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$1.7 Million can buy a lot of Monster Energy drinks

Fri, 2014-06-06 04:56

The Beastie Boys have been awarded $1.7 Million in a case against Monster Energy Corp for copyright infringement. The disputed Youtube video, posted by Monster in 2012, featured several remixed Beastie Boys hits like "Sabotage" and "Make Some Noise." Beastie Boys members Adam Horovitz "Ad-Rock" and Michael "Mike D" Diamond were on hand for much of the trial, having originally asked for $2.5 Million. While Monster claims that it was an internal mistake -- claiming an employee thought the company had permission to use the music -- the jury still sided with the Boys, awarding them an amount significantly above the $125,000 initially offered by Monster.

The Beastie Boys have long opposed the use of their music in advertisements. The group’s Adam Yauch, who died in 2012, prohibited the use of his music in advertisements in his will.

And in case you were wondering, we crunched some numbers on what $1.7 Million looks like for all parties involved:

813,397

That's how many Monster Energy Drinks you could buy with $1.7 Million

154,826

That's the number of CD copies of "Hot Sauce Committee Part II" you could purchase with the same amount of money. "Make Some Noise," one of the disputed tracks, comes from this album.

The strategy behind Hillary Clinton's book release

Fri, 2014-06-06 02:42

Former Secretary of State Hillary Clinton's new memoir, “Hard Choices,” hits store shelves on Tuesday. It’s the latest in a string of tell-alls by former members of the Obama administration, including Robert Gates’s “Duty” and Timothy Geithner’s “Stress Test.”

You’d think memoirs like these could sell themselves. Well, think again, says Jim Milliot, editorial director at Publisher’s Weekly.

“You could say it is one of the great ironies of book publishing that the bigger the author, the bigger the publicity campaign,” he notes.

This campaign kicked off on Mother’s Day, with an exclusive excerpt in “Vogue” magazine: Hillary Clinton, reflecting on motherhood. The excerpt was share-able, the idea being each retweet or Facebook like will translate into sales.

“Social media is a big component of all this,” Milliot says.

In fact, “Hard Choices” has its own Twitter account, managed by Simon & Schuster. Plus, there are more excerpts on a website, as well as YouTube videos.

According to Josh Baran, who managed the publicity campaign for “An Inconvenient Truth,” former Vice President Al Gore’s bestseller, “You want your message out.”

That kind of message machine can cost millions. We don’t know how much this one is going to cost, because the publisher declined our request for an interview. We do know that the publicity team for a big book starts with what Paul Bogaards calls a “communications blueprint,” which includes “television, radio, newspapers, magazines, blogs, big mouths.”

Bogaards, who manages media relations for Knopf Doubleday, has drawn up blueprints for former Gates’s memoir, and for President Clinton’s autobiography, “My Life.”

Rollouts may be more intricate than ever, but one thing is still true: If a reporter gets ahold of the book early, it can throw all that timing, all that money, and all that planning off track.

Still, Journalists were eager to get their hands on Bill Clinton’s memoir before it was published.

Says Bogaards: “I mean, one had them actually had the gall to call me and say, ‘Hey, can you help me out here?’ I was like, actually no, I cannot help you out.”

Publicists play defense and offense. Leaks aren’t all bad, and sometimes they are done strategically. Politico, for example, got it hands on a chapter from Hillary Clinton’s book early, and yesterday, CBS News, which is one of Simon & Schuster’s corporate siblings, obtained a copy of “Hard Choices.”

So far, these leaks have done what every publisher wants: they ginned up interest, they got people talking, and Simon & Schuster hope, that will lead to buying.

