National / International News

It wasn't written in stone, but odds were pretty high some kind of deal on Cyprus was going to get worked out this weekend. And lo and behold, it did. One big bank will be shut down. Big depositors will take in on the chin. And, economic life in Cyprus will likely get worse before it gets better.  

Faisal Islam is the economics editor for the U.K.'s Channel 4. We reached him in the capital, Nicosia. After 13 years covering European economies, Islam says he's stunned at the turn in the Cypriot economy over the past eight days.

"Never in my life would I ever have expected to witness the types of things we're seeing in a kind of Western European economy," Islam says. "You're talking a return to a cash economy, but without any cash."

Cyprus clamped down on how much cash could be withdrawn. As of today, it was down to 100 euros, which made most spending impossible.

"What we had over the past week was a heart attack to the economy," Islam says. 

Cypriots are angry and bewildered. And while the measures discussed in the bailout deal -- spending cuts and tax hikes -- address some underlying problems that led to the crisis, they don't take into account the economic shock of the past week.

"All the equations that the IMF and the EU calculated the bailout on seem to be calculated on numbers that are completely irrelevant now," according to Islam.

The Islamist group Gamaa al-Islamiya recently agreed to handle security during a strike by police in the city of Assiut; the police returned to work the next day. But the group says it will continue to provide services such as trash pickup, reflecting the larger problem of a deteriorating Egyptian government.

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No charges will be brought against a former BBC producer arrested as part of the Operation Yewtree inquiry into abuse claims against Jimmy Savile.

Islamist rebels have attacked Gao in northern Mali, officials say.

Egypt's most senior prosecutor orders the arrest of five leading activists after last week's clashes near the Muslim Brotherhood's headquarters.

Two months before a woman died in a Looe house collapse, residents gave Cornwall Council a 60-page dossier outlining concerns.

The heart, as we all know, wants what it wants. It also rarely wants the most practical thing, which is OK most of the time because on this program we talk a lot about practical things -- like retirement savings, debt, and mortgages. Those are areas where a certain emotionless-ness can be helpful. And yet, not every financial decision is practical. Take settling down with someone forever. Marriage is -- if you think about it -- one of the most important financial decisions a lot of people make. And yet, most don't think of it that way at all. A shocking number of people, in fact, go ahead and get married without ever talking about money with their beloved.

Jenette Sturges and her finance Julian Vargas are having their weekly household meeting. At the kitchen table every Friday, the two review their finances over a glass of wine. They started having these meetings shortly after they got engaged.

"We decided if we didn't have these meetings on kind of a regular basis that everything falls apart and we get really angry at each other," says Sturges.

"There will be murders," adds Vargas.

Between their mortgage, their student loans and their credit cards, the two 28 year olds in Aurora, Ill., have more than $180,000 dollars of debt.

"I get a lot of anxiety over money. I stay up at night thinking about our student loans and things like that. My parents kind of argued over money a lot, so I never really wanted to do that," says Sturges. "This kind of helps."

Arguing over money is not unusual -- it's a top reason couples divorce. What is unusual? A couple talking about money before they get married.

"In our society, money is really a taboo subject -- almost like sex," says Dr. Terri Orbuch, a relationship expert and author. "But I think money is even more a taboo topic, so these days friends are talking about sex, but we rarely know how much our friends make. We don't know even how much our parents make."

Add the blinders of romance to the mix and you've got a recipe for NOT talking money. Even when passionate love wears off a bit -- 12 to 18 months later, according to Orbuch -- people have no idea how to broach the subject of money.  

"So when we are now jointly financially responsible with someone else, we don't have the vocabulary to talk to this other person about money," says Orbuch.

Susan from the state of Washington didn't talk about money with her finance. But after they married, she learned he was a closet spender who would constantly draining their bank account. When the couple was splitting up she says he, "racked up considerable debt in my name on wine women and song and he had a better lawyer."

Susan got stuck with $30,000 of that debt, which she had to pay off while putting her kids through college.

"That's a big source of resentment, let me tell you," says Susan. "But in the end, it's a good lesson."

At 64, Susan's been in a relationship with a financially stable partner for eight years. They live together, but Susan says she won't get married again.

