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PODCAST: The presidential library

Tue, 2015-05-12 03:00

Interest rates are jumping on what is a volatile day for the bond market. More on that. Plus, the announcement that Fox is cancelling American Idol comes right before the first part of the season finale, airing tomorrow. We look at the show which has been on air 13 years and was once a ratings juggernaut, an early talent show setting the mold for others, but which has now lost its luster. And with the announcement that President Barack Obama's presidential library will be located in Chicago, we look at the likely economic impact on the city, and what's happened with the other 13 presidential libraries.

The end is nigh for Idol

Tue, 2015-05-12 02:00

American Idol, the program that launched the careers of singers Kelly Clarkson and Carrie Underwood, will take its final curtain call after its next season, Fox announced Monday.

“Nothing is forever in TV land,” says Sam Craig, a professor at New York University. After 15 seasons spanning 13 years, he says this is an “inexorable movement.”

Idol’s audience is now less than a third the size it was at its peak in 2006. But at nine million viewers per episode, it's still significant, says Max Dawson, the director of national television and video research at Frank N. Magid Associates.

“That still makes Idol one of the top two or three rated programs on Wednesday nights,” he says. “The problem is this: it’s probably one of the most expensive programs on Wednesday night.”

In the beginning, Dawson says Idol was relatively cheap to make, but it’s become increasing expensive as its host and judges have commanded higher salaries. 

The 15-season run of "American Idol" inspired a number of reality TV shows with a panel of snarky judges — some of which will now outlast the program:

Lenders, borrowers remain cool on home equity credit

Tue, 2015-05-12 02:00

In years past, home equity lines of credit, or HELOCs, were part of the reason so many homeowners ended up underwater on their loans. We'll get our latest glimpse at that type of borrowing when the Federal Reserve Bank of New York releases its quarterly Household Debt and Credit Report Tuesday.

But don’t look for a return of the “home as ATM” phenomenon any time soon. Housing values are coming back, but both borrowers and lenders remain cool on HELOCs.

Brian Jacobsen, chief portfolio strategist at Wells Fargo, says homeowners remain gun-shy from the recession, and that's not the only reason: "Perhaps their incomes aren't able to support it. Or maybe their credit ratings are such that they're able to qualify for those loans," Jacobsen says.

Tighter regulation is also part of the story, says Stan Shipley, a managing director at Evercore ISI.

“The consumers would like to borrow more,” Shipley says, “but because of Dodd-Frank laws the banks are not going to let them become as leveraged as they were in 2006-2007.”

Still, if you do qualify, you can still get these loans, and some forecasts point to a slight rebound. 

Erin Lantz, vice president of mortgages at Zillow, says going forward all those low-rate montages people got five to seven years ago could help people tap home equity in the future.

"Consumers have all of these low-rate, first-line mortgages and they'll look at home equity lines of credit as the way to tap equity in their homes without touching that low-rate first mortgage," Lantz says.

According to data from the New York Fed, the real movers on household debt these days, are student loans and car loans.

The scissors that cost as much as $1000

Tue, 2015-05-12 02:00

We're launching a series called Pro Tool: Tools of the Professional. What we're looking for is that must-have device in the possession of anyone in the workforce; be they a welder or a bike messenger or a comedian.

The first item in our series? A pair of scissors.

Professional: Lauren Popper, hairdresser at La Maison Salan & Spa in Short Hills, New Jersey.

Marketplace Morning Report host David Brancaccio gets a haircut from Lauren Popper, hairdresser at La Maison Salan & Spa in Short Hills, New Jersey.

Pro Tool: A pair of 1977 Nic shears, made in Japan.

Why it's a Pro Tool: "You will see the difference, you will hear the difference in a haircut because [cheaper shears] will clank. You won't have a clean line. I see a total difference in how my haircuts look and how they grow out." -Lauren Popper

Cost in 1977: $175

Cost today: Up to $1,000

Do presidential libraries really pay off for cities?

Tue, 2015-05-12 01:59

The waiting is over. Tuesday Morning, President Barack Obama announced the city that will be home to the next presidential library. 

