Marketplace - American Public Media

Coffee engineered to put you to sleep. Seriously.

Tue, 2014-12-16 11:00

There's a coffee company based in Vancouver that is, in my opinion, completely missing the point.

New Counting Sheep Coffee helps put you to sleep. Seriously. The coffee is blended with organic valerian root, which is an herbal sedative. 

It comes in two varieties, Bedtime Blend/40 Winks and Lights Out. The founders of the coffee company pitched their product on the Canadian television series "Dragon's Den."

Should you be interested, the coffee is available on Amazon.

 

Subscription services stage a comeback

Tue, 2014-12-16 11:00

AMC Theatres is experimenting with a new subscription service: Pay a monthly fee and see an unlimited number of movies.

This is the latest in what might be called a "subscription boom." Food, clothing, personal hygiene products, are all being offered through subscriptions. Stacy Spikes, CEO of Movie Pass, the theatrical subscription service partnering with AMC, says people increased their moviegoing by 60 to 70 percent after signing up for a subscription. And most of those people are from that most coveted of demographics: millennials.

Predictable income from young consumers has spawned new businesses like Dollar Shave Club, Blue Apron and Trunk Club. Their investors subscribe to the belief that the future of commerce looks a lot like the old-school business model of media companies.

Subscriptions make a comeback

Tue, 2014-12-16 11:00

AMC Theatres is experimenting with a new subscription service: pay a monthly fee and see an unlimited number of movies.

This is the latest in what might be called a "subscription boom." Food, clothing, personal hygiene products, are all being offered through subscriptions. Stacy Spikes, the CEO of Movie Pass, the theatrical subscription service partnering with AMC, says people increased their movie going by 60 to 70 after signing up for a subscription. And most of those people are from that most coveted of demographics: millennials.

Predictable income from young consumers has spawned new businesses like Dollar Shave Club, Blue Apron and Trunk Club. Their investors subscribe to the belief that the future of commerce looks a lot like the old-school business model of media companies.

When the ruble falls, who hears it?

Tue, 2014-12-16 11:00

The ruble is worth half – half – of what it was worth in July.  The simple reason, of course, is that people don’t want the ruble.

“People aren’t investing in Russia,” says Alexander Kliment at the Eurasia Group. “That was the problem before the Ukraine crisis and it’s been exacerbated by the sanctions and what’s followed."

It is also the reason the ruble’s fall isn’t expected to cause major economic havoc outside Russia. 

Jeff Mankoff, deputy director of  the Russia and Eurasia Program at the center for Strategic and International Studies, says while Russia’s economy is larger and more interconnected, “because of the sanctions there’s been an effort on the part of a lot of those companies in neighboring countries and Europe to reduce their exposure in Russia.”

Inside Russia, of course is a different story.  Russia’s imports are now twice as expensive as they were in July.

“Not only is Russia’s economy contracting, it’s also experiencing inflation,” says Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman. “This is a horrible mix – if you stimulate the economy you fuel inflation.”

Russia’s foreign debts are also more burdensome.

“Russia has about 680 billion dollars of borrowing it did overseas,” Chandler says. “about two thirds of it is denominated in U.S. dollars,” which are now more expensive.

Analysts including Kliment say they don’t see widespread default, yet.

“A lot of that corporate debt is held by state companies ...so if they were to get into trouble the state would probably bail them out.”

While the consequences of Russia’s currency route inside the country are economic, outside they are geopolitical. 

“The economic pressure that Russia is experiencing right now is being framed in Russia as part of a western campaign to weaken Russia,” says Kliment. President Putin’s popularity – which is around 90 percnet – isn’t counted in dollars or rubles. “It’s based almost entirely on a very nationalistic tough guy image.”

So how will that tough guy respond when economically cornered?

Russia ramps up response as ruble plummets

Tue, 2014-12-16 11:00

The Russian Central Bank hopes raising interest rates from 10.5 to 17 percent will give people an incentive to hold onto the ruble and not bail into say, the euro, or the dollar

“The falling  price of oil and economic sanctions are having a very dramatic impact in terms of isolating Russian entities from the international capital markets,” says Charles Movit, chief Russia economist at IHS Global Insight.  Oil accounts for two-thirds of Russia’s export revenue.  Raising interest rates is likely the first of many painful steps for the Russians.

