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In China, the polluter 'that-must-not-be-named'

Tue, 2014-07-15 11:31

Chengdu, the capital of Sichuan province, is home to a thriving teahouse culture. But there’s more than tea brewing here. The tradition of chatting away the day with friends has, for centuries, made it easier for folks here to gossip and talk about politics and current events. Lately, the talk has been about air pollution.

“There are more people and more cars and more industry," complains Wu Youqiong, who sits and drinks tea with her family, "The pollution is bad for all of us – we all have lungs. The government needs to do something about it.”

In the past year, one of the most notorious projects in the history of China’s oil industry began operation outside the city. It’s a $6 billion petrochemical plant run by China National Petroleum Corporation, the country’s largest state-owned oil company, and it has become a focus of a corruption investigation into the family of Zhou Yongkang, China’s former security chief. "The people here didn’t want the plant built, but they built it anyway," says Wu, "It’s going to harm everyone’s health. It’s something people should protest."

The people of Chengdu tried.

Last year, many here among the city’s 14 million residents planned a weekend public demonstration to protest the plant. When the local government found out, police detained organizers, sent out text messages warning people to stay inside, and the government required people to work on the Saturday of the protest, forcing high school and university students to remain in class through the weekend.

Officials are still paranoid– within minutes of arriving in Chengdu, I call a source who had agreed to talk with me about how the pollution affects her family. She abruptly cancels our interview – she’s being interrogated by police officers who had intercepted our emails and text messages. The next day, I hire a driver to take me to Pengzhou, the site of the petrochemical plant. It's a refinery that’s as large as the nearby city. In a small village in the plant’s shadow, I stop to talk to a farmer. "My home was destroyed for the plant last August," a woman tells me, "The sky here is always polluted now. The plant has had a huge impact on our health."

Before I can get her name, a man pulls up beside me on a motorcycle and asks me what I’m doing. He glares at the woman and she dashes off.

I tell him I’m a journalist and I’m talking to people about pollution. “There’s no pollution here,” he says.

Before I can ask him more questions, he makes a call on his cellphone. A minute later, a group of thugs show up. I hop in the car, and we drive to another location where I again begin talking with people, but the men catch up to me and intimidate them, too. Before long, I'm being chased out of Pengzhou by six cars; a motorcade of thugs with a foreign journalist in the lead.

Back safely in Chengdu, I speak with Jin Lei and Guo Xiaohong, a husband and wife who are concerned about the plant. "A lot of people are concerned about the plant," says Guo, who used to work for an environmental NGO in Chengdu. "but people are no longer willing to do anything about it – they don’t think they can change the situation."

Jin and Guo’s two daughters are playing in their living room. A couple of years ago, when the pollution in Chengdu was particularly bad, the couple had to bring both girls to the emergency room several times for breathing problems. “The pollution that year was just as bad as Beijing’s," remembers Jin. "I used to train for triathalons, but I’ve stopped that because my bronchitis was so bad.”

Back in 2005 when Jin and Guo were studying at elite schools in Beijing, they were among a group of students permitted to attend a talk by Al Gore. He was visiting Beijing to talk about his documentary “An Inconvenient Truth”. After the talk, officials allowed only one question from students.

Jin raised his hand and Gore called on him.

“I asked Mr. Gore what can we, as normal people, do to help China’s environment?" remembers Jin. "He said, ‘You are the representatives of China’s young generation, and you must have faith that things can change. If you don’t have faith, then future generations will have less faith.’”

Jin and Guo have now applied this message to how they live in Chengdu. The couple uses reclaimed water to help grow their urban garden, and they’ve taught their daughters to use bath water to help flush the toilet. “Whatever mandate the government hands down that will help protect our environment, we will support it 100 percent," says Jin. "As a country, we must work together. Otherwise, we’ll all pay the price.”

We must have faith, he says, echoing what Al Gore told him - that things can change. But sometimes in China, it’s hard to keep that faith: Just two hours after I leave Jin and Guo’s home, the police show up to intimidate them, too.

What bright lights can tell you about a nation's economy

Tue, 2014-07-15 10:52

The pale blue dot aglow with millions of little lights. It's an image that never ceases to fascinate. But those lights might tell us more than you think.

A new study published in the Quarterly Journal of Economics says that cities and regions that are the birthplaces of a country's leader recieve perferential political and economic treatment in some nations, evidenced by how bright they appear from space after the leader comes into power.

From Wired Magazine:

Paul Raschky from the Monash Centre for Development Economics and Sustainability at Monash University in Australia compared the night-time light intensity of 38,427 subnational regions between 1992 and 2009 with the birthplaces of political leaders of 126 countries.

