Many long-term care policies sold 30 years ago didn't specifically cover assisted living facilities. Policyholders rely on clauses that say new kinds of care will be covered when it becomes available, but the ultimate decision rests with insurers.
Michael Dell is in the group buying the computer maker. Analysts say the debt the company is taking on will be another challenge for Dell.
Dell has stopped trading on the NASDAQ exchange following the news that just came in that the company is being taken private. The investors are Dell's founder Michael Dell along with the private equity firm Silverlake Partners and Microsoft.
In other news this morning, the U.S. government is suing Standard & Poor's. The rating agency is accused of inflating its assessment of mortgage backed securities and contributing to the mortgage meltdown.
As of last Friday, the unemployment rate in the U.S. was 7.9 percent, and until that figure falls to 6.5 percent, the Federal Reserve says it'll keep up its aggressive monetary easing. In some parts of the country, unemployment is below 6.5 percent. Marketplace's Mitchell Hartman to one of them -- Boise, Idaho.
And finally, to Muzak, that background music we hear in malls and elevators. According to the New York Times, the company that owns the name Muzak, is re-branding it "Mood". Don't worry though, the music will not change.
It’s tough to be a computer maker these days. Profits are slim, competition is tight, and shareholder scrutiny is intense. That’s partly why computer maker Dell announced Tuesday it’s going private in a $24.4 billion dollar deal.
Founder Michael Dell, equity firm Silver Lake Partners, and Microsoft are taking the Texas-based company off the market in an effort to make the company more agile, and hopefully, more profitable.
Business Insider CEO Henry Blodget says shareholders will probably be happy with the 25 percent premium the company will pay to buy back Dell stock.
But “on the other hand, you’re probably kind of frustrated that if Michael Dell has some brilliant ideas for how to make Dell much more valuable, that he’s not just doing that with you as a shareholder,” says Blodget.
Dave Johnson, senior analyst with Forrester Research, says the deal is good for business customers because a Dell/Microsoft partnership strengthens both players.
“A relationship with Dell gives them the opportunity to share more knowledge and learning around hardware manufacturing and hardware supply chains,” says Johnson.
Shareholders still must approve the deal.
There are always losers in politics. But even some of the winners wind up so badly outnumbered that accomplishing anything is a rare treat. On the surface, their jobs might seem so hopeless that you wonder why anyone took them on.
A justice department memo obtained by NBC News says the president can order drone strikes on Americans overseas if they take on leadership posts in al-Qaida or affiliated organizations and are "imminent" threats to Americans. But there's no need for proof of "specific" plans aimed at the U.S.
Also: Scandal-mongering author Kitty Kelley turns her gaze on women in Congress; Goodreads makes some unexpected new rules; and Mark Athitakis explains why Barnes & Noble brought literary culture to the suburbs.
In a lawsuit filed late Monday, the U.S. Department of Justice claims the credit rating firm Standard & Poor’s knew some $4 billion worth of mortgage-backed securities were risky. But, the government claims, S&P still gave those securities top ratings anyway, helping to fuel the nation’s mortgage meltdown.
Economic consultant Gary Shilling says Wall Street banks needed S&P’s stamp of approval.
“The rating agencies were working with [banks] to put the maximum amount of what was really very low-quality merchandise in there, securitize it, and sell it off to people who thought a “AAA” rating meant something,” says Shilling.
McGraw Hill, S&P’s parent company, posted a lengthy rebuttal on its website.
“What the government is claiming is just not so,” says Floyd Abrams, the company’s attorney.
George Washington University law professor Jeffrey Manns says this is the first time the government has sued a credit rating agency over the housing crisis.
“It may underscore that the federal government will take a more aggressive posture in the future in trying [hold] rating agencies accountable,” says Manns.
It’s expected Attorneys General from at least a dozen states will also file suit.
According to news reports, rescuers were able to insert a camera into the underground bunker where gunman Jimmy Lee Dykes held a boy for nearly a week. When they feared he might hurt little Ethan, authorities distracted Dykes with an explosion. Then they shot and killed Dykes. Ethan is safe.
He ran the University of Minnesota, the University of Texas, and since 2008, he's been the President of the University of California. Mark Yudof joins Marketplace Morning Report host Jeremy Hobson to reflect on his legacy, higher education, and the future of online learning as he completes his final months at the University of California.
On whether public universities have figured out a way to survive tight state budgets:
"I think they are feeling their way, but I don't think they've figured it out yet. I think in the case of the University of California, in a few year, probably four, five, or six courses will be taken online on your way to an undergraduate degree. We'll make more use of e-learning. It's a progression. You know, what I like to say is we're like a shoot of bamboo -- we need to bend, but we don't want to break. We've been around almost 150 years. I don't want to give up the research, I don't want to give up the access, I don't want to give up the medical care, but we obviously have to change."
