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Credit monitoring becomes a standard offer after breaches

Tue, 2014-09-09 07:00

Credit monitoring services are becoming part of the standard response from big companies after large data breaches. Target offered them, now Home Depot.   

Consumers, however, need to know what these services do and do not do.

“Think about it in layers,” says Suzanne Barber, director of the Center for Identity at the University of Texas at Austin. "Your identity information is connected. Remember your credit card/debit card application. All that information is connected to your credit card number. So, if your credit card is breached, what's the likelihood the criminal can access much more information about you?"

Finances and bank accounts can lead a criminal to other assets like mortgages and car loans, and then health care data and even social media. 

A credit reporting agency isn’t monitoring everything, but you should map out what it is and isn’t monitoring so you can fill in any gaps with your own vigilance. 

Barber says it’s important to know how long a credit monitoring agency will be monitoring for. “Criminals are willing to sit on this info for quite some time before they harvest your assets – as much as five years.”

Credit monitoring “is a specific step for a specific purpose,” says Ted Julian, chief marketing officer with CO3 Systems, an incident response firm. But it doesn’t absolve the consumer of worry or responsibility. “These incidents hammer home some basic good housekeeping that we all know,” he says.

Basics like having a unique and strong password: Don’t have a unique and strong set of passwords, with different ones for different services. 

Use a credit card over a debit card. While it’s likely you will be reimbursed for a debit card loss, it may be more difficult and will take longer than if you are reimbursed by a credit card company. 

Look at statements — and not just for the large $500 purchases at the electronics store. Little "test" purchases of $2 or $0.50 can be used by a thief to determine whether an account is functioning correctly or not. 

What does economic security mean in 2014?

Tue, 2014-09-09 07:00

How do American families define economic security these days? 

Wealthier people in America have been raising their standards on what they consider economic security, even as people struggling with less are lowering their standards about what they see as acceptable. That's among the findings of a new book called "Cut Adrift: Families in Insecure Times."

Its author is Stanford sociologist Dr. Marianne Cooper, who also served as the lead researcher on Sheryl Sandberg's "Lean In," the Facebook COO's best seller on women and leadership. 

Click the media player above to hear Dr. Marianne Cooper in conversation with Marketplace Morning Report host David Brancaccio.

PODCAST: Apple's payment plan

Tue, 2014-09-09 03:00

The way some people put ketchup on their fries, Apple's expected to to pour words like "amazing" and "awesome" all over its script at its product launch in California today. After all, the articles about what an Apple wristwatch might look like, it's now time to actually see what the company has to offer. What might get overshowed is expected news today that could make the economy an even more liquid place. It's about a new mobile payment system in which you wave an device like a magic wand at the point of sale. Plus, what is called the JOLTS Survey is expected out later this morning. It covers how many job openings and what's about workplace turnover. This monthly report's star has risen each time Federal Reserve Chair Janet Yellin mentions it when discussing the health of the labor economy. So just what is JOLTS trying to measure? And what does being economically secure--or its antithesis--economic insecurity mean in 2014 America? Wealthier people in America have been raising their standards for what they consider economic security, even as people struggling with less are lowering their standards about what they see as acceptable. That's among the findings of a new book called "Cut Adrift: Families in Insecure Times." It's author, Stanford sociologist Marianne Cooper, joins us to discuss.

The JOLTS report, or how secure you feel about your job

Tue, 2014-09-09 02:00

The JOLTS report is expected out later on Tuesday. That's the Job Opening and Labor Turnover Survey, for the uninitiated among us.

JOLTS is s a monthly report that gained some notoriety after Federal Reserve Chair Janet Yellen started mentioning it when discussing the health of the labor economy. These monthly labor numbers are closely watched by the Fed because they show the rate of job openings in the U.S. against unemployment levels. 

The predictions: Many on Wall Street expect interest rates to rise if and when the Fed sees labor markets improve.

If you boil it down to what the report signifies, many argue JOLTS gauges how secure workers feel about the job market.

"I'm very happy at my current job, but if push came to shove, I'd feel very comfortable being able to get a job within two weeks to a month," says Kansas City–based marketer Wayne Larson.

Sure, Larson sounds confident, but the 26-year-old actually doesn't much trust the labor market, which is why, on top of his 9-to-5 job, Larson is networking.

"You know, sometimes my girlfriend asks, ‘Gosh, why are you always out there having coffee with somebody?'" he says. "It's because you gotta do that." 

Economist Dean Baker says you've got a strong economy when workers feel like they can quit tomorrow — minus the coffee sit-downs.

He says JOLTS data shows workers' confidence still hasn't returned to pre-Recession levels.

"You still have a very weak labor market, and what we really want to focus on is getting more jobs," which Baker says means continuing to keep interest rates low.

Wayne Larson's not up for debating economic theories.