"No matter how much you love someone, it's a risk to be responsible for their financial behavior. I don't want to take that risk anymore," she says. "I don't think anybody should, frankly."

Emily Grover, 25, wants to minimize that risk. At a popular singles bar near New York University, Grover says the way a man handles his money is very important to her.  

"I've learned from past relationships and just from my own upbringing that having financial stability is something that's really important to me in a relationship," she says.

Grover says she tries to get a sense of someone's financial responsibility early on.

"The beauty of online dating is that you can kind of filter out people from the get-go. So you can see if they have a college degree, if they have a post-graduate degree, and sometimes they even list what their income is," say Grover.  

Since the financial crash, many daters have gotten more financially picky. Several dating sites have cropped that cater to them, by requiring people to list their credit scores. Grover hasn't gone that far yet, but she steers clear of free sites, which might attract the broke and indebted.

"It sounds so unromantic and horrible to say, but I've worked hard to get where I am and I've worked hard to not have credit card debt and to be paying off my student loans ahead of time and that's something that I want to look for in another person," says Grover.

That discomfort in factoring finances into the soul mate search is not uncommon, says family therapist Lair Torrent. He says his single clients often hesitate to bring up financial concerns about a significant other.

"Our popular culture puts it out there that it should be all puppy dogs and ice cream. So there's this sheepishness about bringing up the money issue," says Torrent.  "I'll have people say, 'I don't want to sound like a gold-digger,' I get that a lot."

Jenette Sturges and Julian Vargas have overcome that. They hope their weekly meetings will ease them into the financial side of married life. Vargas says tackling their debt together has made them stronger as a couple.

"It gives us something to come together an attack as a team. Our debt becomes this exterior antagonist," he says.

"He was an English major, that's why he talks about exterior antagonists," adds Sturges.

That exterior antagonist has taught Sturges a few things, too.

"I think I've learned to kind of relax a little bit more about it," she says. "I try not to obsess about it."  

"That's why we have a wine budget," he says.

"Yes! We do have a wine budget," she says.

And a wedding budget. Vargas and Sturges opted for a 2.5 year engagement to be able to afford the wedding they wanted. Their attitude towards couples who don't talk about money before they get to the altar?

"I guess all I can say is good luck," says Vargas.

"Right?" adds Sturges.

The U.S. won a World Cup qualifying game under near-blizzard conditions in Denver. Costa Rica says the conditions were unacceptable and FIFA should grant them a rematch.

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The Supreme Court is taking up same-sex marriage this week. Tomorrow and Wednesday it will hear arguments on California’s Proposition 8 and the Defense of Marriage Act.

It got us wondering about the cost of bringing a case to the Supreme Court. It's not cheap.

The first step is asking the court to consider your claim, which carries a pretty substantial lawyering price-tag. “If you’re just paying hourly, and you are paying at D.C. rates, it would be somewhere from $100,000 to $250,000,” says attorney James Bopp, who has argued many big-deal cases in front of the justices.

And that’s just to ask the Supreme Court to hear the case. If the justices agree, which they rarely do, then we’re talking really big numbers. “About the cheapest you can get away with at D.C. rates is $250,000,” Bopp says, “and then it ranges in the millions after that.” 

Those lawyer fees are only the beginning of the money that gets poured into Supreme Court cases. “When you think about the overall process, there are a lot of actors involved,” says Stephen Engel, a politics professor at Bates College. There are the experts who help prepare the case, the salaries of the justices, their clerks, their staff, the opposing lawyers. And there are the costs of filing amicus briefs.

“Each amicus briefs needs to pay for the process of the staff and all of the costs associated with the labor of generating that amicus brief,” Engel says. 

The same-sex marriage cases the court will hear this week are a little different -- when you’re talking money. “I think that most of the law firms who are involved are not charging their full rate,” says Dan Ortiz from the University of Virginia School of Law.

They aren’t writing those big invoices, in part because they believe in the cause. But also, taking part in hot ticket cases, Ortiz says, “makes you a real player in the profession and raises your profile for future cases.”

Future cases that may have much bigger paychecks.

Schools in England will no longer be rated as "outstanding" if they fail to close the attainment gap between poor and rich children, a minister says.

