It looks like Donald Trump has landed back in the hot seat. New York Attorney General Eric Schneiderman is suing the real estate mogul for fraud and violating consumer protection laws. The suit stems from complaints dating back to 2005 over Trump University, now known as the Trump Entreprenuer Institute, a school of sorts, to teach people the finer points of the real estate business.
The attorney general's office alleges that students, who paid anywhere from $1,500 - $35,000, would work with handpicked instructors to land real-estate deals. According to the lawsuit, once students entered the so-called university, they were encouraged to enroll in additional mentorships that cost tens of thousands of dollars. Students thought they’d meet Trump, but all they got was their photo taken with a life-size picture of the man. Trump’s lawyers say the case is politically motivated, and that really Schneidermann is just upset because Trump didn’t write a his campaign a big enough check when he was running for office.
Both for-profit or not-for-profit higher education institutions are facing more government scrutiny lately. There’s a lot of concern that schools are luring students in, getting their tuition, and then delivering a less than stellar product.
Last week, the Obama administration issued a proposal that would rate schools on some measures like graduation rate, debt, and earnings of graduates. If you believe what New York's attorney general is saying about Trump’s school, it’s pretty easy to guess where Trump Entrepreneur Institute would fall.
The feud continues between Time Warner Cable and CBS over how much the cable provider should pay the network to carry its shows. CBS has been dark since early August for millions of Time Warner customers. With the NFL football season starting Sept. 5, there’s pressure on both companies to work out their differences.
“If I am a customer and I’m a significant NFL fan, I’m going to start thinking about alternative platforms,” Brannon says.
Brannon says fans might switch to another cable provider. But Time Warner Cable spokesman Jon Gary Herrera says there’s no need for that.
“CBS is still delivered over the air for free in all these markets,” Herrera says.
So the cable company is offering some customers free antennas.
A CBS spokesman declined to speak on the record. But analyst Erik Brannon says the network is losing money -- possibly millions -- in payments from Time Warner Cable while its channels are dark.
“They’re giving up possible revenue,” he says, “holding out for more later.”
But with football season starting next week, Brannon says he doesn’t think either side can hold out for long.
Women make up about 16 percent of equity partners at big law firms -- a number that has barely budged in a decade. This despite the fact women graduate from law school in almost the same numbers as men. Women partners also earn on average just under $500,000 a year, while men earn $734,000, according to a recent survey of lawyers' compensation. Some female lawyers have had enough of these discrepancies, and they're pushing for change.
Women lawyers at top firms hate drawing attention to their gender. "We've been told for decades that if we talk about women's issues we're whining," says Victoria Pynchon, a litigator for 25 years and co-founder of a consultancy called She Negotiates. She says a new generation of women is realizing they can't get to the top just by working hard and following the rules.
"Women lawyers in these major law firms are saying good bye to all of that, and they are exercising power without being given the authority to do so," she says. "And this is something that men do without even thinking about it."
For example, she says at one large firm, when they vote for a new equity partner, women partners now come together to support the best female candidate.
That may sound like a small thing, but by bloc voting, they improve that candidate's chance of getting elected. Women at that firm didn't want to talk on the record because what they're doing is not official firm policy.
Some men within firms are also trying to change the status quo. Beth Kaufman heads the National Association of Women Lawyers. She says in-house attorneys at client companies are on the case as well.
"One general counsel raised her hand and said I'm just going to call up my law firms and say I want you to have 30% of your equity partners women within some reasonable amount of time," Kaufman says.
But even if you become a partner, that doesn't necessarily mean you'll become a top moneymaker. Marla Persky is currently general counsel for a global pharmaceutical firm. Next year she's starting a company to teach female lawyers how to be financially savvy -- knowledge she says many sorely lack.
"With everything, you've got to follow the money," says Persky. "At the heart of power and influence within firms is the ability to make rain. You've got to be able to bring in clients."
When women do more of that, she says, both their compensation and status within firms will increase.
Greece's finance minister announced that the economically blighted nation might need around $13 billion to keep itself afloat, setting up the possibility of a third bailout.
Despite the nearly $320 billion that has poured into Greece in two previous bailouts, the Greek economy continues to get smaller. While some of its neighbors in the euro zone have clawed their way out of recession, the Greek economy shrank by 4.5 percent in the second quarter.
