Marketplace - American Public Media

Oil prices tank, we save billions

Tue, 2015-01-20 13:32

Here are a few updates about the current state of the oil industry:

  • Crude oil closed down almost 5 percent today at about $46 dollars per barrel at the close in New York.
  • Gas is under $2 per gallon in more than half the states.
  • Gas that sells for an average of $2.45 cuts — in the aggregate — $120 billion from the amount we'll all pay for gas this year.

That's according to the Oil Price Information Service.

Oil traders are hedging their bets

Tue, 2015-01-20 12:18

Delta Airlines reported a fourth-quarter loss Tuesday because the company’s fuel-hedging contracts overshot the falling price of oil.

Some energy traders and banks seem to think that they might have better luck than Delta. With the forecast for crude starting to trend upward, investors are buying cheap oil and storing it in the hope of turning a profit in the future.

One preferred storage method: Parking the oil on so-called “VLCC’s,” or very large crude carriers, capable of carrying millions of tons of oil in a single delivery. Normally that’s what these tankers would be doing, except almost no one wants to ship oil when the price is so low. 

U.S. is a bright spot in slowing global economy

Tue, 2015-01-20 12:10

The International Monetary Fund has revised downward its global economic projections. The IMF predicts China will grow 6.8 percent in 2015 (the October 2014 estimate was more than 7 percent, compared to growth topping 10 percent in recent years) as it tries to deflate an investment bubble. The eurozone is projected to grow 1.2 percent. Japan is expected to grow just 0.6 percent. 

The United States is the bright spot in this forecast. The IMF now predicts higher growth for the U.S. than it did in October – 3.6 percent in 2015. The U.S. economy is benefiting from declining oil prices and low inflation. Plus, says Paul Ashworth at Capital Economics in Toronto, the U.S. is relatively insulated from troubles in Europe, Asia and other developing countries because of its size and its relatively low dependence on exports.

“Exports are a fairly small part – 11 to 12 percent – of U.S. GDP,” says Ashworth. “And within that, the U.S. main trading partners are Canada and Mexico, which have actually been doing quite well.”

Overall, the IMF expects global growth of 3.5 percent this year. 

Courtesy of: International Monetary Fund

 

Auction houses filled with high-end art – and drama

Tue, 2015-01-20 12:07

The business side of the high-end art world is as dramatic as a Baroque masterpiece – lots of light and shadow.

"Where insider trading is against the law in the financial markets, it is completely legal and actually frequently practiced in the art world," says Michael Plummer, a founder of Artvest Partners, an art advisory firm. Previously, he was COO of Christie’s Financial Services, and also worked with Sotheby’s for years.

 "That’s kind of the game of playing in the art world is that if you are an insider, and you have inside information, then you tend to capitalize on it," he says. And dramatic life events cause works of art to end up at auction houses in the first place.

 “Death, divorce and debt. These are the main consignors,” says David Nash, a co-owner, with his wife, of the Mitchell-Innes & Nash galleries in Manhattan. Before the gallery, Nash spent 30 years at  Sotheby's overseeing paintings, so he well knows how that same drama can trickle down, or up, to the staff.  

"It was pretty high pressure when I left. Now it’s 10 times worse," he says. "Soon as you’ve had one $400 million dollar sale, you’ve got to take the phone call the next morning for the next one.”

And both auction houses seem like they're giving in to some of that pressure, considering Christie’s is replacing its CEO, Stephen Murphy. Sotheby’s CEO, William Ruprecht, who served for 14 years, is also stepping down. Both companies want to become more profitable.

“What is making them less profitable is the intense competition between both houses,” Nash says.

While there are plenty of high-end pieces of art, only two auction houses can handle works of a certain worth. That means there’s often an auction before the auction when the two houses are bidding against each other as they try to offer better deals and land the customer.

"How far are you willing to go to get something that you have to have?” asks Michael Plummer. “Same psychology that’s in the auction room, that puts two people bidding against each other to drive something up to $140 million is the same psychology that puts two auctioneers bidding against each other to get that piece to the auction itself."