If there's one thing we learned from the financial crisis -- and all the other crises ever -- it's that we never learn. You can say that about government letting banks get too big to fail. You can say it about banks getting involved in wild and risky trades. And you can say it about us. Buy high and sell low is a sad truth for a reason, you know. Time and again we let panic or euphoria drive our actions in the market and wind up making big, expensive mistakes. Financial adviser and napkin artist Carl Richards writes about human error and emotions in investing for the New York Times.

"There's something sort of fundamental it feels like about human nature. We take the recent past and we project it in the future. Based on something that just happened, we seem to be all too willing to throw out well-crafted, rational investment plans at sort of the drop of a hat based on news," says Richards.

Richards says over the last 15 years he has noticed the same stories popping up -- stories we tell ourselves to rationalize our behavior. Then we look for evidence to support the stories we tell ourselves.

"It may be hard to talk about this one now, but I think 2008, 2009 -- the story we get ourselves so wrapped in is on the way down. People coming in and saying, 'I've just got to get out.' Like, why? Here's the story: 'Have you seen what the market's doing?' That's the story. It's got so many problems in it because we don't know what the market's doing, we only know what it's done. Somehow we tell ourselves the story despite knowing that what's happened in the recent past is no indication of what's going to go on in the future," says Richards. "It's that same, 'I've got to get in on this' or 'I've got to get out' is two sides of the same coin."

Fear and excitement are just two of the emotions people experience when investing. Richards says it's important to give ourselves permission to acknowledge that those types of emotions are normal and human.

"We are hard-wired to get more of those things that give us security and/or pleasure and hard-wired, almost genetically, to get away from anything that's causing us pain. So I think fear, there's greed, all the societal issues of what are your neighbors doing -- we all sort of chuckle at that. 'That's high school peer pressure sort of stuff.' 'I'm immune to that.' No we're not," says Richards.

Richards says there's only so many ways to say to investors: Build a rational plan based on your goals and stick with it. "That's the only story that matters. If your goals change, your life changes a little bit, revisit the plan. If the market changes, go back to the garden."

Richards says investors may need to make mistakes themselves before they realize that risk and reward -- that's a fundamental law; everytime you try to break it, it breaks you.

Be honest, had you heard of the school before its men's basketball team advanced to the Sweet 16? Well, here are 10 things to know about the new darlings of the court.

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Rich folks can do things regular people can’t. Like eat a banana split with Mountain Dew-flavored ice cream on their helicopter commute home. And land that chopper at a mansion they bought with no money down.

Right, no money down. For those rich enough, buying a home can be as easy as showing banks their money. All some buyers have to do is pledge part of their wealth as collateral, instead of coughing up a down payment.

Many buyers used no down payment loans during the housing boom to get homes they couldn't afford. That led to a wave of foreclosures. So it's reasonable to expect that 100 percent home financing would have died. And it has, for nearly all Americans. But no down payment loans are crawling out of the grave -- for the wealthy, at least.

It may sound a little silly for the well-heeled to skip a doable down payment and pay interest they don’t have to. But it’s actually an interesting gamble that has appeal for banks and buyers.

“Interest rates are historically low. At the same time, the stock market is doing really well,” says Stijn Van Nieuwerburgh, director of New York University’s Center for Real Estate Finance Research. “Some investors or some households are asking themselves, ‘How can I profit from these low interest rates?’”

Here’s how. Say wealthy buyers pay 3 percent interest on a mortgage. Because they don't have to make a down payment, they don’t have to divert money from investments, such as stocks. If those investments earn more than 3 percent, that difference is profit.

"If they’re clients who have a high enough net worth, maybe for them, that’s a good decision," says Chris Mayer, a real estate professor at Columbia Business School. But he cautions, "Those investments could go down in value."

The risks are real. If the economy falters, rich borrowers could see their home and investment values drop. Or, adjustable mortgage rates could rise, eating up their profit. As for the banks, they’re enjoying this new demand from the wealthy.

“The banks are now trying to find new borrowers to lend to,” NYU's Van Nieuwerburgh says, “and this is some loan business that, in their view, is pretty safe and they’re happy to do.”

Pretty safe, because these borrowers have a big house and lots of money as collateral. If necessary, the lender could require wealthy borrowers to pledge more of their investments if home values drop.

