The Federal Reserve's big surprise: no cuts to bond buying for now, the economy isn't strong enough.
JPMorgan agrees to pay $920 million in fines over bad bets. The 'London Whale' saga continues.
Looking for a house on a budget? How does $1 sound?
Publications are hiring reporters to cover the luxury life. Could you qualify?
More than 60 percent of the Senate and most members of the House of Representatives are millionaires. California Republican Darrell Issa tops the list, with an estimated net worth of more than $355 million. A public policy professor tells Americans how to put more working-class people in Congress.
Rescuers have reached some of the remote areas affected by floods, as electricity and phones have been restored.
The Wall Street Journal has a position open: mansion reporter. Just goes to show that while newspapers and magazines are clawing for ad revenue, there's one segment of the industry that's having a lot less trouble: the luxury market.
Say I wanted to apply for the new reporter's job at the luxury website VeryFirstTo.com. According to the job description, I'd have to be able “distinguish between the roar of a Bentley and a Lexus engine,” Now, I've never been in a Bentley. So, can I get the job?
"Well, you certainly appear to qualify on the personality traits," says Marcel Knobil, founder of VeryFirstTo.com, "but unfortunately we're looking for someone who is really acquainted with loads of aspects of luxury."
VeryFirstTo.com previews products and experiences for wealthy early adopters. Media outlets are hiring people to write the stories that go around luxury ads, says Rick Edmonds, media business analyst with The Poynter Institute.
"It could be kind of leaving money on the table not to do something that served that particular advertising market," he says.
Edmonds says it's not just for the super-rich. Plenty of people are happy to live like "The Real Housewives of New York" vicariously.
The best way to think of an exchange is to imagine a huge swap meet taking place in a supermarket.
Let’s say we’re in a Whole Foods. Anyone can set up a stall, or shop at the store, so long as they’re members.
And there are two types of product for sale on the stalls: There’s the supermarket’s own 365 line, which is always available, and there could be products from other markets, if someone’s selling them. So instead of Whole Foods, think of the New York Stock Exchange.
The NYSE’s name-brand goods are the shares of companies listed on the exchange. Like Bank of America or AT&T. You can always buy or sell those shares: the exchange has arrangements with certain companies to make a market in them. But you might be able to buy Apple or Microsoft there, too, even though they’re listed on another exchange (the Nasdaq).
It’s a bit like being able to buy Trader Joe's pretzels at Whole Foods, or Kroger yogurt at the Safeway.
Some exchanges don’t have any listings. They’re like big supermarkets that sell goods from all sorts of other stores, but have no lines of their own.
The exchanges are all connected, and they’re committed to getting customers the best possible deal. That means an exchange may have to send a buyer or seller to a competitor, if they offer a better deal -- imagine that happening at Whole Foods. That’s the upside to connectedness.
The downside is that if one part of the system fails, the whole thing could be affected. And that could leave us very badly needing a drink.
And some consumers have no problem using that return policy.
Take the couple who filmed themselves returning a wedding gift at a Kohl’s department store in 2011 -- seven years after they were married.
“I’m so embarrassed right now,” the wife says in the YouTube video. “The receipt is like all worn out and everything.”
The cookie maker was unused but so old, the cashier couldn't find it in the system. But because Kohl’s has such a generous return policy, she happily gave the couple store credit.
"Seven years later, $32!” the wife says. “Let's go look in the house goods stuff."
At some stories, shoppers have returned items that were even 40 years old. The problem is that many returns are fraudulent, like products the buyer broke or power tools used for a weekend for construction project and handed back as if unopened.
“It’s a pretty widespread problem,” says Richard Mellor, vice president for loss prevention at the National Retail Federation.
He says a particular concern for retailers is what’s known as “wardrobing,” when someone buys a product, say a prom dress, uses it once and then returns it the next day.
“It’s now affecting just shy of 65 percent of retailers we survey. Back in 2009, it was in the 45 percent range,” Mellor says.
Wardrobing is behind Bloomingdale’s decision to put big black tags on dresses that cost at least $150. The tags are attached in conspicuous places, and Bloomingdale’s won’t accept a return if the tags have been removed.
