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A cold glass of inflation to go with your cookies

Wed, 2015-02-04 01:30
$6.3 billion

That's how much Staples will pay in cash and stocks to acquire Office Depot. As reported by the New York Times, the buy-out will likely face antitrust scrutiny; the same deal was denied in 1997.

1

The number items McDonald's and Chipotle both served — fountain soda — over the eight years the former was an investor in the latter. Since Golden Arches sold its stake in 2006, the companies have been on opposite paths, with Chipotle's sales exploding on the strength of its dead-simple menu, sustainability-minded supply chains and the burgeoning fast-casual movement and McDonald's languishing. The pair's strange marriage and the rest of Chip's history are detailed in a new Bloomberg oral history. 

$5

The new price of Girl Scout cookies in Orange County, California this year, up from $4. The Scouts point to inflation, but the folks and Quartz aren't so sure, and they have the complex charts to prove it.

$792 million

One conservative estimate of American sex toy sales by 2017, up from $610 million in 2013. The film adaptation of "Fifty Shades of Grey" — out Valentine's Day weekend — will likely contribute to that bump, the New York Times reported. Sex shops and Target alike are preparing for the release with special tie-in toys. They'll be better prepared than they were when the book came out in 2011 — some retailers couldn't keep certain toys used by the characters in stock.

$26 billion

Oh, how the mighty have fallen. Actually, not really. Alibaba CEO Jack Ma still has a net worth of $24.5 billion, but that's not enough to keep him at the top of the list of China's wealthiest. As reported by Reuters, that honor has been taken by Li Hejun, a solar energy entrepreneur, whose net worth is an astounding $26 billion. 

More jobs research? Add it to the budget

Tue, 2015-02-03 15:19

Tucked into the president's budget Monday was a little extra something something for the Bureau of Labor Statistics.

Specifically, it allocated a couple of million dollars to let them fold what's called "the quits rate" — people leaving their jobs in search of greener pastures — into the monthly data.

It'll let us talk about even more jobs stuff every month.

Federal Reserve Board Chair Janet Yellen looks at it pretty closely too. So there's that.

 

An aerial map quest, with drones

Tue, 2015-02-03 13:09

Skycatch is a company built around drones. But CEO Christian Sanz isn't interested in using drones to deliver goods or spy on people.

"For us, it's just another server that happens to have propellers on it," Sanz says.

Skycatch uses drones to obtain aerial 3D images of construction sites. Companies use the detailed maps for planning and coordinating. In some cases, businesses use the maps to help them automate bulldozers and other construction equipment on the ground.

"We are the first company to automate another machine using a drone," Sanz says.

According to Sanz, using Skycatch's services is as simple as opening up an app. "We invented this concept of being able to, at any given point, open up your app and make a call or just highlight the area you want mapped, and we immediately match you up with a pilot," he says.

And for all the budding drone pilots out there, Skycatch is looking for recruits.

"Right now we are going through a process of verifying and also certifying pilots," Sanz says.

Skycatch uses drones to make 3D aerial maps

Tue, 2015-02-03 13:09

Skycatch is a company built around drones. But CEO Christian Sanz isn't interested in using drones to deliver stuff or spy on people.

"For us, it's just another server that happens to have propellers on it," Sanz says.

Skycatch uses drones to obtain aerial 3D images of construction sites. Companies use the detailed maps for planning and coordinating. In some cases, businesses even use the maps so they can automate bulldozers and other construction equipment on the ground.

"We are the first company to automate another machine using a drone," Sanz says.

According to Sanz, using Skycatch's services is as simple as opening up an app. "We invented this concept of being able to, at any given point, open up your app and make a call or just highlight the area you want mapped and we immediately match you up with a pilot," he says.

And for all the budding drone pilots out there, Skycatch is looking for recruits.

"Right now we are going through a process of verifying and also certifying pilots," Sanz says.

RadioShack's long road to bankruptcy

Tue, 2015-02-03 10:38

RadioShack is preparing to shut down amid bankruptcy.  The chain has over 4,000 U.S. stores, but they have been struggling for quite some time. Things finally came to a head as the 'Shack lost about 90 percent of its value over the past year, and shares sunk Monday.