The days of no down payment loans for property speculators or people with weak credit are over. But there no down payment loans for some homebuyers who aren't rich -- just yet. But they'll have to have certain professions, like the one practiced by Bill Cosby's TV character, who was famous for eye-scorching sweater patterns rather than the scrubs he wore on the job.

“If Cliff Huxtable came and started looking for a loan with us, we’d be delighted to lend to him,” Greg Wheeler, president of the private bank at BOK Financial, says, referring to the doctor played by Cosby.

He’s kidding, of course. Wheeler’s bank is not in the business of handing over money to 80's sitcom doctors. But it does have a growing business in no down payment loans for real doctors, even those just starting out. Many banks have special products for doctors, who can be profitable customers over the years.

“They tend to be very loyal clients,” Wheeler explains. “We want to engender that loyalty and have them join us early as clients. And we keep them for a very, very long time.”

No down payment loans may evoke memories of a swelling housing bubble. But in another form, they’re a way for banks to snare some big money clients.

Kai Ryssdal: We heard a lot about no money down mortgages during the housing boom. People using them to buy houses they couldn't afford. We all know how that ended, but get this: now we're hearing about them again.

This time around, really, really rich people using them to buy houses they can definitely afford. Sounds a little silly to skip a totally doable down payment and pay interest they don't have to. But it's actually an interesting gamble for those buyers and their banks.

Marketplace's Mark Garrison explains.

Mark Garrison: Rich folks can do things regular people can’t. Like eat a banana split with Mountain Dew-flavored ice cream on their helicopter commute home. And land that chopper at a mansion they bought with no money down. That’s right, no money down. For those rich enough, buying a home can be as easy as showing banks their money. All some buyers have to do is pledge their wealth as collateral, instead of coughing up a down payment. NYU real estate finance professor Stijn Van Nieuwerburgh explains the appeal.

Stijn Van Nieuwerburgh: Interest rates are historically low. At the same time, the stock market is doing really well. And some investors or some households are asking themselves, ‘how can I profit from these low interest rates?’

Here’s how. Say wealthy buyers pay 3% interest on a mortgage. They don’t have to divert their money to make a down payment. And if they leave it in investments that earn more than 3%, that difference is the profit.

Chris Mayer: If they’re clients who have a high enough net worth, maybe for them, that’s a good decision.

But Columbia real estate professor Chris Mayer is quick to add that there is risk. If the economy falters, rich borrowers could see their home and investment values drop. Or adjustable mortgage rates could rise, eating up their profit. As for the banks, NYU’s Van Nieuwerburgh says they’re enjoying this new demand from the wealthy.

Van Nieuwerburgh: The banks are now trying to find new borrowers to lend to and this is some loan business that, in their view, is pretty safe and they’re happy to do.

Pretty safe, because these borrowers have lots of money and a big house as collateral. The days of no down payment loans for speculators or people with weak credit are over. But there is a way to get a no down payment loan if you’re not rich, yet. You’ll need a certain job, like this fellow, known for sweaters with patterns that positively scorch the eyes.

Greg Wheeler: If Cliff Huxtable came and started looking for a loan with us, we’d be delighted to lend to him.

Greg Wheeler is kidding, of course. You don’t become president of The Private Bank at BOK Financial by handing over money to 80s sitcom doctors. But the bank does have a growing business in no down payment loans for real doctors, even those just starting out.

Wheeler: They tend to be very loyal clients and we wanna engender that loyalty and have them join us early as clients. And we keep them for a very, very long time.

Many banks have special mortgages for doctors, who can be profitable customers over the years. No down payment loans may evoke memories of a swelling housing bubble. But in another form, they’re a way for banks to snare some big money clients. In New York, I'm Mark Garrison, for Marketplace.

A 48-year-old man appears in court charged with the murder of a schoolgirl in Greenock more than 26 years ago.

England coach Roy Hodgson has no concerns about the "mind games" of Montenegro coach Branko Brnovic ahead of Tuesday's match.

Manager Gordon Strachan promises that Scotland's terrible opening spell in their defeat by Wales will never be repeated.