"Our results suggest that being the leader's birthplace increases night-time light intensity and regional GDP by around four and one per cent respectively," Raschky said, citing previous research that confirms the connection between economic activity and light generated at night.

Here's a look at some of the cities that the study examined, and other images from orbit that show how different economic conditions can change the view from space:

Gbadolite, Zaire (Democratic Republic of Congo)

A screenshot from NASA's "Blue Marble" application showing the city of Gbadolite. (Image courtesy of NASA Earth Observatory)

This small town in the Democractic Republic of Congo (formerly Zaire) was emphazised by the study for the lavish economic favoritism bestowed upon it by the country's authoritarian president, Mobutu Sese Seko, who was born near Gbadolite.

"Mobuto built a huge palace complex costing millions of dollars, luxury guesthouses, an airport capable of handling Concords, and had the country's best supply of water, electricity and medical services," says study researcher Paul Raschky.

Hambantota, Sri Lanka

A screenshot from NASA's "Blue Marble" application showing the region of Hambantota, on the southern tip of Sri Lanka. (Image courtesy of NASA Earth Observatory)

Another region identified in the study for receiving preferential treatment from Sri Lankan president, Mahinda Rajapaksa, who was born in the district. The largest city in the area, Hambantota has a population of 11,000, has seen the construction of a 35,000-seat cricket stadium, and has plans to build a large port.

North Korea and South Korea

An image taken from the International Space Station on Jan. 30, 2014, shows South Korea (lower right) and China (upper left) with North Korea in the center. (Image courtesy of NASA Earth Observatory) 

A photograph from space perfectly illustrates differences in economic development between North and South Korea — a brightly illuminated South, and an eerily dark North.

The Nile River

(Image courtesy of NASA Earth Observatory)

The Nile River with its valleys and delta make up less than five percent of Egypt’s land area, but more than 90 percent of its population lives there. The string of lights illuminating the river's path through the country at night highlights the societal importance of the Nile in Egypt.

North Dakota's fracking fields

Illustration by NPR/NASA

An NPR science writer was looking through NASA's images of Earth at night, and noticed an unusual glow coming from the normally fairly dark North Dakota, one that revealed how the light across the U.S. is still subject to economic changes.

Their explanation:

What we have here is an immense and startlingly new oil and gas field — nighttime evidence of an oil boom created by a technology called fracking. Those lights are rigs, hundreds of them, lit at night, or fiery flares of natural gas. One hundred fifty oil companies, big ones, little ones, wildcatters, have flooded this region, drilling up to eight new wells every day on what is called the Bakken formation.

What was previously wheat and corn fields has quickly become a blazing energy business that has made North Dakota the second largest gas-producing state in the country.

Why Google and Novartis are teaming up

Tue, 2014-07-15 07:00

First, there was Google Glass. Now, Google is getting into contact lenses, teaming up with the Swiss pharmaceutical company Novartis. 

They're working on smart lenses that will be able to monitor blood sugar levels for diabetics through the natural tears in our eyes.  

Google and Novartis also say they’re developing another lens that can auto-focus the eye. It could help with reading, because as the eye ages, it’s harder to see things up close.   

The two companies complement each other pretty well: Google doesn’t need any money from Novartis, while Novartis can help Google navigate the clinical and regulatory side of things.

“They need more the expertise in terms of running clinical trials, getting approval from the FDA, and then marketing after approval,” says John Mack, who follows the pharmaceutical industry as publisher of "Pharma Marketing News."

Google could definitely use an FDA go-between. About five years ago, the FDA went after pharmaceutical companies about ads that popped up in Google searches. The FDA said the ads didn’t contain relevant risk information. 

The partnership also benefits Novartis. Its contact lens division, Alcon, will get a huge jump into smart contact lens technology with the deal. 

Novartis sees a lot of potential for contact lenses that monitor our health. The company says it sees the Google deal as an opportunity to “develop and commercialize” Google’s smart lens technology.

CORRECTION:  The original version of this story misidentified the publication of John Mack. The text has been corrected.

 

Money and love: What would you change about your partner if you could?

Tue, 2014-07-15 06:55

A 2009 study by Jeffrey Dew, faculty fellow at the National Marriage Project and an assistant professor of Family, Consumer, and Human Development at Utah State University, found that couples who argue about money once a week were 30 percent more likely to divorce over time than couples who reported disagreeing about finances just a few times per month.

We're collecting stories and moments that drive you crazy when it comes to your partner and money. Here's a few responses we've received so far:

@lizzieohreally @MarketplaceWknd Daily Starbucks visits (when I bought him an espresso machine for Christmas).

— Melissa (@Muhlyssa_A) July 15, 2014

@lizzieohreally @MarketplaceWknd Bet you'll get this a lot, but too cheap! Example: driving around for 30+ mins to avoid paying for parking

— Daryl Paranada (@darylparanada) July 14, 2014

What could you change financially about your partner if you could? Let us know in the comments or email us.