THE ROLLOUT, planned and unplanned

Sunday, May 11

Vogue.com posts “An Exclusive Excerpt from Hillary Clinton's Upcoming Book, ‘Hard Choices’” 

Tuesday, May 27

Simon & Schuster releases Hillary Clinton’s “author’s note

Friday, May 30

A Politico reporter gets her hands on a “much-anticipated chapter” from “Hard Choices” about what transpired in Benghazi, Libya, on Sept. 11, 2012

Hillary Clinton meets with booksellers at BookExpo America, in New York City

Wednesday, June 4

“People” publishes Hillary Clinton’s “first at-home interview since the end of husband Bill's presidency in January 2001”

Thursday, June 5

CBS News obtains a copy of the book

Monday, June 9

Diane Sawyer, of ABC News, interviews Hillary Clinton during an hour-long, prime-time special

Tuesday, June 10

“Hard Choices” hits store shelves

Hillary Clinton does her first live interview, with Robin Roberts, of ABC News, on “Good Morning America”

She kicks off her book tour at a Barnes & Noble in New York City

Tuesday, June 17

Hillary Clinton sits down with Bret Baier and Greta Van Susteren of Fox News

The strategy behind Hillary Clinton's book release

Fri, 2014-06-06 02:42

Former Secretary of State Hillary Clinton's new memoir, “Hard Choices,” hits store shelves on Tuesday. It’s the latest in a string of tell-alls by former members of the Obama administration, including Robert Gates’s “Duty” and Timothy Geithner’s “Stress Test.”

You’d think memoirs like these could sell themselves. Well, think again, says Jim Milliot, editorial director at Publisher’s Weekly.

“You could say it is one of the great ironies of book publishing that the bigger the author, the bigger the publicity campaign,” he notes.

This campaign kicked off on Mother’s Day, with an exclusive excerpt in “Vogue” magazine: Hillary Clinton, reflecting on motherhood. The excerpt was share-able, the idea being each retweet or Facebook like will translate into sales.

“Social media is a big component of all this,” Milliot says.

In fact, “Hard Choices” has its own Twitter account, managed by Simon & Schuster. Plus, there are more excerpts on a website, as well as YouTube videos.

According to Josh Baran, who managed the publicity campaign for “An Inconvenient Truth,” former Vice President Al Gore’s bestseller, “You want your message out.”

That kind of message machine can cost millions. We don’t know how much this one is going to cost, because the publisher declined our request for an interview. We do know that the publicity team for a big book starts with what Paul Bogaards calls a “communications blueprint,” which includes “television, radio, newspapers, magazines, blogs, big mouths.”

Bogaards, who manages media relations for Knopf Doubleday, has drawn up blueprints for former Gates’s memoir, and for President Clinton’s autobiography, “My Life.”

Rollouts may be more intricate than ever, but one thing is still true: If a reporter gets ahold of the book early, it can throw all that timing, all that money, and all that planning off track.

Still, Journalists were eager to get their hands on Bill Clinton’s memoir before it was published.

Says Bogaards: “I mean, one had them actually had the gall to call me and say, ‘Hey, can you help me out here?’ I was like, actually no, I cannot help you out.”

Publicists play defense and offense. Leaks aren’t all bad, and sometimes they are done strategically. Politico, for example, got it hands on a chapter from Hillary Clinton’s book early, and yesterday, CBS News, which is one of Simon & Schuster’s corporate siblings, obtained a copy of “Hard Choices.”

So far, these leaks have done what every publisher wants: they ginned up interest, they got people talking, and Simon & Schuster hope, that will lead to buying.

THE ROLLOUT, planned and unplanned

Sunday, May 11

Vogue.com posts “An Exclusive Excerpt from Hillary Clinton's Upcoming Book, ‘Hard Choices’” 

Tuesday, May 27

Simon & Schuster releases Hillary Clinton’s “author’s note

Friday, May 30

A Politico reporter gets her hands on a “much-anticipated chapter” from “Hard Choices” about what transpired in Benghazi, Libya, on Sept. 11, 2012

Hillary Clinton meets with booksellers at BookExpo America, in New York City

Wednesday, June 4

“People” publishes Hillary Clinton’s “first at-home interview since the end of husband Bill's presidency in January 2001”

Thursday, June 5

CBS News obtains a copy of the book

Monday, June 9

Diane Sawyer, of ABC News, interviews Hillary Clinton during an hour-long, prime-time special

Tuesday, June 10

“Hard Choices” hits store shelves

Hillary Clinton does her first live interview, with Robin Roberts, of ABC News, on “Good Morning America”

She kicks off her book tour at a Barnes & Noble in New York City

Tuesday, June 17

Hillary Clinton sits down with Bret Baier and Greta Van Susteren of Fox News

How much is California Chrome worth?

