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Quiz: College tuition for the asking

Thu, 2015-02-19 07:30

Researchers at Columbia University estimate that two-thirds of community college students would qualify for federal grants, but not all of them apply.

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Walmart's way to growth

Thu, 2015-02-19 05:30

Walmart scored low marks in a survey of major U.S. retailers released Wednesday. The American Customer Satisfaction Index says the retail giant came in below competitors like Target and Family Dollar.

Walmart’s earnings paint a somewhat rosier picture of its performance. On Thursday, the company reported pulling in $1.61 a share in the fourth quarter — higher than the predicted $1.53 — but still fell short on earnings with a reported $131.6 billion.

Analysts say Walmart may try to accelerate growth in some key areas, like e-commerce, where it has made big strides.  

“Those companies investing in mobile, like Walmart is, seem to be pulling ahead of the competitive set,” says Sucharita Mulpuru is a retail analyst with Forrester Research.

Another growth area: Walmart's smaller store format, called  Neighborhood Market stores.  

But consumer research analyst Brian Yarbrough with Edward Jones is skeptical about how much those growth areas can boost Walmart’s bottom line. He says supercenters are still the main drivers of operating income. 

“If the U.S. supercenters are still just kind of mulling along and not gaining steam,” he says, “they're really not going to be able to show any kind of earnings growth and revenue growth at the overall Walmart company.”

Yarbrough says that picture will be hard to change as shoppers turn increasingly to low-cost competitors like dollar stores.

Part of the problem, he says, is that Walmart is a mature retailer.

"It's difficult to grow when you're this big," he says.


PODCAST: Finding diversity in sports leadership

Thu, 2015-02-19 03:00

With the deadline closing in, Greece asks for an extension, but Germany is not interested. More on that. Plus, while Europe and the wider financial system have been doing some planning in case Greece were forced off the euro, its the kind of uncertainty that could upset global market. This is among the factors that U.S. policy makers have to consider when deciding when to raise interest rates. We'll also talk about combating racism and promoting diversity in the world of sports with Ken Shropshire, author of “Sport Matters: Leadership, Power, and the Quest for Respect in Sports.”

Germany says no to a six month extension for Greece

Thu, 2015-02-19 03:00

Today, Greece put on the table a proposal that embraced its debt obligations, but asked European partners for a six months extension. But in the last few minutes, Germany said no. The German Finance Ministry's quote: "The letter from Athens is not a proposal that leads to a substantial solution."

We were on the line from Brussels with Economist Elena Panaritis, who is advising the Greek government in these negotiations, when the news came from Germany's finance ministry. 

Click on the media player above to hear more.

Just before that statement hit the financial wires, Panaritis talked about Greece's hopes for a resolution that would avoid a default, keep Greece in the Euro, and prevent a wave of global financial uncertainty.

Fed minutes still vague on rate-hike timing

Thu, 2015-02-19 03:00

On February 18, the Federal Reserve’s Open Market Committee released minutes from its meeting January 27-28, 2015. A major topic of discussion was how current economic conditions bear on the Fed’s long-awaited plan to begin raising short-term interest rates. The benchmark federal funds rate has hovered near-0-percent since December 2008, as part of the Fed’s broader effort to stimulate the economy by encouraging more consumer spending, business investment and hiring.

Market analysts trying to glean any hard-and-fast intelligence on when the Fed plans to begin hiking interest rates will be disappointed. Fed officials (who are not named in the minutes) are carefully non-committal on the precise timing of anticipated monetary tightening, signaling they want maximum flexibility to respond to emerging economic developments. The widespread expectation among economists is that rates will start rising in June or September of 2015.

The minutes from January (released three weeks after the meeting) show Fed officials are worried that core price inflation (excluding volatile food and energy) and wage inflation are too low right now, the global economy is stumbling, and the strong U.S. dollar is hurting U.S. exports. But they see a steadily improving job market.

“Job growth has been very good, the unemployment rate has come down,” says Gary Thayer, head of global macro-strategy at the Wells Fargo Investment Institute. “I think businesses are probably at the point where if they want to expand further they will need to hire more workers, and I think that will make consumers feel better. When the Fed gets around to raising interest rates, the impact probably won’t hurt the economy that much.”

Fed officials are concerned that if they raise rates to soon to keep the economy from overheating and inflation from getting out of control, they’ll squash job growth. The danger is that growth will slow down before it can benefit the underemployed and long-term unemployed, who haven’t seen quick improvement in their job prospects during the six-year post-recession economic recovery.

