National News

One reason folks aren't charged up over electric vehicles

Marketplace - American Public Media - Thu, 2014-02-06 12:53

When Seattle homemaker Wendy Lo needs to charge her electric-powered Nissan Leaf, she hunts for a library or community center where she can plug in at no cost. "As long as you plan your trip it will be free," Lo says.

James Echols uses the idea of free fuel to sell Nissan Leaf electric vehicles at a dealership in downtown Los Angeles. He doesn’t tell customers that the Leaf costs nothing to run, exactly. Instead he tells them about the many places they can charge up for free, including at 11,000 Nissan dealerships across the country, and at numerous public facilities, like schools, universities and hospitals.

Run your car for free. It’s a powerful sales pitch. But it also might be one reason why electric vehicle sales are still stuck in neutral. There are currently about 165,000 electric vehicles on the road, just a fraction of a percent of the 254 million passenger vehicles in the United States. The sales of the plug-in electric vehicle rose from 12,970 units in 2012 to 47,694 units in 2013. Although the 2013 sales were more than triple the sales from the previous year, they are far below the rosy estimates of 2011 when Obama aimed for one million plug-in electric vehicles by 2015.

The problem is the lack of charging stations. Despite the fact you can charge up for free in many places, prospective buyers don’t appear convinced that the network of charging stations is large enough. Meanwhile, investors are wary of pouring money into charging stations until there is a critical mass of electric vehicles on the road.

And there’s another wrinkle: Even if there were enough electric vehicles out there, it’s a tough sell to convince investors that charging stations could actually make money. After all, electric vehicle owners have been spoiled: thanks to all of those schools and hospitals, they’ve gotten used to running their vehicles for next to nothing. And charging-station owners have yet to figure out what their proper business model should be.

"Ultimately, someone is going to be paying for charging services,” says Michael Farkas, chief executive of the Miami Beach, Florida,-based Car Charging Group, Inc., which installs and manages charging stations. "Whether it is the property owner or car manufacturer, we are all here to make money."

So far, it’s been a bumpy road for the charging stations. In October, the clean electric transportation and storage technology firm Ecotality and its 12,560-strong network of charging stations, which operated under the name Blink, went bankrupt. The company’s problems included its inability to get customers to pay enough to keep the firm solvent. The Blink network was later acquired by the Car Charging Group for $3.3 million.

Israeli electric car company Better Place went bankrupt in May. It had tried to pioneer a new model in which electric vehicle drivers would swap out a spent battery for a fully charged one at a network of charging stations.

Traditional filling stations run on a simple logic. "We pay $30,000 to BP for 8,000 gallons of gas,” explains Abel Blanco, a manager at an Arco station near downtown Los Angeles. The station adds 10 cents to the wholesale per-gallon price. On a recent day, that was $3.75. It’s a basic business model understood by drivers around the world.

But for electric vehicles, no such standard arrangement exists. Some stations charge by the minute, others by the kilowatt hour of power consumed. Electricity prices can also vary wildly from state to state, with a kilowatt hour going for as little as 3 cents in Washington state and as much as 17 cents in Hawaii.

Currently, charging station operators have a perverse incentive to charge as little as they can for the service: The more it costs, the less reason drivers have to switch from traditional gasoline-powered cars.

"You need an incentive cost,” says Dimitrious Papadoganas vice president for marketing at Campbell, California-based electric vehicle charging company ChargePoint, Inc. “So if you are going to charge someone the equivalent or more than what gas costs, you are not going to have people buying electric cars.”

Just accounting for the price of power, electric vehicles are considerably cheaper to operate. In Los Angeles, it costs about $3.48 to drive an electric vehicle for 100 miles, while it costs a reasonably efficient gas-powered car around $16.24 (paying $3.75 a gallon) to cover the same distance.

But to the operator there’s more to the cost of a charge than the electricity that powers up the car. The installation cost of a charging station can be anywhere from $50 to $80 a foot, meaning that a single charging station can cost up to $15,000 in some areas. The costs arise from having to dig up concrete and upgrade electrical panels to take on the excess power needed for charging vehicles. The electric panels also need to have space for a 240 volt 40A 2-pole circuit breaker, which ensures that the electrical circuit is not damaged by an overflow. The expense is also due to lower economies of scale: most businesses that purchase electric-vehicle chargers only buy two or three stations per site, while most gasoline retailers install many more pumps.

Even the some of the biggest charging-station operators can’t agree on a business model. ChargePoint sells hardware to customers and lets them set the cost of charging. Car Charging Group charges by the minute. Car Charging Group, Inc. is about to announce a $149.99 monthly all-you-can-eat charging plan in a bid woo returning customers.

