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Happy 5th anniversary, bull market?

Wed, 2014-01-22 13:00

The fifth anniversary of the bull market is right around the corner. The Dow Jones Industrial average is worth nearly triple what it was at its lowest point (that's 6,447 in March 2009).

Of course, the fifth anniversary of the bull run comes amid lots of talk about a market correction on the horizon. For a true correction to happen, the stock market has to drop at least 10%. That would mean the Dow Jones Industrial Average would have to fall 1,600 points (ouch).

Turns out, we're due for a fall. "The S&P 500 has averaged a correction every 18 months, and currently we haven’t had one since 2011. So we’re about 28 months overdue," says Alec Young, global equity strategist with S&P Capital IQ. 

"The rally is long in the tooth, but it is also a unique circumstance on a lot of levels," says Max Wolff, chief economist at ZT Wealth. Even so, Wolff still expects a correction. He says unemployment is high, economic growth has been slow, and then there’s the Federal Reserve: It's been pumping billions into our economy every month for years, and it’s hard to know what will happen as the Fed slows down the stimulus.

"We’re about to see, over the next six months, how much of the market’s rally was Fed policy, and how much of the market’s rally was the economy," says Wolff. "That makes everybody nervous and it should."

But a correction would probably not turn into a crash, says Gary Thayer, Chief Macro Strategist with Wells Fargo Advisors. He says corporate earnings are strong and most companies’ stock is not overvalued if you look at how much they’re taking in.  

"So, we’re expecting it would just be a temporary pullback in the market, not a reversal in the trend."

 So, even if the market’s bull run is over, we don’t necessarily have to brace for the bears.

Hey, what a great idea! Chocolate peanut butter cups!

Wed, 2014-01-22 10:30

Coming to a candy store near you – the battle of the chocolate peanut butter cups. Nestle has come out with a new peanut butter cup called Butterfinger Cups, based on the famously crispy-crunchy Butterfinger bar. It takes some chutzpah to challenge an iconic brand like Reese’s, which pretty much owns the peanut butter cup category. (People in the candy business assure us there is such a thing).

Nestle's already attracting attention for its new product by putting out some racy online "teaser ads" leading up to a 30-second spot during the Super Bowl. One features "Mr. and Mrs. Buttercup" – aka Peanut Butter and Chocolate – seeking couples therapy to spice things up a bit. "Don’t you think it'd be nice to try something new?" Mrs. Buttercup asks Mr. Buttercup while they wait for an "Edible Couples Counseling" session. Heavy breathing and the phrase "hurt me" follow, leading some critics to label that particular marketing effort as "raunchy."

A tamer ad is expected during the Super Bowl.Robert Passikoff, founder of Brand Keys, says Nestle is subtly setting up a taste-off with ads that imply a peanut butter cup could be made better. So consumers will either say, "'No it isn’t, but I have to try it to be able to say no it isn’t.' Or people are going to say, "'Wow, it’s something different,'" says Passikoff.

Georgetown marketing professor Ron Goodstein, for one, tastes trouble ahead for Butterfinger. He says it’s like the time Burger King tried to out-French fry McDonald’s.

"Everybody who walked into Burger King to try them had decided they weren't going to like them before they ever tasted it," says Goodstein. "Because the one thing you cannot screw with, with McDonald's, is their French fries."

Marketing expert Jonathan Salem Baskin suggests Nestle's move may be more about corporate strategy than selling tasty morsels of peanut butter and chocolate. "Could this in fact be something from a corporate level and in fact, what Nestle is trying to do is get Hershey’s to spend more money protecting its turf, or its peanut butter cups, which then takes away resources and attention from the categories in which Nestle wants to compete and gain market share?"

But Butterfinger brand manager Jeremy Vandervoet says it’s "almost the opposite... Reese’s is the number one brand in the category, and they are going to do just fine. And I think together we will all sell more chocolate and peanut butter cups," he says.

The new product certainly attracts more attention to that tasty combination. Vandervoet says peanut butter is the most popular flavor to add to milk chocolate and Nestle sees room for growth in the category. He says consumers already use Butterfinger bars in a variety of ways, like crumbling them up and using them as a vanilla ice cream topping: "So it got us thinking, wow, what could we do beyond our traditional candy bar, with Butterfinger?"

And that got us thinking about other food turf wars... remember these?

