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Planning a Kickstarter campaign? Avoid these words

Thu, 2014-01-16 05:49

A new study from Georgia Tech looks at how words you use can determine whether your Kickstarter campaign reaches its goal.

Researchers analyzed proposal language and found projects with phrases like "even a dollar" or "not been able" don't do well. Talk like that in your campaign pitch, and I hope you have rich relatives. As for winning projects, they stressed reciprocity, scarcity and authority. 

The current state of state finances

Thu, 2014-01-16 04:49

As parts of the U.S. economy rebound, some states are beginning to find themselves in the position of needing to think about what to do with the extra money coming in from taxes.

Yes, an actual surplus. Remember that?

Marketplace's economics expert Chris Farrell, joins host David Brancaccio to discuss the current state of local government finances. 

Chuck E. Cheese sold for nearly $1 billion

Thu, 2014-01-16 04:15

Let's paint a little picture of one corporate story in the news this Thursday morning...  

Men and women in $4000 suits sitting around a fancy, mahogany-lined boardroom at a big private equity firm. 

They're earnestly discussing a new and promising acquisition...

Chuck E. Cheese. You know, the place where "a kid can be a kid?"

An entity connected to Apollo Global Management is buying the restaurant and arcade game chain for $950 million (when the assumption of debt is included)

Chuck E. Cheese -- the restaurant chain with pizza, high-pitched laughter and sometimes tears. 

What do our cars know about us?

Thu, 2014-01-16 03:34

If you've got a newer car, chances are it's got GPS. That's useful, but it also might be collecting data on you. A Ford executive recently stirred up controversy when he said the automaker knows when drivers of its cars break traffic laws.

Alan Mulally, Ford's CEO, later said that Ford doesn't track cars -- and won't even down the road. He also called for better privacy laws as cars add new location-based technology.

Ryan Calo, Law Professor at the University of Washington, joins Marketplace's Mark Garrison to discuss. 

Is too much financial news affecting your health?

Thu, 2014-01-16 01:38

According to a study out of The Rady School of Management at the University of California San Diego, there's a strong connection between daily stock returns and hospital admissions. The research found that hospitalizations -- especially those for psychological conditions like anxiety and panic disorder -- rise on days when shares fall. 

University of California San Diego finance professor Christopher Parsons led the study and presented the findings at the annual meeting of the American Economic Association earlier this month. He joins Marketplace Morning report David Brancaccio to discuss. 

JC Penney plans to cut 2000 jobs and shut down more than 30 stores

Thu, 2014-01-16 01:35

On Wednesday, retailer JC Penney announced that it would be closing 33 stores and putting 2000 people out of work. CEO Mike Ullman says this addresses "a strategic priority to improve the profitability of our stores."

The company is still recovering from an overhaul of its retail operations that went sour. Retail expert and founder of America's Research Group, Britt Beemer says watch for more retailers following suit:

You are going to see a lot of retailers, in my mind, close stores this year because they cannot go forward with more than 10 percent of their stores underperforming. And Penney’s probably had 20 percent of their stores underperforming. So you’ll even see more stores closing for Penney’s.

 Britt Beemer spoke with Marketplace Morning Report host David Brancaccio. 

Could personal coaches help low-income students graduate?

Thu, 2014-01-16 00:52

On Thursday at the White House, more than one hundred college presidents will meet with President Obama to discuss ways they can enroll more low-income minority students.  The plan is to help those students graduate on time, without massive debt loads. 

One proposal on the table is to provide more personal and financial coaches.  

At the Hyde Square Task Force in Boston’s Jamaica Plain neighborhood, mentor Mariah Baril-Dore helps high school senior Yoleiris Gonzalez submit her very first college application.

"Without her, I’d probably still be trying to figure out what I would be doing," says Gonzalez.  "She texts me and she’s like, 'Do this, do that. Have you talked to this person? Have you talked to that person?' She’s on me, so it's very good.”

"Just showing up here every week is the least that I can do," says Baril-Dore.

And if more volunteers show up, more nontraditional students could attend college. It’s one of many ideas expected to come up at the White House today.

But some educators are skeptical about President Obama’s plan, which would tie federal financial aid for colleges to outcomes like graduation rates.