And it can seem worth it, for either Sotheby’s or Christie's to do what whatever is needed to lock down a deal to sell a headliner work of art, except it’s not, Plummer says.

“They just don’t make the kind of money that you think they do. When you see those hundreds of millions of dollars of sales, they’re not bringing in the money that people expect that they are, and that I know is a shocking thing to a lot of people.”

Even if you sell a $140 million painting, most of the commission may be given away to the client. Auction houses also offer guarantees that can sound an awful lot like gambling. To secure high-ticket items, the house may guarantee a minimum sale price. But if that sale doesn’t go through, the house is stuck buying that very same, and very pricey, piece of art. One of the problems Sotheby’s is facing, Plummer says, is too much focus on high end sales – the kind that often come with guarantees.

Still, both auction houses say they’re coming off of three years of record-setting sales. while it may seem counter intuitive, this could be the right time to make a bid for new leadership. While it may seem counterintuitive, this could be the right time to make a bid for new leadership, according to David Schick, a luxury industry analyst at investment banking firm Stifell.

"Making a change – I wouldn’t say getting rid of – making a change is easier when times are good," he says.

Auction houses filled with high-end art – and drama

Tue, 2015-01-20 12:07

The business side of the high-end art world is as dramatic as a Baroque masterpiece – lots of light and shadow.

 

"Where insider trading is against the law in the financial markets, it is completely legal and actually frequently practiced in the art world," says Michael Plummer, a founder of Artvest Partners, an art advisory firm. Previously, he was COO of Christie’s Financial Services, and also worked with Sotheby’s for years.

 "That’s kind of the game of playing in the art world is that if you are an insider, and you have inside information, then you tend to capitalize on it," he says. And dramatic life events cause works of art to end up at auction houses in the first place.

 “Death, divorce and debt. These are the main consignors,” says David Nash, a co-owner, with his wife, of the Mitchell-Innes & Nash galleries in Manhattan. Before the gallery, Nash spent 30 years at  Sotheby's overseeing paintings, so he well knows how that same drama can trickle down, or up, to the staff.  

"It was pretty high pressure when I left. Now it’s 10 times worse," he says. "Soon as you’ve had one $400 million dollar sale, you’ve got to take the phone call the next morning for the next one.”

And both auction houses seem like they're giving in to some of that pressure, considering Christie’s is replacing its CEO, Stephen Murphy. Sotheby’s CEO, William Ruprecht, who served for 14 years, is also stepping down. Both companies want to become more profitable.

“What is making them less profitable is the intense competition between both houses,” Nash says.

While there are plenty of high-end pieces of art, only two auction houses can handle works of a certain worth. That means there’s often an auction before the auction when the two houses are bidding against each other as they try to offer better deals and land the customer.

 

"How far are you willing to go to get something that you have to have?” asks Michael Plummer. “Same psychology that’s in the auction room, that puts two people bidding against each other to drive something up to $140 million is the same psychology that puts two auctioneers bidding against each other to get that piece to the auction itself."

 

And it can seem worth it, for either Sotheby’s or Christie's to do what whatever is needed to lock down a deal to sell a headliner work of art, except it’s not, Plummer says.

 

“They just don’t make the kind of money that you think they do. When you see those hundreds of millions of dollars of sales, they’re not bringing in the money that people expect that they are, and that I know is a shocking thing to a lot of people.”

 

Even if you sell a $140 million painting, most of the commission may be given away to the client. Auction houses also offer guarantees that can sound an awful lot like gambling. To secure high-ticket items, the house may guarantee a minimum sale price. But if that sale doesn’t go through, the house is stuck buying that very same, and very pricey, piece of art. One of the problems Sotheby’s is facing, Plummer says, is too much focus on high end sales – the kind that often come with guarantees.

 

Still, both auction houses say they’re coming off of three years of record-setting sales. while it may seem counter intuitive, this could be the right time to make a bid for new leadership. While it may seem counterintuitive, this could be the right time to make a bid for new leadership, according to David Schick, a luxury industry analyst at investment banking firm Stifell.

 

"Making a change – I wouldn’t say getting rid of – making a change is easier when times are good," he says.