Fri, 2014-06-06 02:40

California Chrome goes for horse racing's Triple Crown this weekend at the Belmont Stakes. Even if he wins, the horse won't likely sell for the top rates -- as high as $60 million -- that we've seen in the past.

So here's a look at some of the other numbers around the horse:

1978

The last year there was a Triple Crown winner. The horse was named Affirmed.

11

The number of horses that Daily Racing Forum says have been in a similar position to California Chrome since 1978.

$15 million

How much Peter Bradley III, one of the top bloodstock agents in the country for thoroughbred racing, guesses California Chrome is worth today. Others in the horse racing industry say he's worth a few million more, or a few million less.

$30 million

How much California Chrome's trainer, Art Sherman, says the horse is worth.

1

The number of shoe companies sponsoring California Chrome. This week, Skechers announced they were going to sponsor the horse. Though, don't get excited for a horse in sneakers -- California Chrome's trainers will be the ones sporting Skechers' shoes.

May Jobs Report likely to show moderate hiring

Fri, 2014-06-06 02:36

Employers likely added 213,000 new jobs in May, according to the consensus estimate of economists cited by Bloomberg, while April’s job gain was 288,000. The unemployment rate likely increased 0.1 percent in May to 6.4 percent, after sharply declining in April (from 6.7 percent to 6.3 percent).

If these expectations pan out, May’s performance would confirm a return to steady, modest growth in the economy and the labor market. That follows a volatile winter with multiple severe storms that pushed the overall economy into a surprising quarterly decline in GDP. A projected increase in the unemployment rate in May would likely be caused by people returning to the workforce as job-hunters. April’s drop in unemployment was attributed to a steep decline in the size of the workforce.

“We’re back on track right now,” says Bernie Bauhmolh at the Economic Outlook Group in Princeton, New Jersey.

The economy has now been creating an average of 237,000 jobs per month since February. First-time claims for state unemployment benefits are at a seven-year low.

“The economy is looking better,” says Baumohl. “We’ve seen better performances in manufacturing and services and auto sales. Confidence levels are also higher among consumers and business leaders. It’s going to encourage employers to accelerate hiring.”

Paul Osterman at the MIT Sloan School of Management says the next signs of significant progress in the employment recovery would be improvement in workers’ real wages, and an increase in the employment-to-population ratio, which measures how many adults are working compared to the total population of potential workers. That ratio fell sharply in the recession and has not rebounded significantly since.

As jobs get more plentiful at all wage levels, employers can be expected to compete to attract and retain workers. In response, they might begin raising wages.

“Over the last twelve months real wages have gone up by a little bit under 2 percent," says Osterman. "That’s better than zero, but it’s below productivity gains.”

In other words, employees have been producing more for their bosses, driving profits up, without getting much extra in their paychecks in return.

Do you still call yourself middle class?

Thu, 2014-06-05 23:31

Do you still call yourself middle class?

I put that question to an online network of people willing to be interviewed on Marketplace. It's a fascinating question to me, because it gets at both where we are five years after the recession, and to our definition of "middle class" itself. Recent research shows that while the economy as a whole is improving, more and more of us aren't using the term "middle class" anymore.

One woman, DeeDee in San Diego, wrote that she now considered her family poor. She said her income has been declining since 2002. Here's what being middle class would look like to DeeDee:

"I could step into the 21st century and get a cell phone; it would mean that I could spring for my children's meal at In-N-Out Burger instead of saying, 'If you pay for it, you may go.'"

Across the six dozen or so responses I received, most people felt that being in the middle class meant the ability to educate children, provide a home for them, and plan for a comfortable retirement. And many said they're not sure they can get there.

Jamie from New Hampshire wrote:

"If I had kids, we'd be poor, but since I don't, I'm somehow able to get by and have an occasional social life and such."

I posed the question and I still want to hear from people in the form below.

A Pew poll that came out in January shows a decline in Americans who call themselves middle class. Personally, I think there's more here than just the hangover from the recession. It's a wariness, perhaps, about what it takes to pay for a life better than the one your parents had. It's tangled up with the cost of college and health care. 

It's something that we're going to be exploring on my new show, Marketplace Weekend, both from an economic and fiscal angle, and from a psychological one. It also touches on the nature of work.