And if you need more help when it comes to money in your relationships, here are a few stories from our archives:

Marriage and money: Tips before you walk down the aisle
Hiding money from your spouse, for the sake of the marriage
Money & relationships: When you can't just hug it out

Money and love: What could you change if you could?

Tue, 2014-07-15 06:55

A 2009 study by Jeffrey Dew, faculty fellow at the National Marriage Project and an assistant professor of Family, Consumer, and Human Development at Utah State University, found that couples who argue about money once a week were 30 percent more likely to divorce over time than couples who reported disagreeing about finances just a few times per month.

We're collecting stories and moments that drive you crazy when it comes to your partner and money. Here's a few responses we've received so far:

@lizzieohreally @MarketplaceWknd Daily Starbucks visits (when I bought him an espresso machine for Christmas).

— Melissa (@Muhlyssa_A) July 15, 2014

@lizzieohreally @MarketplaceWknd Bet you'll get this a lot, but too cheap! Example: driving around for 30+ mins to avoid paying for parking

— Daryl Paranada (@darylparanada) July 14, 2014

What could you change financially about your partner if you could? Let us know in the comments or email us.

And if you need more help when it comes to money in your relationships, here are a few stories from our archives:

Marriage and money: Tips before you walk down the aisle
Hiding money from your spouse, for the sake of the marriage
Money & relationships: When you can't just hug it out

PODCAST: Home Depot in 3D

Tue, 2014-07-15 03:00

First up, more on Janet Yellen's profile in the New Yorker. Plus, the week-long Farnborough International Airshow is in full swing. We take a look at how the sale of aircrafts is looking this time around. Also, with Home Depot making MakerBot 3-D Printers available in some of its stores, we explore the motivations behind offering the high tech hot item.

 

Hammer, lumber, 3-D printer? Home Depot sells it all

Tue, 2014-07-15 03:00

Starting this week, you can walk into one of twelve Home Depot stores and buy a MakerBot 3-D printer, a desk-top machine that can create small items from melted plastic. They’re heralded as the next big thing in everything from medicine to manufacturing, but this pilot is a step toward mainstream consumers.

Click the audio player above to hear more on the sale of MakerBot 3-d printers at Home Depot.

Here are the numbers behind Home Depot and MakerBot:

$1,375

Home Depot offers two models of MakerBot printers. The smaller printer is $1,375 while the larger model sells for $2,899.

$18

Most refill packs of plastic filament used to create objects cost $18 or $48, depending on their size and color.

$153.8 billion

Home improvement retail stores, like Home Depot, are expected to earn $153.8 billion in revenue in 2014, according to research firm IBISWorld, Inc.  

$1.4 billion

Companies that manufacture 3-D printers are expected to bring in $1.4 billion in revenue in 2014 from products, materials, and maintenance, according to IBISWorld.

18.4%

Stratasys Inc., which acquired MakerBot in 2013, has a 18.4 percent marketshare of the 3-D printing manufacturing industry, according to IBISWorld.

$550 billion

By 2025, the economic impact of 3-D printing could be as high as $550 billion a year, according to research by the McKinsey Global Institute. Moreover, it could save consumers 35-60 percent in costs per printed product. 

Cellphones as logging detectors

Tue, 2014-07-15 02:00

Illegal logging has been a worldwide problem for conservationists, as it is often only possible to tell that logging has occurred once it has already happened. But Topher White, CEO and founder of Rainforest Connection, has an innovative solution: use cellphones to listen for the sounds of trees being cut down.

The hardware consists of a black box with the phone located inside. "Petals” located on the outside of the box act as solar panels, maximizing the brief flashes of light in the rainforest bed. The generated power then goes to microphones attached to the phone, which in turn listens for the sounds of trees being cut.

While it might sound daunting to pick out the exact sounds, it is far from impossible.

“With a chainsaw, they do have an internal combustion engine, which turns at about 110 times per second, so we are able to pick out these spikes that occur at very set frequencies,” Topher says.

The sound is then uploaded — even at the edges, forests do have cell service — to the cloud, where it is analyzed, and sent to local law enforcement.

Topher is currently looking to fund an expansion of the project on Kickstarter.

 

Casinos developers take extra steps to sweeten the pot

Tue, 2014-07-15 02:00

Boston's new deal with a casino developer will bring the city more than $300 million. That may not seem remarkable, save for the fact that the casino wouldn’t even be in Boston. In a bid to coax casinos into new markets, gambling companies are taking an extra step to sweeten the pot.

In Massachusetts, the Mohegan Tribal Gaming Authority wants to build the next of its “Mohegun Sun” casinos in the city of Revere. It’s paying a dozen surrounding cities and towns, too.