"It is very hard for us to imagine that there would be a handful of metrics that could then be used to rank institutions, given the rich diversity of American institutions of higher education," says Molly Corbett Broad, president of the American Council on Education.

Still, Broad says Thursday’s meeting is not just a dog and pony show. After all, college presidents will spend the entire day at the White House discussing how to get more low-income students to graduation day.   

Listen to Kirk's extended interview with Molly Corbett Broad here: 

Nets, Hawks game underscores NBA's European hopes

Thu, 2014-01-16 00:37

Tonight the Atlanta Hawks are set to face the Brooklyn Nets in London, the second of two international games scheduled this season.

That's on top of eight pre-season games in seven countries last fall.

League officials have made it clear; they want to expand the brand.

University of Pennsylvania Business Professor Scott Rosner says it’s easy to understand why the NBA wants to go international.

"There's a lot of money to be made," he says.

Thanks to the Olympics and international players like Yao Ming, Luol Deng and Tony Parker, the sport has carved out a loyal following around the globe.

Today the NBA brings in about $5 billion a year in revenue.

Rosner says establishing a handful of European teams could grow that pie.

"Just do the math on it, if you figure 5 franchises, $200 million dollars a year in revenue, yeah, that's a billion dollar proposition," says Rosner.

Charles Grantham, former Executive Director of the NBA Player's Union says a roster of international teams is "a long way off."

Grantham says to expand, the league has to figure out how to minimize the wear and tear on athletes from so much travel.

And maybe more important, determine whether foreign cities can support an NBA team.

"You know you are talking about considerable investment of time and money. 8 to 10 investors, developing arenas, marketing, etc, etc, etc," he says.

Even with its deep pockets, Grantham says the NBA can't afford to launch a European division of teams only to see it fold.

Bourbon or scotch? You may be surprised by who owns your favorite whiskey

Wed, 2014-01-15 13:53

Do you prefer Maker's Mark bourbon to Jim Beam? Laphroig scotch to Bowmore? Basil Hayden's to Knob Creek?

All are different distilleries, to be sure, but now they're all owned by the same company. Japan's Suntory is buying Beam Inc. -- as in Jim Beam -- for $13.6 billion. The deal will make Suntory one of the largest alcohol producers in the world.

Curious if your favorite whiskey is one of Suntory's brands -- or another of the big distilleries?

Here's a breakdown of which company owns which whiskey brand:

 

The NSA has new ways to see inside your computer

Wed, 2014-01-15 13:28

What is the National Security Agency monitoring now? Think: nearly 100,000 computers around the world – whether they’re connected to the internet or not.

"There is a good subset of computers that are walled off from the internet, completely isolated. And those are usually the computers that the NSA wants to get into most," says David Sanger, national security correspondent for the New York Times, explaining his report in the Times today.

German newsmagazine Der Spiegel recently published a catalog of tools developed by an NSA division called ANT. Among other strategies, ANT uses small radio transceivers to monitor and even control personal computers. The transceivers are either installed into the computer – usually during transit from the factory –  or through thumb drives. Once the software has been installed, the NSA is able to see inside the computer. Some believe they have used the tcomputers in to cyber weapons or to turn the computer into a cyber-weapon. The Stuxnet attack on the Iranian nuclear enrichment site is believed to have been carried out through such means.

Sanger reports the NSA has used the technology for at least the last five years, on allies and enemies alike. Tech companies in the U.S. fear overseas buyers will be wary of buying American products.   

“I think as the year goes on, you’re going to see more and more pressure from Silicon Valley to both trim back these programs and efforts from Silicon Valley to design systems that the NSA can’t penetrate,” he says.

The NSA uses these programs in the name of national security. There is no evidence that the United States is using the ANT technology to steal intellectual property.

“If they had, they probably wouldn’t know which company to give it to. The Chinese know who they’re going to give it to, they’re going to give it to their state owned firms.”

President Obama is expected to address the issue on Friday.

How to sharpen a knife: A disappearing job

Wed, 2014-01-15 12:53

You go to the drawer in the kitchen, pull out a knife, notice it's a bit dull, and you run it through that knife-sharpener thing you have in that same drawer. In Spain, it doesn't quite work that way. The job of knife sharpener is a tradition over there.