I came back to this idea again Thursday when I saw this great New York Times visualization about the industries that have suffered (and thrived) since the recession. I suspect buried in here are the keys to what a new middle class might look like. Or perhaps whatever our new term is that someday becomes both simultaneously aspirational and everywhere.

 

 

So, who's picking up the doughnuts?

Thu, 2014-06-05 13:35
Thursday, June 5, 2014 - 14:31 Reg Speller/Fox Photos/Getty Images

Salvation Army canteen workers in Brighton operating a doughnut machine flown in from Canada to satisfy Canadian troops appetites for donuts on January 1, 1941.

From the Marketplace Datebook, here's a look at what's coming up Friday, June 6:

It's the first Friday of the month which means all eyes will be on the May jobs report.

Has word gotten around your office that it's National Doughnut Day? It was established in 1938 as a fundraiser for The Salvation Army in Chicago to help those in need during the Great Depression.

The Federal Reserve is scheduled to issue consumer credit data for April.

On June 6, 1998, HBO's "Sex and the City" premiered. It ran for six seasons and fortunately remains in syndication.

It's also the anniversary of the first federal gasoline tax, enacted in 1932. One penny per gallon. That's where it began. Today we pay 18.4 cents per gallon, and state tax too.

And the Great Wisconsin Cheese Festival gets underway in Little Chute. That's right, people: cheese and doughnuts.

Marketplace for Thursday June 5, 2014by Michelle PhilippePodcast Title Datebook: So, who's picking up the doughnuts?Story Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Fewer homeowners drowning in mortgage debt

Thu, 2014-06-05 13:22

The Tampa area has more underwater mortgages than anywhere else in America: roughly 30 percent. But even there, things are getting better fast. That’s down from nearly 41 percent this time last year, according to CoreLogic

“We’re seeing fewer people who are underwater. Prices have come back up,” says Brad Monroe, director of the Greater Tampa Association of Realtors. 

Homeowners are telling his members they’re finally out from under their mortgages and ready to move. “Calling them back and saying, 'It’s time now. Prices are there and we can do it,'” he says. 

Data from CoreLogic show that nationally, about 12 percent of homeowners owe more than their homes are worth. That’s a big drop from the first quarter last year when the number was around 20 percent. 

“Which is really good news for the housing market,” says Mark Fleming, CoreLogic’s chief economist. 

“So many homeowners didn’t have equity or were under equity and didn’t participate in listing their homes for sale. And that’s why house prices increased over the last year or two so dramatically in those markets,” Fleming says.  

This is a virtuous cycle. Rising home values brought back equity to a lot of homeowners. That means more people can move if they want to. And, more homes on the market keeps prices from rising too fast. 

But just because people are no longer underwater in their mortgages doesn’t mean they can move right away. They need enough equity to pay for the expense of selling one home and a down payment on a new one.

“Paying broker’s fees, for example,” says Kostya Gradushy, project manager at Black Knight Financial Services. “And, if you only have 5 percent equity in your house, you’re not going to be able to cover those costs.” 

Black Knight says one in five homeowners today doesn’t have enough equity in their current home to afford a new one.

Vehicle ignitions aren't the only problem at GM

Thu, 2014-06-05 13:17
Thursday, June 5, 2014 - 14:10 Bill Pugliano/Getty Images

General Motors Chief Executive Officer Mary Barra (center), Mark Reuss (left), Executive Vice President, and Dan Ammann (right), President, hold a press conference at the General Motors Technical Center on June 5, 2014 in Warren, Michigan. Barra spoke to provide an update on GM's internal investigation into the ignition switch recall at the General Motors Technical Center. 

General Motors CEO Mary Barra has responded to the auto recalls by firing 15 employees. She also ordered a compensation plan for the victims of the deadly auto defects.

After a report from an internal investigation was released, Barra said the company has some culture issues.

"Mary Barra has made this point that General Motors used to be a cost-focused culture, and now it’s becoming more customer-focused," says Micki Maynard, Director of the Reynolds Center for Business Journalism at the Cronkite School at Arizona State. "But if you read the report, things were going on in 2012 and 2013. It’s not like all of this was ten or fifteen years ago, this is very recent stuff. So I think there’s going to be a lot of work to do."

So if GM culture hasn’t improved in the last few years, what will it take for it to change?

