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Your Wallet: Cheating and Money

Fri, 2015-01-30 09:26

Next week, we're talking about cheating. Have you ever financially cheated? Did you cheat on someone you love? Maybe you cheated yourself in some way. 

We want to hear your stories of cheating and money. How did it change your outlook? 

Tell us your story HERE, on the Marketplace Facebook page, or on Twitter: we're @MarketplaceWKND.

My money story: Boom and bust, at the blackjack table

Fri, 2015-01-30 09:16

Josh Axelrad used to be a professional gambler, (illegally) counting cards. Now, he's a writer and a dad. 

Once he stopped playing blackjack professionally, and started playing poker badly, he lost $50,000.

“I thought it was impossible that the 50 Gs I’d succeeded in vaporizing would ever come my way again,” he says.

This is the story of his crash, and how he was made whole again.

You can listen to Josh's crash story in the audio player above. To hear a longer version, visit The Moth.

Money Story: Crash and recovery at the blackjack table

Fri, 2015-01-30 09:16

Josh Axelrad used to be a professional gambler (a card counter), now he's a writer and dad.

He told Marketplace Weekend about what happened when he stopped playing blackjack professionally and started playing poker badly...he lost $50,000. This is the story of his crash, and how he was made whole again.

You can listen to Josh's crash story in the audio player above. To hear a longer version, visit The Moth.

Global crashes in an interconnected economy

Fri, 2015-01-30 08:59

People crash. So do companies. And stock markets. And, occasionally, entire countries.

We live in an increasingly interconnected world, which means that when one country crashes financially, there's a genuine risk that we could end up with a regional, or even a world-wide pileup.

We wanted to find out how likely a crash of epic proportions is, so we turned Paddy Hirsch, Senior Editor and resident explainer at Marketplace. He spoke with Marketplace Weekend about the global economy. So is it really all that fragile?

Meteorologist Gary Dobbs: Living through a tornado

Fri, 2015-01-30 08:40

A traumatic crash can be a very personal, deeply transformative moment, an event where life's momentum stops and your reality is changed.

How do you move forward? How does it affect the way you look at things? Gary Dobbs dealt with that first hand.

For 31 years, he worked as a meteorologist at ABC's affiliate in Huntsville Alabama.

In April of 2011, Gary had just gotten home after a long day of covering a tornado outbreak.

With storm warnings still in effect, he laid down to take a nap.

Listen to the full story in the audio player above.

Quiz: Reading, writing and citizenship

Fri, 2015-01-30 07:44

A new state law requires high school students to pass the U.S. citizenship test in order to graduate.

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PODCAST: You've got mail

Fri, 2015-01-30 03:00

Low oil prices just sucked some life out of GDP. More on that. Plus, with gas prices nearing $2 a gallon, mass transit authorities are worried about ridership dropping. But gas might not be the deciding factor when it comes to choosing bus or train. And a new postmaster general takes over the U.S.P.S. We look at the challenges ahead of her.

I submit before the court: Exhibit Smiley Face

Fri, 2015-01-30 02:30

Ross Ulbricht is currently on trial for allegedly running the underground marketplace Silk Road. Thus far, there's been a lot of intrigue about who exactly was involved in running the site, and it hasn't been all smiley faces. Well, sort of.

Recently, the prosecutor read a text that ended with a smiley face in court. How would you say that? Well, the prosecutor didn't. Ulbricht's lawyers objected, and the judge agreed that the emoticon was important. 

So should emojis be factored into understanding the intent of communication? Anne Curzan, English Professor at the University of Michigan, certainly thinks so.

Click the media player above to hear more.

New USPS boss faces old problems

Fri, 2015-01-30 02:00

The United States Postal Services prides itself on its ability to handle snow and rain and heat – and also “gloom of night,” but it’s had a tougher time with employee pensions and health benefits.

Saturday is Patrick Donahoe’s last day as postmaster general. He has spent his entire career – almost 40 years – with the U.S.P.S., and his successor, Megan Brennan, is likely to push for many of the reforms Donahoe has.

The postmaster general makes about $275,000 a year, but earns it, say people who follow the agency.

“It should come with free therapy sessions,” jokes David Hendel, an attorney with Husch Blackwell, who specializes in Postal Service contracting. “It’s a huge enterprise.  If it was a corporation, it would probably be a top-25 company.”

Bureaucracy may be one of the biggest problems that besets the agency, and presumably the incoming postmaster general knows that. Brennan started out as a letter carrier in Lancaster, Pa.  According to Hendel, the head of the Postal Service has a lot of people to please.

“You have got so many different constituencies, it is just so hard to gather up,” he says. “And couple that with limited powers.”