And as expected, the library will be located in Chicago, President Obama's home town. The University of Chicago, which is working with the Obama Foundation, has proposed to house the library on one of three potential sites on the city's economically challenged South Side.

There were also bids from Honolulu and New York.

The Obama Foundation will need to raise hundreds of millions of dollars for the library — a process that will take at least a couple years.

For the winning city, a presidential library can offer mixed results, in terms of economic development.

In Chicago, Washington Park has been mentioned for months as one of the potential locations for the library. It's an area characterized by vacant lots and empty buildings. "It's lacking development and investment," says Jason Horwitz, a senior consultant at the Anderson Economic Group.

In a study funded by the University of Chicago, Horwitz looked at the potential economic benefit of  building a the library at Washington Park, as well as at other nearby areas.

"There's going to be a lot of genuinely new investment in this area, and that's going to provide a real opportunity for others to come in and invest, as well," Horwitz says.

The University of Chicago wants to place it  where it can have the greatest economic impact.

Horwitz says the development could create more than $200 million in economic activity from dozens of new restaurants and shops, even a hotel, to meet the demands of 800,000 library visitors a year.

"It would be fantastically unprecedented for 800,000 visitors to come to a presidential library," says Anthony Clark.

Five years ago, Clark was a senior aide in the U.S. House of Representatives, focusing on oversight of the National Archives and presidential libraries. He has since authored a book on presidential libraries, "The Last Campaign."

"The idea that the library creates an economic boost that lasts indefinitely is just not borne out by the numbers," says Clark. "In fact, library attendance, no matter which library ... declines over time."

Many of the 13 current presidential libraries have attendance figures in the tens of thousands, or low hundreds of thousands.

"The most-visited temporary exhibit at a presidential library in history was at the Reagan a few years ago, and it wasn't on the wit and wisdom of the great communicator, it wasn't on the secrets of the Cold War, it was on the treasures of the Disney vault," says Clark.

So, the impact the libraries have on local economies is modest, he says.

Benjamin Hufbauer agrees. He is the author of  "Presidential Temples," and teaches a course about presidential libraries at the University of Louisville.

But Hufbauer points to one big exception: the Clinton library, which was built amidst mostly abandoned warehouses in Little Rock, Arkansas.

"It sparked hundreds of millions of dollars of private investment," says Hufbauer. "And now it's a very successful touristy area in downtown Little Rock."

So why was the Clinton library different?

Horwitz says it's because the library did not have to do all the heavy lifting in redeveloping the area.

"It certainly seems that the Clinton Library served as an anchor," says Horwitz. "When a lot of other development was occurring in this downtown area, and it was a compliment to that."

In other words, presidential libraries can help, but they can't transform an area all by themselves.

You've got acquisition

Tue, 2015-05-12 01:51
$4.4 billion

That's the amount that Verizon Communications will pay to acquire AOL in an all-cash deal announced Tuesday. The move comes as Verizon attempts to bolster its ability to produce and distribute video content.

800,000 visitors

Some experts estimate that's how many visitors can be expected per year at the new presidential library. And it was announced Tuesday that President Barack Obama's library will make its home in Chicago. While the library could bring in much needed revenue to the area, others point out the sometimes disappointing attendance numbers at other, existing presidential libraries.

53.5 million

That's how many Millennials are in the workforce, according to Pew Research, just edging out Gen X last quarter to become the best-represented generation in the workforce. 

$175

That's how much a pair of Nic shears cost in 1977. These days, they can cost as much as $1000. But hairdresser Lauren Popper of La Maison Salan & Spa in Short Hills, New Jersey, says they're absolutely necessary to do her job well. You'll find out more about must-have tools in our series "Pro Tool: Tools of the Professional." We'll be exploring those absolutely necessary devices in the possession of anyone in the workforce; be they a welder or a bike messenger or a comedian.

11 billion

That's how many ketchup packets H. J. Heinz says it sells every year. It's very likely you've gotten a few of those billions, tossed in a fast food bag, opened with teeth and spilled everywhere, over and over. We looked into the sorry state of the ketchup packet for our "I've Always Wondered..." series. Its invention was a byproduct of the sugar packet, but cost is getting in the way of innovation -- no restaurant wants to shell out more for something they'll give away.

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