On online learning versus traditional classroom learning:
"You don't want a camera in the back of the classroom with a professor droning on in his traditional lecture. You know, you want Pixar or someone like that to really fix it up. As for the MOOC's (Massive Open Online Learning), I think we're at the ground level on this. I mean, if you give me $20 million and I can offer a course for free and I have no degrees, no certificates, no assessments, and most of the students drop out before we complete it, I don't consider that a triumph for higher education. It's good that it's available and it's open, but we have to have a business model that works for real people and is self-sustaining."
On his legacy:
"During a very difficult time, I helped hold the place together. I think there was a danger given the furloughs and the pension crisis and other things that we could have had a mass exodus of faculty and lost a lot of ground. That didn't happen. That, I hope is my contribution."
French President Francois Hollande, making his first speech as France's head of state to the European Parliament in Strasbourg, said he believes the eurozone has largely put its crisis behind it but cannot afford endless austerity. Talking about the region, he said the greatest threat was "no longer the mistrust of the markets, but that of the people."
"A big challenge for Europe at the moment is how they can win back support for the idea of Europe among its people. He called for a vision of less austerity and more in terms of providing social security for people and creating jobs for the very very many young people who are without employment," explained the BBC's Bethany Bell in Strasbourg.
Hollande also believes that the euro is too strong which could undermine exporters and wider economic growth. He put pressure on other eurozone countries with strong export economies, like Germany, telling them they should be doing more to grow their domestic market in order to create a fairer balance.
Why are video game sales down? Two words. Ho hum.
"When the 360 came out, the initial problem was, geez, we don't have enough high def televisions," says Mike Hickey, a senior equity analyst with National Alliance Securities.
He says now we have lots of high definition TVs, but new Xbox 360 consoles from Microsoft? No. "And we're not blown away by the current game experience," he says. "All the games that come out are just iterations of prior ones." That's because our consoles are maxed out technologically, Hickey notes.
It's been seven to eight years since the last new gaming consoles were released and video game fatigue has set in.
"This is the longest cycle we have ever had in the video game space, which is all the more reason why we're seeing declining sales," says Arvind Bhatia, a managing director at Sterne Agee.
He says more games bought and played on smart phones, tablets and ordinary computers are also eating in the traditional video game sales. Zynga, the producer of the virally popular game Farmville, also reports earnings today. But analysts expect it to lose money due to all the new competition.
The rise in the U.S. unemployment rate -- to 7.9 percent in January -- suggests that people are coming back into the job hunt after giving up on finding work during the recession. And the increase takes the U.S. economy further from the 6.5 percent unemployment target that the Federal Reserve has set -- at which point it will back off its current policy of maintaining incredibly low interest rates to spur business investment and hiring.
But some places in the United States have already seen unemployment fall far enough to hit the Fed’s target. This reporter traveled to Boise, Idaho -- metro-area population 600,000, metro-area unemployment rate 6.2 percent (December 2012) -- to see what it’s like to run a business in a genuinely recovering economy.
Blake Lingle greets diners at his Boise Fry Company with a casual “Welcome,” followed by an exhaustive tour of the menu. It features six varieties of potatoes with nine dipping sauces (including Thai, garlic aioli, and marshmallow), plus three homemade soda flavors (root beer, orange-basil, and raspberry lemonade). Oh, and burgers -- bison and beef, plus a homemade vegan patty, all available with grilled onions and special sauce (blueberry habanero, anyone?).
Lingle, 32, calls this fare “fries and burgers,” rather than “burgers and fries.” ,
The original Boise Fry Company restaurant is a lunch-counter storefront tucked into an aging strip mall just minutes from downtown. It’s cornered the gourmet French-fry market, and won numerous local and regional awards in the process.
The menu is chalked on a blackboard above the ordering station. “At the top is the Russet,” Lingle explains. “That’s the potato you’re going to get in every restaurant in America. Gold is below that: It’s a slightly more buttery, softer, sweeter potato.” Other varieties currently available -- many from nearby farms in Southwest Idaho -- include yams, lauras, sweets and purples.
“This is a fairly high-priced burger joint,” says Lingle. “It’s not McDonalds. You’re going to pay twice as much to eat here.”
A small order of fries costs $2.39; a large, $3.59. The priciest item on the menu, at $8.00, is “The Bourgeois”: Thin-sliced Russets fried in duck fat and finished with truffle salt.
Lingle didn’t launch this startup when the economy was recovering. He opened in mid-2009 -- when unemployment was hovering around 8 percent to 9 percent, the Boise housing market had crashed as badly as Phoenix and Las Vegas, and local employers like Hewlett Packard and Micron were laying off thousands of workers.
“A lot of people asked me why I started then,” says Lingle. “I was determined to open a business. And at some point, if it happens to be the right time, you can’t let a lot of other variables go through your mind. I was reading a lot of articles at the time, and some of America’s most successful companies actually started during recessions. I think sometimes it allows you to think out of the box, to be a lot more conservative in your financial approach to a business, because you realize how risky it is.”