"One of the most common sentiments I heard when I first started making phone calls for this story was 'I can’t believe it’s taken this long for this to happen to RadioShack,'" says Josh Brustein of Bloomberg.

Sprint and Amazon have separately been in talks with RadioShack about acquiring some stores and closing the rest.

"For the last couple of months, RadioShack has really been kind of circling the drain," says Brustein. "It’s been clear that the most likely outcome was bankruptcy – that doesn’t mean that it would disappear altogether. But basically, what has to be sorted out in bankruptcy is what happens to all these stores."

UPS and FedEx increase fuel surcharge – because they can

Tue, 2015-02-03 10:07

UPS handed investors mixed news when it announced 2014 earnings. Shipping volumes were way up, but profits were down. The company made big investments to meet the 2014 holiday rush – including about 100,000 temporary hires— but didn’t get quite as much revenue out as it had wanted.

Still, don’t feel too bad for UPS. CEO David Abney said the company would start tacking on extra holiday charges. And these are in addition to fee increases by both UPS and rival FedEx that include hikes in fuel surcharges, even though the price of fuel is down. 

FedEx has actually raised its fuel charge, from 5.5 percent to 6 percent. The UPS formula is more complicated: The company has changed how it calculates the fee for ground shipments, so the surcharge doesn't reflect a drop in fuel prices.  

"The price of a gallon of fuel is down a buck," says Jerry Hempstead, a consultant who works with shipping customers to help them get better rates. "You would think: "Oh, the fuel surcharge could even go away.' Well, no."

He thinks it’s the opposite of a price war. First UPS had higher rates. FedEx bumped. Now it’s UPS’ turn.

"They did it because they could," he says.

The price of sending a package includes a bundle of smaller charges, many of which have gone up. The “base rate” just saw annual increases of about 5 percent from both carriers. There are also bumps in “accessorial charges"— like extra fees for delivering to remote locations.

The biggest increase comes from a new way of charging for smaller packages. Instead of charging by weight, shippers now also count the size. That change alone raised shipping prices by an average of 17 percent, according to an analysis by Shipware LLC, another company that helps shipping customers negotiate with carriers.

Not all companies will feel that cost the same way, says Rob Martinez, Shipware's president and CEO. A company that makes microwaves and refrigerators, for instance, wouldn't necessarily take a hit. 

"Other shippers, it is literally doubling some of their costs," he says, meaning companies that ship lightweight items in bigger boxes. 

Martinez thinks FedEx and UPS can impose these fees because they’re the only two national companies in the business.

"It’s great for UPS and FedEx investors," he says. "But lack of competition is bad for shippers."

Some of his customers are giving the U.S. Postal Service another look. "Their 'Priority Mail' product is actually a pretty good product," Martinez says.

The what-ifs of net neutrality

Tue, 2015-02-03 10:06

This week, the Federal Communications Commission is expected to propose reclassifying how Internet service providers are regulated, treating them treated like utilities. The idea is to foster net neutrality, so all data flowing across the Internet is treated equally.

What would the new regulation mean for consumers?  

Internet service providers don’t like the idea of being regulated like a phone company. They say that would pave the way for more taxes on consumers, like those that appear on phone bills. But Congress has prohibited state and local governments from collecting new Internet taxes. So what about federal taxes?

“We don’t know which way the FCC is going to go on any particular provision,” says Jodie Griffin, a senior staff attorney for the consumer group Public Knowledge. The FCC could add a universal service fee to your Internet bill, she says. The fee already appears on phone bills and is used in part to extend phone service to high-cost areas at reasonable rates. But Griffin says the total amount collected might not change. 

“So there will be some people who are not paying now who would be paying something, and there will be other people who are paying now who will be paying less,” she says. 

Other consumer advocates say the FCC could delve into the issue of Internet privacy.

“We’ll have a lot more privacy tomorrow than we do today,” says Jamie Court, president of Consumer Watchdog.  The FCC could use its new authority to prevent tracking on the Internet, he says, but the key word is "could."

Jonathan Zittrain, a professor of law and computer science at Harvard University, says: “Everybody can keep powder dry.  I don’t think there are any immediate changes."

FCC officials seem to be just focusing on net neutrality, Zittrain says. “These are not wild-eyed radicals somehow wanting to blow up the system,” he says.