"Maybe nothing can change it," says Maynard. "It might be that General Motors is the way it is, and you have to manage around that. In a good financial situation, you do just fine. But when things go bad, you end up in bankruptcy and need a bailout."

Marketplace for Thursday June 5, 2014Interviewed By Kai RyssdalPodcast Title Vehicle ignitions aren't the only problem at GMStory Type InterviewSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

What negative interest rates mean for the Eurozone

Thu, 2014-06-05 13:17

Remember when bottled water first came out? I remember thinking, "Who would actually ever pay for water?" I also remember balking at a 75 cents ATM fee years ago.

I imagine that's exactly how European banks are feeling right about now. The European Central Bank's new policy of negative interest rates is, essentially, charging banks for something that it used to pay banks for. 

"Negative interest rates. What that means is that they are now charging commercial banks for leaving money at the central bank," says Beth Ann Bovino, U.S. chief economist at Standard and Poor's.

You know how banks usually pay you for storing your money with them? Now the ECB is actually charging European banks for the privilege. 

So... how does this help the European economy?

"The ECB... is trying to create a hot seat," says Paul Kedrosky, a partner at SK Ventures. "They just want to make it so darn uncomfortable to continue sitting there with your deposits, that you say, 'Oh, screw it! I’ll lend it out.'"

Lending is exactly what European banks haven’t been doing. They’ve been playing it safe and stashing their money at the ECB. Businesses and individuals aren’t getting loans, so they aren’t hiring or buying and Europe’s economy is grinding to a halt.

"The Central Bank, their business is to get the real economy going," says Bovino. To do that, The ECB is making it expensive for banks to save. "Hopefully that means more lending to households and businesses."

So… will it work?

"Many banks in Europe are still fragile and recovering from the trauma of the world financial crisis," says Matthew Slaughter, a professor at Dartmouth’s Tuck School of Business. "How much more likely they will be to make a lot more loans is an open question."

Slaughter says banks might just put their money in another safe haven, like U.S. Treasury Bonds. That would be good for the U.S., but wouldn’t help Europe much.

The ECB can only make the seat hot, now it’s up to the banks to decide where to move their assets.

And maybe Marketplace will convince me to pay them one of these days...

Ikea: New Yorkers spend a lot of time in the bathroom

Thu, 2014-06-05 13:05
Thursday, June 5, 2014 - 15:58 Spencer Platt/Getty Images

Ikea has revealed that it knows way too much about us.

The Swedish furniture and random stuff company did a survey of people in eight cities around the world, one of which was New York.

Here are just some quick tidbits to get you to click on the link:

  • 56 percent of New Yorkers don't see themselves as morning people.
  • Men spend an average of 12 minutes on grooming in the mornings. It's 19 minutes for women.
  • And this one to leave you with: One in six New Yorkers say they take work into the bathroom with them.

Here's the link.

 

Marketplace for Thursday June 5, 2014by Kai RyssdalPodcast Title Ikea: New Yorkers spend a lot of time in the bathroomStory Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Ikea: New Yorkers spend a lot of time in the bathroom

Thu, 2014-06-05 12:58

Ikea has revealed that it knows way too much about us.

The Swedish furniture and random stuff company did a survey of people in eight cities around the world, one of which was New York.

Here are just some quick tidbits to get you to click on the link:

  • 56 percent of New Yorkers don't see themselves as morning people.
  • Men spend an average of 12 minutes on grooming in the mornings. It's 19 minutes for women.
  • And this one to leave you with: One in six New Yorkers say they take work into the bathroom with them.

Here's the link.

 

What do schools want from classroom tech?

Thu, 2014-06-05 12:46
Thursday, June 5, 2014 - 15:42 <a href="http://marketplaceapm.polldaddy.com/s/school-tech">View Survey</a> by Dan AbendscheinSyndication PMPApp Respond NoBranded story type Curveball

What do schools want from classroom tech?

Thu, 2014-06-05 12:42
<a href="http://marketplaceapm.polldaddy.com/s/school-tech">View Survey</a>

So, who's picking up the doughnuts?

Thu, 2014-06-05 11:31

From the Marketplace Datebook, here's a look at what's coming up Friday, June 6:

It's the first Friday of the month which means all eyes will be on the May jobs report.