“Fifty million dollars in annual payments to 13 [host and surrounding] communities closest to the city is just amazing,” Mohegan Sun CEO Mitchell Etess says. “We’re good neighbors.”

Boston Mayor Marty Walsh calls the negotiation with Mohegan developers long but productive.

“They were great in our case. We were basically throwing things on the table,” Walsh says. “They pushed back a bit on it, but everything that we pretty much wanted we were able to achieve.”

All this cash to help neighboring towns pay for better roads and more police is new. Normally, gambling laws carve out a share of casino profits only for the host city and the state. Case in point: Rosemont, Illinois gets no payments from a casino that’s just over the border in Des Plaines. Cezar Froelich, an attorney specializing in casino gambling law, says the state money is supposed to help neighboring municipalities. But it doesn’t always work out that way.

“Part of the problem is, depending on the state’s finances, sometimes it doesn’t get back to the local jurisdiction, as much as the … surrounding community would like,” Froelich says.

There’s no precedent for such payments, such as Mohegan Sun’s deal last week with Boston, which would give the city $300 million in direct investments over 15 years — the largest pact of its kind in the country. Froelich says a lot of Massachusetts cities and towns got greedy.

“Well, you know, if you’re a community and somebody walks up to you says, ‘Listen, you’re a surrounding community. Let’s talk about how much I owe you.’ You’re not going to set the number real low,” he says. “You know, human nature, get as much as you can, I suppose.”

In western Massachusetts, the town of Longmeadow recently failed to reach a deal with a proposed MGM casino in nearby Springfield, Massachusetts. So town manager Stephen Crane went to arbitration and won. Longmeadow would get nearly $850,000 upfront, and $275,000 per year after that.

“Even though we were not victorious, we thought it was a fair process,” says MGM Springfield President Michael Mathis. “At the end of the day, I think we’re a better proposal for it.”

Crane agrees the law worked pretty well. “It gave us a seat at the table, where otherwise we would not have one,” he says.

The extra cash outflows may actually save casinos in Massachusetts. There’s a referendum here on the November ballot to repeal gambling. Some voters might now see those dollars headed to their towns and might not be so concerned about a casino nearby.

Regardless of whether Massachusetts backtracks on casino gambling, the state may have shown the rest of the country a better way forward. Mohegan CEO Mitchell Etess says the Massachusetts gambling law could be a model for new casino developments around the country.

“I wouldn’t be shocked if you see it, because it takes a lot of concerns off the table,” he says.

Highway spending slowed by gridlock in Congress

Tue, 2014-07-15 02:00

As the House prepares to vote on a temporary measure to keep the Highway Trust Fund solvent, the Obama Administration is touting the economic benefits of infrastructure investment.

Paying for roads and bridges is something President Obama is pushing all week. But sometimes, the local road to funding is faster.

Former Secretary of Transportation Ray LaHood says states are the ones moving boldly to pay for fixes. He points to places like Wyoming, which hiked its gas tax last year.

“The states are not waiting around for the federal government, because the federal government isn’t doing anything,” he says.

“We see this at the ballot box,” says Robert Puentes, a senior fellow at the Brookings Institution’s Metropolitan Policy Program. He says in the last couple years, “about 70 percent of the votes to increase investment on the state and local level passed.”

Puentes says, when it comes to transportation infrastructure, part of the difficulty in Congress is that the federal role isn’t as defined as it was, for example, during the interstate highway era.

“We had a program that was designed to build the interstates, to connect metropolitan areas, to get farmers out of the mud,” he says. “There was a clear understanding of the purpose of the program, there were clear economic connections.”

Without that clarity, he says it may be difficult to get sustained federal investment in the nation’s infrastructure.

 

 

Shlepping bike-share cycles in a giant van

Tue, 2014-07-15 02:00

Urban bike-share programs point to a low-carbon, high-tech urban vision. GPS-enabled bikes dock to solar-powered stations, and riders find them with smartphone apps. However, one of the biggest day-to-day expenses for such systems is a gas-guzzling, low-tech operation: Workers driving big vans, shlepping the bikes where they’re needed. 

One June afternoon, I ride along with Caleb Usry, who has been moving bikes around Chicago since the city's Divvy bike-share program started up, about a year ago.  

"OK," he says, as we buckle our seatbelts. "Let's go where the action is."

We get downtown around 4:30 p.m. "You’re  here at a good time, for doing rush hour," says Caleb. "Monday through Friday, this is basically the same every day— I don’t think this changes as long as the weather is warm."

Our first stop: A docking station in the city’s financial district, to drop a load of bikes.