Game-show winner pulls back the curtain on prizes

Tue, 2015-01-20 10:56

That's me, at the red position, talking to Pat Sajak on "Wheel of Fortune," during an episode in April 2014. I've taken my fair share of cash and prizes from three different game shows, $77,421 worth of stuff by my count. 

After doing my fair share of winning – and losing – I started to wonder where all the money come from, in the off-chance that this bit of trivia shows up in my question stack when I inevitably try my hand at "Who Wants to be a Millionaire." 

Art Alisi, president of Promotional Considerations, Inc., offers an answer. The network "may give them, let's say, $50,000 a week for their prize budget," he says. "And the show wants to give away $150,000, so they have to use the fee spots, and that brings them the extra revenue that they're looking for." 

These fee spots are usually shown at the end of the show, and the revenue from these spots is funneled into the weekly prize budget. 

Because "Wheel of Fortune" and "Jeopardy!" have been the top two game shows in syndication since roughly forever, they command a high price for these 10-second promotions. The typical going rate for one of those spots is $15,000, Alisi says.

While that money is used to pay for any cash prizes given away, the show can also use the funds to buy other material prizes, like cars. Buying prizes is common on "The Price is Right," which made it difficult for Alisi to secure cars when he worked for the original "Hollywood Squares" in the '60s and '70s, he says. In those days, shows could easily obtain cars for free from dealers, he says. After "The Price is Right" debuted in 1972, other shows had a hard time obtaining cars, because it was more lucrative for the dealers to sell a car to "The Price is Right," which typically offers two or three cars per show, instead of contracting out a car to another show. 

"So now we have to buy the cars, unless we do a special promotion with somebody," Alisi says. "Most of the time we have to buy the cars, we have to figure that as a cost. And we work with the different dealers, so we usually get it at their cost." 

But the shows don't buy every prize you see on the air. Trips, for example, are almost never purchased but are obtained via contract, as former "Wheel of Fortune" prize coordinator Adam Nedeff explains. That involves cold-calling hotels and airlines and making a detailed sales pitch. "At the time, we would contract them for two trips. The first trip was for the 'Prize Puzzle,' a guaranteed win," he says. The second would go to a viewer who played along from home.

Accepting a prize, or not, is up to the contestant. 

Shows give contestants the option to forfeit prizes, and I took advantage of that after I had my "Price is Right" showcase handed to me on a silver platter.

My big prize was a five-hour private jet flight, valued at $25,000, that came with all sorts of stipulations — the plane would only take me 2½ hours outside of Los Angeles, then 2½ back. I had to spend at least two days in my destination before returning home and any expenses incurred in my destination city were my responsibility.... 

To save myself the headache, I just forfeited the prize. I didn't get anything in return, and I couldn't have sold the plane ticket even if I did accept it. But I also didn't have to pay taxes on that prize. 

Prizes that aren't accepted are a good deal for the show. That five-hour private jet trip I forfeited went back in the show's inventory. If the show wants to, the prize can be offered again, although it might be packaged differently.

"Maybe then, next time they do it, they’ll give you a hotel in Vegas. So now the prize becomes $30,000 — and they already have the credits since you forfeited the prize," Alisi says.

Then again, if you can't use the prize (as long as it's not a trip, where you have to be one of the two people taking it),  you might know someone who can — as eight-time game show contestant Dan Avila did after he won six pairs of women's shoes on "Sale of the Century" in the '70s. 

Forecasting Tuesday's State of the Union address

Tue, 2015-01-20 10:38

President Barack Obama is scheduled to deliver his sixth State of the Union address Tuesday night at the Capital. It will be the first time Obama has delivered a State of the Union address to a Republican-led Congress.

"What he can be proudest of and what he’s probably going to point to tonight is the job market," says Marketplace’s David Gura. "Last month, the economy added 252,000 jobs. The unemployment rate is at 5.6 percent, these are good metrics – metrics that the American people like."

In the past few weeks, President Barack Obama has previewed some of the main ideas that will be presented in Tuesday night’s State of the Union address: tax reform, income inequality, and paid parental leave, to name a few.