  • Hershey’s Swoops, a.k.a. Hershey’s trying to get in on the Pringles market.
  • Bit O’Honey's Bit O'Licorice, trying to get in on... the black licorice market?
  • Reese’s Pieces with peanuts… like Peanut M&Ms but… Reese's.
  • Jell-O's salad gelatin. Presented without comment:


Jell-o once ventured into the green salad industry. Apparently, it didn't go so well.

Kraft

UPDATE: 

Jason Liebig of CollectingCandy.com wrote in with some additions to the list:

None exist today. The cutthroat candy market: Not so sweet on knock-offs?

PODCAST: Optimism at Davos

Wed, 2014-01-22 08:34

The World Economic Forum, the winter gathering of the powerful, kicks off today in the Alpine town of Davos, Switzerland. A Bloomberg survey finds that 59 percent of international investors think the global economy's improving. That's the highest level of optimism in five years, and the mood is up strikingly from the previous survey in November.

College courses with a 95 percent dropout rate would trigger alarm bells at most universities, but researchers at Harvard University and MIT says that’s potentially fine, at least in the case of some massive open online courses, or MOOCs.

A recent study shows one in 10 job applicants have been rejected because something turned up in their credit history. And last month Senator Elizabeth Warren introduced a bill that would, among other things, bar the use of credit reports in hiring. 

New report shows few finish free online courses

Wed, 2014-01-22 08:15

College courses with a 95 percent dropout rate would trigger alarm bells at most universities, but researchers at Harvard University and MIT says that’s potentially fine, at least in the case of some massive open online courses, or MOOCs.

In a new report from Harvard and MIT faculty involved with the online learning programs there, researchers find that only about 5 percent of the more than 800,000 people signed up for the free courses through the online platform edX actually finished enough coursework to obtain a completion certificate. Of those who didn’t finish, some lost interest shortly after signing. Others just sampled bits and pieces of classes and activities. But the faculty members say that’s not necessarily discouraging.

“The instructors welcome these kinds of curious browsers,” says Andrew Ho, a Harvard education professor who co-authored the paper on online learning.

The findings won’t please online learning’s skeptics, though, as a core criticism of distance learning is that it doesn’t adequately engage students.

There’s also the question of how to monetize online courses.

“It brings a completely new approach to teaching,” says MIT professor Isaac Chuang, another co-author of the paper. “It’s a different economy.”

That creates challenges both for non-profits like edX, but also for-profit universities. Big public companies and private equity firms back many of the for-profit colleges. They see online courses as a way to bring in more students and more money.

Online learning is growing. As more people get comfortable with the technology, we’ll see more digital courses, from universities in the non-profit and for-profit world.

Mark Garrison: The research shows more than 800-thousand people signed up for these free courses through the online platform edX. But only about 5 percent actually finished the classes. The Harvard and MIT faculty involved say that may not be a problem online. Harvard education professor Andrew Ho says their findings show many just sampled the classes.

Andrew Ho: The instructors welcome these kinds of curious browsers.

That won’t please online learning skeptics, who worry online classes don’t engage students enough. There’s also the question of how to pay for the cost of offering these classes. MIT researcher Isaac Chuang.

Isaac Chuang: It brings a completely new approach to teaching. It’s a different economy.

And that creates challenges both for non-profits like edX, as well as for-profit universities. Big public companies and private equity firms back many for-profit colleges. And they seeonline courses as a way to bring in more students and more money. As more people get comfortable with the technology, we’ll see more digital courses, from universities in the non-profit and for-profit world. I’m Mark Garrison, for Marketplace.

The Netflix 'State of the Union'

Wed, 2014-01-22 07:43

Video streaming company Netflix announces earnings today. The expectations are high among investors. But the company has challenges, like growing the brand abroad. Molly Wood, the new deputy technology editor for The New York Times, and Marketplace Tech host Ben Johnson assess the Netflix "State of the Union."

When your bad credit keeps you from getting a job

Wed, 2014-01-22 06:59

In the science fiction movie "Gattaca," society turns on everyone's genetics test. But here in the real world in 2014, it seems the fulcrum of all things may be your credit score. You expect the bank to look before lending you money, but what about credit checks when you go up for a new job? 

A recent study shows one in 10 job applicants have been rejected because something turned up in their credit history. And last month Senator Elizabeth Warren introduced a bill that would, among other things, bar the use of credit reports in hiring. 