There are very few decisions you can make without approval, says Gene Del Polito, who heads a trade group called the Association for Postal Commerce. “When you are postmaster general, you really have 535 members of your board of governors – they are all members of the U.S. Congress, and they all think they know your job better than you do.”

In a farewell speech a few weeks ago, Donahue said lawmakers need to find new ways to build consensus. “The narrow interests can’t continue to get in the way of the broader national interest,” he said.

Donahoe singled out retiree healthcare benefits. The Postal Service is required to pre-fund them – something it has not been able to do for years now. And according to Hendel, pensions are a growing problem. “People are living longer and longer lives, and therefore, you can’t really put enough away today for the liability later, or they haven't," he says.

On the one hand, there is this expectation the U.S.P.S. should be run like a business, but Rick Geddes, who teaches policy analysis and management at Cornell University, says the postmaster general’s lack of autonomy has kept the organization from being as nimble as it has needed to be.

“We need to have fundamental postal reform at the legislative level that allows the Postal Service to adapt better to the realities of the communications marketplace,” he argues, predicting that will be something the new postmaster general will push for, just as her predecessor had.

New brands take a chance with Super Bowl ads

Fri, 2015-01-30 02:00

More than a dozen brands will run Super Bowl ads for the first time this Sunday. Look for brands like Skittles, Weight Watchers, and Always, maker of feminine hygiene products, to make their game-day debut. That’s the most newcomers in about 15 years.

NBC finally sold out of Super Bowl ads four days before the game. In 2014, Fox sold out two months before kickoff.

“Due to some of the controversy over the past year with the NFL, there were probably some brands that have traditionally been Super Bowl advertisers that decided maybe this was a good year to not get involved,” says David Griner, digital managing editor at Adweek.com.

Watch the Always commercial here:

Silicon Tally: Earthquakes, Made in the U.S.A.

Fri, 2015-01-30 02:00

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

This week, we're joined by Kyle Wagner, a sports stats fan and a writer at Deadspin.

The online version of this week's Silicon Tally quiz is forthcoming.

Cheap gas could cut into transit ridership

Fri, 2015-01-30 02:00

With gas prices as low as $2 in some parts of the country, mass transit providers are starting to worry that their ridership numbers will also dip.  

Use of public transit in the U.S. is at levels not seen since the 1950’s — That’s according to the American Public Transportation Association.

High gas prices are a part of that growth, and now that costs are falling some cities fear a drop-off in ridership.

So far that has not been the case in Chicago, at least.

"In the two months that fuel prices have been well below $3 we have not seen any significant shifts on either the rail side or the bus side," says Brian Steele, a spokesman for the Chicago Transit Authority.

Steele points out that gas is just one cost associated with driving a car, in addition to parking costs, insurance costs, maintenance costs. 

But others question whether public transit use has really gone up as a percentage of population growth.

"Think of it in terms of inflation: has mass transit ridership, in terms of a percentage increased each year, kept up with inflation? No, it hasn't come close to it," says Ray Mundy, Director of the Center for Transportation Studies at the University of Missouri—St. Louis.  Despite increases in ridership, Mundy says transit still only accounts 5 percent of trips in metro areas.

Super Bowl Sunday's MVC: Most Valuable Commercial

Fri, 2015-01-30 01:30
2.6 percent

Gross Domestic Product expanded at a rate of 2.6 percent in the fourth quarter, as reported by the WSJ. That puts GDP growth for 2014 at 2.4 percent, a below average rate compared to previous growth periods.

9 percent

That's how far Alibaba's stock tanked Tuesday following a solid, if slightly underwhelming, quarterly earnings report. The fall has much more to do with a government report leaked Tuesday accusing Alibaba of being lax on illegal practices from vendors. Quartz has the full story.

15 years

More than a dozen brands will air their first Super Bowl ads this Sunday, the highest number of newcomers in almost 15 years. Look for brands like Skittles, Weight Watchers, and Always, maker of feminine hygiene products, to make their game-day debut. 

70

Speaking of Super Bowl commercials, 70 is how many ad slots NBC had to sell for this year's game. The ads — which cost about $4.5 million for a 30-second spot — finally sold out this week, AdAge reported. Post-game and digital slots are all filled too, but there's still a little time to buy to a pre-game spot if you have the cash to spare. Here's a roundup of the all the ads confirmed so far.

$37,500

That's what an ad in the first Super Bowl cost in 1967, $266,000 adjusted for inflation. Slate has a retrospective of the most iconic ads over the game's last 48 years.

4,500

The number of users currently on This., a new social network that is, based on its coverage in the New York Times, the new Ello. The invite-only site promises a pared-down social media experience wherein users may only share one link a day and nothing more.

4 purchases

That's how many purchases are needed to ID you, despite anonymous credit card data. As reported by Reuters, scientists at MIT worked with metadata (data that only identifies time and place of purchases), and then looked at public information like non-anonymous purchases and social media to try and match people with their credit card activity. In some cases, it took as little as two purchases by a person to positively ID them.

