National / International News
Thirty-two out of 60 economists surveyed by Bloomberg predict that the Federal Reserve will announce plans to keep interest rates near zero for a "considerable time" in a statement expected Wednesday afternoon. In general, Fed-speak-watchers are split on whether the bank will drop that language, which could rattle the markets.
While we wait for the Fed's statement, here are the other numbers we're keeping an eye on:59 percent
Mobile ads are a moneymaker for Facebook, accounting for 59 percent of its ad revenue in the first quarter of 2014. The Wall Street Journal reported that most of that money isn't coming from big consumer brands, but from mobile gaming companies who will pay out the nose for targeted ads and users who hit the "install" button without leaving Facebook –sometimes up to $20 per ad and another $10 per install. That investment becomes worth it once users shell out money for in-game add-ons, but many are concerned the market for "free-to-play" games will bust soon.$500 million
That's how much the Consumer Finance Protection Bureau is seeking in a suit against the troubled for-profit Corinthian Colleges. The suit alleges that Corinthian used predatory lending tactics and harassed students to claim payments, all the while messing with its own job placement numbers by paying employers to temporarily hire its graduates. Corinthian disputes the allegations.53 percent
The parents of over half the students at the Children's Creative Workshop in Malibu have filed "Personal Belief Exceptions," allowing their children to attend school without certain vaccines. Many of the wealthiest schools across California are seeing a huge drop in vaccination rates, according to an investigation by the Hollywood Reporter, and cases of whooping cough are skyrocketing.
The start of the National Football League’s season has been more about incidents off the field than on.
Minnesota Vikings have placed running back Adrian Peterson on the exempt/commissioner's permission list, telling him to stay away team activities while he faces child abuse charges. Baltimore Ravens running back Ray Rice is appealing his indefinite suspension after video surfaced of him hitting his then-fiancé.
Responding to these incidents and others, the NFL’s big-money sponsors are pushing the league to take a bigger stand against this behavior.
“We are disappointed and increasingly concerned by the recent incidents that have overshadowed this NFL season,” Anheuser Busch said in a statement. “We are not yet satisfied with the league’s handling of behaviors that so clearly go against our own company culture and moral code.”
Cover Girl and Pepsi also released statements expressing the desire to see more action from the NFL.
In turn, the league announced its taking steps to address its domestic violence policy. It also hired Cynthia Hogan to be the league’s senior vice president of public policy and government affairs. Hogan was an aide to Joe Biden in the Senate when he wrote the Violence Against Women Act.
“This is one of the first times we’ve seen sponsors threaten to walk away from the entire league,” says Victor Matheson, a sports economist at the College of The Holy Cross.
He says sponsors typically rethink their contracts with the individual players in these types of circumstances. This time, it’s more about the league’s response, though teams can be targets too.
Raddison, the hotel chain, has suspended its sponsorship of the Minnesota Vikings, referring to charges against Peterson by saying, “Radisson takes this matter very seriously particularly in light of our long-standing commitment to the protection of children.”
The Vikings reversed a previous reinstatement and have now kept Peterson from playing.
“We want to be clear: we have a strong stance regarding the protection and welfare of children, and we want to be sure we get this right,” the Vikings said in a statement. “At the same time we want to express our support for Adrian and acknowledge his seven-plus years of outstanding commitment to this organization and this community.”
But for now, despite registering their discontent, most sponsors are staying put.
“For now, I think it’s just piling on,” says Andrew Zimbalist, a sports economist at Smith College. “[Sponsors are saying] ‘We’re good guys, don’t boycott us.’ And when the storm blows over, which I believe it will, then they’ll be back on board.”
Zimbalist says the NFL enjoys strong viewership, more so than other professional sports leagues, which is a big draw for sponsors.
Despite the backlash, fans are still watching. Over 22 million people tuned in Sunday when the Chicago Bears’ played the San Francisco 49ers, according to NBC.
Some of the National Football League's big-money sponsors think the league is not doing enough to grapple with the problem of players who are charged with domestic violence. Last night, the Minnesota Vikings deactivated running back Adrian Peterson while he faces child abuse charges. Plus, California has a new law on its books. It's been dubbed the "Yelp law"--after the online location-aware directory of restaurants and other establishments. More on the "Yelp law," which stops businesses from stopping you from writing bad reviews. And tomorrow, the people of Scotland go to the polls for one of the most crucial political and economic decisions of their lives. They'll vote on whether or not they want to separate from the United Kingdom. More on the economic implications of a decision to split.
California Governor Jerry Brown has signed what some have dubbed the "Yelp Law." It bars the business practice of "non-disparagement clauses": fine print that prohibits customers from writing bad reviews.