Wardrobing isn’t limited to clothing, however. Mellor says retailers from construction equipment to electronics complain about the problem. Electronics retailers see spikes in TV and audio-equipment purchases before the Super Bowl, World Series and the Olympics, only to have them returned after the event.
Outdoor equipment retailer REI -- famous for its unlimited return policy -- has changed its policy, capping returns at one year because shoppers were bringing back so many items that the cost was “material to our profits,” according to an REI spokeswoman.
In all, fraudulent returns of all types cost the retail industry $8.8 billion last year.
It’s tempting to blame the recession, but there may be a different explanation in an age where people publicize their use of generous return policies on YouTube or in blogs.
“It’s possible, though far from proven, that other people read or hear about it happening and might say, ‘Let’s do it ourselves,’” says Stephen Barkan, a sociologist at the University of Maine.
Problem is, those copycats ruin return policies for everyone else.
Ride-sharing apps like Lyft, Uber and Sidecar let people hail a ride with their smartphones. And, for a lot of people, they work great -- as long as they don’t mind that their ride might come decked with an ironic moustache on the grill and that the guy driving it is some dude in his own car.
“I like the big, pink moustaches,” says Lisa Schweitzer with the USC Price School of Public Policy, “but I can honestly say no one asks me anything when it comes to matters of taste.”
But when it comes to matters of sustainable transportation, she’s a good person to call. And she thinks these car services make a lot of sense: “You make your request by your iPhone, and all of those transactions about who’s going to take the cab, where are you headed, that’s arranged by virtue of geolocating.” Plus, the payment piece is taken care of online. Not in the cab, awkwardly fumbling for a wallet or trying to calculate a tip.
Until today, the future of these pop-up cabs and cab drivers in California was murky; no one knew for sure if they’d be allowed to keep driving. Today’s vote by the California Public Utilities Commission answers that.
These amateur cabbies are here to stay.
“I think this is quite significant,” says Juan Matute with the UCLA Institute of Transportation Studies.
The new California regulations mean the companies will have to get a license from the state, run background check on drivers, provide training, insurance-- lots of things they say they do already.
It’s a clear win for the up-and-comers. And a loss for old-school cabbies.
“It will be difficult for taxi cab drivers to continue doing exactly what they’ve been doing in the past,” says Matute. Without a monopoly, cabbies are going to have to step up. Improving the way people find them and the quality of the ride.
Today was a day of financial reckoning for JPMorgan Chase over the case of the “London Whale," the nickname given to a trader in the company's London office who was blamed for a $6 billion loss last year. Today, regulators -- the Federal Reserve, the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency (OCC), and the United Kingdom’s Financial Conduct Authority (FCA) -- announced JPMorgan will pay $920 million in fines. Based on how fast JPMorgan made money last quarter, that is about 13 days' worth of profit, give or take a few hours.
According to James Cox, Brainerd Currie Professor of Law at Duke University, a lot of that JPMorgan settlement money will help us pay down our federal debt.
“It just goes into the vast sieve called ‘the federal purse,’” he says.
Some money from JPMorgan could end up in your purse or wallet. In a separate settlement with the Consumer Financial Protection Bureau, the company agreed to pay an additional $309 million to credit card customers charged for add-ons they didn’t receive.
Now, not all of the London Whale settlement will go to the Treasury Department. Some $220 million will go to the U.K., and some money could end up with investors.
According to Hillary Sale, the Walter D. Coles Professor of Law at Washington University in St. Louis, the SEC has options.
“The SEC can take money and, instead of putting it into the Treasury, can, at its discretion, figure out how to route that money back to the harmed investors,” she says.
That process could take a while, and so could civil suits. Those could grow because JPMorgan did something today other big financial firms haven’t done: It admitted wrongdoing.
Sale says it seems JPMorgan has anticipated more legal bills. A few weeks ago, the company announced it is building up its legal reserves.
“They also made public that they have hired 3,000 new employees to do legal and compliance work,” Sale says.
Those employees don’t come cheap. JPMorgan has earmarked an extra $1.5 billion to cover litigation costs.