"I was struck as he gave these speeches by how much he’s focused on what the administration has done already," says Gura. "His hands have been tied over these last few years, he has not done a lot with Congress. So a lot of what we’ve heard are things he’s talked about a lot, I don’t expect he’s going to stop talking about them. I think he’s hoping that American’s appetites for things like that will grow now."

Tonight will be the second-to-last time President Obama will take part in the annual presidential address to Congress, plus the millions of people watching at home. 

State of the Union, by the numbers

Tue, 2015-01-20 09:20
33,667

Jimmy Carter's 1981 State of the Union address holds the record for lengthiest speech, in terms of words – it had 33,667 of them. That's only about 10,000 words shy of F. Scott Fitzgerald's novel "The Great Gatsby." President Obama’s 2014 speech was a relatively concise 6,989 words. George Washington’s 1790 address holds the record for the speech with the fewest words, 1,089. 

 

1923

In 1923, Calvin Coolidge's State of the Union address was the first broadcast on the radio. The New York Times predicted that Coolidge's voice "will be heard by more people than the voice of any man in history.

  

228

Since George Washington’s inaugural speech in 1790, a total of 228 State of the Unions have been delivered. Some were delivered in the form of letters, not speeches. Thomas Jefferson was the first president to present a State of the Union in a letter format, with some historians claiming that Jefferson believed in-person delivery too closely resembled a British monarch addressing parliament and others attributing the outcome to his shyness.

 

43.3 percent

Of the proposals delivered during a speech, 43.3 percent, on average, actually are enacted during the following year, according to data collected from 1965 to 2002. But the actual legislative success varies from year to year.

Senate.gov

26

Since 1972, presidents have mainly worn colored ties along a blue spectrum. Over the ensuing years, the American public has witnessed 26 State of the Unions in which a president has worn a tie in shades of blue and 16 in shades of red. President Clinton must have missed the memo on colored neckwear, pulling off a dark and yellow polka dot number in 1998.

JOE MARQUETTE/AFP/Getty Images

Winner reveals inside scoop on game show prizes

Tue, 2015-01-20 08:00

Congratulations! You've just won a ton of money and prizes on a game show.

But before you redraw your floor plans to accommodate those new kitchen appliances you won, consider the following:

1. The show may substitute cash for some of your prizes.

The video above shows just one way I got lucky when I won on "The Price is Right" back in 2010. I was quite pleasantly surprised, but still confused, when I was handed my prize paperwork. I discovered that instead of the three-month virtual assistant service, among other things, I had just won in my "showcase," I was getting the cash value instead.

On my prize sheet, certain prizes are labeled "C-I-L": cash in lieu. I wasn't given the option to receive the actual prize instead, and I couldn't trade one of the other prizes I won for their cash value, either.

As Art Alisi explains, that's because the show buys some of their prizes — and there's a way to tell if they did, if you listen closely during the show. "When they say, I’m just gonna say Goodyear tires [as an example], 'You've won a set of Goodyear tires, from the number one store, Goodyear,' then you know that was promoted. If they just said you won a wonderful set of rubber tires, they bought it. So it’s just as easy for them to give you the cash."

Again, not that I'm complaining.

2. Reruns once meant more gifts.

One thing should be made abundantly clear: If your show airs as a rerun during the off-season, you don't get paid a second time.

"Jeopardy!," among many other shows, used to give sponsored parting gifts to departing contestants – the classic Rice-A-Roni comes to mind. They don't do that anymore. My "parting gifts" from "Jeopardy!" amounted to a tote bag, a T-shirt and a glass frame for my photo with Alex Trebek.

When Jerome Vered played in the 1992 Tournament of Champions, he finished in third place and received the announced third-place parting gifts in addition to his runner-up prize of $7,500. What he didn't realize was that when his tournament games aired again over the summer, the show changed the fee plugs at the end of the episode.

"So about a month later, as a loser, I get this huge package from "Jeopardy!" of all these ... left-handed toothbrushes and all these other things they were giving away. I got a whole 'nother set, like a residual, but I didn’t actually get my money again."

These days, all you get for a rerun is a second chance to record your episode.