"Will it get the third bailout? A decision will be made in the fall, but the answer is probably yes," says Marketplace's Stephen Beard from London. "The cost of letting Greece go to the wall in terms of losses on its government bonds and the contagion effect are probably too horrendous for the rest of the euro zone -- and Germany, in particular -- to contemplate."
We talk from time to time on Marketplace Tech about the "Internet of Things" -- the world where every thing is connected together, from appliances to cars to us. The concept can be a bit abstract, but Kevin Roose, writing for New York Magazine, makes it more concrete. For a week he plunged in to the Internet of Things and tells Marketplace Tech's Mark Garrison why the future is almost here.
At a recent cocktail event hosted by the Centre for Social Innovation in New York, crickets were on display everywhere. Their constant chirps provided a faint soundtrack for the evening and reminded those mingling why they had come: Outside, crickets may be pests; in this room, they were dinner.
“There’s a golden opportunity here,” says organizer Aruna Handa, founder of Toronto-based food company Alimentary Initiatives, who is passionate about the global benefits of eating insects. “We just have to figure out how to convince people to give it a try.”
Eat more bugs. That’s Handa’s mission and the message of a recent United Nations report. The world’s growing population needs protein. But beef, pork and chicken eat up valuable resources. Insects offer protein that can be farmed at a fraction of the price.
“They require less water, they require less space and they require a small amount of food,” says University of Georgia entomologist Marianne Shockley.
The challenge is getting squeamish consumers to eat them -- and entrepreneurs to raise them. On a pedestal in the room, thousands of crickets hopped around inside a clear plastic contraption about the size of a vacuum cleaner -- kind of a steampunk Habitrail. It’s a prototype for a compact cricket farm.
“This piece would farm about 2,500 crickets every eight weeks,” explains creator Jakub Dzamba, the event’s featured speaker. He says a farm this size is an easy, cheap way to provide enough protein for two full meals a week.
Giving a tour of his creation, Dzamba paused to tend to it. A rebel cricket escaped, prompting him to dart in and tape up the breach. “I think I found the leak,” he says.
The U.N.’s Food and Agriculture Organization estimates that two billion people -- mostly in Asia and Africa -- already eat insects regularly. Typically, the bugs are either ground into flour or cooked whole and tossed into a variety of dishes.
But to make an impact on global nutrition and the environment, many more people will have to get over deep reservations about eating insects.
The New York crowd on this night bought tickets to a cricket-eating event, so they’re bolder than most.
“I’ve been told it tastes like popcorn,” says Michelle Catanzaro, laughing uncomfortably while eyeballing a raw cricket on a skewer. “I don’t know. I guess it’s a little off-putting just looking at that one, but I’m down.”
After finally popping it in, she pronounced it “actually quite good.”
I visited the buffet table for a taste of what Cookie Martinez made with the critters. She is normally a baker, which means tonight’s assignments posed some unusual challenges. The crickets she got for the event came frozen, but as they thawed, Martinez realized they were still alive. Chasing her ingredients around the kitchen was a new experience, but she managed.
For tonight’s event, crickets got gourmet treatment, winding up in a spread on crostini, inside sweet almond brittle and in a falafel-like ball on a skewer, which Martinez dubbed a “kribab.” I first tried a cricket on its own, or as Martinez playfully described it, cricket sashimi.
It has the crunch and somewhat unsettling gooey center you might expect. The taste is slightly nutty. That characteristic makes it a nice addition to the almond brittle and works well in the “kribab.” The overall flavor is mild, which means bug chefs can incorporate crickets into a variety of dishes without overpowering them.
But many people have trouble getting past eating something with legs and eyes. Insect-farming supporters point to more subtle ways to blend insects into food. Dried crickets can be ground into flour and made into any number of foods. Chapul is a start-up company using cricket flour to make energy bars targeting a sustainability-conscious crowd. The product has a flavor similar to other energy bars and only a close examination of the packaging reveals them as a cricket product.
Enthusiasts of insect eating remind skeptics that eating raw fish was unthinkable for many people just a couple decades ago. But now sushi is a globally popular dish.
That kind of widespread acceptance doesn’t seem likely, but bug believers—including the U.N.—say if even a few more people eat just the occasional insect, the world will be better fed and better off.