“What they are they trying to do is filter, so they are using a credit score to determine if you’re someone who is a risky hire,”Carmen Wong Ulrich, a personal finance expert and host of Marketplace Money, says of the hiring practice. “But it doesn’t necessarily go together that if you have a bad credit score, that you are going to be a bad employee.”

But today, people’s credit reports are a mess for a few reasons, Carmen says.

“Long-term unemployment, foreclosures on a home, or medical debt -- which is the number one reason people declare bankruptcy -- are not going to make you a bad employee,” she says.

To hear more about how people’s credit scores can keep them unemployed, click on the audio above.

 

Who says liberal arts majors can't make a good living?

Wed, 2014-01-22 06:48

A new study from the Association of American Colleges and Universities says liberal arts majors eventually close the earnings gap with workers who chose a “professional” major like accounting. Who knew? Given all the focus and support for STEM education, do the liberal arts need a campaign to fill prospective students and parents in on the facts? 

"You are destined to a life of waiting tables." That’s the kind of stereotype the Council of Independent Colleges is trying to fight about the liberal arts -- with its Twitter username Libby and Art. (Get it?) 

Georgia Nugent, president emeritus of Kenyon College and senior fellow at the Council of Independent Colleges, says the Twitter account was created as a part of a public information campaign.

“We really felt that we needed to speak out. Because so much, what I call 'dis-information' is being circulated to the public,” she said. "Like philosophy and poetry majors you will never earn as much as someone who studies accounting, or nursing." 

Michael Zimmerman, provost at Evergreen State College and chair of the Washington Consortium for Liberal Arts, says the relationship between the liberal arts and STEM is often misunderstood. 

“STEM disciplines are in fact a part of the liberal arts -- they are not apart from the liberal arts. The liberal arts are not liberal, and liberal meaning broad and covering the breadth of human knowledge, if we exclude STEM from them,” he says. 

Debra Humphries, vice president for policy and public engagement at the Association of American Colleges and Universities, and a co-author of the study, notes that at their peak earnings ages, liberal arts majors bring home larger paychecks than professional majors.

So you can major in engineering, but if you also have the breadth and of knowledge and skill that a liberal arts degree provides you, going to be an even more valuable engineer.”

Is our culture too obsessed with the tastes of the mega rich?

Wed, 2014-01-22 05:27

"The jewelry in this show would make Liberace think it's a little tacky," says art critic Blake Gopnik. "We're talking butterflies covered in gems, roses covered in gems -- anything you can think of covered in gems."

The show Gopnik is describing so disdainfully is Jewels by JAR, the Metropolitan Museum of Art in New York's exhibition of 400 pieces by the Paris based jeweler Joel A. Rosenthal. But Gopnik's issue with the JAR show is much bigger than the fact the jewels aren't to his personal taste.

"What really gets me about this, I guess, is I think it reflects a profound change in our culture," Gopnik says. "And that is the dominance of an entire society, economy, and culture by the 0.1 percent."

Gopnik, who describes himself as "one of the few critics in this country -- maybe the world -- who cares deeply about contemporary jewelry," insists JAR has never been taken seriously by the art establishment. So why is one of the most renowned art museums in the world suddenly giving him his due? Gopnik says it comes down to the fact that wealthy people buy JAR's jewelry, and at this moment in American society, the wealthy are casting their tastes across the rest of culture.

"What worries me is we have sort of all bought into the notion that money itself is what matters in the culture," Gopnik says. "And for the Met to have bought into that too worries me a whole lot."

Of course, the exhibition halls of museums around the world are filled with works that were initially commissions by wealthy patrons. But Gopnik says the difference now is that the rich are trying to make the walls of the museum reflect their 0.1 percent taste.

"It used to be that lucre was a little bit filthy, so the reason rich people got involved with museums was kind of money laundering. They could clean up their reputation by caring about things that were above money, things like great art. And in this case, what we have happening is that rich people are taking the things they already care about and installing them in museums. There's no laundering going on here because lucre ain't filthy anymore."

A bright new day at the World Economic Forum

Wed, 2014-01-22 05:15

The World Economic Forum, the winter gathering of the powerful, kicks off today in the Alpine town of Davos, Switzerland. Japanese Prime Minister Shinzo Abe will give the keynote address later today. Japan has been in the midst of what appears to be a dramatic economic turnaround since Abe took office. And Japan isn't the only economy on the mend, says BBC business reporter Anthony Reuben from Davos.