Zittrain says these are all things the FCC could do, if it wanted to – and that’s a big if.

Curious about what net neutrality means?

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What's changed in the credit ratings business?

Tue, 2015-02-03 10:05

Quick refresher: When mortgage-backed securities and derivatives suddenly collapsed into a black hole of toxic assets in 2008, people immediately asked why credit ratings agencies had listed them as good investments.

And then people sued the credit agencies.

Standard and Poor's, one of country’s top ratings agencies, just settled $1.38 billion in lawsuits with 19 states and the District of Columbia, the Department of Justice and the California Public Employee Retirement System. Last month, the agency paid $86 million to settle charges with the Securities and Exchanges Commission and several State Attorneys General. And now, it’s Moody’s turn to be probed by the Department of Justice.

Has anything changed since 2008 in how credit ratings agencies do business?

“The whole industry and certainly Standard and Poor’s has been transformed over recent years,” says Adam Schuman, chief legal officer of S&P Ratings Services. The SEC has expanded regulatory oversight, with an entire department focused just on ratings agencies. 

Standard and Poor’s says it now has a governance board that includes SEC-certified independent board members to oversee how the firm manages conflict of interest risk, and that S&P conducts investigations into the quality of its ratings and compliance by its employees. Schuman also says those employees are evaluated for their adherence to company rules designed to protect the quality of ratings. 

But critics are still strident, arguing that no matter how conflicts are managed, the incentives to inflate ratings still exist. "The fundamental conflict of interest that has led to this litigation and massive settlements still exists," says Daniel Drosman, an attorney with Robbins Geller Rudman & Dowd who has successfully sued ratings agencies. "You have ratings agencies being paid by the institutions whose bonds they are grading."

Bill Harrington, an independent researcher and former Moody’s employee, goes further. He says the problems don't stop with ratings agencies but extend among the many other parties to any complex financial instrument. “It’s the credit rating agencies, the bank underwriters and the counsel looking at a deal’s merits, and the auditors ... none of them gets paid unless the deal closes with a triple-A rating.”

Quiz: Saving college savings from taxes

Tue, 2015-02-03 08:06

President Obama backed away from a proposal to tax 529 college savings accounts, which 3 percent of Americans use.

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Waukesha: A spa town that took its water for granted

Tue, 2015-02-03 06:47

My hometown of Waukesha, Wisconsin, is surrounded by water. There are creeks and rivers. The fourth biggest lake in the world, Lake Michigan, lies 17 miles to the east. Every year the city gets an average 34 inches of rain and 40 inches of snow. Yet Waukesha has a big water problem. Its deepwater wells are contaminated with radium and salts, and now the city needs to figure out a new source of drinking water. How did a city in such a water-rich state get into such a pickle?

Waukesha’s water story started out well enough. In the late 1800s the town was known as the “Saratoga of the West.” People flocked there in summer, 25 trainloads a day, to drink cold, pure water from dozens of mineral springs around town.They thought the water could cure such ailments as diabetes and depression. John Schoenknecht, author of “The Great Waukesha Springs Era: 1868-1918,” says Waukesha water was so prized that when a savvy entrepreneur tried to pipe it down to Chicago for its world’s fair in 1893,  townspeople nearly rioted, fending off his work crews with pistols and rifles.

Eventually the springs and fancy summer resorts there fell out of fashion. Most of the springs were paved over or dried up as the city developed. But Waukesha’s reputation for good water survived, even when grittier industries moved in, including many foundries. All the factories needed water. To meet the demand the city drilled new wells, some nearly 2,000 feet deep, into the sandstone aquifer.   

When my family moved there in 1969, Waukesha was a suburb with almost 40,000 people. Dairy farmers just outside the city’s borders were selling their land to developers who wanted to build new subdivisions. “They were just coming into City Hall like crazy wanting to annex,” says Paul Vrakas, 87. He was Waukesha’s mayor during much of the city’s growth spurt. “It was like having a tiger by the tail, and I think we did a great job,” he says.

If the city hadn’t annexed all the new subdivisions that wanted city water, developers would have built them anyway, Vrakas says. But on oversized lots with private wells and septic systems that eventually would fail. “We, of course, had the treatment plant, state-of-the-art treatment plant and municipal water,” he says. “So it made sense for the city to accept the growth and do it properly.”