Lingle did some things right at the beginning -- starting with ‘location, location, location.’ He opened his first restaurant adjacent to St. Luke’s Medical Center, Idaho’s biggest hospital and one of the state’s biggest employers. Health care employment is relatively recession-proof, so the lunch-crowd stayed pretty steady, even in the depths of the recession.
Now, Lingle is opening his third restaurant in Boise. He’ll have thirty employees, most of them full-time. He pays well above minimum wage -- around $12.50/hour -- with full medical and dental benefits. After two years’ service, employees get a custom bike.
And in Boise, where the unemployment rate has fallen by two percentage points in just the past year, and now sits well below the national average, things are starting to look normal again.
“In the past few months, it seems a lot of my friends and colleagues have gotten promotions, or gotten new jobs,” Lingle says. “I’ve seen a lot of other people take entrepreneurial risks that I wasn’t seeing.”
This final note on the way out today, in which we learn that size really does matter.
A study out of the University of North Carolina says CEOs who have big signatures are more likely to over-spend and have lower sales growth and revenues.
It's a psychological thing, apparently. Big signatures are evidence of narcissism, which in the executive capacity can be detrimental to corporate health.
Interestingly, big-handwriting CEOs tend to have above-average compensation.
In the past, Foxconn's workers union didn't represent workers. It was controlled by upper management. Now because of pressure from Apple, Foxconn's workers will vote for better representation.
"They're requiring us to take control of the union, which is great. But how much of a voice will we really have once we've done that?" says Li Shihong, who assembles iPads at one of Foxconn's largest factories in Shenzhen.
Auret Van Heerden heads the Fair Labor Association, whose audit of Foxconn is directing these changes. Van Heerden wonders if workers will even bother to vote:
"Workers might see it as an inconvenience, you know? One thing we need to get clear is why should I vote? What can they do for me? And will it be worth it?" says Van Heerden.
According to Van Heerden, it's possible one of the first demands of the new union will be to work more overtime hours. Apple has reduced hours for its Chinese suppliers -- an unpopular move with many Foxconn workers.
The Federal Communications Commission will hold the first in a series of field hearings on phone outages during natural disasters on Tuesday. The hearing, in New York and New Jersey, will focus on the blow Hurricane Sandy inflicted on communications networks.
Sandy knocked out about a quarter of the cellphone towers in the hardest-hit states. Andrew Adam Newman lives in New York’s Greenwich Village. He just had time to post a horrifying video and pictures of rising water on his Facebook page before his phone went dead. Most of his neighbors were in the same boat. Newman says many of them wandered around like zombies, trying to get a signal.
“I saw people walking around the neighborhood just staring at their phones," he says. "They looked like people who get metal detectors out and walk all over a football field looking for a nickel.”
Harold Feld, senior vice president of Public Knowledge, a non profit in Washington, says it doesn’t have to be this way. He wants the FCC to force cellphone companies to sometimes share their networks.
“These providers are used to competing with each other," he explains. "So the answer in this case may be, OK, when an emergency comes down, you’re all going to have to work together whether you like it or not.”
The FCC is expected to consider that issue at the hearing. And also look at how well cellphone companies prepared for Hurricane Sandy.
When President Obama has trouble saving a document to his network drive, well let's just say, he doesn't call Todd Park. Park is the Chief Technology Officer of the United States, and his job is -- shall we say -- a bit more large scale:
"The U.S. Chief Technology Officer is a position that President Obama created when he came to office. It's really about creating and executing projects," explains Park. "One of the initiatives is something called the Open Data Initiatives program. This is a program that essentially seeks to liberate data, in machine readable form, from the vaults of the government as fuel for entrepreneurship, innovation and scientific discovery."
To help tackle the job of releasing all this new information as well as other big projects, the government launched a program last summer to bring in a group of techies from the business world as so-called Innovation Fellows.
"We have been tremendously excited by the success of round one of Presidential Innovation Fellows program, and so we are very excited today to be launching round two," says Park. "We've actually identified a set of game-changing projects to apply technology to do massive public good. We are going to market with those projects and then seeking the best people on the planet to come and serve in government working on those projects."
Park's team will be accepting applications for the next six weeks. You can read more about the Presidental Innovation Fellows program here.
There are growing calls for Syria's leaders to face war crimes charges for the assaults against rebel targets and civilian areas. If that happens, veterans of past war crimes prosecutions say, Syrians will have one big advantage: the widespread gathering of evidence across the country.
Labor organizations say the Family and Medical Leave Act is too restrictive and that workers often have to choose between their family and their livelihood. Now, there are calls for Congress to expand the law and provide paid leave.
Life in Puerto Rico is tougher than ever. The U.S. territory — popularly known as "the island of enchantment" — faces a decaying economy and escalating violent crime rate. Many residents are leaving the island in record numbers and embracing the mainland as home.