Ready to try cooking with insects in your own kitchen? Longtime bug chef David George Gordon offers these recipes from his latest book, “The Eat-a-Bug Cookbook, Revised: 40 Ways to Cook Crickets, Grasshoppers, Ants, Water Bugs, Spiders, Centipedes, and Their Kin.” He says he often gets his crickets from Fluker Farms. (Photos by Chugrad McAndrews)
Yield: 6 servings
Orzo, a rice-shaped pasta, gets its name from the Italian word for barley, but we all know that orzo looks exactly like juvenile bugs. Needless to say, it’s a perfect complement for crickets, especially three- or four-week-old nymphs, which are of a comparable size. At this stage in life the young crickets lack wings and ovipositors, the chitinous tubes through which the adult females pass their eggs. Their limbs are skinny, so there’s no need to remove them before cooking. Likewise for the antennae, which, at less than a quarter of an inch, should pose no obstacle to enjoying this meal.
3 cups vegetable broth
1 cup orzo
1/2 cup grated carrot
1/4 cup finely diced red bell pepper
1/4 cup finely diced green bell pepper
1 tablespoon butter
1 clove garlic, minced
1/2 cup chopped yellow onion
1 cup frozen two- or three-week-old cricket
2 tablespoons chopped fresh parsley
1. Bring the broth to a boil, then stir in the orzo.
2. Continue boiling the orzo until it is tender, about 10 minutes; drain any extra liquid, then quickly add the carrot and red and green peppers. Mix evenly and set aside.
3. In a separate skillet, melt the butter and add the garlic, onion, and crickets. Sauté briefly until the onions are translucent and the garlic and crickets have browned.
4. Combine the cricket mixture, including any liquid, with the orzo and vegetables, top with the parsley, and serve.
Deep-Fried Tarantula Spider
Yield: 4 servings
2 cups canola or vegetable oil
2 frozen adult Texas brown, Chilean rose, or similar-sized tarantulas, thawed
1 cup tempura batter (page 84)
1 teaspoon smoked paprika
1. In a deep saucepan or deep-fat fryer, heat the oil to 350°F.
2. With a sharp knife, sever and discard the abdomens from the two tarantulas. Singe off any of the spider’s body hairs with a crème brûlée torch or butane cigarette lighter.
3. Dip each spider into the tempura batter to thoroughly coat. Use a slotted spoon or your hands to make sure each spider is spread-eagled (so to speak) and not clumped together before dropping it into the hot oil.
4. Deep-fry the spiders, one at a time, until the batter is lightly browned, about 1 minute. Remove each spider from the oil and place it on paper towels to drain.
5. Use a sharp knife to cut each spider in two lengthwise. Sprinkle with the paprika and serve. Encourage your guests to try the legs first and, if still hungry, to nibble on the meat-filled mesothorax, avoiding the spider’s paired fangs, which are tucked away in the head region.
1 medium egg
1/2 cup cold water
1/2 cup all-purpose flour
1/2 teaspoon baking soda
1. To make the batter, beat the egg in a small mixing bowl until smooth. Slowly add the cold water, continuing to beat until evenly mixed. Add the flour and baking soda and beat gently until combined; the batter should be a bit lumpy.
2. Let the batter sit at room temperature while heating the oil.
Mark Garrison: At the Centre for Social Innovation in New York, they’re getting drinks and snacks ready for an event. The main course also provides a faint soundtrack to the evening.
Outside, these chirping crickets are pests. In here, they’re dinner. The crickets hop around in a clear plastic contraption about the size of a vacuum cleaner, kind of a steampunk Habitrail. It’s a prototype for a compact cricket farm. Jakub Dzamba created it.
Jakub Dzamba: This piece would farm about 2,500 crickets every eight weeks. Sorry, can I just, do you mind if I. . .
A rebel cricket is escaping. Dzamba darts in, taping up the breach.
Dzamba: I think I found the leak, though.
He says a farm this size is an easy, cheap way to provide enough protein for two full meals a week.
As people mingle, University of Georgia entomologist Marianne Shockley says bugs provide protein at a fraction of the cost of beef.
Marianne Shockley: They require less water, they require less space and they require a small amount of food.
All three are scarce in the developing world. Some cultures already eat insects, either ground into flour or whole. But many people feel like Caitlin Kelley.
Caitlin Kelley: Seeing the insect and its eyes and its legs, it’s just kinda those kinda gross aspects of insects.
Aruna Handa enjoys eating bugs. She organizes events like this to get squeamish consumers and entrepreneurs interested too.
Aruna Handa: There’s a golden opportunity here and we just have to figure out how to convince people to give it a try.
