step down as board chair.

When you're in a position of power, you get no shortage of unsolicited advice. Bearing that in mind, we wondered what sort of advice people might have for Janet Yellen, as she becomes the chairwoman of the Federal Reserve, after Ben Bernanke's term ends today. 

This weekend's Super Bowl pits two states that have legalized recreational marijuana against each other -- the Denver Broncos versus the Seattle Seahawks. That's spawned all sorts of drug inspired nicknames, like the Stoner Bowl, and the Bud Bowl. But this weekend's game is a big opportunity for the pro-pot faction.

Mayday: What to do when the checks stop coming in

Fri, 2014-01-31 08:05
Over one million Americans lost their unemployment benefits at the end of December 2013 and millions more are looking at benefits ending soon. When those checks stop coming, you may throw up your hands and say something unprintable. I don't blame you. I've been there myself. But, as a pro at turning lemons into lemon-gimlets, I know that there are things you can do to keep your head above water and to hopefully maintain your home and lifestyle as long as possible.  All, of course, to get you to that next job:
  1. Cut back.  Now. More like yesterday. I've talked too many folks who lost their jobs but didn't pare back on spending and expenses. Soon enough, you end up staring down a very big financial hole. If your income stops, your habits and needs should change. It's hard to not eat out or drive less or miss vacations — I've had to do it several times myself — and you may already feel down about being out of work. But know that the changes you need to make now are temporary and incredibly helpful. Think Sandra Bullock in "Gravity": Depleting oxygen reserves requires slower breathing to make the air last. Same with your bank accounts. If you were going at 100 percent or even 80 percent when the checks were coming in, now it's time to get as close to 50 percent as you can. Spend shallow.
  2. Know what bills to pay first. When the housing crisis hit, many Americans in financial distress started paying their credit card bills before their mortgages. Thankfully that trend has reversed itself. Keeping a roof over your head, particularly if it's an asset worth something to you in equity, is vital. Credit cards can be a lifeline during tough money times but if you're falling behind  with payments, contact lenders before they contact you to talk about your options. And if they give you no flexibility, consider meeting with a nonprofit credit counselor (find one at to help you with negotiations. Essentially, keep paying what would cost you dearly, personally and professionally, if repossessed or foreclosed like your home and your vehicle. In general, prioritize: mortgage or rent; auto loan and insurance; cell phone service (so you have access to recruiters and job connections; then other loans.
  3. Create and get comfortable with Plans B, C, and D. You need to ask and answer many questions with this one: What is your Plan B? What are your options in terms of worst-case scenario? This is not only about planning strategically about where you may need to head next for either money or a home, but also (and just as importantly), preparing yourself psychologically for what can be a temporary lifestyle adjustment. Lay out your options, including researching the possible need to apply for a hardship withdrawal from a retirement account and if you're willing and able to relocate for a new job. What does that look like? How much will it cost? What can you do to make a possible transition easier?
  4. Work! It doesn't have to be full-time work or work necessarily in your field. While you're applying for more stable positions on a career track, at the same time bring money in via other ways. If you're at a point in your career where you can be hired on a contract basis, reach out and offer yourself up. Two plusses here: First, it keeps you busy in the field and your resume continues to build. And of course, it brings in money and possibly could turn into a fulltime spot. Contracting isn't just for engineers. Look at sites like,, or They offer up short-term gigs from copy writing to assembling furniture.  The plus here is also psychological and social, not only financial. You keep busy and you meet new people, each who could be much more than a temp gig, it could be the connection you need to land that full-time job.
  5. Stay connected or get connected. What are the affinity groups or career groups open to you? For example, are you an accountant? What’s your local chapter of the National Society of Accountants up to? You don't have to be employed to be a member of many of these groups and they are fantastic places to meet people who can offer leads for new work. I'm on the board of a couple of nonprofit groups, professional and community-based and it's amazing the connections you make that can open new doors. And just as worthy are volunteer opportunities. We know that in this day of computers 'reading' thousands of resumes, the best way to the top of the pile is who you know. Is it fair? Not necessarily. But it's helpful. And if you feel icky about all the schmoozing, remember to reach a hand behind you once you land somewhere, pulling others out of unemployment just as someone may do for you.