“I think they're going to have to end up doing even more radical measures, like simply stop people from taking money out of the country as best they can,” says Kenneth Rogoff, a Harvard University economist. “The banking sector can't take this for very long. The banks can't afford to pay these kinds of interest rates when they've made a lot of loans, they can’t afford to pay this to depositors."

Pulling out of Ukraine and thereby escaping sanctions is one possible fix for Russia’s currency problem, Rogoff says. Another more likely solution would be a gradual rebounding of oil prices this coming spring.

Where is your extra gas money going?

Tue, 2014-12-16 11:00

What you and I and all the other drivers in the country aren't spending on gas could add up to hundreds of billions of dollars in savings. The savings will act as an economic stimulus, says Geoffrey Heal , professor at Columbia University's business school. “It will. Definitely," he says. "We’re giving consumers significantly more spending power.” (function(){var qs,js,q,s,d=document,gi=d.getElementById,ce=d.createElement,gt=d.getElementsByTagName,id='typef_orm',b='https://s3-eu-west-1.amazonaws.com/share.typeform.com/';if(!gi.call(d,id)){js=ce.call(d,'script');js.id=id;js.src=b+'widget.js';q=gt.call(d,'script')[0];q.parentNode.insertBefore(js,q)}})()

“They have a little bit more money, but at the same time their investment are doing a little less well," he says, "so they don’t necessarily feel that much richer.

Low gas prices could have a negative impact on the stock market. Shares of oil producing companies might go down, so would our retirement funds which puts us in the mood to save, not spend.

Scott Wren, a senior equity strategist with Wells Fargo Advisors, says we have seen low gas prices act as an economic stimulus in the past. But that was then, and this is a recovering economy.

“In the past people were more prone to increase their spending. They were more prone to borrow money as well, do things like home equity loans," she says. "And I think right now the mentality is a little different."

At least we still like a deal. 

With a Starbucks on every corner, chain pivots

Tue, 2014-12-16 11:00

Forget that grande skim no-foam latte. What used to be "fancy coffee" has become average. That's pushed Starbucks to open the “Reserve Roastery and Tasting Room” in Seattle, the first of about 100 premium stores the chain has in the works.

Starbucks is trying to hit the reset button and make their ubiquitous coffees feel special again, says Tom Pirko, president of the food and beverage consulting company BevMark. The company is also trying to keep up with an ever-growing number of premium small roasters and cafes.

That increased demand, as well as new interest in coffee from Asian consumers, is pushing up prices for high-end beans, says Jack Scoville, a coffee broker with Price Futures Group.

Elvis Lieban, the co-founder and coffee buyer for Bay Area roaster Artís, says the price of his high-end beans has increased 20 to 25 percent this year, but customers don’t tend to be very price sensitive. 

Gourmet coffee is on the up, prices too

Tue, 2014-12-16 11:00

Forget that grande skim no-foam latte. What used to be "fancy coffee" has become average. That's pushed Starbucks to open the “Reserve Roastery and Tasting Room” in Seattle, the first of about 100 premium stores the chain has in the works.

Starbucks is trying to hit the reset button and make their ubiquitous coffees feel special again, says Tom Pirko, president of the food and beverage consulting company BevMark. The company is also trying to keep up with an ever-growing number of premium small roasters and cafes.

That increased demand, as well as new interest in coffee from Asian consumers, is pushing up prices for high-end beans, says Jack Scoville, a coffee broker with Price Futures Group.

Elvis Lieban, the co-founder and coffee buyer for Bay Area roaster Artís, says the price of his high-end beans has increased 20 to 25 percent this year, but customers don’t tend to be very price sensitive. 

Quiz: Studying social networks

Tue, 2014-12-16 04:46

The most discussed academic paper on the web in 2014 involved manipulating social media users, according to Altmetric rankings of online research.

We talked about the study back in July.

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PODCAST: Lend me your art

Tue, 2014-12-16 03:00

How the falling price of oil and its effects on the economy might factor into the deliberations of the Federal Reserve this week. And while the economic scars of the recession largely started to heal by 2013 for white Americans, minority Americans are still feeling an acute decline in wealth, according to Federal Reserve data that was crunched by the Pew Research Center. We dig into one of the reasons why: Housing. Plus, while western sanctions bite more deeply into the Russian economy, and there's talk of a new Cold War, the British Museum has stunned the world with an extraordinary gesture.  It's lent a priceless Greek antiquity to the Hermitage Museum in St. Petersburg. But why lend to the Russians? 