He says he's just going off a simple creed he's learned from entering adulthood after the Recession. "If you're not grinding, you're not getting," he says.

Will Apple's iWatch lead to 'frictionless' payments?

Tue, 2014-09-09 02:00

Apple is hosting a big event for consumers and the press on Tuesday, and along with a new iPhone model and the long-rumored "iWatch," the tech world is buzzing with the possibility that one or both devices will allow for mobile payments.

Europeans can simply tap their credit cards to make a payment, a system that’s more secure than swiping a magnetic strip. Many African countries use mobile payment systems because they’re more convenient and safer than cash. But the U.S. has historically lagged a bit when it comes to adopting new payment technologies, says Deborah Baxley, a principal at CapGemini.

“In some ways, the good is the enemy of the better,” she says, explaining that the current system in the U.S. generally works well. “From the consumers’ point of view, it’s very fast and convenient.”

Plus, there’s a chicken-and-egg problem with new technologies: merchants don’t want to install them until they’re widely used, but consumers won’t adopt them until the infrastructure is in place to use them.

That could change with events hosted by Apple and Intel on Tuesday. The companies may debut products with near-field communication technology, or NFC, which would allow consumers to pay for purchases by holding their device near a register, instead of swiping a credit card.

More than simply replacing the plastic card, the real promise of a so-called mobile wallet is the benefits it could offer consumers, says Rajesh Kandaswamy, a research director with Gartner. “For instance, with your discounts [and] deals automatically applying, that is interesting for the consumer.”

Americans never stop working

Mon, 2014-09-08 13:51

A new research paper from the OECD entitled "Long Workweeks and Strange Hours" sought to highlight some characteristics of the American workforce this week.

According to the study, the average workweek in this country for full-time workers comes in at 47 hours, just about the same as it was ten years ago.

More interesting, perhaps, is that 29 percent of American workers say they do some paid work on weekends, and a quarter of them work at night.

Most American workers are working for the weekend. Nearly 1/3 of Americans are working on it http://t.co/Zuhn9O1LA9 pic.twitter.com/wf2kmYSCZI

— Washington Post (@washingtonpost) September 8, 2014

Americans, you work too much: http://t.co/WUTjrzpmmv says @_cingraham pic.twitter.com/m3GRr9PkrC

— Wonkblog (@Wonkblog) September 8, 2014

Should we know how much stores take in from food stamps?

Mon, 2014-09-08 13:51

In recent years, the U.S. has spent more than 70 billion taxpayer dollars annually on food stamps, formally known as the Supplemental Nutrition Assistance Program. SNAP dollars go to millions of low-income Americans, who spend the money to buy food at stores across the country.

Big-box discount stores and large supermarkets take in the most food stamp dollars. At the same time, most of their employees earn little enough to qualify for food stamps themselves. The nation’s largest retailer, Wal-Mart, told investors it takes in about 18 percent of all SNAP spending, which would amount to an estimated $13 billion last year.

But the government has never disclosed how much individual companies take in from food stamp dollars.

The U.S. Department of Agriculture, which runs the food stamp program, has long argued it is required by law to keep the information private, because it amounts to a retailer’s trade secret. Now, the USDA is reconsidering.

Monday was the last day of a month-long public comment period set up by the USDA. A few hours before the deadline, nearly 500 comments had poured in from a range of voices in the food retail industry and beyond. Input has come from owners of large-supermarket franchises, gas station convenience stores, health food stores, farmers market managers, anti-hunger and nutrition advocates and private citizens.

You can read them all here. Below is a sampling:

I throw my full weight into supporting the release of retailer data concerning food stamps. As a publicly-funded support service, citizens deserve total transparency in what happens to that money, and especially if there's the possibility that companies are profiting from the program. From the reports I've heard concerning Wal-Mart in particular, their employees who receive food stamp support are not only encouraged to then purchase products from Wal-Mart, their very employment at such low wages is made possible by receiving supplemental support.

This latter point mirrors the corporate welfare loophole that also occurs with health care coverage i.e. employees not making enough to have health insurance so they resort to publicly-funded emergency room treatment.

Wal-Mart's only defense to releasing the data seems to be that they are afraid competitor companies could exploit said data to better target the market base in the area. So what's on the scales here is, on the one hand, Wal-Mart's business interest and on the other, the entire public's interest. 

Please side with democracy, transparency, and fairness, not the corporate favoritism that is going to erode our great country.

 
— Lisa Roiter, New York, NY

 

 Seven-Eleven Hawaii is adamantly opposed to sharing our store SNAP sales information for various reasons.

1. Sales information of any type and for any company should be proprietary and not shared with other competitors or the general public.

2. The disclosure of SNAP sales or any sales information to our competitors would provide them with information that they are not entitled to have nor have they worked to build the clientele for the related sales.

3. All companies work continuously to increase their competitive advantage in the marketplace and should not be required to share their corporate intelligence with the competitors or the general public.