Free Bieber dot com? This week's Silicon Tally

Fri, 2014-01-31 07:27

It's time for Silicon Tally. How well have you kept up with the week in tech news?

This week, Tekzilla host Veronica Belmont takes on the tech gauntlet in our weekly Silicon Tally quiz. Play along at home, below.

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We're in a valuation bubble. It's cool!

Fri, 2014-01-31 07:24

When people talk about Silicon Valley or venture capitalism a question that gets raised a lot is, "Are we in a bubble?" Traditionally, that means investors pay a lot more for a company than it's intrinsically worth -- sometimes by as much as a billion dollars. But venture capitalist Jalak Jobanputra is making a novel argument. Yes, we're in a bubble, she says. But maybe those crazy price tags are accurate. To find out why, click the audio player above to hear Jobanputra's interview with Lizzie O'Leary.

In an earlier version of this story, we misspelled the first name of Jalak Jobanputra. The text has been corrected.

Super Bowl point spreads: Seahawks, Broncos, and Gatorade

Fri, 2014-01-31 07:19

When it comes to Super Bowl action, you may think that it all happens out on the field.  Twenty-two men on the gridiron at any given time slogging it out, sometimes in freezing conditions, for the ultimate prize: the elusive Vince Lombardi Trophy. 

But stakes are not only high for the players, coaches, and the National Football League. Las Vegas stands to profit largely from the Super Bowl as well.  In fact, the Super Bowl is the biggest one-day betting event in Nevada and this year will not be different.  

R.J. Bell, sports betting expert and founder of, says when it comes to the big game we can expect to see a record number of wagers.  

"Last year actually was a record in Nevada. $99 million dollars was bet. This year, consensus opinion is that record is going to be broken. $100 million-plus is the expectation," Bell says.

According to Bell, Nevada’s bets only make up a sliver of all wagers on the Super Bowl.

"Only one percent is legal and regulated here in Nevada. $10 billion will be bet on this game worldwide."

You could look to social psychology to examine why the Super Bowl brings out the inner gambler in so many.

"It’s social, it's an office pool, it is a party where there's squares…," Bell says. "In fact, for a lot of people, if you're not involved with a little something on the game, you feel left out."

But gambling over what happens on the field is only part of it.  For those of us who either don't know about or don’t care about football, there is still action to be had. This is where proposition bets come in. 

Will any member of the Red Hot Chili Peppers be shirtless during their performance? 

Chances are… of course one or all of the Chili Peppers will be team skins. The oddsmakers agree.

Have an inkling about the color of the Gatorade that will be poured on the winning coach?  Yep, you can bet on that too.

Bell says that these prop bets allow "the casual fan, who is maybe only watching this one game" to get involved.

So whether you're rooting for the Seahawks or the Broncos, or red or blue Gatorade, odds are there will be winners and there will be losers.

Unrest imperils Thailand's economy

Fri, 2014-01-31 07:09

Police presence ramped up Friday before Sunday’s disputed elections in Thailand. The government wants the public to go to the polls, despite huge anti-government protests that have been going on since November.

The unrest is rippling through Thailand's economy, especially tourism -- a big moneymaker for the country. Marketplace's Mark Garrison – currently on vacation in Thailand -- spoke with Lizzie O'Leary about the economic impact the protests are having. Click the audio player above to hear the interview.

My wife and I booked our trip before this all started and we decided to go ahead with it,” Garrison says. “But the problem for Thailand is that many people are doing the opposite. There have been waves of cancelations and you can see it walking around Bangkok. There are thinner crowds at the major tourist attractions, empty seats at restaurants and vacancies at the hotels.”

To put this in perspective, tourism in America is just over two percent of GDP. In Thailand it's more than seven percent -- far more important. And it has been one of the few bright spots in Thailand's economy recently. Both sides of this political debate know that, and that economic reality is shaping the protests in some interesting ways.

“What you don't see in most of the Western news coverage is that the anti-government groups demonstrating in Bangkok are staging rallies in places that are totally off the tourist map, far out of the way of foreign visitors,” Garrison says. “Right now at the most famous temples or the weekend market, it looks pretty normal and that's what both sides want. There's little common ground between them, but they agree that the tourism industry is vital and they don't want to damage it.”