The law was inspired by a case in Utah, in which online retailer KlearGear went after a couple who aired their grievances on the website Ripoff Report. KlearGear responded by calling the husband, John Palmer. His attorney, Scott Michelman characterizes that call: "'Your wife criticized us on Ripoff Report. You now [owe] us a penalty of $3,500."
Michelman and the Palmers ultimately won the case, though it took a lengthy legal battle. Their story inspired the California law, which bans such policies outright and imposes escalating financial penalties if businesses seek to enforce them.
Michelmann added that the law does nothing to restrict the traditional way of dealing with malicious and untrue statements: a defamation lawsuit.
"As opposed to an effort to harass, intimidate and silence its critics," Michelson says.
Either way, though, the business has to find those critics. Sparks Steakhouse is suing Yelp to find the identity of a reviewer who claims to be a former employee. "I have personally spit my own sal[i]via [sic] into dishes for the passed [sic] 3 weeks now," the review says.
Across the street from the restaurant, Victoria Miller says that one review would keep her away. "I would definitely avoid that place at all costs," she says.
True or false, that online critic's best defense is anonymity.
On Thursday, the people of Scotland go to the polls for the most important economic decision of their lives. They’ll vote on whether or not they want to separate from the United Kingdom. They’ll also be voting with an unprecedented chorus of warnings ringing in their ears.
More than a hundred companies with Scottish operations have spoken of the perils of independence; five major banks, a big insurance company and one of the UK’s largest investment funds have threatened to pull their headquarters out of Scotland if there’s a "yes" vote; and supermarket chains say it could mean higher prices.
The pro-independence leader Alex Salmond blames the 'No' Campaign for this outpouring of corporate angst.
“I think the problem lies entirely with the 'No' campaign," Salmond told a news conference in Edinburgh. "The 'No' campaigners have been caught red-handed as being part of a campaign of scaremongering."
Salmond claims that those opposed to independence—including the UK’s national government at Westminster—have pressured the companies into speaking out.
But the warnings of turmoil have been widespread and cannot be so easily dismissed. The main concern is acute uncertainty.
Following a "yes" vote, there would be at least 18 months of intense negotiation over some highly contentious issues: What currency would Scotland use? How much of the UK’s national debt would it shoulder? How much of the North Sea oil would it inherit?
Mike Amey of the Pimco bond investment firm says this would create uncertainty which could be economically damaging.
“We wouldn’t know who’d end up with what. As a result you’d find some business investment put on hold during that period, the economy would be weaker," says Amey.
Some economists say that, at a stroke, the UK’s reputation as a global safe haven would be smashed. A survey of foreign exchange traders has indicated that the British pound could fall by 10%, and it would be more difficult for the UK to attract the inward investment flows that it needs to balance its books.
Dire predictions are coming thick and fast. A well-known property website forecasts that if there’s a "yes" vote, Scottish house price could crash, wiping $130 billion of the value of Scottish real estate and rattling Britain’s mortgage banks.
Scottish businesswoman and "Yes" campaigner Michelle Rodger says these forecasts are ludicrously negative.
“A 'yes' vote would send the most positive message to the rest of the world,” she says. “It would be Scotland saying: We’ve taken this opportunity, we’ve grasped it with both hands and we’re going to change Scotland for the better."
No one doubts the Scots would be able to run their own successful economy—they’ve played a leading role in the UK’s political, corporate, scientific and creative life for centuries. But divorce can be messy. Disentangling the 307 year old union with the rest of Britain would be monumentally difficult and costly.
We learned from the Census Bureau this week that the federal poverty rate has fallen, albeit slightly, for the first time since 2006. Last year, 14.5 percent of people in this country earned less than the federal poverty line, down from 15 percent in 2012. But a new report out Wednesday says far more families are financially insecure.
Nearly half of households in major U.S. cities are “liquid asset poor,” according to the report from the nonprofit Corporation for Enterprise Development (CFED) and Citigroup. That means if they lose their incomes, those households don’t have enough accessible savings to get by for three months at the federal poverty level.
“Liquid poverty tells us that many communities and families that may be middle class really don’t have the cash available, the liquidity available, to respond to unexpected emergencies or needs,” says Bob Annibale, Citigroup’s global director of community development.
Worse off is Newark, NJ, with nearly 75 percent of households considered liquid asset poor. When so many families lack a financial cushion, it takes a toll on the whole economy, says Stephanie Hoopes Halpin, an assistant professor at the School of Public Affairs and Administration at Rutgers University-Newark.
“What it means is that a huge portion of your community is struggling just to pay their bills,” she says.
The report is being presented at a conference in Washington, D.C. aimed at helping more low-income families save. Solutions include automatic savings plans “so that people don’t have to think about it every time they need to save a dollar,” says Ida Rademacher, chief program officer at CFED, or helping people pay off debts so that they can begin saving.
Lower-income households can and will save, she says, if given the right opportunities.