Can YouTube replace the movie theater?

Thu, 2015-02-19 02:00

So far on our From the Hills to the Valley series, we've talked about how technology is represented by Hollywood, spoken with a producer and actor who has successful projects on both HBO and YouTube, and an MPAA executive who believes Silicon Valley isn't doing enough to beat piracy online.

Today, we have someone from a purely tech background who is meddling with a distinctly Hollywood craft: writing a screenplay. Charles Forman always loved video games, but after selling OMGPOP, the gaming company he co-founded, he decided to try something new. The result: Storyboard Fountain. It’s an app that allows people to literally visualize screenplays and stories as they are being scripted or narrated.

“It’s a computer program that allows you to create a new frame, draw on that frame, and it’s sort of tethered to the script, so you’re sort of drawing a story,” says Forman. “I want somebody to be able to make a movie in their underwear in their apartment."

And when he says “movie,” he doesn’t necessarily mean a movie in a theatre. It could be a project that’s distributed on YouTube or picked up by Netflix. Forman thinks that’s where the future is headed: people creating, distributing and consuming content via the internet—Not a movie hall where strangers gather to watch a big screen.

Froman doesn't think so much about Hollywood versus Silicon Valley as much as he does about the way we measure success itself. Success, he says, won’t necessarily be ruled by the box office. In the future, according to Forman, the most successful distribution model might not include releasing a movie in theaters.

“Ten years from now, if people are still going to see movies, and that’s a thing, I’ll eat my shirt,” says Forman.


Can YouTube replace the Movie Theatre?

Thu, 2015-02-19 02:00

So far on our From the Hills to the Valley series, we've talked about how technology is represented by Hollywood, spoken with a producer and actor who has successful projects on both HBO and YouTube, and an MPAA executive who believes Silicon Valley isn't doing enough to beat piracy online.

Today, we have someone from a purely tech background who is meddling with a distinctly Hollywood craft: writing a screenplay. Charles Forman always loved video games, but after selling OMGPOP, the gaming company he co-founded, he decided to try something new. The result: Storyboard Fountain. It’s an app that allows people to literally visualize screenplays and stories as they are being scripted or narrated.

“It’s a computer program that allows you to create a new frame, draw on that frame, and it’s sort of tethered to the script, so you’re sort of drawing a story,” says Forman. “I want somebody to be able to make a movie in their underwear in their apartment."

And when he says “movie,” he doesn’t necessarily mean a movie in a theatre. It could be a project that’s distributed on YouTube or picked up by Netflix. Forman thinks that’s where the future is headed: people creating, distributing and consuming content via the internet—Not a movie hall where strangers gather to watch a big screen.

Froman doesn't think so much about Hollywood versus Silicon Valley as much as he does about the way we measure success itself. Success, he says, won’t necessarily be ruled by the box office. In the future, according to Forman, the most successful distribution model might not include releasing a movie in theaters.

“Ten years from now, if people are still going to see movies, and that’s a thing, I’ll eat my shirt,” says Forman.


In the fight for water, it's North versus South

Thu, 2015-02-19 02:00

You’ve heard that quote, “Whiskey’s for drinkin’, water’s for fightin”? That’s been true in California for well over a century and the current drought has only intensified conflict over who should get how much water and from where. The latest conflict pits farmers in the California Delta, east of San Francisco Bay, against water users further south.

Delta farmers and environmentalists are fighting a proposal to build two 35-mile long water diversion tunnels upstream. They fear the diversion will ruin the Delta’s water quality. Farmer worry it will make agriculture in the Delta untenable. 

Unlike much of California’s farmland, the Delta is surrounded by water. The Sacramento and San Joaquin Rivers meet there and it's the largest estuary on the West coast. It's also a key part of the state plumbing that delivers northern California’s water to points further south. The “twin tunnels” plan, backed by Governor Jerry Brown, is partly aimed at making sure farms and cities in central and southern California will have a reliable water supply if the Delta’s aging levees collapse in an earthquake. 30 percent of southern California’s water supply flows through the Delta

Rudy Mussi, 62, is among those who oppose the tunnel plan. He and his brother farm 4,500 acres in the Delta. They grow wheat, chardonnay grapes, almonds and other crops.

“Building tunnels isn’t creating more water,” says Mussi. “You’re just stealing water from one area and giving it to somebody else.”

