Many of Wall Street's biggest banks are beating profit expectations as the mortgage business comes back.
Author Michael Lewis, who explained the bond market in Liar’s Poker and the baseball draft in Moneyball, says the stock market is a rigged game. His new book, Flash Boys: A Wall Street Revolt, describes how high-frequency traders use special tricks to make money on other people’s trades. They do it a penny at a time, by being milliseconds faster than anybody else.
And, cell phones sleep next to us at night and travel in our pockets just about everywhere we go. All those hours reading, texting and Facebooking lead to a predictable but terrifying result: low phone battery. In this age of "I'm always available on my cell," businesses hope to make a buck by offering a place to charge.
The Netflix hit show House of Cards might be about Washington, DC but many of the scenes are shot in Maryland. The show has been lobbying the state congress for tax breaks but their tactics aren't going over well.
Marketplace Morning Report for Tuesday, April 1, 2014by David BrancaccioPodcast Title: PODCAST: Dealing with high frequency tradingStory Type: BlogSyndication: All in onePMPApp Respond: No
"We cannot let another aircraft simply vanish," the head of the International Air Travel Association says.
When the team was honored by President Obama on Tuesday, colorful outfielder Jonny Gomes came decked out in a red, white and blue flag jacket. The Sox gave the commander in chief a matching jacket.
This story is Part I in a collaboration with Slate called “The Secret Life of a Food Stamp.”
Last night, as the clock struck 12:01 on the first of the month, some lines of computer code triggered a series of financial transactions that have a profound effect on the American economy. In that instant, hundreds of millions of dollars—taxpayer dollars—were automatically downloaded onto debit cards tucked into wallets and purses of people across America.
Depending on what state you live in, the same thing will happen at different midnights throughout the month, until 47 million Americans living near the poverty line have received their monthly allotment of food stamp dollars—on average, about $130 per person. Once they get that money, some people will start spending it within minutes.
It was 12:30 a.m. and snowing when I met Yolanda Ballard and her 8-year-old son recently, pushing a shopping cart full of groceries toward their car in a Walmart parking lot in Dayton, Ohio. “This little dude right here needs breakfast in the morning, so you just come at night and get it over with,” she said.
Ballard is a widow in her forties, with a part-time job at the discount store Dollar General, where she tries to get as many shifts as she can. Ballard's food stamp card, officially known as an Electronic Benefits Transfer or EBT card, had been recharged with $340 that night, a moment she'd been anticipating. As frugal as she tries to be, her food stamps usually run out by the third week of the month. “Then you're kind of putting stuff together and trying to make stuff happen until your stamps come,” she said.
One in seven Americans uses food stamps today—that’s more than twice 2000’s number. The fastest-growing group of participants are people like Ballard: people with jobs, who work all year round. Many of these workers are employed by big retail chains that take in tens of billions of dollars in food stamps.
In politics and in the news, a lot of focus is put on the manyYolanda Ballards of America. Whether they deserve the food stamp money they get. What they spend it on. If they abuse the system. Those were the kinds of questions clinging to recent debates in Congress over funding for food stamps. But throughout those debates, which resulted in more than $8 billion in cuts to the program over the next decade, one subject got relatively little attention: what happens to those food stamp dollars after people like Yolanda Ballard swipe their EBT cards, and the money becomes store revenue.
Last year, a record $76 billion flowed from the U.S. Treasury to peoples' food stamp cards. That money then flowed into the revenue streams of more than 240,000 stores across the country, all of which have been approved by the federal government to accept food stamps, officially known as the Supplemental Nutrition Assistance Program, or SNAP. You can look at SNAP as a government subsidy with two lives. First, low-income people enrolled in the program get financial help to buy food. Then, when they swipe their EBT card at the check-out counter, the government pays that store for that food—which is, of course, being sold at a profit.
So it seems worthwhile to pay attention to how this "second life” of a food stamp subsidy works. There’s just one problem: A lot of the information about how stores benefit from food stamps is confidential.
The USDA has prohibited the release of information on how much individual companies make from food stamp revenue.
Even basic facts such as how many food stamp dollars go to a particular store in a particular location are not publicly available. For their part, stores don’t like to volunteer the information. “We don’t provide our market-share data on any categories like that—it’s generally proprietary in nature,” explains David Tovar, vice president of communications for Walmart, which caters to low-income customers and takes in a giant share of food stamp dollars. “I think any information that a retailer shares about how they're serving customers and how they're going to market would be interesting to lots of other retailers.”
But say you're not a retailer—you’re just someone who wants to know where $76 billion of your tax dollars are going. For you, it might be useful to know which companies profit the most off this federally funded program that Congress created to fight hunger. You might wonder: In what stores and neighborhoods are the most food stamp dollars spent? What kinds of foods do those stores promote and sell? What are the store’s business and labor practices? The answers to those questions might help you see how food stamp subsidies are serving a community—if they’re doing what they were meant to do.