— Greg Hanna, Seven-Eleven Hawaii, Inc, Honolulu, HI

 

Aggregated annual/monthly SNAP redemption data at the individual store level is indeed confidential. Release of this data will harm the small stores in the following ways.

The big box store could use this data to target areas of potential growth. Studies have shown that when a big box store (Wal-Mart, Lowes, Home Depots, etc) I placed in a neighborhood the small businesses in the area goes out of business.

Small stores are already overburden with the amount of regulations that they have to report and follow. This is reporting requirement will add more cost to the small businesses. This cost will eventually be past down to the consumer. Small retailer in comparison to big box stores are already operating will slim profit margins. They do not need the added burden of this requirement.

For transparency, I would have no problem with the release of this data at the state level. This would protect the small retailer from the big box stores using this data to target their growth. The burden will also shift to the local FNS offices. They already have the data at hand and the small retailer do not have to worry over additional reporting requirements.

My store have been a SNAP authorized retailer for over twenty (20) years. Small retailer are the back bone of this country. It is the small retailer that hires the most people in comparison to the big box store. It is the small business that will have the greatest harm because of this requirement.

— Xavier Gallon, Carolina Market, Philadelphia, PA

I'm not as concerned about the public seeing this info as if anyone cares, but big competition could use that info to target smaller competitors like us as if we don't already have a target on our backs.

— Randy Jackson, Rockdale Grocery, Conyers, GA

 

If retailers SNAP transparency impedes their business, that's a problem they have to deal with internally. Tax payers support SNAP to aid their fellow citizens in need, not to aid SNAP authorized retailers make their bottom line. Their business models should not be reliant on SNAP benefits in the first place. 

I think data per store is most useful. It's always best to be as detailed as possible and there's no reason to withhold details from the tax payers funding the SNAP program. Aggregated sales at all stores within a state or nationally should be provided in addition to per-store data. The public has a right to know where SNAP benefits are being spent at every level. How else would we be able to make informed decisions when we vote or reach out to our representatives about changes we'd like to see in SNAP benefits. Transparency is the only thing that can empower the public to make informed decisions. 

I think it's crazy  this information was ever not available to any citizen who was interested.

— Bri Kapellas, Private Industry

 

The New York City Coalition Against Hunger stands in support of the United States Department of Agriculture in providing greater transparency in the release of data related to retailers and the Supplemental Nutrition Assistance Program (SNAP). The New York City Coalition Against Hunger agrees that the retail data that the USDA requests to be released to the public in the Food and Nutrition Act should be less restricted for transparency purposes.

In general, releasing of data and increasing transparency is in the interest of the public. The New York City Coalition Against Hunger supports the USDA as it strives for the production of more information that can be used to hold government accountable to the public, increase the trust between the government and public, allow the citizenry to be more educated, and allow the government to make better decisions about the peoples well-being, both at elections and at all other times.

Aggregated annual SNAP redemption data at the individual store level should not be considered confidential business information. 

The amount of money that is spent by SNAP recipients is a sizable share of our economy. In 2013, alone, $76 billion were allotted to SNAP beneficiaries. Currently there are approximately 47 million Americans who spend an average of about $133 per person each month in SNAP benefits at grocery stores throughout the nation. While statistics are available for the demographics of the recipients of those SNAP benefits, the public does not have information on where the benefits are spent. 

It is essential to understand and manage our food systems. There have long been links between poverty and obesity, and lack of access to affordable, nutritious food. If we know what people are purchasing with their EBT cards and where, we can link subsidies to healthy food to make it affordable and more accessible through the use of programs such as New York Citys HealthBucks which is used at farmers markets. Purchases can also be tracked, tabulated and linked to the USDAs food desert map so that tactics can be developed to bring more nutritious, affordable options to those who lack them.

In addition to those individuals whose diets are subsidized, stores that sell food products and accept EBT transactions profit directly from SNAP. The public has a right to know which corporations are the beneficiaries of this government money. When many grocery and other stores that accept SNAP have employees who earn wages that are low enough to be eligible for the government food assistance that they and their customers spend, it is in everyones interest to know the facts.

— Lisa Levy, NYC Coalition Against Hunger, New York, NY

Disclosing all benefits utilized in a retail establishment should be no problem. For the retailers that administer the program/benefits correctly and legally they have nothing to hide.

Complete transparency with regards to the SNAP benefits is encouraged as far as I am concerned.

As well as everyone receiving benefits should have to pass a random drug test to get or continue getting benefits.

— Roy Johnson, CJ’s Quick Stop, Jacksonville, TX

What, exactly, Alibaba does

Mon, 2014-09-08 13:51

The Chinese e-commerce company Alibaba aims to hit a Wall Street milestone later this month: biggest IPO ever. Today, the company started what Wall Street calls a "road show" — nonstop meetings with potential investors, in an attempt to raise more than $24 billion. Analysts say the company’s likely to raise at least that much.