Mussi worries the diversion will take too much freshwater out of the Delta, leaving the water supply there too salty for farming. He wants the state to strengthen the levees instead of building tunnels. “We’re gonna fight … because if we don’t, it’s our demise," he says.

Jason Peltier, deputy general manager of Westlands Water District, based in Fresno, insists the Delta won’t “turn into an inland sea” if the tunnels are built. Westland growers, some of them agribusiness giants, would benefit from the massive water project. Peltier says the fear that once the tunnels are built, farms and cities to the south will take more and more water, is unfounded.

“We have the capacity to take about 12 million acre feet a year,” he says. "The most we’ve ever taken is six. I can’t imagine us taking more than that.”

Peltier says there’s strong “genetic code” in California - the belief that southern California’s thirst will eventually destroy the north. That code runs deep and colors much of the debate over water in the state. Historian Phil Garone, California State University, Stanislaus, says it was the same in 1960 when Californians split over funding the famous California Aqueduct.

“Northern Californians and residents of the Delta felt, perhaps rightly so, that once this infrastructure was put into place that ever more water would be transported to southern California,” says Garone.

The 1960 bond measure barely passed. The margin of victory was only 173,944 votes out of 5.8 million ballots cast.

Don't forget to tip...especially if you spend $300,000

Thu, 2015-02-19 01:30

That's how much WalMart reported pulled in per share in the fourth quarter – higher than the predicted $1.53. And while earnings fell short, the company might be more concerned with its poor performance on the American Customer Satisfaction Index, where it fell below Target and Family Dollar. It leads some to wonder if a company can be too big to improve.

35 miles

That's the length of two proposed long water diversion tunnels that would pull water from the California Delta further south. The conflict between North and South is nothing new for California water. This latest battle has farmers worried that siphoning water from the Delta will hurt their crop, and will ruin the water quality. But others claim fears that the South will drain the North are unfounded.

$19 billion

Snapchat's rumored value after its most recent round of fundraising. That would mean the self-destructing message service has nearly doubled in value in a year, and it would be one of the top venture-backed firms in the world, behind just Xiaomi and Uber. Quartz points out other companies publicly traded at that same value seem to make much more money than Snapchat, however. 


The median calaries in a meal from Chipotle, according to an analysis of 3,000 sample meals by The New York Times' Upshot. Their research into the chain's own nutritional info and data from GrubHub shows just how hard it is to craft a more modest meal and the surprising calorie and sodium content in some benign offerings like fresh tomato salsa and tortillas.

$11 billion

That's how much income goes undeclared and untaxed in the U.S. each year, mostly due to cash tips, the Atlantic reported. The magazine's analysis of several different sets of data shows tipping varies wildly state-to-state – generally areas with more resorts see higher tips, as do wait staff and bartenders, compared to chefs and cooks.


Speaking of tipping your waiter, $300,000 is how much Vice Media CEO Shane Smith reportedly dropped on a single dinner at the Bellagio in Las Vegas. During an MGM Resorts International earnings call, MGM CEO James Murren accidentally let slip the details of said dinner. As reported by Quartz, it didn't take long for reporters to connect the dots on who he was talking about. With the guest list only estimated at 12 to 30 people, some speculate that there must have been some pretty expensive alcohol served with the steak.

Here's why Snapchat has doubled in value

Wed, 2015-02-18 14:09

Snapchat is seeking to raise as much as $500 million in a new round of funding, which would value the company at as much as $19 billion. That's almost twice its valuation after its last round of funding, a year ago.

Snapchat's growing audience of teens and young adults is one reason for the increase, says Julie Ask of Forrester Research.  "We don't know how much [Snapchat has] grown their audience, but my guess would be is that it's big," Ask says.

Snapchat is a private company, so it hasn't released a lot of details on its audience. But educated guesses put its growing base of teen and young-adult users at anywhere between 100 to 200 million.

"There is scarcity of companies and options out there that have audiences as large Snapchat," says Ask.

Investors are willing to place big bets, says Ask, on companies that can monetize audience--particularly a young one. And "Snapchat has figured out a monetization model," says Brian Solis of Altimeter Group.

Snapchat is now selling ads for a rumored minimum price of $750,000 a day, and has recently published content channels with news and entertainment.

"They understand the psychology of teenage engagement and communication," says Solis.