City officials weren’t worried about the water supply. Waukesha water customers paid some of the lowest rates in the state. The more a customer used, the lower the rate. Peter Annin, author of “The Great Lakes Water Wars,” says the city’s policies actually encouraged lawn watering. “Because you got a credit on your water bill if you had water that was used but didn’t end up back in the sewer system,” Annin says.

But in 1987 Waukesha’s water officially became a problem. The state put the city on notice. Its drinking water was contaminated. Radium levels were over twice the legal limit. The aquifer beneath the city recharges slowly, and years of overpumping had lowered the water table hundreds of feet. “As you use this water over time, over the last 100 years when we’ve developed groundwater and used it, we’ve drawn down the aquifer to the point where we’re pulling up the water that’s contaminated," says Dan Duchniak, general manager of the Waukesha Water Utility.

Radium is a naturally occurring metal that’s common in groundwater pumped from sandstone aquifers. But the deeper you go, the higher the concentrations. Lifetime exposure increases the risk of cancer.

The state ordered Waukesha to fix its radium problem. But the city resisted. It fought regulators and ultimately sued the Environmental Protection Agency. Fixing the problem was going to be expensive, and city leaders believed the government was overreaching. “In fact, the Argonne Laboratory said that amount of radium was no hazard,” Vrakas says. “And many local doctors told me the same thing as well.”

Nearly two decades later, after a federal appeals court ruled against the city, Waukesha finally decided to stand down. By then, the city’s population had grown another 20 percent.  And its water quality had grown worse. “Waukesha is this poster child of what can happen when you assume that water will just always be there,” Peter Annin says. "And what surprises a lot of people is that here we are in one of the richest water areas of the globe, and yet, we are still fighting over water here in the Great Lakes region.”

But water-challenged cities like Waukesha know they need a secure water supply to keep and attract economic investment. Right now, the city is pinning its hopes on an expensive proposal to pipe water in from Lake Michigan. That’s something those pistol-packing Waukeshans who didn’t want their water piped out to Chicago probably never could have imagined. 

For more on the story of Waukesha's changing water situation, watch the slideshow below:

Photo credit: Jeffrey Phelps
Historical photos courtesy of: Waukesha County Historical Society and Museum

Waukesha: a spa town that took its water for granted

Tue, 2015-02-03 06:47

My hometown of Waukesha, Wisconsin, is surrounded by water. There are creeks and rivers. The fourth biggest lake in the world, Lake Michigan, lies 17 miles to the east. Every year the city gets an average 34 inches of rain and 40 inches of snow. Yet Waukesha has a big water problem. Its deepwater wells are contaminated with radium and salts and now the city needs to figure out a new source of drinking water. How did a city in such a water-rich state get into such a pickle?

Waukesha’s water story started out well enough. In fact, in the late 1800’s the town was known as the “Saratoga of the West.” People flocked there in summer, 25 trainloads a day, to drink cold, pure water from dozens of mineral springs around town.They thought the water could cure everything from diabetes to depression. John Schoenknecht, author of “The Great Waukesha Springs Era: 1868-1918,” says Waukesha water was so prized that when a savvy entrepreneur tried to pipe it down to Chicago for its world’s fair in 1893,  townspeople nearly rioted, fending off his work crews with pistols and rifles.

Eventually, the springs and fancy summer resorts here fell out of fashion. Most of the springs got paved over or dried up as the city developed. But Waukesha’s reputation for good water survived, even when grittier industries moved in, including many foundries. All the factories needed water. To meet the demand the city drilled new wells, some of them nearly 2,000 feet deep into the sandstone aquifer.   

By 1969 when my family moved there, Waukesha was a suburb with almost 40,000 people. Dairy farmers just outside the city’s borders were selling their land to developers who wanted to build new subdivisions. “They were just coming into City Hall like crazy wanting to annex,” says Paul Vrakas, 87. Vrakas was Waukesha’s mayor during much of the city’s growth spurt. “It was like having a tiger by the tail and I think we did a great job,” he says.

If the city hadn’t annexed all the new subdivisions that wanted city water, Vrakas says, developers would have built them anyway. But on oversized lots with private wells and septic systems that eventually would fail. “We, of course, had the treatment plant, state-of-the-art treatment plant and municipal water,” he says. “So it made sense for the city to accept the growth and do it properly.”