But all of the hype leaves open a basic question: What is Alibaba? Is this just a version of Amazon from China?  

No. Alibaba’s not a retailer. One of its biggest branches is a virtual shopping mall called Tmall, where consumers buy stuff from retailers and directly from commercial brands. Alibaba makes its money there much the way Google and Facebook do: by charging businesses for access to consumer eyeballs.

Jeff Papp, an analyst with Oberweis Asset Management, gives an example: “I go to Tmall, and I’m interested in buying bananas, and there’s 100 vendors of bananas,” he says. “So, [if] you’re a vendor of bananas and I am, too... I may pay more for my product to be listed first.”

Alibaba has two other major arms, one of them an eBay-like site called Taobao. The other, the company’s original site, Alibaba.com, does something that barely exists here: helping businesses find suppliers.

Charlene Li, founder of the tech consultancy Altimeter Group, says she once used Alibaba.com to research laptop manufacturing. “The fact that I could put out a bid, and talk to complete strangers in parts of China... that I had no idea where these people were,” says Li. “You think about: ‘I could actually do this at scale.’”

Alibaba has lots of other, smaller business lines — and recently it has made investments in U.S.companies like ShopRunner.com and the ride-share startup Lyft. The scale of those investments is small for a company that pegs its own value above $150 billion.

“I think what they’re trying to do with some of these investments is to better understand the U.S. markets,” says R.J. Hottovy, a tech analyst for Morningstar, “and the differences between its home market... China... and the U.S.”

In other words, this is R&D spending, not an attempt to take on Amazon directly.

What you could buy (on Alibaba) for $155 billion

As the massive Alibaba IPO approaches later this month, we've been trying to wrap our heads around the $155 billion valuation for the Chinese e-commerce company. As it happens, Alibaba lists a number of unique items on its online marketplace that could help put things in perspective. Here's a list of some interesting items you could buy on Alibaba, and how many of them you could get with $155 billion.

15 million silicone life-size Paul Walker statues

 

Image courtesy of Alibaba.

Are you still mourning the untimely loss of your favorite movie star? Maybe you could take the edge off by purchasing a silicone model of his exact likeness. You could buy not just one, but enough to populate a small country. If you want to mix things up, you could even throw in some wax models of other celebrities like Pierce Brosnan, Michael Jackson, or even the pope.

375 million pairs of breast implants

 

Image courtesy of Alibaba.

Alibaba apparently sells all sorts of medical equipment, even down to supplies for specific implants. For the old standby of cosmetic surgery, you are required to make a minimum order of 100 pairs, so you can't exactly get them on the cheap, but the breast implants probably wouldn't be much use without a surgeon anyway. With $155 billion, you could buy enough to stock the world's largest plastic surgery practice.

5 million worm-shaped amusement park trains

 

Image courtesy of Alibaba.

Planning to open the world's creepiest amusement park chain, but can't decide on what rides will best frighten children? Look no further than the "Popular! big worm amusement park electric train." With $155 billion, you could afford to buy a 300,000-kilometer track for your worm-themed attraction.

3.3 billion packs of human hair

 

Image courtesy of Alibaba.

We've reported before on how you can sell your own hair for a decent amount of money, and it seems Alibaba is the place to go to see the other side of that transaction. You can even pick out varieties like Brazilian, Peruvian or Malaysian for your wigs or extensions.

7.1 billion cases of whiskey

 

Image courtesy of Alibaba.

With $155 billion, that bar you've always thought about opening could be stocked well enough to serve a glass of whiskey to everyone on the planet for at least of couple of weeks, all thanks to Alibaba's surprisingly large selection of wholesale alcohol.

56.6 billion kilograms of spandex

Image courtesy of Alibaba.

Need more material for spare "Star Trek" uniforms for you and your friends after the old ones got a bit ripe at the last convention? Alibaba has got you covered, and with $155 billion, you could probably even manage to outfit Starfleet for real.

What $500 million buys for the Syrian opposition

Mon, 2014-09-08 13:51

President Barack Obama is renewing his call for Congress to authorize another $500 million for pro-Western rebels in Syria. There is growing pressure on the president to combat ISIS, also known as the extremist terrorist group Islamic State, and to help topple the regime of Syrian president Bashar al-Assad.

But what does $500 million buy in this scenario?

When the president first proposed the aid back in June, the money was expected to train and arm 2,300–2,500 Syrian rebels. That’s less aid than Assad's opposition wants.

“You’re talking about everything from Kalashnikovs to rocket launchers and grenade launchers,” says Andrew Tabler, a Syrian expert at the Washington Institute for Near East Policy. “The real question is does that include anything close to an anti-aircraft weapon?”