"It's a very sunny morning here in Davos, and a lot of people are seeing that as a reflection of the way the economy is going," Reuben says. "It was a much gloomier economic forum this time last year. A lot of people are coming in and saying, 'Actually, we're seeing a bit of a recovery now.'"

To find out more about this year's World Economic Forum, click the audio player above to listen to the interview.

 

The elements: Carbon's all around

Tue, 2014-01-21 15:33

In the latest of their ongoing talks about the elements, Kai and the BBC’s Justin Rowlatt discuss carbon – what it is, what it bonds with, and how it’s commoditized.  Justin mulls on the limited success of carbon dioxide emission pricing in Europe.

He and Kai also discuss carbon dioxide, which some say is to blame for global warming. They say its ability to absorb infrared radiation adversely affects the earth’s ozone layer, even though it's present in relatively small quantities. 

Justin ponders the effect of the discovery of carbon’s energy-storing properties on global growth which, since the Industrial Revolution have been dramatic. 

Why I'm saying goodbye to the NFL

Tue, 2014-01-21 13:58

I fell in love on a Monday night.

Now, many might say that a teenage girl can't know about such things. But that night, as I watched the Dallas Cowboys running back Tony Dorsett roll downfield 99 yards for a touchdown, I fell head-over-heels in love with the NFL.

It was January 3, 1983. Dallas vs. Minnesota. Tony Dorsett was so free, so graceful, and so powerful to me. And watching him break free of his competitors, those who wanted to bring him down and stop him from reaching his goal, I was in awe. And I knew then that his run capsulized all that I wanted to accomplish in my life.

That football game is one of my most cherished childhood memories. I have been a passionate NFL fan since that moment -- though I switch my loyalties to the Philadelphia Eagles, my hometown team. I ended up spending much of my career in sports journalism, a dream job if ever there was one.

But after 30 years, my love and respect for the game is fading. And I'm seriously considering giving up football completely.

I've come to this pass because of the NFL's concussion crisis.

The NFL has consistently has denied any connection. But many of the men who play the game feel differently.

When I watch the games today, the awe is gone. And I thank God that my son never wanted to play football, that it was basketball that stole his heart.

Today, instead of telling kids how football inspired me to go after what I want in life, I advise them and their parents to avoid the game at all costs. It's not safe at any level.

I've worked with former NFLers who suffer blackouts in midsentence, after being diagnosed with numerous concussions over their careers. And many of us knew Junior Seau and other football players who have taken their own lives. And too many of us in the sports industry stood by and watched yesterday's heroes implode, or fall into depression in retirement.

If my beloved NFL continues to lie and deny while men and boys are suffering and dying, well, then it's time for this fan to say good-bye.

Why it's hard to charge $40 for a pork chop

Tue, 2014-01-21 12:26

I'm in a high-brow part of New York at a high brow restaurant and I'm about to eat... a brow. "This is pig's head. Enjoy," laughs Nick Anderer, executive chef at Maialino restaurant in New York's Grammercy Park neighborhood. Actually, it's half a pig's head, brined, deep fried and served on a salad. Teeth and all.

Crispy Suckling Pig Face has become one of most popular dishes at Maialino ('suckling pig' in Italian). Pig face's popularity surprised Anderer. "I was completely surprised," says Anderer. "I never thought that a dish of a pig's face on a plate would sell as much as this one does."

Part of the push to use more pig parts has to do with pork prices, which hit a 30 year high last year.

"When corn goes up, everything goes with it," explains Steve Meyer, president of Paragon Economics, an agriculture market consulting firm. Meyer says pigs eat a lot of corn and corn prices have been at record highs. They've dropped a lot recently, so pork prices were poised to plunge, but now a deadly illness from China is hitting pig populations in the US. "Now we're facing some supply challenges caused by a viral disease in baby pigs that might keep them high as we go through this next year as well," says Meyer.

While the supply of pigs might be shrinking, demand for pork has been flying high. "Bacon has been a very big food trend," says brand consultant Debra Kaye, author of Red Thread Thinking. Kaye says our cultural tastes have evolved and we are embracing bacon like never before. "We started to see that sweet, smoky, salty could go together... and what is better salty and smoky than bacon? And that's where it really started to take off."