City officials weren’t worried about the water supply. Waukesha water customers paid some of the lowest rates in the state. In fact, the more a customer used, the lower the rate. Peter Annin, author of “The Great Lakes Water Wars,” says the city’s policies actually encouraged lawn watering. “Because you got a credit on your water bill if you had water that was used but didn’t end up back in the sewer system,” Annin says.

But in 1987 Waukesha’s water officially became a problem. The state put the city on notice. Its drinking water was contaminated. Radium levels were over twice the legal limit. The aquifer beneath the city recharges slowly, and years of overpumping had lowered the water table hundreds of feet. “As you use this water over time, over the last 100 years when we’ve developed groundwater and used it, we’ve drawn down the aquifer to the point where we’re pulling up the water that’s contaminated," says Dan Duchniak, general manager of the Waukesha Water Utility.

Radium is a naturally occurring metal that’s common in groundwater pumped from sandstone aquifers. But the deeper you go, the higher the concentrations. Lifetime exposure increases the risk of cancer.

The state ordered Waukesha to fix its radium problem. But the city resisted. It fought regulators and ultimately sued the Environmental Protection Agency. Fixing the problem was going to be expensive, and city leaders believed the government was overreaching. “In fact, the Argonne Laboratory said that amount of radium was no hazard,” Vrakas says. “And many local doctors told me the same thing as well.”

Nearly two decades later, after a federal appeals court ruled against the city, Waukesha finally decided to stand down. By then, the city’s population had grown another 20 percent.  And its water quality had grown worse. “Waukesha is this poster child of what can happen when you assume that water will just always be there,” Peter Annin says. And what surprises a lot of people is that here we are in one of the richest water areas of the globe, and yet, we are still fighting over water here in the Great Lakes region.”

But water-challenged cities like Waukesha know they need a secure water supply to keep and attract economic investment. Right now, the city is pinning its hopes on an expensive proposal to pipe water in from Lake Michigan. That’s something those pistol-packing Waukeshans who didn’t want their water piped out to Chicago probably never could have imagined. 

For more on the story of Waukesha's changing water situation, watch the slideshow below:

PODCAST: When BP earnings seem like BS

Tue, 2015-02-03 03:00

This morning, the oil company BP reported no profits, but instead a loss of nearly $1 billion. Yet BP's stock price in London went up 2 percent. That's because while BP lost money, it didn't lose more money. Which brings up the question, are earnings reports just Rorschach tests? Also, there's a new study today saying we are now paying 15 percent of our medical bills out of pocket. More on that. And when the topic is children and money, the focus is often on consumption. But Ron Lieber, personal finance columnist for the New York Times says when teaching about money, don't forget the giving-it-away option.

Amazon heads to college

Tue, 2015-02-03 02:00

Amazon has struck deals with three major universities to create online university stores, which will sell course textbooks and other university-branded goods.

University of Massachusetts, Amherst, which is one of the institutions along with Purdue and University of California, Davis, estimates that its students will save about $380 a year in textbook costs, because of lower prices through Amazon.

"This is something that students have already started to do," says Ed Blaguszewski, a spokesperson for UMass Amherst. "Online sales of books have been increasing."

The online retailer will establish an on-campus distribution system at the three universities to deliver textbook orders within one day. It will also offer deliveries of other goods in one day for students who purchase a discounted Prime plan at $49—Amazon's customer loyalty program, which also includes access to its streaming video service.

Blaguszewski says the deal with Amazon will take over an expiring contract with Follett, one of the retailers that are licensed to operate many university bookstores. Another such retailer in the $10 billion college bookstore market is Barnes & Noble.

"Definitely, this continues to put pressure on Barnes and Noble," says Forrester Research analyst Sucharita Mulpuru. "This is yet again another example of how Amazon is gaining share."

"When any entity of that size comes into the marketplace ... that is going to be a formidable competitor, " says Todd Summer, who runs a university-owned bookstore at San Diego State and is the president of the National Association of College Stores board of trustees.

Summer says his store can compete with Amazon: "We've got a very dedicated staff that's tied into the campus."