Not everyone is sold on the valuation. "Were I to be a Snapchat shareholder," says Paul Kedrosky, a partner at SK Ventures and a technology equities analyst, "I would be very happy selling to the people buying at $19 billion."

Kedrosky says that Snapchat investors are probably hoping an eventual IPO will come in at more than $19 billion,  so that they can cash out. Others may believe the company eventually will be sold at an even higher price (just as WhatsApp was bought for $22 billion by Facebook).

"This is a house of cards," Kedrosky says, referring to Snapchat's valuation. "The numbers themselves are in no sense credible."

Central Valley farms come at a cost for dry California

Wed, 2015-02-18 13:33

In California, as in many states, the biggest water users are farmers. Almost 80 percent of the water used by Californians (not including, for example, water released to keep rivers at flows liveable for fish) goes to agriculture.

That’s in part because the state’s ranchers and farmers haven’t taken water for granted, holding hard to water rights handed out on a “first-come, first-served” basis long before there were 38 million people in the state. But if drought persists and there’s just not enough water to go round, what happens?

Between the Central Valley, some coastal areas and the Imperial Valley on the Mexican border, California grows roughly half the fruits, nuts and veggies Americans eat. The Central Valley, much of it irrigated, is at the heart of it. It’s farming on steroids.

The region, bigger than nine states, churns out everything from canned tomatoes to chardonnay grapes to citrus. Not to mention all the almonds. Each almond requires a gallon of water. And the million-plus dairy cows in the valley each drink a bathtub of water every day.  

Some of this production takes place in counties lucky to get eight inches of rain a year. That’s what Phoenix gets.

“When you think about California without water, there’s not a whole lot of agricultural potential there,” says Andrew Novakovic, an agricultural economist at Cornell University. “But like the rest of the West, and even more so in the Central Valley, you throw in a little water and it becomes an incredibly fertile, incredibly productive area.”

But water is the key; cheap water and lots of it. A herculean system of government-built dams, canals and pipelines carries melted snowpack from the Sierra Nevadas on the eastern edge of the valley, down to the hot, dusty flatlands below.

The snowpack is at near-record lows. When that happens, California’s “first-come, first served” water rights leaves the “last-served” staring at dry taps. Even in wetter years, the water supply is oversubscribed.

“There literally are more water rights to more acre feet of water than there is water available,” says Phil Garone, associate professor of history at California State University, Stanislaus.

California is by far the country's top agricultural producer, but it’s hardly a farm state. Agriculture accounts for only 2 percent of California’s GDP.

“If you’re driving between cities ,you’ll see a lot of agriculture,” says Jay Lund, director of the Center for Watershed Sciences at the University of California, Davis. “But if you look at economic production per acre or per acre foot of water, agriculture is very, very small compared to most urban uses of water and land.”

In a persistent drought, Lund says, farming in the Central Valley would inevitably shrink. But he and other researchers wondered what was the worst that could happen. So they computer-modelled a seven-decade megadrought. The results were surprising. 

“What the model does, it says, well, the urban areas, they have a very, very high willingness to pay for water,” Lund says. Cities and their residents will have to conserve, but they will have water.

 The model shows water deliveries to farms and ranches shrinks 25 percent. Irrigated cropland in the Central Valley plummets. Some farming communities die. The environment suffers. But farming survives. 

In fact, agriculture loses just 10 percent of economic production. “It sounds really disastrous to lose half the water in California,” Lund says. "And in some places it definitely would be. But the overall economy and our overall civilization really stays around.”

That’s partly because it doesn’t take a lot of water shifting from farmers to cities to satisfy urban needs, says Daniel Sumner, director of the University of California Agricultural Issues Center. After all, plants and livestock require a lot of water. Farmers don’t talk in gallons, they talk in acre feet, Sumner says. An acre-foot is 326,000 gallons.

“Think of gallon jugs filling football field after football field. And think of what we do with it. We pour it on the ground."

The mega-drought model carries several assumptions, including efficient water trading and urban conservation. It also assumes farmers will adapt to changing conditions. That’s already happening in the Central Valley.

Farmers are drip-irrigating fields instead of flooding them. They're ditching low-value crops, like cotton,for more lucrative crops,  like almonds. Farming, after all, is a business.

“So when a farmer is short on water they’re going to say, well, I’d like to have more water but the water I have I’m going to make the most profit from it that I can,” Lund says.