And then there’s the free charge issue. Many well-meaning city governments and even some private employers have jumped on the electric-vehicle bandwagon to offer charging stations to their employees at no cost. Shopping malls and big box retailers have also begun to offer free charges as a way of enticing shoppers to linger. In Los Angeles, there’s even a mobile app, Recargo, that informs whether a nearby charging station is free or not.

“If I am a retailer owner, I would make the first two hours of charging free in order to attract customers,” says Charge Point’s Papadoganas.

Leaked Phone Call Offers Not-So-Diplomatic U.S. View Of EU

NPR News - Thu, 2014-02-06 12:53

A pair of U.S. diplomats are heard discussing the merits of various Ukrainian opposition figures. One of them is heard using a profanity directed toward the European Union.

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Another SAC Manager Found Guilty Of Insider Trading

NPR News - Thu, 2014-02-06 12:38

Mathew Martoma, a former portfolio manager at the hedge fund, was found guilty of helping his employer reap hundreds of millions dollars in illegal profits.

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Sochi half-bathrooms: True or false?

Marketplace - American Public Media - Thu, 2014-02-06 12:07

We here at Marketplace are never ones to let a good corporate or government fail go by.

BUT.

Some of those viral pictures of half-toilets and Russian menus translated into words we can't say are amusing, but they're not from Sochi, where the Winter Olympics start today.

Sochi appears to be plagued with hotel problems and questions about the safety of some events, but sometimes viral humor just proves a little too good to be true.

Sochi half-bathrooms: True or false?

Marketplace - American Public Media - Thu, 2014-02-06 12:07

We here at Marketplace are never ones to let a good corporate or government fail go by.

BUT.

Some of those viral pictures of half-toilets and Russian menus translated into words we can't say are amusing, but they're not from Sochi, where the Winter Olympics start today.

Sochi appears to be plagued with hotel problems and questions about the safety of some events, but sometimes viral humor just proves a little too good to be true.

JFK 1964 and Beatle-mania

Marketplace - American Public Media - Thu, 2014-02-06 12:00

From the Marketplace Datebook, here’s a look at what’s coming up Friday:

  • How many folks started off 2014 with a new job? The Labor Department releases its employment report for January.
  • The Federal Reserve is scheduled to release its monthly Consumer Credit Report for December.  
  • And fifty years ago fans screamed their guts out at John F Kennedy International Airport when The Beatles landed on their first visit to the U.S.   

Most Smokers Don't Buy Their Cigarettes At CVS

NPR News - Thu, 2014-02-06 11:55

The CVS drugstore chain's decision to stop selling tobacco products drew praise as an important public health step. But, we wondered, how many people buy cigarettes at drugstores? Not as many as we thought.

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Free checking accounts weren't making banks money. Go figure.

Marketplace - American Public Media - Thu, 2014-02-06 11:54

Free checking used to be almost ubiquitous at American banks. But those days are over.

In 2009, more than 80 percent of banks offered free checking. Now, it’s down to around 60 percent, according to economist Michael Moebs, who runs a research firm called Moebs Services. He surveyed almost 2,900 banks about free checking.

"We’ve seen probably the steepest decline that I’ve ever seen, in any major financial service, ever," says Moebs.

Checking accounts are almost never profitable for big banks. And new regulations have driven up costs for the banks.

"The cost to operate a checking account is very expensive. On average, it’s about $380 a year," says Moebs.

The big banks did the math. Moebs says: "They decided to get out of free checking because they couldn’t make any money in it."

Well, it is called free checking.

"Free checking is a bit of a misnomer," says Bob Meara, an analyst with the research firm Celent. He says banks have used free checking as a kind of loss-leader to get customers in the door and sell them other services.

But since the Great Recession, customers haven’t been buying as many services. And new regulations have limited bank profits on things like credit cards and debit cards.

"Banks responded by increasing the per incident fees. So, overdraft fees grew to over $30 an incident," says Meara.

Free-checking still exists. But it helps to be a preferred customer.

"Banks will position lower costs – ostensibly ‘free-checking’ – for consumers who don’t consume the more expensive aspects of service delivery," says Meara. "And charge other consumers a bit more who represent a greater cost."

If you want to avoid some fees, you might try a community bank or a credit union. Their cost structure is lower than the big banks, so they are more likely to offer you free-checking.

Why would you want to brew your own Coke?

Marketplace - American Public Media - Thu, 2014-02-06 11:54

Green Mountain Coffee's Keurig machine allows users to make one cup of coffee at a time. A new product from Green Mountain, due out in the next year or so, will do the same for cold beverages — including Coca-Cola, thanks to a new partnership announced this week.