NACS says there are some 4,500 college and university bookstores in the United State, and a majority are owned by the schools. Still, that leaves hundreds, at least, that are operated by Follett, Barnes and Noble, and others. They are likely targets for Amazon once existing contracts with schools expire.

And while Mulpuru says three stores do not market disruption make, she sees Amazon's move as one of building habits: getting young people used to its online services, which could yield dividends well after students graduate.

Right now, it's an interesting experiment, she says. And where better to launch an experiment than America's college campuses.

Out-of-pocket healthcare costs soar

Tue, 2015-02-03 02:00

Healthcare costs keep climbing, and so does our share of them.

Adults with insurance through work paid almost 7 percent more out-of-pocket in 2013 than in 2012, according to a new study  from the Health Care Cost Institute, a nonprofit funded partly by insurance companies.

“There’s more high deductible health plans and cost sharing, so the co-pays change,” says Eric Barrette, a senior researcher at the Institute.

The co-pays are going up, of course. High out-of-pocket spending could lead consumers to shop around more. Obviously you don’t want to just look for a bargain. You want a good doctor. But healthcare costs could fall if consumers were a bit more price-sensitive.

“If you’ve got more skin in the game, then you’re going to care much more about where you’re going to,” says Vivian Ho, a health economist at Rice University. 

But Ho says it’s hard to get consumers interested in shopping around. It’s tedious.

“And then you’re on the phone with all these people and you get transferred from one place to another,” she says.

Even when you do reach the right person, information can still be really hard to get, and inconsistent. Healthcare prices can vary, in the same state or even city.

 

 

 

 

 

 

 

 

Major retailers' herbal pills called into question

Tue, 2015-02-03 02:00

The New York Attorney General’s Office is asking four big retailers to pull some of their private label herbal supplements from store shelves due to what it says is fraudulent labeling. The office focused on GNC, Walmart, Target and Walgreens.

The AG's researchers went to a few of those retailers’ stores in new York state, rounded up a couple of their popular store-brand supplements, and then did some fancy DNA testing to see if the ingredients matched the labels.

Supplements at Walmart, which were supposed to contain ginkgo biloba, thought to be a memory booster, did not appear to have any of the plant’s material, but instead contained fillers like powdered radish and wheat—a potential issue for people allergic to gluten.

Tests on the other retailers’ private label supplements yielded similar results for other herbs such as St. John’s wort and valerian root.

The findings may resonate with health experts who’ve sounded alarms about weak federal oversight of the health supplement industry. Herbal supplements, unlike prescription medications, do not require premarketing approval from the Food and Drug Administration.

The New York Attorney General’s office is asking the retailers to stop selling the products in question and provide information on the products’ manufacturers, along with any relevant quality control testing results.

Walmart says it wants customers “to have complete trust in the products they buy from our stores.” The company will reach out to its suppliers and “take appropriate action.” But it has no plans to pull the products at this time.

GNC says it will cooperate with the Attorney general’s office but that it stands behind the quality of its private label products and that it does test them.

Target says it has not yet seen the full report and “can't comment other than to reiterate that Target is committed to providing high quality and safe products to our guests.”

Walgreens could not be reached for comment. It told the New York Times it would pull the supplements from store shelves nationwide.

Amazon heads to college

Tue, 2015-02-03 02:00

Amazon has struck deals with three major universities to create online university stores, which will sell course textbooks and other university-branded goods.

University of Massachusetts, Amherst, which is one of the institutions along with Purdue and University of California, Davis, estimates that its students will save about $380 a year in textbook costs, because of lower prices through Amazon.

"This is something that students have already started to do," says Ed Blaguszewski, a spokesperson for UMass Amherst. "Online sales of books have been increasing."

The online retailer will establish an on-campus distribution system at the three universities to deliver textbook orders within one day. It will also offer deliveries of other goods in one day for students who purchase a discounted Prime plan at $49—Amazon's customer loyalty program, which also includes access to its streaming video service.

Blaguszewski says the deal with Amazon will take over an expiring contract with Follett, one of the retailers that are licensed to operate many university bookstores. Another such retailer in the $10 billion college bookstore market is Barnes & Noble.

"Definitely, this continues to put pressure on Barnes and Noble," says Forrester Research analyst Sucharita Mulpuru. "This is yet again another example of how Amazon is gaining share."