Case in point: bacon donuts, bacon cocktails, bacon chocolates, bacon-flavored vodka, bacon ice cream, bacon lip balm...

All this new demand + low supply = the price of pork goes up...

Econ 101, right?

Maialino chef, Nick Anderer says it's not quite that simple. "Yes, pork prices spiked," says Anderer. "But we made no price hikes in our dishes because we just didn't feel like the perceived value would be there. Ultimately, pork is a comfort food for me and once you start charging luxury prices for it, it starts taking it into a realm that I don't feel comfortable with."

Restaurants can get away with big mark-ups for beef. Here in New York a fancy restaurant can charge $40 for a ribeye, but pork is kind of the people's meat. It's hard to charge $40 for a pork chop. Restaurants can't *not offer pork, because we're a nation obsessed with bacon.

Faced with this pork pricing puzzle, Anderer's done two things. The first is stretching the pork: "It's such a great seasoning agent that it doesn't need to be the main focus of a dish," says Anderer. "It can just be a few ounces of torn meat with the malfatti pasta and arugula and you've got yourself a great dish."

The other solution is to use more parts of the pig. "We sell a lot more weird pork dishes now than we did before," says Anderer, including charred pig hearts, pig liver crostini, crispy pork skin served with vinegar and, of course, pig face.

Brand consultant Debra Kaye says our deep love of bacon is pushing us to boldly brave new frontiers of pork eating. She agreed to try Anderer's famous pig's face. He offered her the ear, which he says he usually eats first.

"That is so good, oh my god," says Kaye. "The thing I give Figaro, my dog, for dessert every night is a pig's ear. I don't think I want to give it to him anymore they're so good."

The pork puzzle for people may be solved for this year, but the pork puzzle for dogs may be just beginning.

Bernanke's probably thinking about a think tank

Tue, 2014-01-21 12:16

Think tanks have become more and more prominent in Washington.   They’re attracting big money -- and big names.  There's speculation that Fed Chairman Ben Bernanke could end up at a think tank.  

According to tax filings, the top five richest think tanks in the US have more than $1.5 billion in assets.  That’s about the GDP of Liberia.

“Let’s face it.  There’s a lot of money at stake here,” says Peter Metzger, vice chairman of CT Partners in Washington and a a think tank headhunter. 

Metzger says even if you’re not a famous Washington wonk like Ben Bernanke, think tanks pay very well.

“Some in the neighborhood of three-quarters of a million to a million dollars or more depending upon their experience and what they can bring to the effort," he says.

But what do the big names do for a think tank?  Why are they so prized? 

The best known wonks are big moneymakers. They might make an appearance at a fundraiser.  If they make a speech, the think tank can charge admission.  

James McGann, who runs the Think Tanks and Civil Societies Program at the University of Pennsylvania, says sometimes just having a really big name on a think tank’s letterhead is enough to get donations  flowing. 

He says, “Those that have a strong brand, which is connected to the rigor of their research, are key.”

Think tank donors include foundations, interest groups, and, increasingly, corporations -- which see the influence of think tanks as a way to pierce Washington gridlock.  Some think tanks have even set up separate arms that can lobby Congress, according to Jack Pitney, who teaches political science at Claremont McKenna College. 

“A lot of the organizations are really conglomerates of different kinds of groups depending on what kind of contributions they’re trying to draw," he says.

But Pitney says, for all the money involved, think tanks aren’t trying to make a profit. They're more interested in the real currency of Washington: power and influence.  

If only we had technology to limit credit card fraud... Oh, wait...

Tue, 2014-01-21 12:16

IT’S JUST TOO BAD

There was TargetNieman MarcusCitiBank.  Between 2012 and 2013, the number of data breaches involving credit or debit card information increased by 41.2%

It’s really too bad there isn’t some way to use modern technology to dramatically reduce credit card fraud. 

Oh.

Wait.

There is. 

And has been. 

FOR ALMOST A DECADE.

CHIP & PIN

It’s called Chip & Pin technology, also known as EMV, it’s a little cryptographic chip embedded in the card, and unlike those magnetic stripes, it doesn't just hold all your info unencrypted for every Tom, Dick, and Harry with a card reader or hacking skills to copy or scan or download.  And there's the added protection of a PIN.

 “The types of breaches we’ve seen recently would’ve been prevented by the use of this chip and pin technology,” says Chester Wisniewski, senior security advisor with Sophos. “It makes it much harder for thieves, and it’s had widespread use in Europe and everywhere else.”