The administration is worried about funding those kinds of weapons because they can easily fall into the wrong hands. A new report indicates that anti-tank weapons once owned by Syrian rebels are now in the hands of Islamic State militants.

Haim Malka, deputy director of the Middle East program at the Center for Strategic and International Studies, says the problem is figuring out exactly which groups to give money to.

“Many of them may share U.S. objectives of fighting the Islamic State or fighting the Assad regime today, but we’re not sure exactly what their agenda is going to be tomorrow.”

Tabler of the Washington Institute for Near East Policy predicts the U.S. will get more deeply involved in the Syrian conflict.

“We were naïve to think we could get out of it,” says Tabler. “What happens in the Middle East doesn’t stay in the Middle East.”

Your Wallet: The cost of elder care

Mon, 2014-09-08 13:14

The cost of elder care continues to rise, along with the number of people who need it.

Are you taking care of an older relative? Or planning to?

Tell us on Twitter @MarketplaceWknd or email us, we'd love to hear your story.

It's not you, it's my cost-benefit calculations

Mon, 2014-09-08 11:24

Companies have lots of ways of optimizing for the best results. Big data, customer satisfaction and good old cost-benefit analysis are, of course, the buzz words of the moment

As writer Josh Freedman made clear in a story at McSweeney's Internet Tendency, they are popping up everywhere

Susan, we need to talk. I’ve been doing a lot of thinking lately. About us. I really like you, but ever since we met in that econ class in college I knew there was something missing from how I felt: quantitative reasoning. We can say we love each other all we want, but I just can’t trust it without the data. And after performing an in-depth cost-benefit analysis of our relationship, I just don’t think this is working out.

Listen to his piece adapted for the radio in the player above. 

 

Susan, we need to talk. I’ve been doing a lot of thinking lately. About us. I really like you, but ever since we met in that econ class in college I knew there was something missing from how I felt: quantitative reasoning. We can say we love each other all we want, but I just can’t trust it without the data. And after performing an in-depth cost-benefit analysis of our relationship, I just don’t think this is working out.

Please know that this decision was not rash. I just made a series of quantitative calculations. The calculations are fairly simple. Sex with you grants me seventeen utils of pleasure, but I derive negative utils from all of the cuddling afterwards.

Meanwhile, I could be doing plenty of other things. I could be drinking at the Irishman with a bunch of friends from work. I derive between 20 and 28 utils from hitting on girls at the bar. However, most of those girls don’t laugh at my jokes, which drives down utils gained. 

I know this breakup might come as a bit of a shock to you. I have included in my calculations the fact that as a courtesy I will have to pay for this dinner in its entirety, which, given the gender parity we have previously expressed in our relationship, would normally cost me only half that.

In the meantime, I need to get back home. My utility calculations tell me that the best thing I can do right now is strip down to my boxers, microwave a quesadilla, and watch a bunch of episodes of The Wire. It might seem strange and horribly unproductive, but it’s not me — it’s just my utility function.

Electrolux gets a deal, GE Appliance finds a home

Mon, 2014-09-08 07:00

Swedish consumer appliance company Electrolux announced its plan to buy GE Appliances for $3.3 billion. GE, parent company of GE Appliance, is probably breathing a great big sigh of relief.

GE is a very large company with subsidiaries in aviation, oil and gas with net profit margins in excess of 15 percent, whereas its appliance division is only making around 5 percent. 

“Relatively speaking, it’s been neglected for years and financial performance has been poor,” says Brian Langenberg, principal at Langenberg & Company. “General electric is selling it for at least a third less than what they should be selling it for; they just want out.”

Electrolux, on the other hand, is getting a deal.  

“It gets them into the American market, which is a market where they haven’t been much of a factor,” says Erik Gordon, professor of business law at the Ross School of Business at the University of Michigan. “That’s important because the American market is growing at 6, 7, 8 percent, but Electrolux’s main market, Europe, is not growing at all; less than 1 percent.”   

Electrolux also gets a 48 percent stake in Mexican appliance company Mabe, extending its reach in North America even further. 

PODCAST: Millennials aren't building credit

Mon, 2014-09-08 03:00

First up, a new report that millennials are avoiding credit cards. A study out today by Bankrate.com finds that younger adults--the ones who hit the workforce around the year 2000 and younger--are avoiding credit cards. That's in part because they don't want more debt beyond their student loans. And when members of Congress get back to work in Washington today, Republicans and Democrats expect to pass a continuing resolution to keep the government open. The lack of drama on that score is connected to the election year. Plus, more on the growth in popularity of Latin music among non-hispanic people.

What's next for Atlantic City?

Mon, 2014-09-08 02:30

Around dusk on a recent sticky summer night, Mark Gawel and his son took turns taking photos of each other standing in front of the big silver letters marking the entrance to the Revel, Atlantic City’s newest casino.

He wanted to “get a couple shots of it, just in case it doesn’t exist [soon],” he said.