3. You don't receive your winnings immediately.

You don't get to drive off the set in the new car you just won, nor do they immediately pay you any money you win once you step off the stage. It usually takes between 90 and 150 days to receive your prizes.

Alisi says the prize department needs to verify that you are indeed who you say you are when you go on the show....

Alisi says: "I had one where someone told me he was an admiral, and the FBI came in and wanted to know where we found this man. And they told us, 'He’s not an admiral, he’s been impersonating an admiral for 30 years.' They arrested him, and whatever he won, they took away."

.. .and to make sure you've paid your taxes on your prizes. In the case of "The Price is Right," out-of-state contestants like me have to pay California state taxes before accepting any prize. "Let's say you're in Illinois, and we sent the prizes, and you didn't pay the taxes," Alisi says. "We're liable to pay those taxes. So we make sure you've paid the state taxes before we deliver the prizes."

Once a prize is won, the show contacts the appropriate prize supplier to let them know they'll need to save an extra – let's just say –desk chair for the lucky contestant. "We have to notify the prize providers to say that they’re going to be on the show, and then we send them another certification saying you have 90 days to send the gift," says Alisi.

4. The show isn't the only entity paying out prize money. 

Prizes for our second and third place contestants provided by Aleve.

Photo courtesy of Sony Pictures Television

Call it a sneaky way to get in some additional advertising, but in the case of the above photo, Aleve will actually cut the runners-up a check for the standard second- and third-place prize.

You see it elsewhere, too. When "Wheel of Fortune" used to have the "Jackpot Round," which would be prefaced by a short plug for the round's sponsor. The arrangement with the show was similar to that of the Aleve plug "Jeopardy!" uses today, but with a significant difference. 

Photo courtesy of Sony Pictures Television

Aleve pays out $3,000 an episode, because, unless something strange happens, every show will have someone finishing in both second and third place. However, the sponsor of the "Jackpot Round," says former prize coordinator Adam Nedeff, only had to pay out when the jackpot was won. If it wasn't won, which was most of the time, the sponsor effectively got a free commercial. 

But suppose there was a week when the Jackpot was won every time it was offered. Nedeff says the sponsor only was responsible for paying three of those Jackpots; "Wheel" would pay the rest, and the sponsor would get the free commercial on those nights anyway.

"That was the best way to get the sales pitch," Nedeff says, "because the sponsor of that round is getting a fantastic deal. It’s not, 'Hey, it’s "Wheel of Fortune," it’s this fantastic show that all of America is watching,' it’s, 'You are getting a really, really cheap commercial here.'”

5. Trips aren't always worth as much as the show says they're worth.

It's no secret that game show winners are taxed on whatever they win, and the amount of taxes a contestant has to pay partly depends on the value of the prizes they win.

In the case of trip prizes, though, the value announced on the show may be different from what the player is actually taxed on, because the value announced on the show reflects the price of the trip during the sponsoring hotel's peak season.

"One of the things we have to hammer home is that we have to honor blackout dates," says Nedeff. "A lot of places do not want to offer a trip that’s going to be redeemed during Thanksgiving or Christmas weeks, because that’s the week when the big money is coming in for the hotels."

Contestant paperwork explicitly states that winners of trips have up to 365 days following their airdate to redeem their prize, so the value of the trip can fluctuate depending on when the trip is taken.

"If the person actually did redeem the trip, we would find out what the comparable rate would have been for the time of year that they were staying there," says Nedeff. "And when it came time to pay the taxes for their prizes, the contestant was only taxed on what they would have paid during the offseason."

5 things you didn't know about game show prizes ... unless you've won one

Tue, 2015-01-20 08:00

Congratulations! You've just won a ton of money and prizes on a game show.

But before you redraw your floor plans to accommodate those new kitchen appliances you won, consider the following:

1. The show may substitute cash for some of your prizes.

The video above shows just one way I got lucky when I won on "The Price is Right" back in 2010. I was quite pleasantly surprised, but still confused, when I was handed my prize paperwork. I discovered that instead of the three-month virtual assistant service, among other things, I had just won in my "Showcase Showdown," I was getting the cash value instead.