But how eager are we to make our own soda pop? What's in it for us?

Variety and personalization, says Bob Goldin, from the food-industry consulting groupTechnomic. He says that's one of the things that makes Starbucks so successful with coffee. Skim or whole milk? What roast? Half-caff?

"And double-shot, triple-shot, and then you probably have 10 to 15 different kinds of syrups," he says. "So this is higher math, but the number of options is almost mind-boggling."

Coke offers this now with "freestyle" vending machines in some fast-food restaurants. They allow you to dispense yourself a custom cocktail—so, if mixing Mr. Pibb and Mello Yello is your thing, you can knock yourself out. The company says that stores with those machines report higher sales. So, OK, variety.

Gary Hemphill, director of research for Beverage Marketing Corporation, adds convenience to the list. Maybe. Instead of lugging home cases of cans or two-liters from the store, consumers can stock up on pods.

"You get the ability to keep basically an endless supply," he says. "And then you don’t have to worry about recycling the containers."

These don’t sound like compelling reasons for people to buy a soda-making machine to Harry Balzer, who watches consumer behavior—like, the foods and drinks we consume—for NPD.

"This has the feel of 'Why would I want to make this, again? It better save me an awful lot of money,'" says Balzer.

He thinks the main reason people might buy this machine is what motivated people to buy bread machines 20 years ago.

"Which, to me, was: We just have no more gifts to give our parents," he says. "This kind of has the same feel to me. We have no more gifts to give anybody, so: Give 'em a soda maker!"

And in a few years, they can toss it in the attic.

Ignore the Unemployment Rate. There's a better jobs indicator.

Marketplace - American Public Media - Thu, 2014-02-06 11:54

The monthly jobs report comes out tomorrow.  So we’ll get a better view of who’s employed, and who’s not. 

But some prominent movers and shakers in the finance world, including outgoing PIMCO CEO Mohammed El Erian, are suggesting we ought to give less weight to that employment rate number

DETHRONING KING INDICATOR?

Why might the long reigning king of economic indicators need to be dethroned?

Well, many people in finance focus on the unemployment rate because of the Federal Reserve.  The Fed has said (...in so many words...), "the economy’s got issues, we’re not going to even think about pushing up interest rates in the economy until the unemployment rate gets down to 6.5 percent."   

Trouble is, we’re near that threshold.

"But we’re not there for the right reasons," says Kevin Logan, Chief U.S. Economist with HSBC. The unemployment rate is almost down to 6.5%, but the economy has still got problems.

For example, one reason the unemployment rate is going down is because a lot of people are giving up looking for work.  Another reason is that a lot of baby boomers are retiring.

"It’s very hard to make a rule that’s good for all time," says Neal Soss, Chief Economist with Credit Suisse. "Mothers can do that, but you can’t do it when you’re managing an economy of 350 million  Americans." 

As a result, Soss says, the Fed is giving the unemployment rate "much less weight, and I think that means it’s less consequential for financial markets."

He adds that the unemployment rate and other indicators like the labor force participation rate suffer from "statistical problems." The unemployment rate and labor force participation rate are calculated "as if all the people who are in the older, retiring age brackets were still effectively available for work," says Soss.  "We really ought to give them less weight as a gauge of economic performance," at least without the proper context. 

SO WHAT SHOULD WE BE LOOKING AT?

So what should we be looking at – not just for a glimpse into Fed policy, but for a look at how the economy’s doing? 

Well, really, the answer is.... everything else in the jobs report.  Because there is a LOT of stuff.

"The unemployment rate might give an unintentionally optimistic view for people who are not paying attention to all of the other statistics produced in these reports," says Gary Burtless, a labor economist with the Brookings Institution.    

How many people are involuntarily working short hours? What is the labor participation rate compared to what we would expect at full employment?  How much has the employment rate returned to the rate we would predict, given how old the population is? 

Total hours worked and data on wages are also included in the jobs report.

"Those are numbers that are very easy to tease out and they give us a complete indication of the health of the job market."

Credit Suisse’s Soss and HSBC’s Logan both agree that fully fleshed out numbers are still useful to the Fed, and to understanding the economy.

Both say the Fed, with the unemployment picture still recovering very slow, may focus on inflation as an important threshold for policy action.  However, inflation is a long-term, slow-moving indicator, and not as reflective of instantaneous conditions in the economy. 

YEAH, YEAH HOLISTIC VIEW, LOTS OF FACTORS, I GET IT. 

NOW WHAT’S THE ONE BEST NUMBER WE SHOULD LOOK FOR?