Wealth gap in U.S. widens among races

Tue, 2014-12-16 02:00

As the economy recovers, the wealth gap along racial lines in the U.S. is widening.

What’s driving the divide? Recent research shows one big reason is the disparity in asset wealth. 

Click the media player above to hear more.

Wealth gap widens among races

Tue, 2014-12-16 02:00

As the economy recovers, the wealth gap along racial lines is widening.

What’s driving the divide? Recent research shows one big reason is the disparity in asset wealth. 

Click the media player above to hear more.

How will the Fed respond to plummeting oil prices?

Tue, 2014-12-16 02:00

The Federal Reserve is expected to make some big announcements this week on the heels of meetings in Washington where Janet Yellen and her colleagues will discuss the health of the U.S. economy. One subject that will undoubtedly come up: Plummeting oil prices. As of today, oil is hovering right around $60 a barrel. So how will oil’s new low, low price affect the Fed’s anticipated policy changes?

Let’s start with inflation. One of the Fed’s stated goals is to increase inflation in the U.S. from its current 1.7 percent, to a target rate of 2 percent, “and all that’s going on in the energy sector is somewhat disinflationary if not deflationary,” says  Marilyn Cohen, president of Envision capital management. She thinks falling prices in the energy sector could make the Fed cautious about raising interest rates.

But Americans spending less on fuel means consumers have more money for goods and services, “and that,” says former Fed economist Morris Davis, “should create, or at least be correlated, with new job creation.”

Money not being spent on oil would do more good for the economy than the hit that U.S. oil companies will take, and Davis thinks the Fed sees these low oil prices as a new, longer term reality. “If that’s what the Federal Reserve is thinking then they would I guess, assume an extended boom on these low oil prices.”

A continuing boom would be a signal to the Fed that says "go ahead, raise interest rates." The Fed will issue its statement on Wednesday.

 

 

 

 

 

 

Navigating health insurance for small businesses

Tue, 2014-12-16 02:00

This is Mike Brey’s busiest time of year. 

Brey owns four Hobby Works toy stores in Maryland and Virginia, and he’s got about 50 full- and part-time workers. He huddles with one at his store in Laurel, Maryland, in an aisle jam-packed with remote-control cars. They're talking inventory.

Brey is just getting over a cold. There’s no time to sleep around the holidays if you own a toy store, and no time to look over health insurance plans – one of his least favorite chores.

“Yeah, I hate it,” he says.

Still, Brey does provide insurance for his employees, even though he doesn’t have to, because he has fewer than 50 full-timers. Brey leads me to his back office and computer, where he’s been noodling around on Maryland’s SHOP website, which was set up under the Affordable Care Act to connect small businesses with health insurers.

“There we go," he says, clicking on the site and reading. "See details of SHOP plans for 2014 coverage.”

Brey says he used to have only a couple of plans to choose from. But on the SHOP exchange, “You have CareFirst offering, Coventry, Evergreen, Kaiser, United.”

But here’s the thing: Brey’s just browsing, not buying. And he’s not alone.

“It’s been, admittedly, a little slow getting out of the starting gate,” says Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms. 

She says there are a number of reasons enrollment in the SHOP exchanges isn’t taking off. They’ve had technical problems, and a tax credit small businesses get for using SHOP is hard to apply for.

“I’ve heard from some small businesses that they’d have to pay their accountant and broker more than they actually would get back in benefits,” she says.

Still, there is some evidence that businesses could get a deal on SHOP. 

“We found, in general, that plans on the SHOP cost less than those off the SHOP," says Jon Gabel, a senior fellow at NORC, a University of Chicago research center. "Could be 9 percent lower on average.”

Still, Gabel says, it’s too soon to say whether the SHOP exchanges will survive.  

But Brey hopes they stick around. He says he’ll start some serious insurance shopping after the holiday rush.

Will oil’s price affect the Fed?