Has word gotten around your office that it's National Doughnut Day? It was established in 1938 as a fundraiser for The Salvation Army in Chicago to help those in need during the Great Depression.

The Federal Reserve is scheduled to issue consumer credit data for April.

On June 6, 1998, HBO's "Sex and the City" premiered. It ran for six seasons and fortunately remains in syndication.

It's also the anniversary of the first federal gasoline tax, enacted in 1932. One penny per gallon. That's where it began. Today we pay 18.4 cents per gallon, and state tax too.

And the Great Wisconsin Cheese Festival gets underway in Little Chute. That's right, people: cheese and doughnuts.

Vehicle ignitions aren't the only problem at GM

Thu, 2014-06-05 11:10

General Motors CEO Mary Barra has responded to the auto recalls by firing 15 employees. She also ordered a compensation plan for the victims of the deadly auto defects.

After a report from an internal investigation was released, Barra said the company has some culture issues.

"Mary Barra has made this point that General Motors used to be a cost-focused culture, and now it’s becoming more customer-focused," says Micki Maynard, Director of the Reynolds Center for Business Journalism at the Cronkite School at Arizona State. "But if you read the report, things were going on in 2012 and 2013. It’s not like all of this was ten or fifteen years ago, this is very recent stuff. So I think there’s going to be a lot of work to do."

So if GM culture hasn’t improved in the last few years, what will it take for it to change?

"Maybe nothing can change it," says Maynard. "It might be that General Motors is the way it is, and you have to manage around that. In a good financial situation, you do just fine. But when things go bad, you end up in bankruptcy and need a bailout."

Britain is giving subsidies for rock music

Thu, 2014-06-05 11:09

In Britain, government subsidies for the arts have traditionally been focused on ballet, opera and theater. But now, they are giving a boost to a rather less exalted area of creativity: thrash metal bands, acid punk and nu-grunge groups.

The aim is to promote British musical talent abroad by subsidising the cost of mounting a foreign tour. The grants – which have so far totaled more than three quarters of a million dollars – have caused outrage in conservative circles and have stirred criticism from low-tax campaigners.

But the recipients have defended the subsidy.

"As a band trying to break through, the cost of touring abroad can be prohibitive," argues Dave Silver, lead singer of the heavy metal band Savage Messiah. The band is getting $25,000 of public money.

Is this sex, drugs, and rock'n'roll at the taxpayers’ expense?

“Absolutely not !” says Silver “ There are strict controls on how you can spend the money. It can only be used for things like marketing costs, tour support, venue costs, international travel and so on.” 

The taxpayer will not be footing the bill for: tattoos, studs, chin spikes or other body piercing… let alone picking up the tab for wrecked hotel rooms and wild parties. Not that Silver indulges in such excesses.

“I don’t actually drink alcohol at all. I don’t smoke. I don’t take drugs. So yeah, we’re pretty well behaved, really," he says.

The bands say they need state aid because they’re losing money from illegal downloads. And the only way to make a decent living is to break through into the live touring circuit. 

The government clearly believes that it’s worthwhile offering a helping hand to up and coming talent and supporting the smaller, independent record labels.

Music is an important export for Britain. The British Recorded Music Industry – a trade body – claims that one in ten of all the albums sold in the United States are by British artists; the figure for continental Europe is one in four. 

None of this cuts any ice with the Taxpayers’ Alliance, a group that campaigns for lower taxes. Political director Dia Chakravarty claims that the touring subsidy is wasteful and  unnecessary. 

“British bands have a long history of breaking overseas markets but that’s because they had great songs to sing, not because of taxpayers’ subsidies,” she argues.

Chakravarty takes a keen personal interest in the music industry. 

“I’ve actually just finished working on my first album of Bangladeshi songs but I’ve supported that by having a day job….working at the Taxpayers’ Alliance,” she says. “I’ve not taken a single penny from taxpayers.”

Oddly enough, her argument against subsidy strikes a chord with Dave Silver. The lead singer of Savage Messiah divides his time between headbanging and studying economics and he’s a real fan of the Austrian School of Economics which favors the free market. So why accept the government grant?