If you had to pick one number, it’d be the payroll numbers – that’s how many people are employed - full time, part time, all of it. 

"The reason for that," says HSBC’s Logan, "is that things are produced when more people work, the economy grows when more people work; payroll won’t grow if the economy is stagnant."

"The report in its entirety will continue to be very important," says Logan.  "The payroll data, hours data, wage data, will continue to drive market opinion," as well as Fed policy.

SO WHAT ARE THE JOBS NUMBERS – ALL OF THEM – SAYING?

Well we haven’t seen tomorrow’s jobs report, but right now: "We’re seeing a very weak recovery," says Michael Farr, president and chief investment officer at investment firm Farr Miller & Washington.  "We’ve seen a huge surge in part-time jobs versus full-time jobs," he says. 

Part time jobs are better than no jobs, but with part time employees, employers don’t have to pay out benefits or pay as much money. 

"It’s not as healthy for the economy because those folks don’t earn as much, they don’t have as much money in their hands, they don’t buy things, and so manufacturers don’t have to make as much."

Through November things were looking up, but December fell far below everyone’s expectations.  Payroll increased by 74,000 people – analysts were expecting an increase of 200,000. 

The big question is whether December’s numbers were just a weird quirk of weather, or statistical sampling, or if they reflect a trend. 

Tomorrow’s numbers will give us a clue. 

Author: When It Comes To High-Speed Internet, U.S. 'Falling Way Behind'

NPR News - Thu, 2014-02-06 11:47

The U.S. needs to start treating the Internet like electricity or railroads, law professor and author Susan Crawford says. "We can't create a level playing field for all Americans or indeed compete on the world stage without having some form of government involvement," she says.

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Sniper Attack On Power Station Highlights Grid's Vulnerability

NPR News - Thu, 2014-02-06 11:42

The former head of the Federal Energy Regulatory Commission continues to warn about the security of the nation's power grid. Last spring, shots fired at transformers in San Jose, Calif., and caused extensive damage.

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John Boehner Casts Doubt On Prospects For Immigration Reform

NPR News - Thu, 2014-02-06 11:17

The House speaker said there was a trust deficit between the GOP and President Obama, so immigration reform would be a "difficult" issue to move on this year.

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NASA Probe Finds Newly Formed Crater On Mars

NPR News - Thu, 2014-02-06 10:37

The impact that formed the 100-foot-diameter scar threw Martian rock and soil more than nine miles across the surface.

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Taliban Release Video Of Captured 'American Military Dog'

NPR News - Thu, 2014-02-06 10:15

The video seems to mark the first time a canine has been used in a prisoner of war video. The Pentagon said U.S. forces lost a working dog in December.

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The 9 weirdest cities that have hosted the Olympics (and why!)

Marketplace - American Public Media - Thu, 2014-02-06 10:05

With the Winter Olympics starting, the world’s attention is drawn toward Sochi, a small and sunny resort city in the Southwestern corner of Russia. And with that attention, a question. Why Sochi?

It does seem strange to choose a city known for its beach and palm trees to host something called the Winter Olympics, but strange city choices aren’t new to the Games. So without further ado, here are the nine oddest choices to host the Olympics:

Melbourne & Stockholm. That's right, the 1956 Summer Games were held in two entirely different cities, in two entirely different countries, and on two entirely different continents. No, track athletes didn’t run the 100 meters in Melbourne and then take a flight to Stockholm to compete in the 200 meters.  Melbourne was picked as the host city and nearly all of the events happened there, but because of Australia’s strict quarantine laws, the equestrian events had to be held in Stolkholm. The Olympic organizers were not aware of these laws before they picked Melbourne, and by the time the International Olympic Committee learned of them, it was already too late to do anything about it.

Helsinki. As Sochi is one of the warmest cities to host a Winter Olympics, Helsinki was one of the coldest cities to host a Summer Olympics. During the summer months it averages 64 degrees, which isn't too cold, unless you compare it to other Summer Games. The Beijing Olympics had an average high of 87 degrees, and the Athens Olympics averaged 90 degrees. But that’s not the only reason Helsinki was a strange choice for the 1952 Olympics. It's actually the smallest and least economically powerful city the IOC has ever picked. According to Brookings, Helsinki has the lowest GDP of any city to host the Summer Olympics. And Finland is the smallest nation to have organized them. By all accounts, it did a fine job hosting, with 70,000 people crowding into the stadium stadium. At the time, Helsinki had a population of 380,000.