Like me. Cookie Martinez, normally a baker, shows me her cricket cuisine.
Crosstalk: I’ll try just a cricket, what would you call it, cricket. . . Cricket sashimi. You leave the legs on and everything? Everything, you take it all over. It’s crunchy. It’s not a bad little snack. Do I have any legs in my teeth? I feel like I have a leg in my tooth right now. You’re fine.
Bug believers, now including the U.N., say if enough people eat the occasional insect, the world will be better fed and better off. In New York, I'm Mark Garrison, for Marketplace.
This final note today, in which Google's quest to take over the world moves another step forward.
I direct you now to the U.S. Patent and Trademark Office -- specifically patent number 8,510,166, issued 10 days ago for a "Gaze Tracking System."
Or, to paraphrase, Google Glass is gonna be watching you while you're watching it.
And then how about this, buried deep down in the fine print: A pay-per-gaze advertising system.
The thing's gonna measure pupil dilation so see how invested you are in the ad.
The U.S. Open tennis tournament, which starts Monday, bills itself as the biggest annual sporting event in the world. It draws some 700,000 spectators. But where does it rank in terms of bucks?
When it comes to money, the U.S. Open serves a wallop. It's generates roughly $750 million for New York’s economy, according to the U.S. Tennis Association. That’s $200 million more than the Super Bowl. Of course, the tournament lasts two weeks and those numbers may be a little loose.
"They’re not being conservative," says Lisa Delpy Neirotti, a sports management professor at George Washington University. She says the U.S. Open counts not only tourists, who bring in new money, but also New York tennis fans, who might be spending anyway. "It's called expenditure switching," she says. "Instead of just going out to dinner, now maybe they’re going to the U.S. Open."
For one-time ad dollars, the Super Bowl wins, says Kenneth Shropshire of the Wharton School. But while Super Bowl ads hawk razors and fast food, the U.S. Open appeals to consumers with pricier tastes. "The Rolex, the Lexis. This is the demographic, you can reach them," he says.
They’re also more brand loyal. But, Shropshire says, naming the money champion is really a toss-up.
The NFL and one of its broadcast partners, ESPN, are getting some blowback after ESPN pulled out of an investigative project with Frontline on PBS about head injuries in the National Football League. The league denies pressuring ESPN in any way.
PBS made this announcement yesterday. ESPN responded:
Because ESPN is neither producing nor exercising editorial control over the Frontline documentaries, there will be no co-branding involving ESPN on the documentaries or their marketing materials. The use of ESPN's marks could incorrectly imply that we have editorial control. As we have in the past, we will continue to cover the concussion story through our own reporting.
The NFL has been known to be vigiliant in protecting its brand, says John Ourand, media reporter at Sports Business Journal.
"It's called The Shield. They love to protect The Shield," says Ourand. "In fact, that's one of the reasons they started their own network, the NFL Network. And what's ironic is that on the NFL Network, they do cover the concussion issue ... so they're not scared of this, they're not shy of this. That's what makes what happened so much more confusing."
The NFL is big business for ESPN, as well as other sports-broadcasting networks like FOX, CBS and NBC. ESPN alone pays the NFL $1 billion for Monday Night Football and highlight rights, and they just signed a deal for the next decade for close to $2 billion a year.
"Journalistically, this is a huge black eye for ESPN," Ourand adds. "I think it shows that ESPN bowed to some sort of pressure that was given by the NFL, and I think that's a real shame because ESPN has spent the past couple of years hiring some of the best sports journalists out there. They have taken people from the New York Times, some of the best newspapers, in order to get in there and cover these types of topics. What I'm going to be looking for is whether those people that came over find this untenable, because they're hirable people, and if they start to leave, then we'll know something's up."
But with business partners like the NFL, can ESPN hold on to its editorial integrity?
"That is literally the billion dollar question. I think they can," says Ourand. "I think that there's enough of a division between the business side of ESPN and the editorial side of ESPN. But the problem is, it's all called ESPN."
The next time you're in a CVS pharmacy and drug store, and you're buying a pack of gum, you might want to think twice when the clerk asks you if you want your receipt.
"You have this moment when you're standing at the counter where you're sort of like, 'Is it really this long?'," says Katie Manderfield, a contributor to Fast Company and senior editor at Group SJR that tracks digital trends. "And I think that's the moment that a lot of consumers have been documenting and capturing and uploading onto Twitter and Facebook."