In late August, the city was still hoping a last-minute buyer would swoop in and keep the bankrupt casino open. But the Revel closed in early September and workers took down those silver letters. Three other casinos have already closed or will close this year, leaving roughly 6,000 casino workers unemployed and the city searching for a new path forward.

New Jersey Governor Chris Christie will host a summit on the future of Atlantic City on Monday, with local officials, congressmen, and gambling industry stakeholders all pondering the fate of the faded gambling mecca.

“Reinvent Atlantic City again,” advised Gawel, a housekeeping supervisor at a nearby casino. “It’s a shame. After 35 years of having casinos here, we should have been bigger, more like Vegas.”

He thinks the city needs to capitalize on its ocean location and to better cater to families.

“We’re going through a transitional time,” said John Palmieri, the executive director of the state’s Casino Reinvestment Development Authority. “There are 20 new casino operations within a couple hours' drive now, and five years ago they didn’t exist.”

He agrees that Atlantic City needs to bolster its non-gaming options.

“Our role is to create these other reasons for visitation, mostly driven by tourism, but the convention trades and some of the destination retail and the hotel activities that can survive beyond gaming,” he explained.

Gaming revenue peaked in 2006 at over $5 billion, but it’s been on a steep slide since. A few years ago, Atlantic City started using the slogan “Do Anything. Do Everything. Do AC,” trying to market itself as more than just casinos.

Atlantic City Mayor Don Guardian wants the city to host more events, concerts, and conferences.

“What we’ve lost is the older people who used to come,” he says. “The blue-haired Italian ladies aren’t coming here anymore [to] the casinos. What we have is a young crowd, because the casinos that have nightclubs are doing real well.”

He’s hoping a new campus for a local university will open by 2016, attracting even more young people.

But the city could take another hit if plans move forward to build new casinos in northern New Jersey.

Del Rowley was a regular at one of Atlantic City’s closed casinos. Standing on a street corner in Manhattan, he says if a casino opens closer to New York with similar games and “comps,” he’d switch in a heartbeat.

“Atlantic City’s two and a half hours [away],” he said. “So it’s a lot easier to go someplace closer.”

Moreover, all the press over Atlantic City’s troubles doesn’t help its fight for business.

There’s a famous quote often attributed to Mark Twain: “Reports of my death have been greatly exaggerated.” Atlantic City is hoping to be able to say something similar.

For personal finance advice, ask a millennial

Mon, 2014-09-08 02:30

Millennials seem to be avoiding credit cards. A study published on Monday by Bankrate.com says younger adults prefer debit cards because they don’t want to fall into debt — or, in the case of people with student loans, further into debt.

When Bankrate analyst Jeanine Skowronski first looked at the data, she thought she saw naiveté. These younger adults who shun credit cards didn't seem to know they would need a credit history when they wanted to buy a car or a house.

Then she did some interviewing.

"I talked to a lot of millennials that said they were going to get credit cards, but they weren't so thrilled with it," she says. "They were like, 'I know I have to do this because I want to rent an apartment,' or 'I know I have to do this because I’m getting married, and I want to buy a home — but if I didn't have to, I wouldn't.'"

That sounds pretty smart to Marc Fusaro, an economist at Arkansas Tech. Millennials have figured out what economists — and businesses — have known for years: "Hands down, if people are using a credit card, they will spend more money," Fusaro says. 

One possible caveat is this recent study from researchers at Carnegie-Mellon University, who expected to confirm the general consensus with a new experiment, but then didn't. They gave consumers an incentive to use credit cards for lunch to see if that led them to buy pricier meals. They identified two kinds of credit-card users in their study group: “Convenience users,” who pay off balances in full every month, spent more; “revolvers,” who carry balances and pay interest and fees, spent less.

In general, though, Fusaro's research shows that some consumers used debit cards to counter the tendency to spend, and to avoid racking up interest.

"A debit card is a check on how much money I can spend," he says.

Millennial spending by the numbers:

63 percent

 That's the big number here. 63 percent of consumers aged 18 to 29 don't carry a credit card at all, and 23 percent carry just one card. Next to no millennials have more than two cards.

35 percent

 That same figure for adults aged 30 or over — only a little more than a third have no cards. The older set was also far more likely to carry a lot of plastic. Of the consumers with two credit cards, Bankrate found, about two-thirds were over 50.

3 to 1

 A recent Creditcards.com survey found millennials prefer debit over credit three-to-one, and they don't use cash nearly as often as their elders, especially for small purchases. But young people aren't alone — an April study from the Fed found debit-card use has risen across the board since 2000. And checks? Forget it.

$29,400

 The average debt for graduating seniors from four-year colleges in 2012, according to Project Student Debts. Entering adulthood with this burden and growing up during the Great Recession could be making millennials very debt-adverse, Bankrate says.