On my prize sheet, certain prizes are labeled "C-I-L": cash in lieu. I wasn't given the option to receive the actual prize instead, and I couldn't trade one of the other prizes I won for their cash value, either.

As Art Alisi explains, that's because the show buys some of their prizes — and there's a way to tell if they did, if you listen closely during the show. "When they say, I’m just gonna say Goodyear tires [as an example], 'You've won a set of Goodyear tires, from the number one store, Goodyear,' then you know that was promoted. If they just said you won a wonderful set of rubber tires, they bought it. So it’s just as easy for them to give you the cash."

Again, not that I'm complaining.

2. Reruns once meant more gifts.

One thing should be made abundantly clear: If your show airs as a rerun during the off-season, you don't get paid a second time.

"Jeopardy!," among many other shows, used to give sponsored parting gifts to departing contestants – the classic Rice-A-Roni comes to mind. They don't do that anymore. My "parting gifts" from "Jeopardy!" amounted to a tote bag, a T-shirt and a glass frame for my photo with Alex Trebek.

When Jerome Vered played in the 1992 Tournament of Champions, he finished in third place and received the announced third-place parting gifts in addition to his runner-up prize of $7,500. What he didn't realize was that when his tournament games aired again over the summer, the show changed the fee plugs at the end of the episode.

"So about a month later, as a loser, I get this huge package from "Jeopardy!" of all these ... left-handed toothbrushes and all these other things they were giving away. I got a whole 'nother set, like a residual, but I didn’t actually get my money again."

These days, all you get for a rerun is a second chance to record your episode.

3. You don't receive your winnings immediately.

You don't get to drive off the set in the new car you just won, nor do they immediately pay you any money you win once you step off the stage. It usually takes between 90 and 150 days to receive your prizes.

Alisi says the prize department needs to verify that you are indeed who you say you are when you go on the show....

Alisi says: "I had one where someone told me he was an admiral, and the FBI came in and wanted to know where we found this man. And they told us, 'He’s not an admiral, he’s been impersonating an admiral for 30 years.' They arrested him, and whatever he won, they took away."

.. .and to make sure you've paid your taxes on your prizes. In the case of "The Price is Right," out-of-state contestants like me have to pay California state taxes before accepting any prize. "Let's say you're in Illinois, and we sent the prizes, and you didn't pay the taxes," Alisi says. "We're liable to pay those taxes. So we make sure you've paid the state taxes before we deliver the prizes."

Once a prize is won, the show contacts the appropriate prize supplier to let them know they'll need to save an extra – let's just say –desk chair for the lucky contestant. "We have to notify the prize providers to say that they’re going to be on the show, and then we send them another certification saying you have 90 days to send the gift," says Alisi.

4. The show isn't the only entity paying out prize money. 

Prizes for our second and third place contestants provided by Aleve.

Photo courtesy of Sony Pictures Television

Call it a sneaky way to get in some additional advertising, but in the case of the above photo, Aleve will actually cut the runners-up a check for the standard second- and third-place prize.

You see it elsewhere, too. When "Wheel of Fortune" used to have the "Jackpot Round," which would be prefaced by a short plug for the round's sponsor. The arrangement with the show was similar to that of the Aleve plug "Jeopardy!" uses today, but with a significant difference. 

Photo courtesy of Sony Pictures Television

Aleve pays out $3,000 an episode, because, unless something strange happens, every show will have someone finishing in both second and third place. However, the sponsor of the "Jackpot Round," says former prize coordinator Adam Nedeff, only had to pay out when the jackpot was won. If it wasn't won, which was most of the time, the sponsor effectively got a free commercial. 

But suppose there was a week when the Jackpot was won every time it was offered. Nedeff says the sponsor only was responsible for paying three of those Jackpots; "Wheel" would pay the rest, and the sponsor would get the free commercial on those nights anyway.

"That was the best way to get the sales pitch," Nedeff says, "because the sponsor of that round is getting a fantastic deal. It’s not, 'Hey, it’s "Wheel of Fortune," it’s this fantastic show that all of America is watching,' it’s, 'You are getting a really, really cheap commercial here.'”