"When any entity of that size comes into the marketplace ... that is going to be a formidable competitor, " says Todd Summer, who runs a university-owned bookstore at San Diego State and is the president of the National Association of College Stores board of trustees.

Summer says his store can compete with Amazon: "We've got a very dedicated staff that's tied into the campus."

NACS says there are some 4,500 college and university bookstores in the United State, and a majority are owned by the schools. Still, that leaves hundreds, at least, that are operated by Follett, Barnes and Noble, and others. They are likely targets for Amazon once existing contracts with schools expire.

And while Mulpuru says three stores do not market disruption make, she sees Amazon's move as one of building habits: getting young people used to its online services, which could yield dividends well after students graduate.

Right now, it's an interesting experiment, she says. And where better to launch an experiment than America's college campuses.

How an algorithm is taught to be prejudiced

Tue, 2015-02-03 02:00

Algorithms are everywhere. It’s what advertisers use to target users online, and it’s what search engines use to cough up all those results in a particular order. Even the data collected by governments is used to build algorithms which are then used to track, flag or analyze whatever the government is looking to track, flag or analyze.

But there’s a growing fear that these algorithms are learning stereotypes, and therefore abetting data discrimination. Some algorithms, for instance, make an assumption about an individual's ability to pay debt based on race. Basically, a lot of data goes into these “black box algorithms,” as they are known, and they produce results that are often discriminatory.

“I call it a black box because we don’t have access to these sorts of algorithms,” says Frank Pasquale, professor of law at the University of Maryland. Pasquale explores this subject in his new book, The Black Box Society: The Secret Algorithms That Control Money and Information.

The algorithms produce results based solely on the data that was fed to them, but the trouble is no one knows exactly how the algorithm is crunching that data. Yes, algorithms are racist, Pasquale says, but they are also “reflecting the preferences of thousands and possibly millions of users.”

He sees this as a problem because it’s likely to influence even those who don't buy into such stereotypes. And they may start thinking like the algorithm. He recommends something akin to “an anti-discrimination type of approach."

If it’s true, he adds, that we can never know how these algorithms work, then we must not allow certain results: “We need to move beyond saying we just reflect what people think and make them (algorithms) more progressive."

How to avoid raising a spoiled brat

Tue, 2015-02-03 02:00

For many parents, there is the very real fear of raising a spoiled brat; clueless about money, how to manage it, and how to be smart about it. According to Ron Lieber, author and personal finance columnist for The New York Times, raising a financially responsible child is a matter of being open to dialogue, as well as giving regular opportunities to be smart about money.

That means providing a regular allowance, free of any correlation to whether or not a child accomplishes tasks. In his new book, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About MoneyLieber argues that regular chores and allowances should accomplish two separate goals: fostering work ethic, and teaching a child how to manage money, respectively. 

Read an excerpt from "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money" below

The Allowance Debates

Three jars, unpaid chores, and a whole lot of patience

In the 18 or so years before your children leave for college, they are likely to want many of the following items: American Girl dolls. One-hundred-fifty-dollar sneakers. Then another pair six months later, when they grow out of the first pair. A second ear piercing. Beats by Dre headphones that will cover the piercings. Apps by the dozen. A microscope as powerful as the ones they use at school. Jeans with a price tag higher than in-state college tuition was 30 or 40 years ago. Concert tickets. Cars. An iPad. An iPhone. The new iPad. The new iPhone. Replacement chargers for the ones they lose, repeatedly. North Face jackets. A dog.

All the while, there will be many things you want them to do: Pick up a younger sibling from an after-school activity. Make the floor reappear in their room. Take out the garbage. Start dinner. Mow the lawn. Walk the dog. The dishes. Four loads of laundry. Grocery shopping.

Most parents consider these two lists and deliver a consistent message to their kids about the connection between them: Do the work, and we’ll give you money to save up to buy the stuff. They call the work chores, and the money is the children’s allowance. The lesson is that you can buy things, just so long as you do things.

It all seems reasonable. But there’s something fundamental that we fail to stop and ask ourselves during the decade or so that we make our weekly distributions to our children: What are we really trying to accomplish with an allowance anyway?