If you haven't been to a CVS lately, you might not know how long these receipts can go. But the Internet has noticed and it's become a meme.
"My colleague Matt Mirandi actually just noticed that this meme was happening and that people were sort of hilariously documenting these really really long receipts," Manderfield says."And then of course once we found the requisite parody account, which is CVS_Receipt, we knew it was bound to become something big."
But, can CVS turn that free press mocking them into dollars at stores?
"We wanted to use it as a case study to see what was happening with this trend, and to see how CVS could really leverage the laughs," says Manderfield. "Especially with these sort of memes that happen organically, it's not necessarily something CVS would choose under their own volition ... but the good news at the end of the day is that people are talking about CVS."
But, the Internet has weighed in and those receipts still are pretty long. "They'll hold their receipt up to a 7-year-old or next to their huge german shepherd dog ... it's a little ridiculous."
Think you know TV show homes? Play our new brain game and match the famous home with its TV show. Play now.
Many of us still believe owning a home is the American Dream. Marketplace Money puts homeownership under the microscope. What should you know before you buy? What apps are out there to help you search for a home? And what is the skinny on short sales?
Plus, we developed a new brain game to test your housing pop culture knowledge. Homes have been featured in some of our favorite TV shows through the years. From Blanche's Miami home in "Golden Girls" to the "Full House" in San Francisco with DJ, Stephanie and Michelle Tanner. Your challenge is to match the famous TV home with its TV show.
And for any home buyers out there, check out our infographic of 10 mistakes you should avoid. Happy house hunting!
Nasdaq halted trading Thursday for about three hours due to a technical glitch. Things were fixed just before the market closed, and the day after no problems were reported.
"I think this is another instance that we see that the way we trade securities now has just become immensely complicated, and how in the last 10-15 years, new and better technology -- along with all these participants finding new ways to get around regulations -- have found ways to make things really complicated to make a little more money," said FT Alphaville's Cardiff Garcia. "The immediate effect of what happened yesterday was something akin to everybody taking a long lunch and then catching up on their work later. But it is troublesome that these kinds of things just seem to keep happening, and there's got to be a way to make these systems more robust."
"I mean, it's going to happen again," said The Guardian's Heidi Moore. The CEO of Nasdaq "gave an interview and he considered himself happy if they could get above 99 percent reliability in doing these. Imagine that -- he's just conceding -- 'you cannot get 100 percent.' And he's right."
And we've got our Weekly Wrap #longreads suggestions.
Heidi Moore recommends:
- As we talk more and more about the surveillance state, this week The Guardian has questioned not just the scope of the intelligence collected on Americans, but also its accuracy. A great example is mild-mannered author William Vollmann, who sued for his FBI file and found that the leading lights of intelligence once suspected him of being...the Unabomber.
- A great New York Review of Books analysis of musician Questlove, a "hip-hop evolutionist."
- The bastardization of the French baguette into something doughier and less crusty is a metaphor for humanity itself: it speaks to national identity, changing tastes in food, and the be-blanding of globalization.
Cardiff Garcia suggests:
You've made it. You are settled in life. You are on the path for financial security. Homeownership means more than just a picket fence or a two-car garage. It's emotional and personal. Even with the clouds that hung over the housing market the last few years, it was hard to get away from this idea -- that buying a place is part of the American Dream. It's certainly a part of the economic recovery. We still pay close attention to home sales, prices, inventory.
The National Association of Realtors says existing home sales topped an almost four-year high in July. So what do you need to ask yourself before you enter the market? We're getting some advice from Alison Rogers, a real estate agent and a columnist for Time.com.
What is the right moment to get in?
"Sometimes people have a desire to own a house. You have to remember that purchase of your single-family home isn't an investment, it's a consumption. I would certainly recommend that people have saved up a 10 percent down payment and feel that they're going to stay in the house for at least five years," says Rogers.
Rogers says first-time home buyers are always surprised to find out how expensive it is to own a piece of property.
"When you're considering purchasing, ask the current homeowner for his or her utility bills, his or her property tax bills, and also factor in the idea that you'll probably be making one major repair a year. I would just add in maybe 2-3 percent of the house's purchase price in my head as annual maintenance," says Rogers. "For maintenance, for example, if you're buying a $400,000 house, I would think of wanting to have $8,000 in annual maintenance costs. That sounds like a lot, but if you're replacing a roof or have boiler problems, it starts to add up."