They say seeing is believing, but what you see isn't all that there is. We make judgments based on how people look or sound and are otherwise affected by outside influences all the time: music, paint color, the weather -- you name it. And most of the time we don't even know this is going on.

Adam Alter teaches marketing and psychology at New York University's Stern School of Business and he's got a new book out called "Drunk Tank Pink" about how our environment affects our decision-making.

In the book, Alter reveals that in general we are sharper, clearer thinkers when it's cold outside and that the colors around us can impact our mood -- from how angry we are to how willing we are to buy. He says his book is not so much about taking advantage of others as it is about educating consumers on what these cues are, because one they recognize them they can cope with them and deal with them and sometimes even harness them for personal benefit.

When asked if having all of this information about colors and music has changed his decision-making, he said that he has an advantage: He's color blind.

Legislation which affects just England should normally need backing by a majority of MPs who represent English constituencies, a report says.

The Marketplace Wealth and Poverty Desk is launching a series of stories exploring the safety net.  No we’re not talking about that thing circus acrobats use. We’re talking about the things people have to do when they’ve fallen financially.

In order to do this we’re going to need your help.  Have you ever had to go on government programs like welfare or food stamps? Or maybe you’ve had to ask your family or a close friend for financial assistance. If so, we want to hear from you!

As this series continues we want you to let us know what you’ve had to do when things got rough.  We’ll take your answers and post them (no last names will be used).  If we really like your answer, we’ll contact you for an interview!

Here are some great responses we’ve already gotten from people!

Kurt, Portland, OR-

“Eleven years ago I lost both my full-time jobs within a few months of each other. My income went from 80,000 one year to 8,000 the next. After a year and a half of applying for positions, interviewing and still not having a job, I took out a $10,000 loan to go back to school to study website development.”

Bernie, New Carlisle, OH-

“As an educated, talented person with a bi-polar challenge and an entrepreneurial spirit I have, from time-to-time had to rely on help when a business venture didn't go well or when something prevented me from finding a stop-gap job. One time when things were financially tough it took a relative stranger to make me aware of food assistance and medicaid to help with a baby who was coming. One other time we were forced to get government food assistance and most recently we received help from what is called the "Hardest Hit Funds" which helped with our mortgage payments. Sure wish I had rich parents who could help; but like so many other people in our country I don't relatives to fall back on.”

Geoff, Belmont, MA-

“I lost my 10-year job in March 2011. I was old enough to take social security but did not take that option right away. I have a child to support and a wife who was also jobless who had run out of unemployment benefits. What kept us going was my unemployment benefits and food stamps, although these did not come to enough to pay rent and COBRA premiums, let alone our food and utilities. So I tapped my savings.”

Frank, San Diego, CA-

“I am my own safety net and I am also the safety net of our family and friends. From the time I was very young, I have always been saving. I have always had a cushion of one form or another. My family and friends call me the Bank of Frank and for some of my family and friends, I have been their lender of last resort and at times, their deposit institution.”

Kevin, Chanhassen, MN-

“I was laid off. We cut back on our spending, my wife worked part time and I made a strenuous effort to get a new job. If appropriate, we collected unemployment.”

Robert, Coon Rapids, MN-

“Three months after the birth of our 3rd child, I was fired. My spouse was not working at the time, so we lost 100% of our income. It took 3 months for me to find another job (with a loss of 1/3rd of our income). We relied on cutting expenses, using savings and our parents from whom we borrowed a car for the duration of my unemployment (I had lost my company car) and borrowed enough money to buy the car necessary for the job I ultimately found.”

Peter, Prescott, AZ-

My wife lost her job this year... and in a previous year we had to short-sell our home so we had no access to credit due to the hit in our credit rating. fortunately, despite our income of 50,000 gross for a family of four, we live quite well because we have cut waste our of our home economics. waste = all cost, no benefit. so, in terms of utilities, resources, food, and behaviors... we simply do not waste anything. everything has one or many more uses. it is not hard, it is not problematic... just shifts in habits so that we can live quite well without concern by maximizing benefits while minimizing costs.