In the Central Valley, that can also mean “value-added” agriculture. Bolthouse Farms is doing that with carrots. One of its products is “Kids Veggie Snackers” -- colorful packets of baby carrots with a pouch of seasoning like chili lime or ranch.  

“You can literally snack a vegetable anywhere, anytime,” says Todd Putman, Bolthouse’s chief marketing officer.

Bolthouse is owned by Campbell Soup and farms up to 30,000 acres of carrots in California. The company’s square-mile facility in Bakersfield processes 2 billion pounds of fresh carrots a year.

“We’re lucky that carrots don’t require a lot of water, versus citrus and pistachios,” Putman says. But Bolthouse grows carrots in other parts of the country and eastern Canada, too.  “That diversifies our growing regions,” he says. “And we’re trying to do more and more of that to anticipate any drought threat.”

Michael McMaster, a third-generation farmer who grows citrus in Tulare County, has already felt the full force of the current drought. This year, he didn’t receive a drop of irrigation water from the federally run water project he depends on. He lost most of his crop as a result.

“And what little we have left is tiny., "McMaster says. "I mean, the fruit that’s remaining is too small to market.  So we’re looking at pretty much a total loss for this season.”

One in four jobs in Tulare County depend on growers like McMaster staying in business, according to the local farm bureau. McMaster says the United States could import all its fresh citrus, but asks at what cost? “We provide some of the safest produce in the world, at a reasonable price, and once we’re gone, it will be hard to bring it back,” he says.

This season, McMaster managed to keep his trees alive only by buying surplus water from a district with more senior water rights than his. He paid eight times his normal price, roughly what some city dwellers in California pay.

The FCC wants to move the U.S. to 5G. Here's what that means.

Wed, 2015-02-18 11:19

The Federal Communications Commission just wrapped up a public comment period on 5G – or what the FCC likes to refer to as, "bringing the U.S to the forefront of fifth-generation wireless technology."

So, what exactly is 5G?

"The Original 'Gs' were about voice service, we wanted voice on our cell phones," Marketplace Tech host Ben Johnson. "But eventually we wanted more than that, we wanted data, we wanted texting. So we got texting on 2G. Then we wanted the actual Internet, so we got 3G."

These days, 4G or LTE is the fastest internet access available – what allows us to download movies in just seconds and have constant connection. That is, until 5G makes its debut.

"It’s better, that’s the basic thing. It promises really high speeds," says Johnson. "But the interesting thing is, it promises higher speeds, but for shorter distances – think meters not miles."

The logistical mind behind "Boyhood's" 12-year shoot

Wed, 2015-02-18 09:18

There are countless names that appear in white print on a black background at the end of films. People who toiled away in roles many of us don't know but who contribute greatly to the final product.

Vince Palmo's name may never be engraved on an Oscar, but he had arguably the most difficult job on the set of "Boyhood," the Richard Linklater film nominated for eight Academy Awards including Best Picture and Best Director. As first assistant director, Palmo was in charge of logistics — no small feat for a 12-year shoot.

So what exactly does an assistant director do? 

“I try to make sure everything is in place so that on the day all the director has to say is 'action' and 'cut,' says Palmo. “We’re the first line of support for the director. We interact with every department. As soon as camera is ready the actors are ready, the background is ready, any special effects would be ready if necessary, so the director has to do as little as possible.”

The assistant director is a somewhat thankless job, but it wasn't always that way. Back in the 1930s, the Academy actually created an Oscar for assistant directors and awarded them for five years.

Palmo didn’t know that, but he says he’s not leading the charge to bring it back.

“That could be the part of the ceremony where people decide to go to the kitchen,” Palmo says. “When they talk about the glamour of movie-making, I don’t know if people associate it with that.”

Palmo is also a screenwriter who penned the screenplay for the 2008 film “Me and Orson Welles,” also directed by Richard Linklater. Palmo says he does hope to direct a film himself one day, but he knows it won’t come easy.

“Man, it’s a big leap,” he says. “It’s like a nurse saying he or she would like to be a doctor. It’s a big step.”

The hardest-working woman in monetary policy

Wed, 2015-02-18 09:12

Using the Fed Chair's official calendar, The Wall Street Journal tallied up exactly how much time Janet Yellen spent in meetings last year and with whom.

It's kind of daunting.

Starting on the day she was sworn in, February 3, 2014, Yellen had more than 950 meetings--sometimes as many as 11 in a day.