"People who work in those office buildings," Caleb says, "they’ll come out, they’ll empty ‘em out and take 'em to the train stations. Guys in business suits, they’ll put on their helmets and get over there. You can set your watch to it. Over by the stock exchange, that place will empty out three times between five and six-thirty."

Having dropped more than twenty bikes, Caleb heads to the train station, where bikes come in faster than he can grab them and wedge them, artfully, into the van. He's worked out the optimal number that can be jammed in without making them hard to dig out: "Twenty-five," he says. "Twenty-two back-to-back, and then three up the middle. Yeah, this is a great gig if you have OCD, which I do. I keep telling my bosses: 'Hire guys with obsessive-compulsive disorder— it works out great for everyone involved.'"

Caleb Usry loads a Divvy bike as part of his weekly rounds.

(Dan Weissmann/Marketplace)

Caleb estimates that he’ll touch more than 200 bikes before his shift ends. Mostly, he’ll haul them away from the train station to re-stock hotspots like the financial district.

"But at some point around 8:00, when it slows down, we stop going to pick up at the trains, we let ‘em fill up," he says.  "And the morning guys come in at 6:00 a.m., they do the exact opposite of what you and I are doing right now— they take bikes from the loop back to the train, fill it up."

When Divvy started, the bike-haulers — Divvy calls them rebalancers — conferred from the field by text message to make sure they weren’t all heading to the same spots at once. Now, a dispatcher tracks them from headquarters via GPS, and sends out instructions.

"It’s funny," Caleb says. "Even though we’ve got more stations and more people, the system we’re using now is working better than what we were doing last year."

So, even with 3,000 bikes, the system has only about a half-dozen vans in the field at a time. "With six or seven in the city during the week, we can get by OK," says Caleb. "So we don’t have to worry about the day we’re sitting in traffic like this, and it’s all Divvy vans, I guess is what I’m saying. That would be ultimately ironic, I imagine. Nothing but blue vans in the whole city."

Serendivvity shares Divvy ridership data in the style of a dating site, allowing exploration by romantic interest and neighborhood.

  A sample video of "Sound of Divvy," a web app created by Team Magnani that allows users to watch and listen to all the Divvy rides from three stations on a given day. The action starts about 40 seconds in, at 6 a.m. Play with the full app here.

 

The creators of this graphic calculated that “rebalances”—bikes being schlepped by Divvy staff from station to station—represented about one-fifth of all the trips the bikes made in the program’s first six months.

(Courtesy:Taylor Blackburn and Laura Ettedgui)

 

 

Lindt Chocolate just snapped up Russell Stover

Mon, 2014-07-14 12:30

Russell Stover, maker of the fabled Whitman Sampler, just got bought out by Chocoladefabriken Lindt & Spruengli, a.k.a, Lindt.

The merged company should hit an estimated $1.5 billion in sales per year.

This made me wonder how companies find each other for these sorts of deals. It would be great if they had to write personal ads the way people do. What is the professional equivalent of candlelit dinners and long walks on the beach? What is the corporate translation of a hardworking, athletic non-smoker?

In the audio player above, I imagine how the Russell Stover/Lindt relationship would start off...

Incidently, to help research this article, I purchased a Whitman Sampler and a bag of Lindt truffles from Duane Reade. After doing my necessary background research, I put these both in the communal kitchen. The Lindt truffles are gone and the only chocolate left in the Whitman Sampler is Raspberry Cream (Thank you, chocolate map).

Also, Russell Stover has a chocolate hack available on its web site.

You won't be sorry. The words "butter fudge" appear.

How tough is it to sell steel?

Mon, 2014-07-14 11:33

After much speculation of the South Korean steel case — which found steel tubes are being illegally dumped in the U.S market — the Department of Commerce found unfairly priced imported steel could harm the U.S. market and cost jobs.

Lisa Goldenberg, president of Delaware Steel Company in Pennsylvania says her company is not doing as well as she hoped they would be this time of year, but business is moving along slowly. Job openings are a bit scarce too.

"We have not hired a lot, but I’m always looking for talented salespeople," says Goldenberg. "And that is very difficult in steel."

Being a steel sales person requires a strong sales personality, she says, and a lot of experience in the industry. However, Goldenberg hopes to hire an intern to help bring the company up to speed with new technology.

Goldenberg feels the pressures of a slow economy and says she tries to stay positive for a better 2015.

"We’re going to come out better on the other side, but with some bumps and bruises," says Goldenberg.

Giant African snails seized at Los Angeles airport

Mon, 2014-07-14 11:30

Straight from the wires of the Associated Press; customs inspectors seized a live shipment of 67 giant African snails at Los Angeles International Airport this month.

They took 67 snails with a total weight of 35 pounds. That is more than two pounds apiece. Of snails.