“We’re a band. We’re four people in the band and not everyone in the band is of the Austrian School, so what can we do?" saysSilver. And he laughs: “ Yeah in an ideal world privatize everything that moves  and have no state intervention in the economy. But that’s not where we’re at now. We've got to break into overseas touring.”

Fewer homeowners drowning in mortgage debt

Thu, 2014-06-05 10:24
Thursday, June 5, 2014 - 16:22 Spencer Platt/Getty Images

A U-haul truck is parked in front of a home in Bridgeport, Connecticut.

The Tampa area has more underwater mortgages than anywhere else in America: roughly 30 percent. But even there, things are getting better fast. That’s down from nearly 41 percent this time last year, according to CoreLogic

“We’re seeing fewer people who are underwater. Prices have come back up,” says Brad Monroe, director of the Greater Tampa Association of Realtors. 

Homeowners are telling his members they’re finally out from under their mortgages and ready to move. “Calling them back and saying, 'It’s time now. Prices are there and we can do it,'” he says. 

Data from CoreLogic show that nationally, about 12 percent of homeowners owe more than their homes are worth. That’s a big drop from the first quarter last year when the number was around 20 percent. 

“Which is really good news for the housing market,” says Mark Fleming, CoreLogic’s chief economist. 

“So many homeowners didn’t have equity or were under equity and didn’t participate in listing their homes for sale. And that’s why house prices increased over the last year or two so dramatically in those markets,” Fleming says.  

This is a virtuous cycle. Rising home values brought back equity to a lot of homeowners. That means more people can move if they want to. And, more homes on the market keeps prices from rising too fast. 

But just because people are no longer underwater in their mortgages doesn’t mean they can move right away. They need enough equity to pay for the expense of selling one home and a down payment on a new one.

“Paying broker’s fees, for example,” says Kostya Gradushy, project manager at Black Knight Financial Services. “And, if you only have 5 percent equity in your house, you’re not going to be able to cover those costs.” 

Black Knight says one in five homeowners today doesn’t have enough equity in their current home to afford a new one.

Marketplace for Thursday June 5, 2014by Dan BobkoffPodcast Title Fewer homeowners drowning in mortgage debtStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

What negative interest rates mean for the Eurozone

Thu, 2014-06-05 10:21
Thursday, June 5, 2014 - 16:17 Thomas Lohnes/Getty Images

Traders work under the index board that shows the DAX has broken the 10,000 mark for the first time ever at the Deutsche Boerse exchange on June 5, 2014 in Frankfurt, Germany. The rise comes after European Central Bank President Mario Draghi announced record low interest rates. 

Remember when bottled water first came out? I remember thinking, "Who would actually ever pay for water?" I also remember balking at a 75 cents ATM fee years ago.

I imagine that's exactly how European banks are feeling right about now. The European Central Bank's new policy of negative interest rates is, essentially, charging banks for something that it used to pay banks for. 

"Negative interest rates. What that means is that they are now charging commercial banks for leaving money at the central bank," says Beth Ann Bovino, U.S. chief economist at Standard and Poor's.

You know how banks usually pay you for storing your money with them? Now the ECB is actually charging European banks for the privilege. 

So... how does this help the European economy?

"The ECB... is trying to create a hot seat," says Paul Kedrosky, a partner at SK Ventures. "They just want to make it so darn uncomfortable to continue sitting there with your deposits, that you say, 'Oh, screw it! I’ll lend it out.'"

Lending is exactly what European banks haven’t been doing. They’ve been playing it safe and stashing their money at the ECB. Businesses and individuals aren’t getting loans, so they aren’t hiring or buying and Europe’s economy is grinding to a halt.

"The Central Bank, their business is to get the real economy going," says Bovino. To do that, The ECB is making it expensive for banks to save. "Hopefully that means more lending to households and businesses."

So… will it work?

"Many banks in Europe are still fragile and recovering from the trauma of the world financial crisis," says Matthew Slaughter, a professor at Dartmouth’s Tuck School of Business. "How much more likely they will be to make a lot more loans is an open question."

Slaughter says banks might just put their money in another safe haven, like U.S. Treasury Bonds. That would be good for the U.S., but wouldn’t help Europe much.

The ECB can only make the seat hot, now it’s up to the banks to decide where to move their assets.