53-year-old Rafael Romero del Campo first took up his trade, as a knife sharpener, 40 years ago. He has no intention of quitting his job, but this trade is dying and he thinks that when he calls it a day, nobody will succeed him.

"I have five children and four grandchildren, and my job as a knife sharpener feeds them all," Romero del Campo says. "The truth is there's no other work. I've been doing it so many years, because I love it."

As part of a BBC series on disappearing jobs, we visit Seville, in Southern Spain, to look at the life of a knife sharpener.

How to quit a job without talking to your boss

Wed, 2014-01-15 12:03

This final note, in which I am not, repeat not, quitting my job. (I got in a whole mess of trouble the last time I joked about that.)

But if I were, boy have I found a good way to do it.

It's called the Quit Your Job app.

You decide why you want to quit, it sends an appropriate text to your boss.

Also available from the same company?

The BreakUp text app.

Explainer: Why can't we cap CEO pay?

Wed, 2014-01-15 10:30

Income inequality is one of the phrases of the month in Washington, following the President's December speech on the issue.

President Obama threw his support behind a proposal to increase the minimum wage to $10.10 from $7.25, and to provide for automatic annual increases linked to changes in the cost of living. This week, Rep. George Miller (D-Calif.) and Sen. Tom Harkin (D-Iowa) discussed the issue with Council of Econmic Affairs chairman Jason Furman.

On the face of it, raising the minimum wage appears to have a lot of support.

A group of 75 economists came out in support of the proposal, including seven Nobel laureates and several former Obama and Clinton administration economists. A poll by Hart Research found that 80 percent of Americans support the proposal, including 80 percent of political independents, and 62 percent of Republicans.

But despite the swell of support, the proposal seems unlikely to make it through the House. A similiar measure failed in March of last year, with every Republican and six Democrats voting against raising the minimum wage. Republicans in Congress tend to argue against raising the minimum wage, arguing employers who are forced to pay workers more would hire fewer people or cut those workers' hours.

Moreover, the argument goes, employers might handle the added expense of paying workers more by passing costs on to consumers in the form of higher prices.  

So if there's such a strong reaction to the idea of using the minimum wage as a weapon in the war against income inequality, what about an alternative approach? Pay caps, for example.

Switzerland recently toyed with the idea of capping CEO pay at 12 times the amount of the lowest-paid worker. But a referendum on that issue voted the idea down.

And it's pretty easy to see why that idea is unlikely to fly here in the U.S. For one thing, it puts a ceiling on the American Dream, or at least that part of it that has Americans aspiring to huge mansions and private jets. But on a more practical note, it rewards certain industries disproportionately.

For instance, the lowest paid worker - or even the average worker - in a software company or law firm is almost certainly going to earn more than the worker on the bottom run at a hotel company. Which means hotel company executives are liable to be rewarded a lot less for their work, even if their businesses employ many more workers (and are that much more valuable to society) than the law firm. It also means the CEO will likely get paid less -- potentially a lot less -- than other workers in the firm. 

No way that idea flies here.

Blackstone-backed real estate firm learns how to be a landlord

Wed, 2014-01-15 09:57

A number of big companies are betting against the American Dream. They think lots of people are going to want to rent instead of buy a home. One of the biggest bet-makers, with 40,000 rental properties under its belt, is Invitation Homes.

Realtor Jim Tice first noticed the company popping up as a buyer in a Minneapolis suburb. He was trying to sell a client's house that was headed to foreclosure. Then the client got a cash offer from Invitation Homes. Tice says the company provided a bank statement to prove it had enough cash to cover the deal. He says the account balance was eye-popping.

"A buyer usually isn't showing you millions of dollars of savings in order to buy. So it was pretty impressive in that respect," Tice says.

Invitation Homes is a subsidiary of the Blackstone Group, the world's largest private equity firm.  And over the past year and a half, it has spent a whopping $7.5 billion buying those 40,000 properties—1,000 of them in the Twin Cities.

Invitation Homes largely buys low-priced foreclosures. Then it spiffs them up and rents them out. Experts say large-scale purchases of foreclosures by investors like Invitation Homes have helped housing markets heal.

"Had it not been for them, prices would've fallen further and it would've taken longer to recover," says Elliot Eisenberg, a housing economist.