Guess everything costs more in New York City

Thu, 2015-01-29 15:03

We are, as you know, a show about business and economics, so we try to find the money in everything we do. But occasionally we struggle to find an angle.

Take, just for instance, the blizzard earlier this week. I mean ... can you really do a "what's the cost of snow" story?

Turns out, you can.

Over the past 12 years in New York City, snow and ice removal costs have averaged about $1.8 million per inch.

This according to a recent post-storm report from the City Comptroller.

Value of a dollar in Indiana's Medicaid expansion

Thu, 2015-01-29 09:54

A deal between Indiana and the federal government to expand Medicaid provides a telling glimpse into how flexible the Obama Administration is willing to be to get more people on the healthcare insurance rolls. Under the agreement reached this week – which could serve as a model for other states – monthly premiums will be at least $1.

Doesn’t sound like much, right? But that dollar is enormous to people who are philosophically opposed to the Medicaid expansion. It’s also huge to those whose incomes are staggeringly low.

Penalties on the way for the uninsured under Obamacare

Thu, 2015-01-29 09:53

According to the new numbers from the Department of Treasury, 2 to 4 percent of taxpayers will owe a penalty for not having health insurance last year. That's approximately 3 million to 6 million households. But who has to pay — and what happens if they don't?

The penalty this tax season is $95 per adult — about half that per child — or 1 percent of household income, whichever amount is  higher. The fines will also keep going up. Not having insurance in 2015 will cost $325 per adult or 2.5 percent of household income. In 2016? 2.5 percent or $695 per person and tied to inflation in the years that follow. 

It's unclear how many will actually have to pay up, however. Many groups are exempt from the penalty and the IRS' ability to enforce could be limited, especially after recent budget cuts.

For more, listen to the story in the audio player above.

McDonald's orders a fast-food quick-fix

Thu, 2015-01-29 09:51

McDonald's Don Thompson announced this week he'll resign after two years as CEO — two years that were not very successful for the company. Sales at McDonald's roughly 14,000 U.S. restaurants have slumped.

Raghu Manavalan/Marketplace

Sara Senatore, a research analyst with research firm Sanford C. Bernstein, says part of the problem is competition from more "wholesome" competitors, so-called fast-casual chains like Chipotle. “The food is better quality and tends to be higher priced as a result. There's a real emphasis on provenance, sourcing, local farms,” she says.

McDonald's also faces image problems with customers who just want a good deal on lunch. Carla Norfleet Taylor at Fitch Ratings says that's another area where competitors are winning. “Whether it’s Burger King with '2 for $5,' 'mix and match,' 'choose what you want,' [they’re] just being a lot more creative than what we're seeing with McDonald’s, I think, on the promotional front,” she says.

Incoming CEO Steve Easterbrook is currently McDonald's chief brand officer. He's spearheaded efforts to boost marketing and allow diners to more easily customize their orders. He previously led a successful turnaround in McDonald's United Kingdom business. He helped dispel worries about food quality, and even took part in a televised debate about the fast-food industry.

Still, Sara Senatore wonders why the chief brand officer will face a brand crisis when he takes over the corner office. "He should've had some imprint when there does seem to be an issue with brand resonance,” she says.

Easterbrook takes over on March 1, 2015.

What the U.S. has gained from sequestration

Thu, 2015-01-29 09:45

Since the automatic spending cuts known as sequestration started in 2013, the budget deficit has gotten smaller. But it’s still hundreds of billions of dollars. Sequestration just nibbled at it.

“Sequestration has been saving us between $60 [billion] and $90 billion per year,” says Marc Goldwein, senior policy director of the Committee for a Responsible Federal Budget. “Now, that’s not enough to solve our debt problems. But it’s not nothing, either.”

Congress eased some of sequestration’s sting during the past two budget years. But it still bit hard enough for people like Emily Holubowich of the Coalition for Health Funding to notice. Under sequestration, she says, Congress sacrificed planning for medical emergencies like Ebola.

“They look and say, 'Well, where can we cut?'  We don’t need to invest in planning and preparedness. And it’s when you let your guard down that we see something else happen, like Ebola,” she says.

At the Pentagon, sequestration forced cuts in training. It meant deferred maintenance, and it limited pay increases.  Jim Savage, who teaches politics and public policy at the University of Virginia, doesn’t think much of sequestration.

“When you rely upon across-the-board measures, it’s usually the sign of weak management," he says. "It’s also another way of sort of avoiding political accountability – to make the hard choices.” 

But, Savage says, sequestration will force some hard choices on Congress this year. Lawmakers have already cut the low-hanging fruit.  There aren’t many spending cuts left that everyone can agree on. And remember, sequestration is scheduled to last until 2021. 