40 percent

 The number of millennials who pay off their credit card bill each month. Per Bankrate's own study, that's only a portion of a pretty small group, but the idea of paying off purchases on time could be scaring other young adults away from getting a card at all.

A separate survey from BMO Harris points to a possible reason for the slow payment. They say 39 percent of millennials — defined here as 18- to 35-year-olds — erroneously believe keeping a balance on one's card can boost credit scores. In fact, the opposite is true.

628

 The average millennial's credit score, according to Experian. Regardless of their attitude toward paying on time, waiting to get a credit card can make it harder to build a credit score. Let's look back at the older set, with the George Costanza wallets full of credit cards. Baby Boomers average a credit score of 700, and Generation X averages 653.

CORRECTION: An earlier version of this story stated 63 percent of consumers aged 18 to 24 don't carry a credit card at all. The correct consumer age bracket is 18 to 29. The text has been corrected.

Congress is back in town

Mon, 2014-09-08 02:00

As Congress returns to Washington on Monday, Republicans and Democrats expect to pass a continuing resolution in the coming weeks to keep the government open.

Unlike recent years, when we’ve had our share of partisan economic drama, this fall looks calm as we approach the midterm elections. 

Politically, that’s smart, says American University Professor James Thurber. With an approval rating in the cellar — nearly 8 out of 10 Americans think Congress is doing a bad job — you want to tread lightly.

Thurber says passing a continuing resolution to keep funding the government is the epitome of treading lightly. “A continuing resolution, or a CR, which continues spending at the same level, avoids making hard choices,” he says.

This approach means federal programs that are performing well don’t get extra funding, and the programs that need to be eliminated keep getting cash.

Thomas Mann of the Brookings Institution says it’s nice to have less drama in the early fall air. But he recommends the public guard against any sense of optimism.

“What [is really going on] is just another indicator of how our government can no longer work when power is divided between the two parties,” he says.

Mann says given the general dysfunction, Congress isn’t expected accomplish much else in the coming weeks, when members have campaign trail commitments. 

Salsa helps drive Latin music higher

Mon, 2014-09-08 02:00

The Latin Grammys are coming: Nominations will be out September 24, and the 15th annual broadcast will be held in Las Vegas on November 20.

The popularity of the show is a sign that the Latin music market is strong, and getting stronger. One category within Latin music — salsa, or “tropical” as it is designated in the awards — is gaining more fans among non-Latinos in the U.S., and abroad as well.

All one has to do is to Google the phrase "I want to go salsa dancing tonight" in any major American city, and multiple venues for social dancing will pop up. They often feature live, multipiece bands, and are packed several nights per week with dancers spinning, dipping and flipping their partners across the floor.

Learning to do this flashy, athletic and intimate dance form takes time and money.

Sarah Riddle owns The Viscount studio in Portland, Oregon. She’s done good business teaching salsa to Latinos and others — even through the recession. “People are struggling and they want to spend money on things that feel good,” says Riddle, “and so there’s an increase in that market.”

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Here's Sarah Riddle demonstrating various styles of salsa. In order: ballroom, Puerto Rican, Cuban, and L..A. styles. (Video cred: Mitchell Hartman)

The Latin market — not just salsa from the Caribbean (which also includes salsa variants bachata, timba and kizomba), but also Mexican regional and pop music — is one of the bright spots for the industry. Latin digital-music sales were up twice as much as the rest of the music market last year (14 percent vs. 7.6 percent), according to the Recording Industry Association of America.

Music marketing consultant Peggy Dold of Navigation Partners has penned the “Latin Corner” blog for the Association of Independent Music Producers. She points out that this a promising market for a struggling music industry. The U.S. Latino population skews young; Hispanics listen to radio, use online streaming services such as Pandora and watch music and dance videos, more than other demographic groups.

Salsa is now expanding across the U.S. and overseas, with flashy competitions hosted in several hundred cities now. According to Albert Torres, a Los Angeles–based salsa promoter, interest and participation is growing, from North America and South America to Europe, Asia and North Africa. He regularly travels to Japan, Germany, Morocco, Turkey and other countries to host Salsa Congresses.

“I don’t care why people walk in the door — whether it’s to watch, to dance or to perform in a show themselves, it just gets into your core,” says Torres. “All these African beats that came over from 1533 until now — sooner or later you have to put your seat belt on because you’re hooked.”

At the annual Salsa & Bachata Congress in Portland, Oregon, in June, partner teams from as far away as Idaho and British Columbia spent hundreds of dollars each on travel and sequined costumes to compete. Latinos and non-Latinos were represented among the top competitors. The winners — including Erika Lachen Meier and Malik Delgado — will go on to compete at Torres’s World Latin Dance Cup in Miami in December.

“I go out there onstage, and when I come back and remember nothing, that’s when I know it went well,” said Lachen Meier after the competition. Delgado added: “It’s great just to feel the energy, and next thing I know her foot’s up in the air and she’s in a dip and I’m asking, ‘Are we done?’”