UM, WE INVENTED THE CREDIT CARD.  WHY DON’T WE HAVE THAT TECHNOLOGY HERE?

There are a few reasons. 

COST 

“One of the big obstacles is the expense,” according to Bill Hardekopf with Lowcards.com, a consumer resource website.  “Retailers would have to get a different credit card processor, probably about a $200 expense per terminal for each checkout lane.”    

Doable for large retailers, less so for small businesses, expensive for everyone.  Card issuers and banks would have to pay to make the more expensive cards too.  Small retailers, according to Wisniewski and other analysts, have been particularly resistant.   Businesses would be laying out money for the benefit of banks, in a sense, since it’s the banks which are often liable for fraudulent purchases.

But that doesn’t explain why we’re behind the rest of the world.  

WE DIDN'T NEED THIS KIND OF TECHNOLOGY BACK IN THE DAY

“There wasn’t really the same demand to address fraud in the United States as there was in other parts of the world,” says Andrew Davidson, senior vice president at Mintel. “Fraud wasn’t as big of a deal as it was in say Europe.”

Old tools used to be enough to deal with the fraud problem.  “Previously,” says Doug Jones, vice president of risk management policy the American Bankers Association, “we were able to depend on our neural networks that looked for unusual transactions.”  It seemed to work, “it didn’t create a difference in terms of the amount of fraud we saw compared to what was seen in other countries.”

Until, of course, it did. 

As other countries have adopted more secure credit card technology, the U.S. has become the fraud basket case.

NOBODY MADE US ADOPT IT. SO WE DIDN’T.

Some governments forced adoption of Chip & Pin, ours didn’t.

“We don’t tend to legislate these requirements,” says Jones.  “That serves our economy well in the long run but in this particular instance it did slow down the process.”   

You’re talking about the largest economy in the world and a large number of financial institutions and retailers that have to make this shift.  A little like herding cats. 

GOOD NEWS! WE’RE GETTING NEW CARDS. SOON. PROBABLY.

“Now is the time that the U.S. should upgrade to chip technology,” says Mastercard’s Senior Vice President for U.S. Product Delivery, Carolyn Balfany. 

Mastercard has been pushing the new technology in the U.S. for several years, and in 2012 issued a “roadmap” for the country to migrate. 

Many credit card companies have started to issue the new cards, in small batches.  “They’ve started with international travelers,” says Balfany, since it can be inconvenient to use the U.S. backwards cards abroad.  “But they’re rolling that out more broadly.” 

On the merchant side, some larger retailers are already installing new cardreaders.  “They’ve been in the process of beginning that for some time now and will continue on over the next couple of years.”

One tool to push the process along is a “liability shift” which will start taking place in October, 2015 for Mastercard, a year later for Visa.  Usually, a bank has to cover a bogus purchase.  But starting in October  2015, a retailer will have to suck it up if it hasn’t changed its card reader. 

“Many of the larger retailers and banks have come out in industry conferences expressing their intent to migrate around that October 2015 time frame,” says Balfany.  “I think we’re gonna see some really good movement.”

Why Bernanke would want a think tank - and why a think tank would want Bernanke

Tue, 2014-01-21 12:16

Think tanks have become more and more prominent in Washington.   They’re attracting big money -- and big names.  There's speculation that Fed Chairman Ben Bernanke could end up at a think tank.  

According to tax filings, the top five richest think tanks in the US have more than $1.5 billion in assets.  That’s about the GDP of Liberia.

“Let’s face it.  There’s a lot of money at stake here,” says Peter Metzger, vice chairman of CT Partners in Washington and a a think tank headhunter. 

Metzger says even if you’re not a famous Washington wonk like Ben Bernanke, think tanks pay very well.

“Some in the neighborhood of three-quarters of a million to a million dollars or more depending upon their experience and what they can bring to the effort," he says.

But what do the big names do for a think tank?  Why are they so prized? 

The best known wonks are big moneymakers. They might make an appearance at a fundraiser.  If they make a speech, the think tank can charge admission.  

James McGann, who runs the Think Tanks and Civil Societies Program at the University of Pennsylvania, says sometimes just having a really big name on a think tank’s letterhead is enough to get donations  flowing. 

He says, “Those that have a strong brand, which is connected to the rigor of their research, are key.”