Fake snow is a genuine business plan for ski resorts

Thu, 2015-01-29 09:23

Across the West, skiers and winter resort operators pine for a blizzard like the one that blanketed the Northeast this week. A number of resorts in California, Oregon and Washington have had to temporarily or permanently suspend operations this season due to low snowpack. Things are so topsy-turvy, trail groomers in Anchorage, Alaska, had to resort to snowmaking to be able to open in time for the winter holidays.

"They don't need it in Cape Cod. They need it here in Washington," Kevin McCarthy, general manager of White Pass Ski Area,  says with a chuckle.

The snowpack at his resort in Washington State's Cascade Mountain Range is about 25 percent of normal, McCarthy says, a common predicament this winter up and down the West Coast. For some resorts, this is the second or third tough year in a row. Unreliable winter weather is increasingly forcing ski areas to rely on expensive snowmaking machines to remain viable.

"For three weeks we made snow, and it has been a lifesaver, tying the lower area to the upper mountain, which has enough natural snow to operate," McCarthy says.

A stretch of unusually balmy weather caused headline writers and outdoor enthusiasts in the Pacific Northwest to nickname the normally snowy month of January  "Juneuary." Skiers at White Pass, where the terrain ranges from 4,500 to 6,500 feet elevation, had to look out for rocks, ice sheets and brown patches as they navigated the lower slopes.

But snowmaking machines aren't a cure-all. The White Pass Ski Area machines were shut down this week because it was too warm for them to work.

Still, McCarthy credits his small collection of "snow guns" for his ability to open on time and stay open. "Every time we go by these, we want to give them a hug," McCarthy says.

Snowmaking systems are not new in the ski industry. Resorts in the Midwest and East have relied on snowmaking for decades. Farther West there are more holdouts.

"The challenges of the weather, particularly in the Pacific Northwest, are causing the resorts to rethink their reliance only on natural snow," says Joe VanderKelen, president of SMI Snowmakers. The Michigan-based company is one of the biggest purveyors of snowmaking equipment and services.

"A lot of folks that said, 'Hey Joe, you're a nice guy, but jeez, we'll never have snowmaking at our mountain because you know we actually have too much snow' are now circling back," VanderKelen says.

Resort owners recognize the threat of climate change, because they're seeing it, VanderKelen says. Spring now arrives more than two weeks earlier in the Lake Tahoe resort region than it did 50 years ago, according to a NASA study cited by the industry group Protect Our Winters.

 VanderKelen says he tells resort operators that snowmaking gives them a chance to weatherproof their businesses. "There are literally over 100 resorts in North America that would have gone out of business without snowmaking, maybe 200," he says.

Customers may spend from $50,000 for a single snow gun and pumping station to $50 million to bring snow to an international resort such as Whistler in British Columbia, according to VanderKelen. And the expenses are ongoing. Ski industry consultant Dave Belin of RRC Associates in Boulder, Colorado, says the cost of water, energy use and labor make snowmaking a pricey proposition.

 "It really comes down to: Can you operate without it?" Belin says. "Most ski areas have decided they need it to maintain their operations from the beginning of the season all the way through to the end of the season."

Water availability and scarcity present additional challenges, especially for ski areas in drought-stricken parts of the West. In southern Oregon, Mount Ashland Ski Area management say they have looked into snowmaking systems to augment the snowpack at their oft-closed slopes. But they found the equipment too costly and say the ski area lacks an adequate water source to create manmade snow.

 "There are some big hurdles," says John Gifford, president of the Pacific Northwest Ski Areas Association. "Not only do you have to have water, you have to have low temps and low humidity" to make snow.

 

Change comes to Facebook one hire at a time

Thu, 2015-01-29 08:53

Before new Facebook employees get their computers, they go see Maxine Williams, global director of diversity at Facebook. Facebook says 85 percent of the tech employees at the company are male, and 53 percent are white. Williams has been charged with changing that, since she was hired a year and a half ago.

One of Williams' jobs is finding new talent for Facebook. “We have people now whose whole job is to think about how we can contribute to developing the pool for the future."

There are practical reasons behind Facebook's diversity mission, the value proposition isn't hard.

“We want to have as many different ways of seeing things,” Williams says, “and that’s what you miss when you don’t have enough diversity.”

And that can help Facebooks’ bottom line. “It will improve not just what we build but then how we serve people. Because we will understand people better," she says.

If Facebook can do that, Williams is convinced that the company will be more successful and create better products.

"There's a ridiculous amount of value in having more people that look like you, because now this place starts to belong to you," she says. "You see yourself in the fabric of it. You are now a protagonist in this story, and we all want to be protagonists in our story ... So it becomes our story when there are more of us."

 And that’s something Williams "likes."

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