And maybe Marketplace will convince me to pay them one of these days...

Marketplace for Thursday June 5, 2014by Stacey Vanek SmithPodcast Title What negative interest rates mean for the EurozoneStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Data: The secret ingredient in hospital cooperation

Thu, 2014-06-05 08:51

If you’ve got to go to the hospital   – one that’s near your home or very far from it – you’d want your prescriptions, past procedures, and all the rest at your doctor’s finger tips.

And while sharing that kind of data could reassure consumers and save perhaps as much as $80 billion a year, it remains a fantasy for most patients.

“Everybody in the medical field knows there are economies to be gained there if we would just work together and share the information,” says former Beth Israel Deaconess Medical Center CEO Paul Levy. “And yet the industry, for the most part, is dead set against doing that.”

After nearly ten years running one of the premiere institutions, Levy says he came to see that hospital executives don’t trust each other enough to work together. But what is out of reach for most patients in America is becoming a reality in one of America’s poorest and most troubled cities, Camden, New Jersey.

It’s a potential blueprint, say executives involved in the program.

“You get three health systems to come together who are competitors who on Monday, Wednesday and Friday want to kill each other in the marketplace, but on Tuesday and Thursday are putting together a coalition that is taking better care of patients at lower costs,” says Dr. Anthony Mazzarelli, a Senior Vice President at Cooper University Health System in Camden.

Cooper, Our Lady of Lourdes Hospital and the Virtua health system have all agreed to share patient data on the city’s 30,000 residents enrolled in Medicaid. They’re doing that through what’s called a health information exchange – or HIE.

The Virtua Health Systems building. (Photo: Jessica Kourkounis)

The value, says Virtua attorney Deborah Mitchell, is that doctors and hospitals can track who is where, when they are there, all in real time.

“Now a doctor will know, 'This patient was at Cooper yesterday, now why are they are Virtua’s ER today? What’s happening with this patient?'” she says.

To put Camden in context, there are only 119 HIEs around the country and they’re generally more limited. University of Michigan health policy professor Julia Adler-Milstein explains for most of us our information may be shared with some doctors and hospitals.

For Medicaid patients in Camden the HIE involves virtually every health provider.

“Is what is happening in Camden in the best interest of their patients?” Adler-Milstein says. “You would say yes. You go to most other places, you would say no.”

Adler-Milstein says it’s hard to criticize hospitals and physicians. After all, she says, they’re just following the economic incentives they see.

In that way, Camden’s hospital executives are no different.

“The common denominator is we all can kind of win,” says Cooper’s Mazzarelli.

What’s different in Camden is data.

Long before the HIE, Dr. Jeff Brenner began tracking some of the city’s sickest and most expensive patients, the patients hospitals had lost money on for decades. And he told docs and executives often mesmerizing and horrific stories -- like one guy who had 300 emergency room visits in a year.

“I mean there’s only 365 days,” says Mazzarelli. “I think before this every health system thought they were carrying the burden and now you realize, ‘Wait, wait, we are all carrying this unbelievable burden on the same patients.’”

Those stories cracked opened the door to modest data sharing in the city. And that helped the hospitals get their arms around the problem.

Pretty soon, Kim Barnes, with Our Lady of Lourdes, says everybody could see it was in their economic best interest to share patient data, at least on their Medicaid patients.

“You realize that problem is going to be solved by partnering, by developing better transitions and handoffs among providers,” she says. “Those pictures are painted very clearly when you see the data.”

What took Camden so long to do might be quicker in San Diego, Kansas City and Miami as incentives move and more and more providers get paid to keep costs down.

Mazzarelli predicts that’ll be enough to get hospital executives over the hump to break bread with their competitors.

“Executives, I think – and I can say this, being one myself – I think we look at where our incentives lie,“ he says. “I wish that shifting the incentives of how people get paid didn’t change things in our healthcare system, but it’s becoming pretty clear it probably will make a difference.”

Executives at all three Camden hospitals say they imagine a day soon when they’ll exchange data for all their patients. Mazzarelli says the incentive undertow is so strong that the patients the hospitals have gone to war over for decades – gold-plated privately insured patients – are now more valuable as something shared than something guarded.

Cooper University hospital. (Photo: Jessica Kourkounis)

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