Nowadays, people are looking at mortgage rates, which have been low for the past few years, but are now starting to creep up. Rogers says the rates are still historically very low.
"We've seen a bounce from 3.5 percent to 4.5 percent, which is very scary if you're thinking of buying. But historically anything below 6 percent is still a very low mortgage rate. I wouldn't use the rising rates as a reason to be too hasty in my decision [to buy]," says Rogers. "I wouldn't panic and I wouldn't make a decision you're going to regret based on just seeing those numbers move around."
Rogers says people shouldn't think of a home as a way of building wealth. She says building wealth is a wonderful extra of buying a home and is a worthy purchase you should save up to make, but you shouldn't expect price appreciation.
"The price appreciation that we got in this country in the '90s and the '00s really was whipped cream on top of the sundae. It wasn't something you should have expected and you shouldn't necessarily expect it to repeat," says Rogers.
Could it possibly be true that watching videos on my smartphone uses as much electricity as two refrigerators?
“This is an example of a claim that sounds interesting, but really has no basis in fact,” says Jonathan Koomey, a research fellow at the Steyer-Taylor Center for Energy Policy and Finance at Stanford University.
Koomey has devoted years of his professional career to fighting this refrigerator analogy. It first came up more than a decade ago, by the same author, then making the claim that a Palm Pilot used the same electricity as a fridge.
Koomey says fighting it again now is pretty frustrating, “I’d rather not have to spend time rehashing this stuff.” But, the claim is back. So Koomey is back; figuring out just how much electricity goes into making and using my smartphone.
By his calculation, it’s about 60 kilowatt-hours.
Mark Mills, a senior fellow at the Manhattan Institute, and the author of the phone-equals-refrigerator claim, estimates it’s closer to 700 kilowatt-hours.
Mills is author of a report called The Cloud Begins with Coal, sponsored by the mining and coal industries. He says he wants to get people thinking about how much electricity these devices use. And he doesn’t think the controversy around the refrigerator analogy distracts people from his bigger point.
“The debate makes it an interesting conversation, like we’re having,” says Mills.
He stands by his calculations and his main assertion: “It is accurate: it uses a lot of electricity. Now if someone were to say, it’s not equal to a refrigerator or equals half a refrigerator or a tenth of a refrigerator, that’s still a big number.”
Why use this analogy again? Why compare a phone to a fridge, when Mills got so blasted the first time?
“If I came up to you and remarked to you that there is a one-headed cat around the corner from your house you would be totally uninterested,” says Bruce Nordman, a research scientist at Lawrence Berkeley National Laboratory*, “but if I said there was a three-headed cat you’d be amazed that it exists and want to go see it; so these fantastical assertions naturally attract people’s attention, whether or not they are real.”
Nordham says the idea that our phones use as much energy as a fridge is basically that three-headed cat; it’s not real. And still, these things get picked up, and passed around.
Which raises another question -- why?
“Thinking about a smartphone, a tiny small device, that sits in our pocket using the same amount of energy as a huge refrigerator, seems so amazing that we just have to share us with someone else,” says Jonah Berger, a marketing professor at the Wharton school and author of "Contagious: Why Things Catch On." “It’s a neat little factoid that makes us look smart, even if in this case, it’s not actually true.”
He says the controversy around it helps makes it sticky and it taps into a broader conversation about the environment. “If everyone is talking about the environment, they are looking for something to add to that conversation,” Berger says. “We all know that gas prices are up, what's there to say that’s new? But if I can plug in a new fact to that conversation, it’s going to get talked about a lot.”
Even if that fact isn’t factual.
Here's something to remember: When most of us buy a home, we're essentially getting help from the government in the form of Fannie Mae and Freddie Mac. They are two government-backed companies that subsidize and underwrite mortgages -- including one that is the bedrock of the real estate market, the 30-year fixed rate. That loan makes up a large part of the U.S mortgage market.
So when we talk about homeownership, we are essentially talking about the 30-year. Because most consumers have used this mortgage to get a home. Right now, Congress is trying to figure out whether it should still exist. Will it go away? Ilyce Glink, a personal finance expert and author, says she can't imagine that ever happening.
"I know that there's been talk about eliminating it, and truth be told, most Americans don't keep their mortgages for 30 years. The typical American household will keep a mortgage for usually somewhere between 5-7 years. But now that mortgage interest rates are near historic lows -- they're not quite at the historic low, but very close to it -- I think we're going to see these mortgages kept for a long time," says Glink.