Squaw Valley, Calif. The Winter Olympics has been hosted in some fairly out-of-the-way places. Lake Placid, N.Y., Albertville, France, and Innsbruck, Austria, aren't really megacities. But the 1960 Winter Olympics have the distinction of being the only Games to go to a place with only one resident. When Alexander Cushing persuaded the IOC to have the games in his new resort of Squaw Valley, there was one chairlift, one lodge, and one person living there. That person was Alexander Cushing. Fortunately for Cushing’s legacy, a world-class winter sports complex was built in time for the games, and afterwards, Squaw Valley became a destination ski resort, frequently visited by Hollywood stars. In fact, the opening ceremonies were designed by Walt Disney himself, and included the release of 2,000 doves. 

 

St. Louis. The choice for the 1904 Summer Olympics wasn’t as out-of-the blue as you might think. St. Louis was the fourth-largest American city at the time, and the games were part of an immense World’s Fair that celebrated the centennial of the Louisiana Purchase. Unfortunately, the World’s Fair completely overshadowed the Olympics. Even more unfortunate, it led to one of the most disgusting moments in Olympic history. A competition, concocted by one of the Fair's organizers, pitted Olympic athletes against "savages" from the human zoos at the World's Fair. Yes, "human zoos." The fair took people from "primitive" societies, recreated their villages in St. Louis, and then let tourists gawk at them. It was disgusting. And the contest between these displaced tribespeople and Olympic athletes was embarrassing.

Montreal. Montreal makes sense as an Olympic host city. It's the second-largest city in Canada and generates $142.8 billion in GDP. It wouldn't have been a strange choice for the IOC at all, if not for the corruption and cost overruns. Originally estimated to be around $360 million, costs for the 1976 Summer Games ballooned to $1.6 billion. Montreal's Olympic Stadium was eventually paid for. In 2006. Although the site of some of the greatest moments in Olympic history (Nadia Comanici’s perfect 10 being the best example), the Montreal games stand as a reminder for future host cities to not overspend on the Games.

Moscow & Los Angeles. Moscow and Los Angeles are two of the biggest and most culturally important cities in the world. Combined, they have a GDP of over $1 trillion. However, the IOC's choice to pick Moscow as the host of the 1980 Summer Games and Los Angeles as the host of the 1984 Games presented a few problems, as there happened to be a Cold War going on at the time. The U.S. organized a boycott of the Moscow Games as a response to the Soviet invasion of Afghanistan. More than 50 nations joined America in the boycott, lowering the number of participating nations to 80, the fewest since 1956. In response, the USSR boycotted the Los Angeles Olympics. Only thirteen other countries joined them, but this bloc of countries took home 58 percent of the gold medals in the 1976 Olympics. And though the Los Angeles Games are now remembered for actually managing to turn a $223 million profit (mostly because of corporate sponsorship and using existing structures), picking these two cities caused the level of athletic competition to dip significantly.

Sochi. This list had to include Sochi, one of the strangest host cities to be chosen. It's a subtropical resort town that boasts palm trees and beaches. Granted, the skiers and snowboarders will be skiing and snowboarding on the nearby mountains, but organizers are still hoarding snow in case it doesn't, well, snow. And because Sochi is a sunny vacation destination, organizers had to construct massive sports and transportation projects. Partly due to that, it's the most expensive Olympics in history, with a price tag of nearly $50 billion. Certainly one of the weirdest host cities ever to be picked.

From Projects To Parliament, Britain's 'Rev. Rose' Breaks Barriers

NPR News - Thu, 2014-02-06 09:59

Rose Hudson-Wilkin was the first black woman to be chaplain to the queen of England. Now she is chaplain to the speaker of the House of Commons as well. Even while fulfilling these high-profile roles, she continues to run an East London parish that struggles with poverty and gang violence.

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From Projects To Parliament, Britain's 'Rev. Rose' Breaks Barriers

NPR News - Thu, 2014-02-06 09:59

Rose Hudson-Wilkin was the first black woman to be chaplain to the queen of England. Now she is chaplain to the speaker of the House of Commons as well. Even while fulfilling these high-profile roles, she continues to run an East London parish that struggles with poverty and gang violence.

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Subway Phasing Out Bread Additive After Blogger Flags Health Concerns

NPR News - Thu, 2014-02-06 09:51

Just a few days after a food blogger created a buzz with an online petition raising questions about the safety of a food additive commonly used in commercial baking, sandwich giant Subway has announced plans to phase it out of its fresh-baked breads.

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Sony Will Shed 5,000 Jobs And Its PC Business

NPR News - Thu, 2014-02-06 09:05

The embattled entertainment and electronics company also said it had annual loss of $1 billion. Analysts fear the restructuring may be too little too late for the company.

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