When parents tie allowance to the completion of chores, they make work the primary focus, not money. But children have many places to pick up a good work ethic. Strict teachers, drill-sergeant coaches, and choral conductors will instill plenty of discipline. Homework is a slog that builds stamina over time. Most part-time jobs that teenagers take on involve a fair bit of drudgery, but they adjust and get dressed down by difficult bosses, and few of them ever get fired.

We should certainly do our part at home by making them do all kinds of chores. But they ought to do them for the same reason we do—because the chores need to be done, and not with the expectation of compensation. If they do them poorly, there are plenty of valuable privileges we can take away, aside from withholding money. So allowance ought to stand on its own, not as a wage but as a teaching tool that gets sharper and more potent over a decade or so of annual raises and increasing responsibility.

Secret sauce, public sale

Tue, 2015-02-03 01:30
$258 million

How much Google Ventures initially invested in Uber in August 2013. It's put more money into the "e-hailing" service since then and a Goggle exec sits on Uber's board, but the companies could soon go from friends to bitter enemies, if they haven't already. Bloomberg dropped the bomb late Monday that Google is prepping its own ride service, likely connected to its self-driving cars. It would be a blow and a huge threat to Uber, which is investing in its own self-driving cars.

$10 billion

How much the college bookstore industry is worth — and now Amazon wants a piece of that market. The online retailer will establish an on-campus distribution system at three universities to deliver textbook orders within one day. It will also offer deliveries of other goods in one day for students who purchase a Prime plan  — Amazon's customer-loyalty program — discounted to $49. Prime includes access to its video-streaming service.

92

The number of measles cases recorded statewide in California as of Monday night, nearly a third in Orange County alone. The outbreak has been largely attributed to the anti-vaccination movement that's gained momentum in the past several years and threatened to become a partisan issue Monday. A new episode of Retro Report explores how debunked autism research, celebrity and unclear reporting by the media have helped push down vaccination rates in parts of the U.S.

6

At least that many court cases in the past two months have had to wrestle with the use of emoji in texts, Facebook posts or other online chatter being admitted as evidence. We pointed out one already, and the Marshall Project has outlined several more. They also created a nifty tool that pairs a random movie line with a random emoji to show how the context changes.

1949

The year Edsac, the Electronic Delay Storage Automatic Calculator and one of the U.K.'s earliest computers, first ran calculations. A piece of that computer was recently discovered in the U.S., according to the BBC.

25 milliliters

The size of a tube of McDonald's Big Mac secret sauce, now on sale in Australia until supplies run out. 

Special sauce, special sale

Tue, 2015-02-03 01:30
$258 million

That's how much Google Ventures initially invested in Uber in August 2013. It's put more money in the e-hailing service since then and a Goggle exec sits on Uber's board, but the companies could soon go from friends to bitter enemies, if they haven't already. Bloomberg dropped the bomb late Monday that Google is prepping its own ride service, likely connected to its self-driving cars. It would be a blow and a huge new threat to Uber, which is investing in its own self-driving cars now.

$10 billion

That's how much the college bookstore industry is worth — and now Amazon wants a piece of that market. The online retailer will establish an on-campus distribution system at three universities to deliver textbook orders within one day. It will also offer deliveries of other goods in one day for students who purchase a discounted Prime plan at $49 — Amazon's customer loyalty program, which also includes access to its streaming video service.

92

The number of measles cases recorded statewide in California as of Monday night, nearly a third in Orange County alone. This outbreak has been largely attributed to the anti-vaccination movement that's gained momentum in the past several years and threatened to become a partisan issue Monday. It was perfect timing for the new episode of Retro Report, which explores how debunked autism research, celebrity and false balance in the media pushed down vaccination rates in some parts of the U.S.

6

At least that many court cases in the past two months have had to wrestle with the use of emoji in texts, Facebook posts or other online chatter being admitted as evidence. We told you about one already, and the Marshall Project has outlined several more. They also created a nifty tool that pairs a random movie line with a random emoji to show how the context changes.

1949

That's the year Edsac, the Electronic Delay Storage Automatic Calculator and one of the UK's earliest computers, first ran calculations. A piece of that computer was recently discovered in the U.S., as reported by the BBC.

25 milliliters

That's the size of a tube of McDonald's Big Mac secret sauce, now on sale in Australia until supplies run out. 

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