Tue, 2014-12-16 02:00

The Federal Reserve is expected to make some big announcements this week, coming on the heels of meetings in Washington where Janet Yellen and her colleagues will be discussing the health of the U.S. economy. One subject that will undoubtedly come up is plummeting oil prices. As of today, oil is hovering right around $60 a barrel. So how will oil’s new low, low price affect the Fed’s anticipated policy changes?

Let’s start with inflation. One of the Fed’s stated goals is to increase inflation in the U.S. from its current 1.7 percent, to a target rate of 2 percent, “and all that’s going on in the energy sector is somewhat disinflationary if not deflationary,” says  Marilyn Cohen, president of Envision capital management. She thinks falling prices in the energy sector could make the Fed cautious about raising interest rates.

But Americans spending less on fuel means consumers have more money for goods and services, “and that,” says former Fed economist Morris Davis, “should create, or at least be correlated, with new job creation.”

Money not being spent on oil would do more good for the economy than the hit that U.S. oil companies will take, and Davis thinks the Fed sees these low oil prices as a new, longer term reality. “If that’s what the Federal Reserve is thinking then they would I guess, assume an extended boom on these low oil prices.”

A continuing boom would be a signal to the Fed that says go ahead, raise interest rates. The Fed will issue its statement on Wednesday.

 

 

 

 

 

 

Taking the pulse of SHOP exchanges

Tue, 2014-12-16 02:00

This is Mike Brey’s busiest time of year. 

Brey owns four Hobby Works toy stores in Maryland and Virginia, and he’s got about 50 full and part-time workers. He huddles with one at his store in Laurel, Maryland, in an aisle jam-packed with remote-control cars. They're talking inventory.

Brey is just getting over a cold. There’s no time to sleep around the holidays if you own a toy store, and no time to look over health insurance plans — one of his least favorite chores.

“Yeah, I hate it,” he says.

Still, Brey does provide insurance for his employees, even though he doesn’t have to, because he has fewer than 50 full-timers. Brey leads me to his back office and computer, where he’s been noodling around on Maryland’s SHOP website, which was set up under the Affordable Care Act to connect small businesses with health insurers.

“There we go," he says, clicking on the site and reading. "See details of SHOP plans for 2014 coverage.”

Brey says he used to have only a couple of plans to choose from. But on the SHOP exchange, “You have CareFirst offering, Coventry, Evergreen, Kaiser, United.”

But here’s the thing: Brey’s just browsing, not buying. And he’s not alone.

“It’s been, admittedly, a little slow getting out of the starting gate,” says Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms. 

She says there are a number of reasons enrollment in the SHOP exchanges isn’t taking off. They’ve had technical problems, and a tax credit small businesses get for using SHOP is really hard to apply for.

“I’ve heard from some small businesses that they’d have to pay their accountant and broker more than they actually would get back in benefits,” she says.

Still, there is some evidence that businesses could get a deal on SHOP. 

“We found, in general, that plans on the SHOP cost less than those off the SHOP," says Jon Gabel, a senior fellow at NORC, a University of Chicago research center. "Could be 9 percent lower on average.”

Still, Gabel says, it’s too soon to say whether the SHOP exchanges will survive.  

But Brey hopes they stick around. He says he’ll start some serious insurance shopping after the holiday rush.

Pulling the Ruble out of the rubble

Tue, 2014-12-16 01:30
17 percent

Russia raised its interest rate in the middle of the night to 17 percent, as reported by the New York Times. The move came in response to a slip in the worth of the ruble by 10 percent on Monday. 

$5 million

That's how much money the nonprofit Invisible Children made in just 48 hours after their video "Kony 2012" redefined viral. The windfall was soon followed by a wave of criticism that cost donations and irreparably damaged the group's reputation. Two years later, Invisible Children has announced it will let most of its staff go, Buzzfeed reported, and raise $150,000 for a planned phase-out of its programs in 2015.

$60

That's about where the cost of a barrel of oil currently rests. The record low prices have some wondering how upcoming announcements (expected this week) from the Federal Reserve will be affected.

0

The number of people who lead the practices outlined in the Senate's CIA torture report who are still working in government. All of them are now retired or in the private sector. Mashable has a "where are they now?" feature.

50 full-time employees

Small businesses with fewer than 50 full-time employees are not required to provide health insurance. But in the case that they do, many are having a tough time navigating exchanges under the Affordable Care Act, specifically in what is known as a SHOP exchange.