Gregory, San Francisco, CA-

I believe that I am solidly middle class, but maybe upper middle class. My wife and I earn solid incomes. We are both professionals, and have little to fear from the economic downturn. At most we will be inconvenienced. Because of the above statement, we are avid savers. We max out on our 401K plans, and fund our IRAs to the maximum. On the rare occasion that we have an unexpected expense, we draw from savings to cover the cost.

Kryshon, Houston, TX-

“I took the opportunity to start a business. We are now in our sixth year and growing. No help just desperate. Hard work and sacrifice are my safety nets. Its 9pm and I will be at the office for another few hours. “

The Marketplace Wealth and Poverty Desk is launching a series of stories exploring the safety net.  No we’re not talking about that thing circus acrobats use. We’re talking about the things people have to do when they’ve fallen financially.

In order to do this we’re going to need your help.  Have you ever had to go on government programs like welfare or food stamps? Or maybe you’ve had to ask your family or a close friend for financial assistance. If so, we want to hear from you!

As this series continues we want you to let us know what you’ve had to do when things got rough.  We’ll take your answers and post them (no last names will be used).  If we really like your answer, we’ll contact you for an interview!

Here are some great responses we’ve already gotten from people!

Kurt, Portland, OR-

“Eleven years ago I lost both my full-time jobs within a few months of each other. My income went from 80,000 one year to 8,000 the next. After a year and a half of applying for positions, interviewing and still not having a job, I took out a $10,000 loan to go back to school to study website development.”

Bernie, New Carlisle, OH-

“As an educated, talented person with a bi-polar challenge and an entrepreneurial spirit I have, from time-to-time had to rely on help when a business venture didn't go well or when something prevented me from finding a stop-gap job. One time when things were financially tough it took a relative stranger to make me aware of food assistance and medicaid to help with a baby who was coming. One other time we were forced to get government food assistance and most recently we received help from what is called the "Hardest Hit Funds" which helped with our mortgage payments. Sure wish I had rich parents who could help; but like so many other people in our country I don't relatives to fall back on.”

Geoff, Belmont, MA-

“I lost my 10-year job in March 2011. I was old enough to take social security but did not take that option right away. I have a child to support and a wife who was also jobless who had run out of unemployment benefits. What kept us going was my unemployment benefits and food stamps, although these did not come to enough to pay rent and COBRA premiums, let alone our food and utilities. So I tapped my savings.”

Frank, San Diego, CA-

“I am my own safety net and I am also the safety net of our family and friends. From the time I was very young, I have always been saving. I have always had a cushion of one form or another. My family and friends call me the Bank of Frank and for some of my family and friends, I have been their lender of last resort and at times, their deposit institution.”

Kevin, Chanhassen, MN-

“I was laid off. We cut back on our spending, my wife worked part time and I made a strenuous effort to get a new job. If appropriate, we collected unemployment.”

Robert, Coon Rapids, MN-

“Three months after the birth of our 3rd child, I was fired. My spouse was not working at the time, so we lost 100% of our income. It took 3 months for me to find another job (with a loss of 1/3rd of our income). We relied on cutting expenses, using savings and our parents from whom we borrowed a car for the duration of my unemployment (I had lost my company car) and borrowed enough money to buy the car necessary for the job I ultimately found.”

Peter, Prescott, AZ-

My wife lost her job this year... and in a previous year we had to short-sell our home so we had no access to credit due to the hit in our credit rating. fortunately, despite our income of 50,000 gross for a family of four, we live quite well because we have cut waste our of our home economics. waste = all cost, no benefit. so, in terms of utilities, resources, food, and behaviors... we simply do not waste anything. everything has one or many more uses. it is not hard, it is not problematic... just shifts in habits so that we can live quite well without concern by maximizing benefits while minimizing costs.

Gregory, San Francisco, CA-

I believe that I am solidly middle class, but maybe upper middle class. My wife and I earn solid incomes. We are both professionals, and have little to fear from the economic downturn. At most we will be inconvenienced. Because of the above statement, we are avid savers. We max out on our 401K plans, and fund our IRAs to the maximum. On the rare occasion that we have an unexpected expense, we draw from savings to cover the cost.

Kryshon, Houston, TX-

“I took the opportunity to start a business. We are now in our sixth year and growing. No help just desperate. Hard work and sacrifice are my safety nets. Its 9pm and I will be at the office for another few hours. “