There's all kinds of fascinating stuff in there. For example, on December 2 last year she met with Jamie Dimon, the CEO of the biggest bank in the country, JP Morgan Chase, from 1:30 PM to 2:30 PM in the afternoon.

Take a look.


Searching for the economy's new normal

Wed, 2015-02-18 09:11

The first quarter of 2015 is not starting out with a bang. Several new economic indicators came out this week, which, taken individually are not overly noteworthy, but if you bundle them all up, they begin to indicate that tales of the resurgent U.S. economy might be slightly over-exaggerated.  

Industrial production rose just 0.2 percent in January, slightly less than expected. Housing starts also fell 2 percent in January, and add to the mix the tanking price of oil which dragged producer prices down to a five-year low.

So is the overall trend of positive economic forecasts still on track, or starting to stumble? Well, half the country is still buried under snow to think about spending all that extra gas money we’re carrying around.

“You know, it really is an issue of where you lose and where you win,” says Diane Swonk, Chief Economist at Mesirow Financial. “There's no way to recoup the wages lost in some areas where you just couldn't get to work because of the weather, or stores couldn't open or had to close.”

Swonk points out that cold weather may be slowing home building. An ongoing strike by longshoremen on the West Coast is also holding things up.

"Suppliers, retailers, a lot of people who can't get the goods they need to distribute them, all of this disrupts and displaces economic activity," says Swonk.

Producer prices are falling, which means it’s cheaper for manufacturers to make things, which if continued over the long-term, can actually restrict economic activity — but at this point, that remains a pretty big "if."

"In fact, the decline in producer prices is actually hiding a good thing, it’s driven by declining oil prices,” points out University of Michigan Economist Justin Wolfers. Overall, he says he’s still bullish on the U.S. economy.

"The most reliable data we have shows that firms have been hiring and hiring pretty rapidly. So, I think there is probably at least as many people worried that the economy is growing too fast, as those that think we're on the cusp of a downturn any time soon," says Wolfers.

Other indicators, such as unemployment, continue to trend in a positive direction. A big problem for economists and policymakers going forward is just trying to establish what a “normal” data looks like in the post-recession economy.  

“I mean I definitely think we shouldn't panic about the old normal not being the same as the new normal, that doesn't mean it’s a bad normal,” says Diane Lim with the Committee for Economic Development.

What Lim is saying is the Great Recession changed household behavior, around things housing and spending, and we might just have to wait a little while yet to say precisely how.

"It’s a tricky thing to conduct policy around, but a lot of it is not in policymakers control. A lot of it will be, 'Let's wait and see where the economy seems to settle after the recovery is through.’"

Quiz: Teens get fewer zzzzzs

Wed, 2015-02-18 08:00

Teens have been losing sleep for two decades, according to a study published in the journal Pediatrics.

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PODCAST: A good time to be in the air freight industry

Wed, 2015-02-18 03:00

The attorney general says the time is approaching to prosecute Wall Street ... or not. Plus, dock workers at West Coast ports haven't had a contract since the end of June and somehow they haven't been working quite as fast. This has caused bottlenecks for months that are starting to really hit factories and retailers across the country. One winner here already: the air freight industry. The International Air Transport Association says global air cargo rose 4.5 percent last year, due in part to the congestion at these shipping terminals. More on that. And fair trade coffee is meant to give smaller growers a larger share of high retail prices. You may have seen other fair trade crafts in hipster boutiques but some of that merchandise is now coming to a department store near you. We head to Guatamala to find out more.

Exiting U.S. Attorney General's last act

Wed, 2015-02-18 03:00

Before U.S. Attorney General Eric Holder rides into the sunset—to be succeeded (pending Senate confirmation) by President Barack Obama’s nominee, Loretta Lynch—he is acting the lawman one final time.

In a speech at the National Press Club this week, he said he’s instructed Department of Justice lawyers to decide in the next 90 days whether they can bring viable civil or criminal cases against individual executives for actions that helped precipitate the financial crisis in 2008.

Holder has been criticized for launching few successful fraud or money laundering prosecutions against individuals in the aftermath of the mortgage meltdown. Holder has denied that his department has followed a de facto policy of ‘too big to jail’ in pursuing big banks and their top executives.

Karen Petrou at Federal Financial Analytics says dragging individual executives into court at this point might help deter future bad behavior by bankers.