$2.44

The cost of a half-gallon of milk, one of many items featured in the New Yorker's "gift guide for the boyfriend who has nothing."

Sony warns media against publishing leaked information

Mon, 2014-12-15 11:00

Sony Pictures Entertainment fired a warning to media outlets over the weekend saying they'd better stop posting the gory details of its computer hack.

At stake? The company's intellectual property and trade secrets.

"One of the most sensitive things out there from the standpoint of Sony corporate is what are called 'ultimates,' the studio profit and loss statements," says Jonathan Handel, an entertainment and technology attorney with the law firm TroyGould in Los Angeles.

The dissemination of Sony's hacked profit and loss statements undermines the studio when it's negotiating to pay talent, Handel says. Such documents paint a picture of the studio's costs and what it can afford.

"Once you got those for several films, it gives you background for more," Handel says. "You get a sense of what the studio overhead is and how they internally charge things."

Sony also cites the loss of intellectual property as a big concern.

For example, the screenplay for a James Bond film got released in the computer hack. That could mean fewer people showing up at the box office for the film.

But those worries might be overblown, according to Paul Dergarabedian, a media analyst with Rentrak, a box office data firm.

"The reason people, the average person, goes to the movies is they don't want to read the script, they want to see the movie," he says.

A lot of the leaked documents — screenplays, marketing plans — gets updated and changed all the time, Dergarabedian says.

How much damage will all this do to Sony? That script is still in development.

We lost $100 million making pennies and nickels

Mon, 2014-12-15 11:00

 A penny is worth 1 cent, and a nickel, 5. But how much does it cost to make the money itself?

According to the U.S. Mint's most recent report to Congress, way too much.

The good news is that the Mint says we saved $29 million this year making coins thanks to cheaper copper prices.

The bad news is that we're still losing $100 million a year on pennies and nickels because it costs 1.66 cents to make a penny and more than 8 cents to make a nickel. A nickel is made of 75 percent copper and 25 percent nickel.

Of course, I'm on the record as favoring getting rid of the penny anyway.

Treasury undersecretary wanted, must love Wall Street

Mon, 2014-12-15 11:00

Fresh off their stand against rollbacks to the Dodd-Frank act in the recently passed government spending bill, liberal Democrats are displeased with President Obama's pick for a Treasury undersecretary job – investment banker Antonio Weiss .

Speaking about Wall Street's influence on economic policy late Friday, Massachusetts Sen. Elizabeth Warren said, “Enough is enough with Wall Street insiders getting key position after key position and the kind of cronyism that we have seen in the executive branch.”

But the White House has called Weiss a “highly qualified nominee.”

So just what does this job entail?

If the U.S. Treasury were to draft a job description for the current vacancy, it might list a set of skills that included “understanding of very high level and sometimes very complex finance,” says Kevin Jacques, a professor at Baldwin Wallace University who spent 14 years at Treasury. Potential hires should also be able to translate wonky economic papers into policy and work across different government agencies, he says.

“Absolutely critical is an ability to talk [and] negotiate with Wall Street,” says Jacques, which is partially why he says so many candidates come to the job from financial institutions. It gives them credibility with the industry.

Lawyer Jerry Hawke held the post in the '90s, but has never worked on Wall Street and doesn’t think that should be a must. It does help, he says.

But “the process of treasury issuance of bonds and notes and so on, that was an area I didn’t have any real experience in,” he says. “Someone who understood bond trading and Wall Street could make a great contribution.”

But Wall Street isn’t the only source of these skills, says Daniel Carpenter, a professor of government at Harvard University. “There’s a lot of alternative sources of expertise that are used by Wall Street banks themselves,” he says, “including the legal academy, the business academy, consumer financial organizations, and state government officials.”

It might be worth sacrificing some financial acumen, Carpenter says, for the fresh perspective a Wall Street outsider would bring.

"There's too many people who think that just because somebody worked on Wall Street, they literally are a financial master of the universe and can do any finance job," says Dennis Kelleher of Better Markets, Inc., a nonprofit that seeks to promote the public interest in the financial markets. "That's just objectively false." He suggests drawing from large global corporations instead. 

Of course, in the end, the final must for this undersecretary? Confirmation by the U.S. Senate.

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