The government is trying to wind down Fannie Mae and Freddie Mac, which could really change the mortgage picture out there because most of the new mortgages that have been taken out the last few years have been backed by the two government-backed companies. What could mortgages look like if Fannie and Freddie go private or have a diminished role?
"In its place is going to be a system that I think will look very much like Fannie Mae and Freddie Mac except going to be not Fannie Mae and Freddie Mac. What will end up happening is that private entities [will] step in and perform this secondary mortgage market function and it'll probably names that you name like Bank of America or Chase. The big banks are going to want a part of this," says Glink.
If you're thinking of buying a house and trying to figure out the financing end of it, what should you expect?
"I think what you'll see with whatever replaces Fannie Mae and Freddie Mac are additional charges and fees that are going to go into this. Ultimately that will fall to the buyers. So I think buyers will see mortgages that are going to be more expensive," says Glink. "The costs of mortgages is going to go up. We see interest rates already going up, that's making mortgages more expensive. And I think the fees associated with it are going to go up."
Glink says the super low interest rates we've seen the last few years are a direct result of the economy tanking, and the Federal Reserve buying mortgage-backed securities and other instruments to keep rates low. She says eventually the economy will improve and costs will go up.
In 5-10 years, what might the standard mortgage look like?
"I don't know that there's any way to know right now. But looking out 10 years, if I had to lay odds on it, I would say there will still be a 30-year mortgage. People will still be able to qualify, but they're going to have to qualify based on what they actually earn and can afford to repay," says Glink. "We went through a period where all you needed was a pulse and a good credit score and you could leverage up your income by 10 times. I think those days are gone."
There were no show-stopping glitches in the stock market Friday. But everyone from day-traders to Securities and Exchange Commission officials were still scratching their heads about Thursday’s “flash freeze” on the Nasdaq Stock Exchange.
One puzzled expert was Michael Goldstein, chairman of the finance department at Babson College. “Why didn’t Nasdaq have a back-up?” he asked.
In many cases, it does. The U.S. has 13 stock exchanges. If one goes down, investors can go through the others. That is, only if they know the stock prices, and what failed Thursday was the system that tells everyone Nasdaq share prices.
“It’s kind of ridiculous,” says Joseph Saluzzi, co-founder of brokerage firm Themis Trading. “It’s a Rube Goldberg machine. Here we call it a fragment maze of destinations.”
The complexity of the exchange system makes it vulnerable, Saluzzi says, and as for a back-up, “As far as we know, that does not exist.”
Nasdaq CEO Robert Greifeld said Friday he agrees that U.S. markets should have a system that backs up stock quotes for all exchanges.
Part of the problem, says Eric Hunsader, founder of market data provider Nanex, is that exchanges haven’t had the incentive to focus on back-up systems for price-sharing programs. That’s because the most lucrative traders don’t need them. They’re so big they have their own.
“Exchanges cater to the high-frequency traders,” he says.
Nasdaq did not respond to a request for comment.
Investors and others are concerned that a single point of failure could close Nasdaq for three hours.
“This is a chokepoint, so you’d thing the chokepoint should have all the redundancy in the world,” says Charles Jones, a Columbia finance professor. Still, he says, no matter how much stock exchanges invest, “I don’t think we’ll ever get to 100 percent reliability.”
The cape hand-off has happened. Ben Affleck will be the next Batman. He'll team up with Superman for the sequel of "Man of Steel." The choice of Affleck sparked a backlash by comic book nerds on the Internet.
“There has been a lot of backlash online. There are a couple petitions to remove Affleck from the film on Change.org,” says Rachel Abrams, who covers the movie biz for Variety. The news got a better reaction from the people who follow the money in Hollywood.
“Good for Warner Brothers for getting Ben Affleck to be a superhero. Because Ben Affleck had said that he’s never going to do it again after he had a horrible experience playing a blind superhero in 'Daredevil,'” says Sharon Waxman, editor-in-chief at The Wrap.com.
As you may recall, there was no "Daredevil" sequel. Did Ben Affleck kill the chances for a "Daredevil" franchise?
“The proof is in the pudding. There hasn’t been a 'Daredevil' franchise. So that’s probably fair to say,” says Waxman.