The unrest comes at a difficult time for emerging markets, which have suffered significant losses in financial markets this week as investors retreat.

Global investors are already nervous in general, so the unrest in Thailand is giving them another reason to put their money elsewhere”  Garrison says. “Japanese automakers manufacture cars here and some execs have said they're rethinking plans for future investment. Investors who are thinking about putting money into Southeast Asia look at Thailand and see a place where this kind of unrest bubbles up every few years. Many of them are going to move that money.”

Marijuana advocates use Super Bowl as advocacy tool

Fri, 2014-01-31 06:59

This weekend's Super Bowl has all sorts of drug inspired nicknames — the Stoner Bowl, the Bud Bowl, the Weed Bowl, the Bowl Bowl. On Facebook, Cheech and Chong have suggested the tagline: "Lots of Hits. No Penalties."

The Denver Broncos will play the Seattle Seahawks, pitting the two states that have legalized recreational marijuana use against each other, making the game the perfect opportunity to talk marijuana — and marijuana laws.

"You are dealing with two likable and very visible teams from the legalized states," says Greg Wagner, a marketing professor at the University of Denver. For groups that want more legal pot, it's a chance they can't pass up. "Let's jump in there and be a part of the party."

A group called the Marijuana Policy Project spent $5,000 on pro-pot billboards near the stadium.

"Most people are just interested in the Super Doobie Bowl or whatever" says Kevin Oliver, with the Washington state affiliate of NORML. But he hopes that humor will turn into a bigger discussion about legalization and employee rights.

It's not a discussion that the NFL is in the mood for. The league declined comment.

Where is Microsoft going next?

Fri, 2014-01-31 06:06

There’s a lot of chatter out there about who will be named as Microsoft’s next CEO. And there’s questions swirling about whether Bill Gates will step down as board chair. The company isn’t talking. 

But one thing seems clear: the tech giant wants to do more than be king of software.

Forrester analyst George Lawrie says the time has come for Microsoft to expand beyond its core software business. 

“In a way its traditional business is quite saturated. So from their perspective they’ve got to look for different sources of revenue,” he says. With nearly $80 billion in revenue last year, Microsoft is well positioned to pivot.

“Microsoft certainly needs to expand its horizons, but the question of in which direction,” says Roger Kay, president of runs Endpoint Technologies Associates. Kay says the company has had some hardware success, Xbox for example.

But there’s something a little cannibalistic about the move.

“Microsoft’s traditional customers, Dell, Hewlett-Packard, Acer, Lenovo are all in the hardware business. And so basically Microsoft starts competing with its own customers when it moves into hardware,” he says.

The smart money, says Kay, may be internet services, something like Amazon. Whoever becomes Microsoft’s CEO, Kay says the test is to pull the company’s different businesses together and thrive.

Advice for Janet Yellen

Fri, 2014-01-31 05:38

When you're in a position of power, you get no shortage of unsolicited advice. Bearing that in mind, we wondered what sort of advice people might have for Janet Yellen, as she becomes the chairwoman of the Federal Reserve, after Ben Bernanke's term ends today. We took a sampling, not just from those who know the Fed, but from some regular folks, too.

DONALD KOHN, Former Vice Chairman, Federal Reserve

Dear Janet,

Better you than me. May the force be with you.

Your friend,

Don Kohn


ED MORALES, a tourist from California we caught up with near the Fed building in Washington

Dear Janet,

Treat others as you would want to be treated.  Obviously going in and talking with your coworkers... Give them the respect that you would want, and obviously you would receive the same respect in return. And it would make for a better work environment.


Ed Morales


SUSAN TENDALL, of North Potomac, Md.

Dear Janet,

If I were to give advice to my four grown children on the first day of their jobs, I would tell them to try and find somebody they can mentor with. Take lots of notes, review those notes every night until you know what you’re doing, and keep a smile on your face and to not give up.


Susan Tendall


JOHN MAKIN, Resident Scholar, American Enterprise Institute

Dear Chairman Yellen,

Congratulations on your appointment as Fed chairman. One of the things that's important to remember is that the usual problem the Fed faces – rising inflation – is no longer present. In fact, deflation is a primary threat to a stable and growing economy. As you proceed with deliberations with the FOMC, I hope that you will put a higher priority on avoiding deflation.