Think tank donors include foundations, interest groups, and, increasingly, corporations -- which see the influence of think tanks as a way to pierce Washington gridlock.  Some think tanks have even set up separate arms that can lobby Congress, according to Jack Pitney, who teaches political science at Claremont McKenna College. 

“A lot of the organizations are really conglomerates of different kinds of groups depending on what kind of contributions they’re trying to draw," he says.

But Pitney says, for all the money involved, think tanks aren’t trying to make a profit. They're more interested in the real currency of Washington: power and influence.  

Rising demand for oil: 'Growth is easy when you've been in the pits'

Tue, 2014-01-21 12:16

The International Energy Agency tracks which countries use how much oil -- and the United States is always at the top of the list.

“Every single day, just over 19 million barrels of oil are consumed in the U.S.,” says Matt Parry, senior oil market analyst for the agency. That accounts for about 20 percent of global oil use. China comes in second, using about 10 million barrels a day.

In recent years, China’s demand has been growing, while demand here has been slouching. But not in 2013. For the first time in more than a decade, demand for oil in the United States grew faster than China’s.

“The strength of it has exceeded everyone expectations,” says Parry.

Why? In part, the answer has to do with the recession. Growth is easy when you’ve been in the pits.

“As the economic activity picks up, there’s a lot more transportation going on,” says Peter Hartley, an economist at Rice University. There are more people driving to more jobs. There are more trucks, delivering more things.

And, the U.S. is drilling more of its own oil and natural gas. Supply is up. Prices are down. “And that’s really stimulating a renaissance of the petro-chemicals in the United States,” says Hartley. Plastics, chemicals, fertilizers. We’re making more of them here now.

But, don’t expect U.S. demand to continue rising. The energy agency says petrochemical companies in this country are pretty maxed out. Our cars are only going to get more fuel efficient. 

“Over time we think that U.S. demand is going to be flat at best, or probably trending a bit down,” says Mark Schwartz, president of PIRA Energy group, a consulting firm. China, on the other hand, likely has a whole lot of growth in its future. More people there are looking to buy cars, to travel, and to consume more like we do here in the United States.

The Davos World Economic Forum: A lot of 'hot air'?

Tue, 2014-01-21 09:56

Some  2,500  of the world’s most powerful  business and political leaders will make their annual pilgrimage to a mountaintop in the Swiss Alps this week. They won’t be seeking a religious experience (well, most of them won't). They’re headed for the small ski resort of Davos for the 44th annual  World Economic Forum -  four days of economic discussion and debate.

Not everyone is expecting many major revelations.

"There will be a lot of bloviating," says David Rothkopf of the Carnegie Endowment for International Peace.  "There are a lot of people there who love to hear themselves talk, that go on at length. That mountaintop in Switzerland each year  is warmed by quite a bit of hot air."

Anthony Hilton, Financial  Editor of the London Evening Standard is another Davos skeptic: "They go on about the 'Spirit of Davos' and how they’re shaping the world. But  they’re not. They’re actually revelling in their own self-importance and smugness. It’s  an exercise in self-preening and group think."

The gigantic agenda seems well-meaning enough. Among the 250 subjects under discussion over the next four days  are:  climate change, the future of healthcare, the nightmare of  youth unemployment and the challenge of scientific innovation.

But some items appear gloriously misplaced in this well-heeled assembly: "One of the big themes this year is – I kid you not – income inequality," points out John Reeves of The Motley Fool financial services group. "It’s ironical: Income inequality is the theme, and you’ve got to pay $40,000 to go there and weigh in." ($40,000 is  the  estimated average cost per attendee– including travel, accommodation, and getting into the event.) 

Forget all that guff about making the world a better place, says Anthony Hilton. Once investment bankers got involved, he claims, Davos went downhill: "They started throwing parties obviously to get business. And it now has become a competition to see who gets invited to the most exclusive parties.  So the whole spirit of it has gone by the board."

But Davos must be doing something right. A thousand corporations keep it afloat, pumping in around $200 million a year. And Martin Wolf of the Financial Times asks: So what if it is a gabfest? He believes that  Davos may have helped the world weather the financial crisis by forging contacts between politicians and businesses people around the world.   With forty heads of state, 20 central bank chiefs, and  numerous tycoons and Nobel Laureates attending this year, maybe Davos is a talking shop we cannot afford to ignore.      