“If you prosecute a few high-profile individuals and make it clear it’s not good enough to just make speeches about corporate ethics, that could well bring it home,” says Petrou. “That’s as opposed to abstract corporate sanctions which are ultimately paid for by taxpayers and shareholders.”

Under Holder, the DOJ has been aggressive in the past few years in pursuing civil settlements with big banks for alleged financial wrongdoing—levying $36 billion in aggregate penalties against JP Morgan Chase, Citigroup, and Bank of America. 

Growth of fair trade brings benefits for artisans

Wed, 2015-02-18 02:00

Since ancient times, the women of Guatemala’s indigenous communities in the western highlands have used hand-dyed thread to made clothes on back strap looms. Now, they are using those same techniques to make clothes and accessories for Nordstrom, J. Crew and other mainstream brands.

Yolanda Calgua Morales, 45, leads a group of weavers is the remote mountain community of Quiejel, near Chichicastenango.

Growing demand for traditional handmade textiles has changed Morales’ life. She’s been able to build a house and educate her two children.

Morales learned to weave when she was seven. She has taught her daughter, nieces and cousins. 

“I teach them to weave because I don't want them to lose the culture,” Morales says. “I love the work and I don't want it to disappear.”

Morales says her grandmother passed down designs using four colors. Now, the Quieiel community uses 12 colors and new designs, many of them created by Morales. “I always think about what needs to change and how to improve,” she says. “When it's ready I give it to the group; that's why they call me the representative.”

Morales and the other Quiejel weavers work with a non-profit organization called Maya Traditions, which helps them sell their work for a fair price.

"We’re providing a product people want to buy with a story they support,” says Alison Wandschneider, director of sales and marketing for Maya Traditions.

Maya Traditions works with about 120 weavers from six areas in Guatemala, including Quiejel. There are many nonprofits like it, especially in Panajachel, a beautiful and touristic town of about 12,000 that anchors the indigenous villages around Lake Atitlán.

The nonprofit organizations court customers like Piece & Co., a Chicago-based for-profit company with a mission to improve artisans’ lives around the world “by partnering with leading fashion and retail brands,” according to its website.

“We're the link between the artisan groups and these mainstream brands,” says Danielle Huffaker, the company’s Guatemala representative. “There’s all sort of expectations that brands have that artisan groups may not be accustomed to working with.”

On a recent Monday, Huffaker brought her laptop to the offices of Maya Traditions. She had a long list of questions Piece &Co. uses to vet artisan groups all over the world. Among them: How often do you meet with your artisans? How old are they? What is your bank? How do you define living wage? How many Guatemalans are on staff? How do you certify dyes are chemical-free?

Maya Traditions has answers to many of the questions, but some still need to be figured out. For instance, the industry talks about fabric in yards. But what comes off a back strap loom is not a yard. It’s the width of the weaver’s waist; more like 20 inches than 36. It’s called a lienzo. As Huffaker looks at the intricate product samples from Maya Traditions, she thinks out loud:

“There's advantage to us in the sizes being in yards so we can compare prices between different countries,” she says. “We can definitely do this in lienzos as long as it’s really clear what unit we’re measuring so we can do conversions on our end.

The women say shoppers want fair trade products in mainstream stores. And consumer demand is driving both retailers and artisans to change the way they do business. For Piece & Co.'s customers, the goal is predictable high-quality supply. Sellers like Maya Traditions want to get a fair price and keep traditional ways while growing an export business.  

“We have had a lot of tough conversations and missed some deadlines,” Wandschneider says. “But I think it's all at this very interesting point of tension and out of it will come something really awesome.”

Back in Quiejel, Marisol Morales Calel, program coordinator with Maya Traditions, is explaining this year’s contract to 18 weavers in K’iche, an indigenous language. Some weavers don’t speak Spanish, some will sign with a thumb print. The deal spells out deadlines and deliverables; it promise fair pay and benefits. It may turn out to be a binding agreement between the past and the future.









Postal Service wants a redesigned mail truck

Wed, 2015-02-18 02:00

Representatives from auto companies and the U.S. postal service meet in Washington D.C. on Wednesday to discuss replacing the postal service's fleet of mail trucks.

The trucks, manufactured by a fighter jet maker, were designed to last but not for 30 years. They are guzzling fuel, are requiring too much maintenance, and aren't big enough for the postal service's growing e-commerce package business.

The contract for a new fleet of trucks could be a $6 billion bonanza for the winning manufacturer, but it also has its challenges.

Click the media player above to hear more.