With very best wishes for success in what I’m sure you know is a challenging job,

John H. Makin

Early bird alert! You can file your taxes starting today!

Fri, 2014-01-31 05:31

Income tax season is upon us. Today is the first day you can file, electronically or on paper. Rejoice! Sound the trumpets! Ready your calculators. Nah. Let’s be honest, most early filers are not filing early, unless they know they’re receiving a refund.

“There’s certainly no reason for them to let the IRS keep their money for two months or more, till April 15th,” says John Ams, executive vice president of the National Society of Accountants.  "They want to get it now and I would certainly not blame them.” 

But though we may be reluctant to think about it, Ams says there are multiple reasons to get an early start.  There are people who qualify for tax credits -- and want their money. And then there are the uber-responsible taxpayers -- those who are sensible enough to think well beyond the end of this tax year, and all the way into the misty future years of their retirement. Chuck McCabe, president of the Income Tax School, says this kind of advance planning is yet another good reason to file early.

If you do  you can get your refund in time to fund an IRA.  

“You can actually deduct the amount you plan to contribute to an IRA from your tax return even though you haven’t opened the IRA yet,” he says.

Tax magic! McCabe notes that even for those of us who owe the IRS and are planning, instead of mature and responsible fiscal action to fully embrace procrastination -- even we should still file early. Filing an extension, notes John Ams, won’t help postpone the real pain.

“It’s the return that’s not due till Oct. 15th,” he say. “You do not get an extension of time to pay. The money is still due April 15th.”

We know you don't want to, but here are 10 reasons to file your taxes early:

  1. Get it over with already! If you think you’ll owe taxes, you find out sooner how much you’ll owe. Filing early will give you time to budget, or, to save money before the balance is due. And, if you find out you owe a ton, you can always make a payment arrangement with the IRS.
  2. Get your refund, now. The National Society of Accountants says in recent years early filers have received refunds in 21 days. Taxpayers filing nearer the deadline day waited an average of 31 days. Why wait for your money?
  3. Help the children. Having your tax return may help in getting financing. Banks and other lenders, especially small business lenders, often require current tax returns to be submitted with loan applications. And if you have children applying for college financial aid, your tax return information may be required for the financial aid form.
  4. Take your financial responsibility to the next level. Use your tax refund to fund an IRA. The IRA contribution doesn't have to be funded until your tax filing deadline (April 15 for most people).
  5. Prevent mistakes. Want a a sleep deprived, overworked accountant doing your taxes? Not so much. One extra zero, or a missing deduction could hurt, big time. Get your taxes done early when your tax preparer is feeling energetic and ready to go.
  6. Buy yourself time. The last minute is no time to discover a wrinkle that complicates your tax situation. Nor is the last minute the time to make a hurried and careless mistake in your return – a mistake that could trigger an audit.
  7. Prepare for the ultimate battle. Let's say you do get audited. Filing early means you had time to get your paperwork together and think through your decisions. Maybe the IRS has questions about deductions for your home office or chartiable contributions but you are READY. Bring it taxman! 
  8. Beat the criminals to your refund. Identity theft is a pricey problem when it comes to taxes. If a thief files a false return using your stolen identity (before you file a real one) it could take up to a year to get your money back. Beat the bad guys by filing your return first. 
  9. Skip the line. If you're one of the three out of ten taxpayers who still mails in your returns on paper the line at the post office in April is going to be LONG. Skip the hassles and file now.
  10. Sleep better. You know you will.

(Answers adapted from the National Society of Accountants and the Income Tax School.)

Global currency traders may be fixing the '4 p.m. Fix'

Thu, 2014-01-30 17:24

Unlike the stock market’s closing bell at the end of the day, the trade in currency operates around the clock. And since there’s no end-of-the-day benchmark, the foreign exchange market draws a line in each day’s trading at 4 p.m. London time.

Joe Marston, a small-time, retail foreign exchange trader, says whatever exchange rates happen to be within a 60-second window become what’s known as the "4 p.m. Fix."

"The 4 p.m. Fix was devised so everybody around the world knows what the price is at 4 o’clock," says Marston. "So that’s the benchmark."