 "I happen to believe that talking is quite a good thing to do," Wolf says.

Stressed out by the Davos World Economic Forum?

Tue, 2014-01-21 08:58

This week, the who’s who of the...world ... will gather in Davos, Switzerland, to set the economic agenda for 2014.

Now the summit isn't just dull economics. This is the Alps after all, so skiing and partying also seems to be on many agendas during the week. (Though not on everyone's agenda, this year:)

Matt #Damon says he won't be skiing in Switzerland after #Davos2014 as he's a broken collarbone from falling off his mountain bike

— Joanna Partridge (@JoannaPartridge) January 21, 2014

Setting the global economic agenda isn't a small task for a four-day confab.

But when sessions such as "Rethinking Ocean Economies" and "Responding to Global Risks" get stressful, organizers have attendees' backs. For the price of the cost of membership in the World Economic forum -- that's $70,000 -- you can also attend any of the following:

  • Let Goldie Hawn convince you to meditate. She's giving a talk on the ways "neuroscience, mindfulness training and social and emotional learning can change the world"
  • Make jewelry. Attend a workshop on "precision fabrication of unique components, such as jewellery and optics."
  • Hear a special concert by the St Petersburg Mariinsky Theatre Orchestra.
  • Track how well you sleep. Sign up in advance for a Jawbone "health tracker." Keep track of your rest and exercise. 
  • Meditate with a Buddhist monk. Matthieu Ricard will lead recurring 8 a.m. sessions on how to "learn and experience the benefits of meditation."
  • See a special Screening of "Mandela: Long Walk to Freedom". Hors d'oeuvres will be served.
  • Muse upon the meaning of happiness. A session entitled "The Importance of Being Happy" promises to answer "Why is the pursuit of happiness so critical for ourworld andthat of future generations?
  • Celebrate with friends "new and old" at the "Jazz and Dance Soirée". Black tie, of course.

Video of Mariinsky Orchestra

Stressed out by the Davos World Economic Forum?

Tue, 2014-01-21 08:58

This week, the who’s who of the...world ... will gather in Davos, Switzerland, to set the economic agenda for 2014.

Now the summit isn't just dull economics. This is the Alps after all, so skiing and partying also seems to be on many agendas during the week. (Though not on everyone's agenda, this year:)

Matt #Damon says he won't be skiing in Switzerland after #Davos2014 as he's a broken collarbone from falling off his mountain bike

— Joanna Partridge (@JoannaPartridge) January 21, 2014

Setting the global economic agenda isn't a small task for a four-day confab.

But when sessions such as "Rethinking Ocean Economies" and "Responding to Global Risks" get stressful, organizers have attendees' backs. For the price of the cost of membership in the World Economic forum -- that's $70,000 -- you can also attend any of the following:

  • Let Goldie Hawn convince you to meditate. She's giving a talk on the ways "neuroscience, mindfulness training and social and emotional learning can change the world"
  • Make jewelry. Attend a workshop on "precision fabrication of unique components, such as jewellery and optics."
  • Hear a special concert by the St Petersburg Mariinsky Theatre Orchestra.
  • Track how well you sleep. Sign up in advance for a Jawbone "health tracker." Keep track of your rest and exercise. 
  • Meditate with a Buddhist monk. Matthieu Ricard will lead recurring 8 a.m. sessions on how to "learn and experience the benefits of meditation."
  • See a special Screening of "Mandela: Long Walk to Freedom". Hors d'oeuvres will be served.
  • Muse upon the meaning of happiness. A session entitled "The Importance of Being Happy" promises to answer "Why is the pursuit of happiness so critical for ourworld andthat of future generations?
  • Celebrate with friends "new and old" at the "Jazz and Dance Soirée". Black tie, of course.

Video of Mariinsky Orchestra

'Dear subscriber, you are registered as a participant in a mass disturbance'

Tue, 2014-01-21 08:50

The Ukrainian government may be using mobile phone location data to intimidate protesters during ongoing civil unrest. Ukrainians have taken to the streets in recent days criticizing President Viktor Yanukovych's seeming refusal to move towards further integration with the European Union. In the capital of Kiev, some protesters have been receiving menacing text messages, apparently from the government, reading "Dear subscriber, you are registered as a participant in a mass disturbance." Andrew Kramer of The New York Times is on the ground in Kiev, and tells Marketplace Tech host Ben Johnson about the story.

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