Washington took two big steps toward more normal times. First, the Federal Reserve said it will modestly taper down its easy-money program. And then Congress completed the first bipartisan budget agreement in years. But some other obstacles loom.
A baby born today in Ethiopia is three times more likely to survive to age 5 than one born in 1990. This reduction in child mortality isn't due to expensive international aid, but rather an investment in bare-bone health clinics run by minimally trained community workers.
Hundreds of people, perhaps thousands, have been killed in those nations in recent days in clashes between groups. Samantha Power, the U.S. ambassador to the U.N., is in the Central African Republic to try to convince the sides to put down their guns.
Target is saying this morning that about 40 million credit and debit cards were compromised in a giant data theft that occurred at nearly all of Target’s 1,800 locations during the Black Friday weekend. So far it seems like only people who shopped at a brick and mortar store—the data breach doesn’t seem to have affected online shoppers.
The crime may have involved hacking into the actual machines stores use to swipe cards. “If we look at previous breaches, it’s likely the bad guys got in via some kind of internal access to the store,” says online security expert Brian Krebs, who broke the story. “It could even be physical access to the store.” Krebs says a big TJ Maxx data breach back in 2007, where 45 million cards were compromised, started with two guys sitting in their car in a store’s parking lot with an antennae pointed at the store’s wireless network.
The data theft hit customers on Black Friday and seems to have lasted for a couple of weeks—until December 15th.
If you were a Target shopper during that time, Krebs says you probably shouldn’t worry. He says consumers are not liable for fraud on their card, though banks might reissue some cards proactively.
He says the real monetary hit will be to Target. “They’re going to face fines and they’re going to face lawsuits from card issuers like Visa and Mastercard,” says Krebs. “And Target’s going to pay a lot of money to banks because of this.”
Krebs said Target has actually been very proactive with security, but it’s really hard to stay ahead of these criminals.
The housing market is cooling because of higher mortgage rates and limited supply, economists say. Meanwhile, seasonal factors related to the holidays may have temporarily pushed up claims for jobless benefits.
The Federal Reserve handed a gift to investors yesterday by ending some of the uncertainty about interest rate and stimulus policy. The Fed's extra buying of bonds to stimulate the economy will be tapered back by about $10 billion dollars, or 12 percent, starting in January. And, the Fed announced it has no plans to raise interest rates any time soon.
The strong suggestion that interest rates will stay low means the Fed is not worried about inflation right now. But should it also worry about the opposite? Persistently falling prices, or deflation, can also wreck an economy, as the experience in Japan over the last 20 years has shown.
Chris Farrell, Marketplace's economics guy, says that just because inflation is not a problem doesn't mean we don't have a potential economic problem on our hands.
"Inflation is an increase in the overall price level. Deflation is a decrease," Farrell explains. "So, on one hand, you say, 'Hey, things are getting cheaper. What is the problem?' The problem with deflation is that it can set off a downward debt spiral -- think Great Depression."
Click on the audio player above to hear more about why deflation can be problematic when investors have been so accustomed to a culture of borrowing.