It’s an important benchmark. Multinational companies and pension funds use it as a price to make enormous foreign currency deals.

And regulators suspect traders may have rigged the 4 p.m. Fix to make more profit.

Here's how it works:  On a quiet trading day, Marston shows on his computer screen that the Euro hovers at about $1.35 in U.S. dollars.  But just moments before the 4p.m. Fix was set, the numbers on Marston’s screen start to tick upward.

"It’s moving up a little bit," says Marston. "Sometimes the market can actually move quite violently a few minutes before."

That movement has attracted the attention of U.S. and European regulators.

"Round about exactly 4 p.m., there appear to be jumps in the exchange rate that disappear after a few minutes," says Mark Taylor, a former currency trader who's now dean at Warwick Business School. Taylor says if you look at the 4 p.m. Fix over several months, you see a very suspicious pattern. 

"What it suggests is that people are deliberately trying to manipulate the market around that time."

Traders at some of the world’s largest banks are suspected of collaborating through online chat rooms with names like "The Cartel" and  "The Bandits’ Club," and they’re believed to have conspired to combine billions of dollars in trades to shift the 4 p.m. Fix. It’s what’s known in trader-speak as "Banging the Close".

"It suggests that you’re banging something in order to move it," says Taylor. "And you’ve only got to move the market a small amount for a small period of time for that to translate into literally millions of dollars of profit."

Taylor says the concern is that banks make their profits by charging clients the higher 4 p.m. Fix rate, while really putting currency trades through at a lower price once the market settles down. Richard Payne at Cass Business School says, for the moment, these are just allegations. But this is possible, he says, because the global currency market is largely unregulated, and concentrated among a handful of players.

"There are only a few big banks that control the vast majority of currency trading on the planet, says Payne, "and we can all name them – Deutsche Bank, Barclays, UBS."

That list includes Citigroup and JP Morgan. No bank would comment for this story. But many have already suspended their top currency traders as investigations continue.  And any proof of wrongdoing could bring steep fines.

Peyton Manning's New Jersey tax bill

Thu, 2014-01-30 16:38

Writing at Forbes, a tax lawyer has pointed out that Peyton Manning -- who will have played twice in New Jersey this season -- will owe the Garden State tax man about $46,844 dollars for the slice of his paycheck he gets for working there.

Catch is, the loser's check from the game is $46,000 even. So if the Broncos lose (...which they won't...), Manning would be paying to play.

Of course, he makes something like $15 million a year. So.

Advice for Janet Yellen

Thu, 2014-01-30 15:35

When you're in a position of power, you get no shortage of unsolicited advice. Bearing that in mind, we wondered what sort of advice people might have for Janet Yellen, as she becomes the chairwoman of the Federal Reserve, after Ben Bernanke's term ends today. We took a sampling, not just from those who know the Fed, but from some regular folks, too.

DONALD KOHN, Former Vice Chairman, Federal Reserve

Dear Janet,

Better you than me. May the force be with you.

Your friend,

Don Kohn


ED MORALES, a tourist from California we caught up with near the Fed building in Washington

Dear Janet,

Treat others as you would want to be treated.  Obviously going in and talking with your coworkers... Give them the respect that you would want, and obviously you would receive the same respect in return. And it would make for a better work environment.


Ed Morales


SUSAN TENDALL, of North Potomac, Md.

Dear Janet,

If I were to give advice to my four grown children on the first day of their jobs, I would tell them to try and find somebody they can mentor with. Take lots of notes, review those notes every night until you know what you’re doing, and keep a smile on your face and to not give up.


Susan Tendall


JOHN MAKIN, Resident Scholar, American Enterprise Institute

Dear Chairman Yellen,

Congratulations on your appointment as Fed chairman. One of the things that's important to remember is that the usual problem the Fed faces – rising inflation – is no longer present. In fact, deflation is a primary threat to a stable and growing economy. As you proceed with deliberations with the FOMC, I hope that you will put a higher priority on avoiding deflation.

