National News

Activist investors help shareholders, right?

Marketplace - American Public Media - Tue, 2014-04-22 02:02

Activist investor William Ackman has set his eyes on a new target: Allergan.

Ackman has joined forces with Valeant Pharmaceuticals to purchase the Botox-maker for an undisclosed amount -- $50 billion is one educated guess. Ackman along with other so-called corporate raiders Carl Icahn and Nelson Peltz, have become famous, and sometimes infamous, for shaking up the companies they invest in.

Do they do more harm than good?

Bloomberg News reporter Tara Lachapelle joins Marketplace Morning Report host David Brancaccio to discuss the track record of activist investors, noting that more often than not, these in-it-to-win-it investors are actually a shareholder's friend.

Click on the audio player above to hear more. 

What's in a number?

Marketplace - American Public Media - Tue, 2014-04-22 01:29

We’re taking Marketplace on the road this week, heading to Washington, DC for a live show on Thursday night. The title of the show is “How I Learned to Stop Worrying and Love the Numbers".  Which can be quite difficult, sometimes, as numbers can lead you seriously astray.

For example, I’m looking forward to tech earnings this week, and specifically  to results released by Apple (Wednesday) and Microsoft (Thursday). Lately a lot of people have been debating whether Apple is a “value” stock, or a “growth” stock.  Growth stocks are usually the shares of young companies, and investors buy them in the hope that they grow very quickly and the investor can make pots of money by selling into the stratospheric gains. Value stocks, on the other hand, tend to be associated with more mature companies. These shares grow slowly but steadily and often pay dividends: they are a long term play, while growth stocks are often a short term buy.

So which is Apple? Well, it’s a bit confusing, really. You see, from 30 thousand feet, Apple looks a lot like a value stock. It was started 38 years ago, and it went public in 1980, eight years before Microsoft. It’s huge: at $453 billion, it’s the biggest tech company in the US. It generates more revenue than any other US tech company. And it’s been paying dividends to shareholders since 1988. Big, mature, dividend-paying and safe, it looks like the epitome of a value play.

But that’s at 30,000 feet. Get a little closer to Apple, and a different picture emerges. Yes, it’s still the biggest and most profitable tech company in the US, but you could argue that Apple really only became Apple as we know it today in 1997, when Steve Jobs rejoined the firm.

Let’s call it Apple 2.0.

And Apple 2.0 looks a lot more like a growth stock. For one thing, it’s just 17 years old. As for those dividends, well, Apple 2.0 does pay dividends, but it only started paying them in 2012 (Apple 1.0 stopped paying them in 1995).

Apple 2.0’s stock trajectory makes it look like a growth company, too. Most companies go through a growth spurt, during which their stock price surges – this is what attracts investors wanted to make a little fast money, of course –after which companies often settle into a nice steady pace of slower growth. In other words, they transition from growth to value. But it’s hard to know whether Apple has done that. Microsoft’s growth spurt peaked in 2000, a full fourteen years ago, and people still argue about whether it’s a value stock or a growth play. Apple’s growth spurt peaked in 2012, just two years ago.

It goes to show that often it’s not the numbers that tell the story: it’s the numbers within the numbers. And that’s something we’ll be talking about a lot on Thursday night. Hope to see you there.

What Exactly Is 'High-Quality' Preschool?

NPR News - Tue, 2014-04-22 01:03

Many educators tout the benefits of preschool, but there's no clear standard for what qualifies as a quality program. Researchers say that when it comes to pre-K, Tulsa, Okla., gets it right.

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For Early Childhood Education, Tulsa, Okla., Stands Out

NPR News - Tue, 2014-04-22 01:03

Many states are planning to expand early childhood education programs, but what constitutes a high-quality pre-K program? Researchers say the city of Tulsa, Okla., has come up with a winning formula.

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Supreme Court Will Hear Challenge To Ohio Ban On Campaign Lies

NPR News - Tue, 2014-04-22 01:03

The U.S. Supreme Court hears arguments Tuesday testing whether states can make it a crime to lie about candidates during an election campaign.

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Is Chicago America's funniest city?

Marketplace - American Public Media - Tue, 2014-04-22 01:00

Researchers at the University of Colorado have used a Humor Algorithm (HA) to determine the funniest city in America. Among other things, factors like the number of comedy clubs and how many famous comedians were born in each city were taken into account.

And the funniest city? Chicago. It makes sense when you consider the improv scene in the area. The iO and The Second City are two of the most notable training grounds for fledgling comedians and improvisers.

Among the long list of notable Second City alumni are Steve Carrell and Stephen Colbert:

Speaking of Second City, two of their regular comedians (Alan Linic and Claire Meyer) are in a relationship in which they regularly tweet what they fought about that day. That helped Chicago in the algorithm because the number of humorous tweeters in each city also factored into the rankings:

How did the rest of the country fare? Boston came in second and Atlanta third. You can check out the rest of the rankings, and the full report here.