It was these sorts of questions that Jonathan Ellis, a reporter at the Argus Leader in South Dakota, was pursuing when he stumbled into a legal battle with the federal government that is still unresolved. Ellis had requested information from the U.S. Department of Agriculture (USDA) about exactly how much it reimburses each store for sales from EBT cards.
“Typically, if a business participates in a government program, you can get a copy of their contract and find out how much they're being paid,” Ellis says. That’s how it works when the government pays a construction company to build a bridge, or a defense contractor to build a fighter plane. But when Ellis filed a Freedom of Information Act request to find out how much the government pays stores in the food stamp program, he was denied.
In refusing Ellis’ request, the USDA cited a provision dating back to the 1970s forbidding the government from sharing "relevant income and sales tax filing documents" that a store might submit in the course of applying to be part of the food stamp program. For many years, officials at the USDA have interpreted that to mean no information can be released on how much an individual store or company makes from food stamp revenue. Ellis and his newspaper think that is a misinterpretation of the federal statute; recently, a federal appeals judge agreed, and sent the issue back to a lower court for review.
Kevin Concannon, Under Secretary for Food, Nutrition and Consumer Services at the USDA, who oversees the food stamp program, agrees that SNAP sales information should be made available. “I think, personally, it's in the interest of the American public,” he told me. “These are public benefits that are moving through the economy.” Yet he wouldn't rule out the possibility that his agency could appeal the judge's ruling.
That means for the time being, there is a lot we don’t know about how food stamp subsidies affect stores. So what do we know?
We know that food stamps affect how and when stores manage their inventory, as sales often spike on the days of the month when benefits kick in. In Ohio, where cards are recharged between the first and the tenth of the month, stores stock up on bread, meats, milk, and cheese ahead of the rush of customers. “All the staples are usually what disappears the fastest,” says Mary Burkett, an assistant manager at a Walmart supercenter in Ohio. “If you don't have your staples, you know customers are going to be upset, you'll lose sales.”
Mary Burkett, an assistant manager at a Walmart supercenter in Ohio.
While we don’t know exactly how much individual stores make in EBT card sales, we know that revenue really matters to stores’ bottom lines. This is something Walmart share-holders have learned firsthand. When Walmart announced disappointing profits and store sales last quarter, company executives blamed bad weather and the reduction in SNAP benefits that went into effect in November 2013, after an economic stimulus bill expired.
Then just last week, when Walmart released its annual report, it listed among the potential risks facing the company “changes in the amount of payments made under the Supplement Nutrition Assistance Plan [sic].” Namely, the $8 billion in cuts to SNAP that Congress passed earlier this year.
At a private dinner Walmart held for market analysts last fall in Bentonville, Ark., a company vice president estimated Walmart takes in 18 percent of all food stamp spending in the U.S., a number Walmart’s David Tovar confirmed when I interviewed him. That means Walmart took in more than $13 billion in revenue—or about 4 percent of Walmart’s total sales in the U.S.—from federal food stamp dollars last year.
So Walmart is likely the biggest single corporate beneficiary of SNAP, but it’s not just Walmart. A growing number of stores have baked food stamp funding into their business model since the Great Recession. The tally of stores authorized to accept food stamps has more than doubled since the year 2000, from big-box stores like Target and Costco to 7-Elevens and dollar stores. It’s a paradox that the more people are struggling to get by, the more valuable food stamps become for business.
In 2009, the CEO of Family Dollar told shareholders that expanding in to the multi-billion dollar food stamp market represented a "significant opportunity" that would help them weather the bad economy. Other stores put tables outside their doors with information about SNAP to help sign more people up.
Retailers’ embrace of SNAP has been encouraged by the USDA, which depends on stores to make the program work. It’s a symbiotic relationship, and the government takes every opportunity to remind retailers what’s in it for them. In a USDA training video sent to stores that take food stamps, the narrator drives the point home: “If you approach it as you do any other good business practice, accepting SNAP benefits can be a profitable part of your operation.”
Profitable for companies, and potentially for their workers, too. The USDA’s Kevin Concannon says food stamps can be a job creator. He told me about a visit he made to HEB Grocery, a supermarket chain in Texas. “The vice president of the company pointed to some of the clerks,” Concannon recalls, “and he said, ‘See these folks here? We're able to employ more of those, for more hours per month, due directly to the financial impact of food stamp benefits.’”
But there is something else that’s important to point out about the jobs you can get at stores that accept food stamps. In many cases, at many different stores, those jobs pay so little that their workers depend on food stamps, too.