The mollusks apparently arrived from Nigeria.

Experts the AP spoke to say the species of snail is prohibited because, A: ew, but also, B: they pose a serious threat to agriculture, public health and the economy.

Giant African snails seized at Los Angeles airport

Mon, 2014-07-14 11:30

Straight from the wires of the Associated Press; customs inspectors seized a live shipment of 67 giant African snails at Los Angeles International Airport this month.

They took 67 snails with a total weight of 35 pounds. That is more than two pounds apiece. Of snails.

The mollusks apparently arrived from Nigeria.

Experts the AP spoke to say the species of snail is prohibited because, A: ew, but also, B: they pose a serious threat to agriculture, public health and the economy.

When is joining a bull market asking for trouble?

Mon, 2014-07-14 11:04

Wouldn’t it be great if the stock market was just more straightforward? When individual investors wait out an iffy market until stocks seem strong enough to buy, a decline could be imminent. Or, says James Angel, an associate professor of finance at Georgetown’s McDonough School of Business, "since there are still plenty of people still on the sidelines, it could be a sign that the great bull market is going to get even stronger.”

Angel notes that participation in the stock market is still far below where it was five years ago, which means there are still many investors left to start buying stocks again. And he says, figuring out exactly when the market will peak is, at its very easiest, difficult.

"When the market goes up it’ll often overshoot and go above the fair value of the market," he says. "And when the market goes down it’ll overshoot on the way down and often go below the fair value of the market. Calling the turning point is the hardest thing to do."

Scott Wren, senior equity strategist at Wells Fargo Advisers, says a flood of individual investors entering the market can be a sign a bull run is over, but that's not what's happening here.

“Money is starting to move in, but I would not agree – when you read some headlines out there that money is pouring in from retail investors – we’re not seeing that from our clients,” he says.

Wren notes while we may see more volatile trading, there’s only a slim chance of another recession in the next couple of years. He expects the bull market to continue through 2016 – though a little less bullish. Gregory Miller, chief economist with Sun Trust Banks, agrees that the market may continue its course, though tempered slightly.

“Now, the prospect of continued 20 percent annualized returns may be coming to an end,” he says.

If you are looking for a safe place to park your cash, says Miller,  look for stocks that are tied to the economy, like industrials.

The worst thing to do," says James Angel, speaking about potential individual investors who may only now be buying into the stock market,  "is to chase what was hot last year."

If a stock was really hot last year, notes Angel, chances are it’ll have cooled off by now. Instead of looking to the past, he says to focus on the future -- thinking about investment objectives, time horizons and risk tolerance, especially while interest rates are so low. 

"Right now," he says, "we’re in a low-return environment, so making sure you don’t do something stupid is the most important thing. "

 

Payback time for student-loan scams?

Mon, 2014-07-14 11:00

Here’s a handful of student loan numbers for you. According to the Consumer Financial Protection Bureau, current student loan debt is nearing $1.2 trillion. An estimated 7 million borrowers are now in default; behind on $100 billion in debt.

All of which adds up to a juicy market for companies looking to cash in on people with student debt troubles.

Today, Illinois Attorney General Lisa Madigan filed suit against two student-loan debt-settlement companies.  The suits allege that Broadsword Student Advantage and First American Tax Defense tricked borrowers into paying upfront fees for student loan help the companies didn’t provide.

According to one of the filings, First American Tax Defense promised enrollment in a fake “Obama Forgiveness Program.”

Madigan said these companies run ads that entice people excited to call, “and what they really find out is that these are scam artists [who] want their money.”

In a 2013 report, the National Consumer Law Center found that  “a new ‘student loan debt relief’ industry has sprung up in response to the demand for borrower assistance and the dearth of reliable resources.” 

“There’s a lot of debt, it’s very confusing,” said NCLC attorney Persis Yu. “I think some borrowers are desperate and they are turning to places that look like they might be an easy fix.” 

She says many of these debt-settlement companies mischaracterize government programs as their own.

They charge borrowers as much as $1600 for services, like debt consolidation, that are available from the government for nothing.

“What’s making this possible is a lack of awareness of repayment options,” said Mark Kantrowitz, student financial aid expert from Edvisors.com.

He says the government should run an ad campaign of its own, so students with debt know what help is available for free.