Powerful Narcotic Painkiller Up For FDA Approval

NPR News - Mon, 2014-04-21 23:29

The FDA is weighing the pros and cons of a drug that would, for the first time, combine morphine and oxycodone in a single pill. Critics warn that it could launch a new wave of abuse.

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'Ready For Hillary': Clinton's Campaign-In-Waiting

NPR News - Mon, 2014-04-21 23:28

A shadow campaign is underway, raising small donations by selling T-shirts and baby onesies and holding fundraisers, all just waiting for Clinton to say that, yes, she is running for president.

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British Marine's New Mission: Save All Of Kabul's Street Animals

NPR News - Mon, 2014-04-21 23:27

Street dogs and cats find treatment and get linked up with foreign adopters at a clinic that's helping lower the rabies threat in Kabul.

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Fields And Farm Jobs Dry Up With California's Worsening Drought

NPR News - Mon, 2014-04-21 23:26

For the first time in six years, many California farmers have been told they'll get little or no federal irrigation water. And as farms run dry, workers are deciding to pack up and move away.

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Death Count In Ferry Sinking Tops 100

NPR News - Mon, 2014-04-21 23:06

Officials in South Korea said Tuesday that confirmed fatalities had reached 104, with nearly 200 people still missing.

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Who's Protecting Whom From Deadly Toxin?

NPR News - Mon, 2014-04-21 16:16

Last year a scientist said he'd found a new form of botulinum toxin, and was keeping details secret to keep the recipe from terrorists. But other science and public health labs were shut out, too.

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Netflix Says It Will Raise New Customer Subscription Rates

NPR News - Mon, 2014-04-21 15:46

The video-streaming announced plans to raise its monthly rates for new customers by $1 or $2 a month. It also said it had gained 2.25 million new customers.

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Sharp Rise In MERS Cases May Mean The Virus Is Evolving

NPR News - Mon, 2014-04-21 15:38

A rash of infections in Saudi Arabia could be a warning signal that the deadly virus has reached a tipping point and is ready to spread out of the Middle East, scientists worry.

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The costs of climbing Mount Everest

Marketplace - American Public Media - Mon, 2014-04-21 15:00

The deadliest avalanche in Mount Everest history is leading Sherpas in Nepal to consider a labor strike. The boycott would protest the amount of money provided by the Nepalese government to families of the deceased. Thirteen Sherpas were killed and more are presumed dead after last Friday's fatal avalanche. The government currently provides about $400 per family and the strike would aim to increase that amount to $10,000. 

Sherpa guides have one of the most dangerous jobs in the world, but many Sherpas are attracted by the relatively high pay of assisting climbers up Mount Everest. Sherpas make at least $2,000 per climbing season, considerably more than the median income of Nepal, which comes in at around $540 per year. Elite Sherpas can make as much as $4,000 - $5,000 in just two months. By comparison, Western guides make as much as $50,000, plus tips.

Alpine Ascents is a company the leads Everest climbs for $65,000 per person. Five of the Sherpas who died in last week's avalanche were employed by that company. Director of Programs Gordon Janow understands the importance of the Sherpa role in the business. "They're setting up the camps, carrying oxygen, walking side-by-side one-on-one," Janow says. Without Sherpas, he continues, "it'd be an entirely different style of expedition."

Perhaps even more difficult than the task of accompanying climbers to the summit, Sherpas also carry supplies and equipment on the climb. Legally, they are only supposed to carry 8 to 10 kilograms (17 to 22 pounds), but willingness to carry double that can also lead to double the earnings

 Right now, it's the start of climbing seasson and business is booming.

"You know there's a lot of money in the hundreds of thousands, if not millions of dollars that changes hands on Everest every year," says Nick Heil, editorial director of and author of "Dark Summit," a book about the commercialization of climbing the Earth's highest mountain. "Only a small percentage of that goes into the hands and pockets and accounts of the work force that basically enables all of this to take place."

Sherpa's wages are not a part of the proposed boycott, but Janow says they're also worth discussing. However, he acknowledges it's a balancing act. If compensation rises too much, it could damage Nepal's climbing industry altogether. 

"Like anything else, does it push the cost of it up so people aren't going?" Janow asks.

Sherpas face more than just the fear of death. Being a Sherpa means frequent exposure to injuries, yet there is little support for those who become disabled on the job. The Sherpas are also asking the government to provide $10,000 in compensation for guides who can no longer work in mountaineering due to their injuries.