Eisenberg says since the foreclosure crisis, credit standards have tightened and a lot of people can't get a mortgage. As a result, Invitation Homes and other big investors are betting that home rentals will become increasingly popular.

"It's certainly a bet. Whether it's worth making -- we'll know in a couple years how it turns out," he says.

Until recently, it's largely been mom and pop outfits that rent houses. Eisenberg says big investors could potentially run that business more professionally.

So far, Micheal Apple has had a good experience renting a four-bedroom house from Invitation Homes in a Minneapolis suburb. Apple says if something's broken, his property manager jumps right on it.

"Either I call her or I email her, and she gets back to me within a day or so," he says.

Not so for another Twin Cities renter, Brad Dukes. He's got a beef about the "throne" in his rental home. When Dukes sits on the toilet, his knees barely clear the wall in front of him.

Dukes says the house was advertised as having two bathrooms. But one was just a free-standing toilet in the basement. Invitation Homes agreed to frame up a real bathroom and dropped a few thousand dollars to add walls, a shower and a sink.

Still, Dukes is dismayed by the end product.

"The exterior of this box they put in this unfinished room is going to remain. I'm going to be looking at sheetrock," he says.

Renters in other markets have panned Invitation Homes in online reviews. But in the Twin Cities at least, the company may not have enough renters yet to establish a clear track record. I checked out a random sample of homes the company's purchased. All of them were vacant, some for more than six months.

Andrew Gallina is a spokesman for Invitation Homes. He's aware of the empty houses and complaints from renters. Gallina admits the company is still learning the ropes. It has, after all, purchased 40,000 homes in a short period of time.

"There are times we're going to be disappointing to a resident. But at the same time, we have a real commitment to getting it right," he says.

Of course, if the landlord gig doesn't work out, the firm always has an exit strategy: Sell the homes at a profit as prices rise.

My Nick Jr. personalizes TV -- and it smells like Netflix

Wed, 2014-01-15 09:53

If you've got kids, you're probably well-acquainted with Nickelodeon programming. Not just Nickelodeon, but Nicktoons, TeenNick, and Nick Jr. for the pre-school set. Well, soon you can add My Nick Jr. to that roster. It's an interactive channel that will allow parents to customize their kids' viewing experience.

Here's how it will work. You can program your kids' TV channel to only play certain Nick Jr. shows --think Dora the Explorer --or shows about certain themes, like problem solving or friendship.

"After each episode, the child would be asked to rate the show," says Verizon spokesman Bill Kula. "And if no action were taken then the next episode would begin."

My Nick Jr. is pretty much a direct response to the way streaming services like Pandora, Netflix and Amazon are changing media consumption.

Paul Sweeney of Bloomberg Industries says people are getting used to viewing programming, "When they wanna watch it, where they wanna watch it, and on whatever device they want to watch. No longer are consumers content to simply watch programming as scheduled by an existing network."

Brad Adgate of Horizon Media says customized channels like My Nick Jr. are the wave of the future. But he has a warning.

"Not only can this endeavor hurt rivals like Disney, who's probably their biggest rival, and Cartoon Network, but it's also something that could cannibalize Nickelodeon themselves," Adgate says.

That's because little kiddos might abandon old Nickelodeon channels for the interactive -- and now ad-free -- My Nick Jr.. Adgate says that could hurt ratings and decrease advertising revenue for the old school channels of the Nickelodeon family.

My Nick Jr. has already debuted in France. Verizon's FIOS TV service will make the new channel available to its customers in the U.S. within a few months.

The Koch brothers are spending on the midterm elections. Already

Wed, 2014-01-15 09:19

The midterm elections are more than nine months away, but if you live in a state where the race for a U.S. Senate seat is going to be close, it may feel like Election Day is a lot closer.

That is because political advocacy groups, including Americans for Prosperity, are pouring millions of dollars into those races. Their decision, to run ads early, goes against conventional wisdom, which says it is a better investment to air ads closer to an election.

“I’m not sure there is conventional wisdom anymore,” says Whit Ayers, a Republican political consultant and the founder and president of North Star Opinion Research.

That is thanks, in part, to outside spending. It used to be groups wouldn’t spend a dollar now, because they were worried about running out later. With many more dollars in play, the economics of campaigning have changed.