In order to be authorized by the government to participate in SNAP, a store must meet certain standards and fulfill certain responsibilities. It must keep a specific amount and variety of food in stock. It must work with the federal government to monitor fraud. It must not discriminate against customers who use EBT, or force them to use certain lines. But nowhere does the government require that for a store to be part of the food stamp program, it must pay its workers enough that they don’t need to use food stamps themselves.
Additional reporting and production on this story from Jolie Myers and Martha Little.
A construction worker stands on the roof of a condo complex under construction on July 17, 2013 in Berkeley, California. According to a Commerce Department report, housing starts and permits for future home development fell 9.9 percent in June...
Some pretty lackluster news from the housing market today.
Construction spending rose a measly .1% in February. Part of that was because of the wild weather we saw this winter, but economists say that only accounts for part of the lacklusterness. It seems we’re not building or buying homes like we used to. Pending home sales fell in February to their lowest level in more than 2 years. The housing market made big gains last year, but so far 2014 isn’t looking so hot.
L is for Labor: The lackluster labor market means people don’t want to make big investments, like buying a house, says Susan Wachter, professor of real estate and finance at Wharton. "Jobs and affordability of mortgages are the two fundamental drivers of the housing market and they’re both weak right now."
L is for Loans: Namely, it's not easy to get a loan these days. Nicolas Retsinas teaches real estate at Harvard Business School. "The bread and butter of the housing market is first time homebuyers. They continue to have increasing difficulty getting a mortgage, accessing credit."
Those loans have to be a little larger because of the third L...
L is for Lumber: "Costs have been going up. The cost of lumber’s been going up," says Patrick Newport, an economist with IHS. He says demand from China and other elements have lifted lumber prices, making building less lucrative for builders and a lot costlier for buyers.
L is also for : Undeveloped or ripe for development real estate is getting expensive too, especially in urban areas.
And let's not forget the L for Lousy Weather: The winter freeze clamped a lid on the housing market on most of the Eastern Seaboard this year, and sales in the West and South just weren't enough to make up for it.
All of this is a big deal for the overall economy, says Newport, because it is (I know, you may be going into acute sugar shock at this moment) an economic...
L for Lynchpin: "Basically, the housing market has been sideways for the past six months and that’s very disappointing, because housing is supposed to be one of the key lynchpins that will get the economy back on track."
That's largely because it creates a lot of Lucrative construction jobs.Marketplace for Tuesday April 1, 2014by Stacey Vanek SmithPodcast Title: Housing is having a bad month, thanks to the letter "L"Story Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No
The formal naval intelligence analyst is serving a life term for spying for Israel. This is not the first time his case has cropped up in the larger context of Israeli-Palestinian peace negotiations.
Federally funded health clinics serve all comers, and people pay fees based on a sliding scale. That's one option for people who didn't sign up for health insurance on the exchanges.
The golf star has been experiencing back pain in recent weeks. He had surgery Monday to relieve pressure on a spinal nerve. The Masters tournament begins next week.
The new jerseys feature a familiar U.S. badge on the chest. But they depart from the previous models by using thick bands of the national flag's three colors.
A former top general of the People's Liberation Army has been indicted for his allegedly lavish lifestyle and investigators say there's evidence of wrongdoing at key military units.
Obesity docs say it's time for the Girl Scouts to ditch the processed, sugary cookies and find another way to raise money. But the tradition is deeply ingrained and has been around for a century.
You'd think that the popular kids don't get picked on, but as a teenager's social status rises, they're more apt to be bullied. Increased social combat may be to blame.
A picture taken on September 25, 2013 shows a general view in Monaco with yachts moored at Port Hercules during the 23th edition of the International Monaco Yacht Show. The Monaco Yacht Show is considered the most prestigious pleasure boat show in the world with the exhibition of 500 major companies in the luxury yachting and a hundred super and megayachts afloat.
Is it possible that yachts can serve as an economic indicator? The Monaco Yacht Show, where billionaires gather to browse for boating baubles, is coming up in the fall. But event organizers say the yacht industry is beginning to bounce back from the recession.
"The yacht industry is the first thing to crash and the last thing to come back," says Lang Ryder, who runs the Marine Lending Division for Seacoast National Bank. He says there was even a boating bubble - owners needed cash so they sold and prices dropped. "The bubble was overnight, if you had a boat in 2007 that was worth $1,500,000. In 2009 it might be worth $750,000."
Claudette Bonville, an interior designer for yachts, says renovating a boat is just like redoing your house, "except it costs a lot more money. Sometimes it can be a $1 million, sometimes it can be $5 million."Marketplace for Tuesday April 1, 2014by Sally HershipsPodcast Title: The yacht index: How the price of pricey boats shiftsStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No
When you pull an April Fools' prank, the joke could be on you.
Medecins Sans Frontieres' new report called Greece's treatment of migrants not only a "violation of national, European and international standards, but also" harmful to people's health and dignity.