Skechers a winner this Boston Marathon

Marketplace - American Public Media - Mon, 2014-04-21 14:42
Monday, April 21, 2014 - 17:33 Jim Rogash/Getty Images

Meb Keflezighi of the United States celebrates after winning the 118th Boston Marathon on April 21, 2014 in Boston, Massachusetts. And check out his shoes.

It was a big day for the Boston Marathon, of course, and also for men's winner Meb Keflezighi. 2:08:37 was his winning time.

Also enjoying a victory lap today, if you will, are Skechers. Yes, the sneaker company voted most unlikely to be associated with marathon winners.

Keflezighi was wearing them for their first marathon win ever.

Marketplace for Monday April 21, 2014by Kai RyssdalPodcast Title Skechers a winner this Boston MarathonStory Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Skechers a winner this Boston Marathon

Marketplace - American Public Media - Mon, 2014-04-21 14:33

It was a big day for the Boston Marathon, of course, and also for men's winner Meb Keflezighi. 2:08:37 was his winning time.

Also enjoying a victory lap today, if you will, are Skechers. Yes, the sneaker company voted most unlikely to be associated with marathon winners.

Keflezighi was wearing them for their first marathon win ever.

Alaska OKs Bill Making Native Languages Official

NPR News - Mon, 2014-04-21 14:05

If you're inclined, you could soon speak Tlingit, Inupiaq, or Siberian Yupik in Alaska with the knowledge that those and 18 other languages (including English) are officially recognized by the state.

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Why it makes economic sense to send a letter for $0.49

Marketplace - American Public Media - Mon, 2014-04-21 13:52
Friday, April 25, 2014 - 16:30 David Weinberg/Marketplace

Postal worker Dalyncia Stevenson at the sorting facility in Los Angeles, where she took our letter and sent it on its way to a small island in the South Pacific.

Every other week we try to answer some of the questions that you've submitted for our series, I’ve Always Wondered. This week, we are going to answer a question from listener Mark Robbins: "How is it possible that for less than the price of a cup of coffee, you can send a letter halfway across the globe to a remote island in the South Pacific?" 

Marketplace reporter David Weinberg wanted to know, too. And thus his week-long experiment began: 

Monday: The Post Office's spectacular scale.

Tuesday: How postage gets divided among nations (spoiler: not evenly).

Wednesday: Until the 1960s, it didn't matter if the Postal Service made money.

Thursday: Why the USPS doesn't do email

Friday: How else could we get a message to the people of Tanna? (serious question)

Monday: The Post Office's spectacular scale.

Listener Mark Robbins sent us his question via email. He chose, for his example, the island of Tanna, about a thousand miles west of Australia. I found an address for a bar on the island, and before I sent the letter, I called Robbins to ask if he had anything he'd like to say to the people of Tanna.

“Hello from chilly northeastern Pennsylvania. Wish I were there.”

I dropped the letter in the mailbox with a $1.15 global forever stamp. From there, it was taken to the main Los Angeles sorting facility, a 1 million square foot building  where I met Ken Starks, the acting manager of plant support operations.

And herein lies the answer to Mark’s question: The reason you can send a letter across the ocean for less than the price of a cup of coffee is because of the staggering economy of scale of the USPS.

Take, for example this one machine:

This delivery bar code sorting machine processes 30,000-40,000 pieces of mail per hour. The minimum amount of postage required to send a letter is $0.49. So nearly every day, this one machine processes at least $20,000 in postage revenue per hour. And this is just one of several machines in a single sorting facility.

The USPS handles half of all the mail in the world. In 2013 the postal service generated $65.2 billion in revenue. It has more retail locations in the U.S. than McDonald's, Starbucks, and Wal-Mart combined. It's the second largest employer in the U.S. behind Wal-Mart, and the median salary of a U.S. postal worker is about $53,000.

So for every letter that travels across the globe, there are millions that travel much shorter distances. They subsidize the cost of international letters.

Tuesday: How postage gets divided among nations (spoiler: not evenly).

To send our letter to the island of Tanna, I purchased a global forever stamp for $1.15. By the time it arrives it will have traveled on multiple on-the-ground vehicles and airplanes in multiple countries.

This is what the inside of a postal truck looks like.

David Weinberg/Marketplace

So how does that $1.15 get divided among all nations? Here are the steps:

Step 1: Receive Payment for Postage

The origin country of the letter gets to keep 100 percent of the postage revenue. For now…

Step 2: Weight it

The island of Tanna is in the country of Vanuatu, which is one of the 192 member countries of the Universal Postal Union. At the end of the year, every member of the UPU adds up the weight of all the mail it delivered for other countries.

Step 3: Pay Your Dues

The UPU has established a complicated system of terminal dues that countries pay each other for mail delivered outside its borders. So if the USPS delivered 2,000 kilograms of mail from Vanautu in 2013, and Vanautu only delivered 1,000 kilograms U.S. mail from the U.S., then Vanautu will have to pay terminal dues to the U.S. How does that money get divided up among the multiple countries that handle the letter? 