The buzz in Hollywood is that the Batman deal was less about Affleck chasing a paycheck, and more to do with his relationship with Warner Brothers. The studio backed some of his smaller films, like "Argo," which won an Oscar for Best Picture.
“Ben Affleck now is kind of repaying the studio in some way for that vote of confidence,” says Waxman.
But Rachel Abrams disagrees. “I think he’s going to make a lot of money off this movie. I don’t think he’s doing anyone any favors,” says Abrams.
No word yet on how much Affleck will be paid. But Christian Bale reportedly turned down $50 million to put the cape back on.
Many successful superhero movies have relied on virtually unknown actors. But star power can help the film stand out. Waxman says, “There’s a lot more competition now for superhero movies, because all the major studios are doing that as sort of single diet in the summertime.”
It is possible for a Batman movie to disappoint at the box office. Remember George Clooney is "Batman and Robin"? Keith Simanton is managing editor at the Internet Movie Database, or IMDB. Speaking of "Batman and Robin," Simanton says, “Domestically, it didn’t make back its budget."
Even if Affleck is a monumental flop, don’t expect him to kill the franchise. In the last 25 years, globally, the Batman movies have made almost $4 billion.
Microsoft Corporation now hiring
Position: Chief executive officer
Microsoft was founded in 1975 by Bill Gates and Paul Allen. Today we are the world’s largest multinational software company.
Our mission and values are to help people and businesses throughout the world realize their full potential. We are based in Redmond, Wash.
We are currently looking for a self-motivated, innovative leader who can help us expand our reach as a software maker and generate successful new product lines.
If hired, you will replace current CEO Steve Ballmer, who will retire within the next 12 months.
- Candidate must be able to focus on customer and employee satisfaction while simultaneously satisfying shareholder demands.
- Must be able to make Microsoft likeable (see Google and Apple, e.g.).
- Experience in product development a must.
- Previous role in a leadership position at a Top 10 tech company preferable.
- Baldness a plus (see Jeff Bezos and Steve Jobs, e.g.).
- Extensive knowledge of mobile hardware and operating systems required.
- Must have reliable transportation.
For more Americans, the process of buying a home starts with their phone. There are apps galore for those on the house hunt. So, how do you decide which software will really help you in your search? Katie Roof, a business and technology journalist in New York, has test driven some of these real estate apps, and says the process of finding a home has gotten easier these days because of these apps.
"There's a lot of apps in the app store. You have the big ones like Zillow and Trulia. They each have four different apps that you can choose from. Some of them are for home buying. Some of them are for renting. You can use your location and it will help find listings near you. Then you can set your criteria," says Roof. "You can help find listings in your area that are suitable for you."
For example, you can look for houses near a certain school district or located within a specific zip code.
"A website out there that's good for that is BlockAvenue, which shows information about schools and crime and different neighborhood data that you might find interesting. Trulia and Zillow also have more detailed information on that on their websites. And some of them, like Lovely, will alert you. Once you've stored your preferences in there it will tell you when a home becomes available that meets your search criteria," says Roof. "Then there are others like Home Snap, where you can take a picture of a home that you see out there already and it will show you information about that home."
Homesnap has been called a Shazam for homes, and there's also a social component where you can get input from your friends on what they think of certain homes.
The best real estate apps out there right now, according to Roof:
Roof says her favorite app is Trulia because it has the best design and is pretty comprehensive nationally. Trulia also has another app, a mortgage calculator, which Roof likes. Zillow and Bankrate also have similar apps. Roof recommends taking a look at one of these mortgage calculator apps even before you begin house hunting.
"Even before you're looking actually, it could be good to take a look at these apps and say 'How much can I afford right now? This is how much I make. This is my credit score. This is the area I'm looking at, so what are the property taxes?' It will help you figure all of that out quickly and then it will help you find people that will help you find a loan at that rate," says Roof.
As for renters, Roof says Trulia and Zillow both have a separate app for people looking for rental listings.
Trader Joe's is suing a small business owner for reselling its products in Canada. The popular grocer doesn't operate in Canada, which is a business opportunity for Mike Hallatt, who runs a Vancouver shop called Pirate Joe's.
As President Obama pressures colleges to limit tuition increases, could colleges with wealthy endowments use some of that money to offset the rising cost of higher education?
Pull up a chart of the Nasdaq on Thursday and you see something crazy: a flat line for hours. Nasdaq halted all trading because of a technical glitch. Things were fixed just before the market close, but many are still looking for answers.