If you are struggling to pay back your federal student loans, here are your options:

  • Direct consolidation: If you have multiple federal student loans you can consolidate them into one payment and extend the life of the loan to 30 years to lower monthly payments. 
  • Extended repayment: Borrowers with more than $30,000 in debt can extend the repayment period from the standard 10 years up to 25.
  • Graduated repayment: Borrowers who choose extended repayment can also set up monthly payments that start low and grow every two years.
  • Income-based repayment: Your monthly payment is pegged to your income and can be adjusted annually to account for income fluctuations. The term of the loan can also be modified to go beyond 10 years.
  • Income contingent repayment: Your payment based on your monthly income and any outstanding debt is cancelled after 25 years.
  • Pay-as-you-earn: For borrowers who took out loans after 2007 and have a family or financial hardship. This income-based plan offers the lowest monthly payment options of any income-based plan.
  •  
  • Source: Office of Federal Student Aid

 

How to spot a scam:

  • High-pressure sales tactics, like suggesting your interest rates are about to skyrocket, without debt consolidation.
  • Charging fees before debts are settled
  • Touting a "new government program" or suggesting they have special access to government programs
  • Claiming to represent the Department of Education or other government agency
  • Offers of discounted pay-back rates, gifts or special incentives
  • The hard sell, plain and simple

Source: Department of Education and Federal Trade Commission
 

 Correction: The previous version of this story misidentified Mark Kantrowitz as Mike Kantrowitz. Marketplace regrets the error.

Why HealthCare.gov is going to get a CEO

Mon, 2014-07-14 10:55

File this under one of the toughest jobs in America.

The federal Department of Health and Human Services (HHS) is beating the bushes for a CEO of HealthCare.gov, the site that became a punch line on late night TV last fall.

The Obama Administration wants to make sure the funny guys get material from somewhere else. New HHS Secretary Sylvia Burwell hopes appointing a CEO to oversee the operation will make the jokes go away.

The first thing the CEO must understand? That HealthCare.gov is an online store that exists to sell a product, and that product isn’t exactly a "hot ticket."

Health insurance is “a grudge buy,” says Jon Kingsdale, the first executive director of the Massachusetts exchange, known as the Massachusetts Health Connector.

“Nobody likes to go down to their corner broker’s office on a Saturday morning, like they do a car dealer, and smell the print on the new 150 page explanation of benefits, [or] see how fast they can get it from $0 to $60,000 in claims.”

Of course the federal government’s “glitchy” website only made it harder for consumers to kick the tires on those insurance policies.

As last year’s fiasco proved, running a public exchange – which covers two-thirds of the states - is uncharted territory for Washington.

Kingsdale says it’s a more entrepreneurial enterprise than most anything else the government does.

“I used to shock my very liberal, left-leaning board of directors by reminding them if you want to talk about enrollment and getting people covered, you are basically talking about marketing and sales,” he says.

By announcing plans to hire a CEO, many think HHS Secretary Sylvia Burwell understands this operation requires a business approach, with business savvy.

The new executive will work with state exchanges, consumers and insures.

Former White House advisor Kavita Patel says if HHS is going to call this person a CEO, Burwell must give the person the power of a CEO.

"As we saw with the rollout, people didn’t have the resources or authority to make the decisions they needed, and in the end, we suffered for it,” she says.

While Patel likes the idea of these management changes, it’s easy to see how the CEO could get buried in the federal government maze. 

He or she will run what’s called the Center for Consumer Information and Insurance Oversight - a bureau within the Centers for Medicare and Medicaid, a division of HHS.

“Imagine taking a new start-up organization and putting it inside IBM. Something with 20,000 divisions, 200 senior vice presidents,” says Patel.

In a statement last month, Burwell said the CEO will have a “dotted line” straight to her.

In other words, this new management structure is supposed to help Burwell stay in the loop – poised to move if calamity strikes.

Leadership - though - is just one challenge facing the feds as we approach HealthCare.gov 2.0.

“Let’s say you are Aetna, Cigna, United, Blue Cross - they are in the middle of doing incredibly complicated bids right now for 2015, with lots and lots of open questions,” says Tom Scully, former CMS Administrator under George W. Bush.

Scully says the CEO must understand what it’s like to develop new insurance policies, and how to get consumers to buy them. Someone, he says, who knows the industry inside and out: “You are probably going to know when someone is coming crying screaming at you, or whether they are crying wolf, or have a real problem.”

Kingsdale, the former head of the Massachusetts exchange says here’s the thing: HealthCare.gov is here to stay.

He says that means the federal government must do things like "enhance the consumer experience", and hold insurers' hands - or keep their feet to the fire.

“As the exchange matures from the start-up to this more commercial, entrepreneurial phase, this is a chance for the Obama Administration to show that the government can learn from the private sector,” he says.

Kingsdale says the more HHS accepts that it’s running a unique online store, serving as middleman to frequently overwhelmed shoppers and frequently frustrated insurers, the more people get insurance.

Which, he says, is the whole point. 

PM – ACA CEO                                  7/10/14                                                GORENSTEIN

Host Lede: File this under…one of the toughest jobs in America.

The federal Department of Health and Human Services is beating the bushes for a CEO of healthcare.gov, the site we all know that became a punch line on late night T.V. last fall.