Google Maps

Short answer: It doesn’t get divided for each individual piece of mail. Instead, countries pay terminal dues based on the overall weight of mail shipped between them.

These rates are decided by The Universal Postal Union.

Wednesday: Until the 1960s, it didn't matter if the Postal Service made money.

And now our letter to Vanuatu takes a moment to ask itself the question: "Why am I not an email?"

The Postal Service is, as they know all too well, losing money

Historian Richard John says, this isn't a new story -- it just didn't matter as much in the country's early days. When the Postal Service was established in 1775 -- with Ben Franklin as the country's first Postmaster -- it functioned as a government agency, with no real mandate to break even.

And as the country expanded, the Postal Service did too. They were often at the forefront of new transportation technologies -- think: stagecoaches, motorcycles, railroads, airplanes, and even missiles.

A city carrier in Washington, D.C., gathers mail from a post-mounted collection box using \"The Flying Merkel,\" a belt-driven, two-cylinder V-twin motorcycle, circa 1911. The use of motorcycles for mail collection and delivery in cities peaked in the 1920s. Four-wheeled automobiles and trucks, with their larger capacities, soon became the vehicles of choice. 

Courtesy of the United States Postal Service

"The Post Office was very quick to give contracts to flyers. Charles Lindbergh. And the airlines got an absolutely essential boost from that postal funding in 1920s and 30s," John says. "In more recent period, the 50s, 60s and 70s, optical scaning recognition are technologies the Post Office [supported]."

How'd they manage to pay for all this innovation?

"Congress used to foot the bill when the institution was running a deficit," John says. "Coroporate money doesn't become important til 1900."

And even then, John says, these external funds competed with "a thought experient about how our nineteenth century forbearers believed politics should be conducted with major federal subsidies to make it possible to spread the news, which remained a central mandate. Newspapers and magazines -- LIFE Magazine was a famously important magazine in 1960s -- was more or less destroyed by changes in postal rates. It got more expensive to mail, and it was no longer economical. So it's a remarkable odyssey for an institution a lot of peope cared about." 

Today's assumption that the postal service should break even took root in the early 1970s. Postal worker strikes prompted then-President Richard Nixon to pass the Postal Reorganization Act in 1971, which turned the agency into a semi-independent business -- and as a semi-independent business, money started to matter. The Postal Service hasn't used taxpayer money since 1982, with a few exceptions, such as sending absentee ballots to Americans overseas. Today, the USPS relies on the costs of postage and sales for almost all of their expenses.

Eddie Hubbard (left) and William E. Boeing stand in front of a Boeing C-700 seaplane near Seattle, Washington, after returning from a survey flight to Vancouver, British Columbia, on March 3, 1919. They brought with them a pouch with 60 letters, making this the first international mail flight.

Boeing Airplane Company/Collection of United States Postal Service

Some say the Postal Service stopped innovating because its business model changed, and the funds simply weren't there.

Tomorrow, we'll talk with someone who thinks the story isn't so simple. 

Thursday: Why the USPS doesn't do email

Why isn’t there an email address available to the public -- one that carries with it the same privacy laws that apply to postal mail?

Shiva Ayyadurai asked USPS management that same question in 1997, the year he calls "The Crossover," when email volume exceeded postal mail volume. At the time, Ayyadurai says the USPS did not see email as a threat to first-class mail. And in 1997, there really was no reason to be concerned -- during the three years leading up to 1997, the USPS posted cumulative earnings of $4.6 billion and, First-Class mail was up by 13 percentage points.

Ayyadurai calls himself the inventor of email, a claim that has been widely disputed, says he has a vested interest in the answer. It would take 15 years of criticism, but in 2012 Shiva Ayyadurai  produced a report, funded by the USPS, outlined several ways for the USPS could integrate email into its business model. Ayyadurai says the USPS did respond after he submitted his research.


Friday: How else could we get a message to the people of Tanna? (serious question)


In all probability, our letter is still on its way to Tanna. 

Which raises the question: How else could we convey Mark's message to this small island nation? What are your ideas, Internet?

Send them to us via Facebook or in the comments below. Or, you know, via snail mail. 

Marketplace for Monday April 21, 2014

Answers to the big questions behind small, simple, ubiquitous things in the world of business.

by David WeinbergPodcast Title Why it makes economic sense to send a letter for $0.49Story Type FeatureSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

U.S. Marshal Fatally Shoots Defendant In Utah Courtroom

NPR News - Mon, 2014-04-21 13:52

The alleged gang member was killed when he reportedly lunged at a witness and was shot several times in the federal courtroom in Salt Lake City.

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