Latin rap artist Carsello was in town from New York, showcasing his "urban salsa" — a crossover genre — at the Portland event. “Now we’re taking salsa to a pop-culture level, by English-rapping, but with traditional salsa music,” he said. “Salsa is here to stay, and it’s just going to get bigger.”

Click the video player at the top of the article to see Sarah Riddle giving reporter Mitchell Hartman a dance lesson at The Viscount studio in Portland, Oregon. (Video cred: Cliff Rees)

The rise and fall... and rise and fall of Atlantic City

Mon, 2014-09-08 02:00

On a recent summer day, Atlantic City’s famed boardwalk was thick with tourists in bathing suits and T-shirts, crossing between casinos and a beach dotted with candy-colored umbrellas. Nelson Johnson, a local historian and author of the book "Boardwalk Empire," stood beside one of the area's oldest buildings, built as a hotel in the 1860s and now used as a casino.

At the height of Atlantic City, he explained, there wouldn’t have been any blank spaces along the boardwalk.

“The thought of an unbuilt piece of property on the Boardwalk in the 1920s was impossible,” he said. “It was such hot property; there were so many people walking by.”

But there are empty spaces on the boardwalk now, plus empty buildings. As the HBO show "Boardwalk Empire" (based on Johnson's book) begins its fifth and final season this Sunday, the curtain is also dropping in real life for some of Atlantic City’s casinos — three have closed this year so far, and another will follow in a few weeks.

So, how’d Atlantic City get here?

A resort for the working class

Johnson says the city got its start with the opening of a railroad in 1854. Originally, the idea was to build a health retreat for the wealthy, though it was the working class from Philadelphia — 55 miles to the northwest — who really made the city into “America’s Famous Playground," one of its slogans. Factory workers could come down for the day, dress up to stroll the boardwalk, and feel like they were a part of the middle class.

“So it was a booming town for close to 50 years, from the late 1870s, past World War I, and into Prohibition,” say Johnson. “Prohibition really was the zenith of this town.”

Authorities in Atlantic City ignored alcohol bans because it was good for business. The city was always a one-industry town, completely dependent on tourists — and keeping them happy.

The playground tires

But when prohibition ended in 1933, there was less reason to come here.

“So after World War II is really when things started to decline in terms of numbers,” says Heather Pérez, archivist at the Atlantic City Free Public Library. “The rise of commercial airplane flights made things much easier for people to go elsewhere, more exotic locations, more interesting things to do and see.”

Over the next few decades, Atlantic City began to fade; its hotels failed to keep up with their counterparts elsewhere. When the Democratic National Convention was held here in 1964, the press gave the city terrible reviews, says Pérez.

Atlantic City needed something to draw the crowds back, so in 1976, New Jersey passed a law allowing casinos here. And for a while, gambling worked.

Casinos as (temporary) salvation

“The first casinos opened late ’70s and there were crowds of people waiting to get into them,” says Pérez. “The boardwalk was filled with these lines and, one by one, the casinos popped up along the beach and along the marina.”

For years, Atlantic City enjoyed a monopoly on gambling on the East Coast. But in the mid-2000s, the city’s luck turned along with the nation’s economy. Gamblers abandoned Atlantic City for new casinos in the region, including Pennsylvania, Maryland, and Delaware. Casino revenues are now roughly half their 2006 peak.

About two years ago, developers cut the ribbon on the Revel, a sleek, blue-glass hotel and casino with a $2.4 billion price tag. It was supposed to help revive the city.

But last month, a customer rode down the elevator of the Revel shouting "Last time." It closed on September 1, just a day after its neighbor, the Showboat.

Mary Thomas and her husband made a last stop at the Revel a few weeks ago. There’s a new casino just a few miles from her home in Hanover, Pennsylvania, but they still prefer to come here.

“We drive three hours to Atlantic City because we just enjoy the ocean and the boardwalk and all the shops on the boardwalk,” she says. “It’s just a nice little getaway.”

Thomas comes to gamble, too — and that’s encouraging to Don Guardian, the mayor of Atlantic City. Dressed in a sharp cream suit and bright blue shirt, he sits in his office overlooking downtown. He has big plans for the city, but he believes a large part of the city’s future lies in its roots with tourists like Thomas.  

“Where you came here, it was a casino. I think now you come to a place like the Borgata, like Harrah’s, cause it’s a resort,” he explains. “So a nice room, water views, a spa, a nightclub, a theater, fun food, fine food, conference rooms and, oh by the way, gambling as well.”

Four casinos are closing, but eight will remain, and Atlantic City gets a nice cut of their gaming revenue. Guardian thinks the gambling business here will stabilize and continue to be a mainstay of the local economy.

The city’s shuffling the deck and hoping for a better hand this time.

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