With very best wishes for success in what I’m sure you know is a challenging job,

John H. Makin

The 5 steps of snow day acceptance

Thu, 2014-01-30 14:43

Where are the Nannies Without Borders when you need them? For  working parents who have already blown through their repertoire of "fun things to do with kids when you're stuck inside!" -- and also their patience and vacation days-- this winter has been particularly cruel.
And it threatens to get worse. In Boston earlier this month, on the same day that school was cancelled, yet again, an assistant professor at the Harvard Kennedy School unleashed a pro-snow day study. It concluded that snow days don't, in fact, have a negative impact on learning -- a finding that threatens to embolden superintendents to err on the side of cancellation.  Talk about kicking parents while they're down.

Psychologists have yet to name the combination of despair and bitterness a snow day can trigger, but it's not unlike the famous five stages of grief described by psychiatrist Elisabeth Kubler-Ross.
Based on interviews I've conducted with house-bound would-be working parents, they are:
Stage One: Denial

  • "It doesn't look like it's accumulating."
  • "The meteorologists are always wrong."
  • "If they were going to call a snowday, they would have called it already."

Stage Two: Anger

  • "I stayed home last time -- my husband/wife is staying home tomorrow."
  • "Let my boss spend the day with a two-year-old and see how easy it is to get work done."
  • "When I was a kid they never cancelled school."

Stage Three: Bargaining

  • "If they don't cancel school tomorrow, I promise I will: a) chaperone a field trip; b) get off my phone when my son is at bat; c) be better about making sure my kids floss, and not just the morning of the dentist appointment."

Stage Four: Depression

  • "That brown-noser in accounting is going to make a play for my job."
  • "I'm going to be stuck at home with a toddler and a kindergartner, and they're going to want to go sledding."
  • "I am powerless over the hot chocolate and brownies I bought in a pathetic attempt to make the day seem festive."

 Stage five: Acceptance

  • "My children are going to spend eight hours playing Madden."

U.K. spat over women's pay in the financial sector

Thu, 2014-01-30 13:48

On Saturday, Janet Yellen becomes the first woman to head the U.S. Federal Reserve, an honor which has brought her top billing in a British poll of the world’s ten most powerful female financiers. Eight of the women – including Yellen – combined their glittering careers with a family and children.

This may come as a revelation to Nigel Farage, head of the fast-growing U.K. Independence Party. Farage has just caused a storm of protest with some outspoken comments in London’s financial centre – the City as it’s known – on the subject of maternity and work. To quote:

"If a woman broker who has a client base, has a child and takes two or three years off work, she is worth far less to her employer when she comes back than when she went away," said Farage, claiming that said woman's clients will have drifted off, and her contacts will have dwindled.

"This helps explain why female finance workers in Britain earn on average 30% less than men," he said.

Should Nigel Farage know what he’s talking about? He spent more than 20 years working as a commodities broker before he became involved in politics.

"He’s talking absolute rubbish!" declares Louise Cooper – a former stockbroker and a mother of two. "You don’t get two or three years off to have a baby. The maximum amount of time you get off is 12 months. And many women choose to take four, five, or six months. That is usually much less than gardening leave," says Cooper.

"Gardening leave" is the time that city workers – having quit their jobs – must stay away from work before they are allowed to join a rival company. In London, it usually lasts six months to a year.

Cooper asks: "Why is six months or so of maternity leave more damaging to a company than twelve months of gardening leave?" 

Kirstie Ayre – an employment expert with the Pinsent Masons law firm - said the notion that women are "somehow intrinsically worth less to financial institutions because they might leave to have a family is laughable."

"These days when an employee leaves, the company does not automatically lose clients. Those contacts are usually shared between teams of employees," she said.

Others complained that Nigel Farage’s comments were harmful to working mothers.

"We found his remarks very disappointing. This will make life so much more difficult for the many women who are doing a very impressive job of balancing their work and family responsibilities," said Rosalind Bragg, director of the charity Maternity Action.

Bragg is afraid that Farage’s comments will fuel further prejudice against working women, already a major problem.

"Since the economic downturn began, the rates of pregnancy discrimination in the U.K. have grown dramatically, and that’s true of the finance sector as much as it is of the wider labor market. In 2006, 30,000 women lost their jobs as a result of pregnancy discrimination, and now the figure’s risen to about 60,000 a year. That’s roughly 1 in 7 pregnant women in the workforce," she said.  

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