“This is a whole new world of politics, where there is certainly no cookbook on how to do things right,” Ayres says, noting conservatives see an opportunity to make the Affordable Care Act the defining issue of 2014.

“It makes a lot of sense, from my perspective, to strike while the iron is hot.”

That is what an organization called Americans for Prosperity, which is backed by the Koch brothers, is doing. I reached Tim Phillips, the group’s president, in Montana, where he just announced a $1.8 million ad buy.

“We are determined to make Obamacare front and center, the number one issue for the American people,” he says.

The organization’s strategy has been to use politicians’ words against them, as in this ad, targeting Rep. Bruce Braley (D-IA).

So far, Phillips says Americans for Prosperity has spent $22 million, adding “we expect to spend substantially more than that in coming months.”

Democrats are in a tough spot, says Steve Jarding who managed senate campaigns for Democratic candidates before he became a professor at the Harvard Kennedy School. 

“They could spend early money to try to compete with this, and actually run out of money late,” he says.

That is not something Republicans have to worry about. Jarding says that, before long, we will be inundated by ads.

"Pretty soon you have ads going essentially year-round year after year.”

And that is what groups like Americans for Prosperity want. Its president says the organization will keep at it after the election is over.

Just how seriously should we take the latest bank earnings?

Wed, 2014-01-15 09:10

It's a big week for the big banks. Bank of America beat expectations with its earnings report today, $3.4 billion last quarter. Earlier this week, Wells Fargo announced record profit. JP Morgan had better than expected earnings.

"You can tell that the banking industry is recovering, and that our economy is on a recovering path," says Ken Carow, a finance professor at Indiana University's Kelley School of Business.

But, turns out these banking numbers maybe smell a little sweeter than they really are. The effects of the housing crisis linger on these balance sheets. Banks are writing fewer mortgages. They're facing lawsuits, government settlements.

One thing propping up these earnings reports—accountants. Big banks are adding billions of dollars from reserves that they'd set aside for loan-losses that never came to be. "Now they are reducing the reserve for the bad loans, and are going to have a positive income effect," says Anne Beatty, an accounting professor at Ohio State University. But, be very clear, "there's no cash flow associated related to this income being created. It is a pure accounting effect."

So what's a regular investor to do?

Fight back, with some math of your own.

"Do some accounting," says David Stowell, a finance professor at Northwestern University's Kellogg School of Management, "it's not easy to do, and you have to look carefully at the financial statements." But, he says, it's worth it. There's a lot of accounting noise in these earnings reports, obscuring the actual business of banking.

PODCAST: The Fed -- cash cow or sitting duck?

Wed, 2014-01-15 06:38

President Obama has called on employers to stop passing over long-term jobless applicants.

As the NCAA gathers for its annual meeting, is it considering a first step toward paying its players?

When the Fed sends less money to the Capitol, it also loses some political capital.

Why does the NSA spy?

Wed, 2014-01-15 06:12

The National Security Agency says it only spies to protect us from cyberattacks.  Or so it told the New York Times. A Times article says the NSA has inserted software in almost 100,000 computers across the globe.  Using them to spy. And launch cyberattacks of its own. 

Washington has repeatedly accused China of giving intelligence to Chinese companies, to give them a leg up on their international competitors. The U.S. says it never does that for American firms. The NSA told the Times, quote, "We do not use foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of…US companies."   

Endpoint Technologies founder and president Roger Kay says, don’t you believe it.

"It’s another instance of the pot calling the kettle black," he says. 

Kay doesn’t buy the NSA’s insistence that it never shares secrets with U.S. CEOs. He says it’s just too easy to let juicy stuff slip. 

"It would be easy enough to have somebody who knows how to do these things approach the company directly and just say, hey -- by the way, this might be of interest to you," he explains.

Kay says it would be of interest to the NSA because more and more, getting an advantage economically, is part of national security.

The incredible business card of Chen Guangbiao

Wed, 2014-01-15 03:49

When you print up business cards, you want to put your best foot forward.

Take Chen Guangbiao, the CEO of a recycling company in Nanjing, China. According to his business card, he's quite a guy.  

Take a look at some of his credentials:

(photo credit: William Launder for The Wall Street Journal)

His business card's gone viral and he certainly seems like a good man to have in your contacts list. 

Chen's a busy guy. If you remember, he was also interested in buying the Times

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