TAPE: Joke from Colbert Report

The Obama Administration wants to make sure the funny guys get material from somewhere else.

New HHS Secretary Sylvia Burwell hopes a CEO to oversee the operation will make the jokes go away.

From the Health Desk at WHYY, Marketplace’s Dan Gorenstein has the story.

DG: When you think about it…healthcare.gov…is an online store that exists to sell health insurance.

Kingsdale: It’s a grudge buy.

DG: Jon Kingsdale was the first guy to run the Massachusetts exchange – the Connector.

Kingsdale: 2:40 nobody likes to go down to their corner broker’s office on a Saturday morning like they do a car dealer and smell the print on the new 150 page explanation of benefits.

DG:  Of course the federal government’s “glitchy” website only made it harder for consumers to kick the tires on those insurance policies.

As last year’s fiasco proved; running a public exchange – which covers two-thirds of the states - is uncharted territory for Washington.

Kingsdale says - really - it’s a more entrepreneurial enterprise than most anything else the government does.

Kingsdale: 3:33 …I used to shock my very liberal, left-leaning board of directors by reminding them if you want to talk about enrollment and getting people covered…you are basically talking about marketing and sales.

DG: By announcing plans to hire a CEO, many think HHS Secretary Sylvia Burwell understands this operation requires a business approach, with business savvy.

Which makes sense since this person will work with state exchanges, consumers and insures.

Former White House advisor Kavita Patel says if we’re going to call this person a CEO though, we’ve got to give them the power of a CEO.

Patel: 4:36…as we saw with the rollout, people didn’t have the resources or authority to make the decisions they needed and in the end we suffered for it.

DG: While Patel likes the idea of these management changes, it’s easy to see how the CEO could get buried in the federal government maze.

Not to get too deep in bureaucratic mumbo-jumbo, but this CEO will run what’s called the Center for Consumer Information and Insurance Oversight…a bureau within the Centers for Medicare and Medicaid…a division of HHS.

Patel: :14… imagine taking a new start-up organization and putting it inside IBM. Something with 20,000 division with 200 senior vice presidents.

DG: In a statement last month, Burwell said the CEO will have a “dotted line” straight to her.

In other words, this new management structure is supposed to help Burwell stay in the loop – poised to move if calamity strikes. (flat)

Leadership - though - is just one challenge facing the feds as we approach healthcare.gov 2.0.

Scully: 14:56 let’s say you are Aetna, Cigna, United, Blue Cross, they are in the middle of doing incredibly complicated bids for 2015 right now, with lots and lots of open questions.

DG: Tom Scully was a top HHS official under George W. Bush.

Scully says the next CEO must understand what it’s like to develop new insurance policies – and how to get consumers to buy them.

Someone, he says, who knows the industry inside and out.

Scully: 8:06… you are probably going to know when someone is coming crying screaming at you or whether they are crying wolf, or have a real problem.

DG: Jon Kingsdale – the former head of the Massachusetts exchange – says here’s the thing; healthcare.gov is here to stay.

He says that means the federal government must do things like ‘enhance the consumer experience’ and hold insurers hands…or keep their feet to the fire.

Kingsdale: 6:!2… As the exchange matures… from the start-up to this more commercial, entrepreneurial phase, this is a chance for the Obama Administration to show that the government can learn from the private sector.

DG: Kingsdale says the more HHS accepts that it’s running a unique online store…and has a role as middleman to frequently overwhelmed shoppers and frequently frustrated insurers…the more people get insurance.

Which, he says, is the point.

I’m DG for Marketplace.

eBay and Sotheby's join forces again

Mon, 2014-07-14 09:00

eBay and Sotheby’s want you to buy more high-end stuff (from them, of course). So, they're marrying Sotheby’s cache and eBay’s technological know-how.

eBay is creating a new marketplace where it will stream some of Sotheby’s New York auctions, so customers can bid online. The idea is to reach new, younger consumers, who'd never go to an auction.

“You’ve got millennials who are starting to make  some money, and they’ve grown up around this technology, and would find it silly to go somewhere to do something like this,” says Paula Rosenblum, a managing partner with RSR Research.

Sotheby’s can just piggy back on eBay’s existing technology, the question is: What’s in it for eBay? 

“There’s never any harm from having a venerable brand like Sotheby’s sprinkle some of its pixie dust, hopefully, onto eBay,” says Sucharita Mulpuru, a retail analyst with Forrester Research.

Mulpuru says eBay wants to attract more affluent consumers to its site. But they won’t be able to use PayPal for their new paintings and purses - at least not right away.  

 The two companies tried a partnership a dozen years ago, but it didn’t work. They're hoping this time will be different.

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