5. Trips aren't always worth as much as the show says they're worth.

It's no secret that game show winners are taxed on whatever they win, and the amount of taxes a contestant has to pay partly depends on the value of the prizes they win.

In the case of trip prizes, though, the value announced on the show may be different from what the player is actually taxed on, because the value announced on the show reflects the price of the trip during the sponsoring hotel's peak season.

"One of the things we have to hammer home is that we have to honor blackout dates," says Nedeff. "A lot of places do not want to offer a trip that’s going to be redeemed during Thanksgiving or Christmas weeks, because that’s the week when the big money is coming in for the hotels."

Contestant paperwork explicitly states that winners of trips have up to 365 days following their airdate to redeem their prize, so the value of the trip can fluctuate depending on when the trip is taken.

"If the person actually did redeem the trip, we would find out what the comparable rate would have been for the time of year that they were staying there," says Nedeff. "And when it came time to pay the taxes for their prizes, the contestant was only taxed on what they would have paid during the offseason."

Quiz: Schools where the underprivileged are few

Tue, 2015-01-20 06:08

After being publicly ridiculed, this college says it will double its share of low-income undergrads.

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PODCAST: Faster, supercomputer! Faster!

Tue, 2015-01-20 03:00

Some context on what the President might say tonight in regards to college tuition. Plus, Fidelity will reportedly lead the creation of a new private, stock trading venue, otherwise known as a dark pool. More on that. And Tennessee's Oak Ridge National Laboratory may once again be home to the world's fastest supercomputer. Its current machine was the fastest when it went live in 2012. That title only lasted six months - then a computer in China took the top spot. But the U.S. recently put aside more $400 million to keep itself in the race.

The unending race to make the fastest supercomputer

Tue, 2015-01-20 02:00

Tennessee’s Oak Ridge National Laboratory may once again be home to the world’s fastest supercomputer. It held the title in 2012, but only kept it for six months — then a computer in China took the top spot. But the U.S. recently put aside more than $400 million to stay in the race.

The supercomputer at Oak Ridge, called Titan, is the size of a basketball court and sounds like a jet engine. It can make 27 quadrillion — that’s 27 followed by 15 zeros — calculations per second.

“It’s almost like it’s alive,” says Buddy Bland, director of the Oak Ridge Leadership Computing Facility. “It has a pulse to it. You can feel it in your body when you walk in the room.”

These kinds of machines are used to do incredibly complex simulations of real-world things, such as analyzing weather patterns over time or predicting new chemical combinations in drugs. Faster computers mean more scientific breakthroughs.

Like any computer, whether it's a Titan or your personal laptop, it will be basically obsolete in a few years, Bland says.

“Because we can go out and buy a new machine for less than it costs to pay the maintenance of the old machine,” he says.

The U.S. has been a leader in supercomputing for decades, and staying up-to-date and ahead of the pack is pricy. Oak Ridge’s next computer, called Summit, could cost up to $280 million.

Yet Congress has funded supercomputing with gusto. In November, the Department of Energy pledged $425 million to help build Summit and a computer at Lawrence Livermore National Laboratory in California. Sen. Lamar Alexander, R-Tenn., says it’s a priority that stretches across party lines.

“This is a case where the Obama administration and I and others in Congress since 2008 have had the same goal: We wanted double funding for supercomputing,” he says.

Alexander gives two reasons: First, national security — some federally funded machines manage the country’s nuclear weapons.

Second, private companies can apply for time on the computers to develop products more quickly. For example, Procter and Gamble has used Oak Ridge’s Titan to research how  skin might react to its products.

And then there’s something that has nonmonetary value: pride.

“It’s like being number one in football,” Alexander says. “We like the idea of having the fastest supercomputer in the world, and we have had that at Oak Ridge.”

Summit is expected to go live in 2017, but Oak Ridge isn’t calling it the fastest yet — by that time, some other country may be building one that’s even faster.

 

Closing the loophole on a tax advantage

Tue, 2015-01-20 02:00

On Tuesday, President Barack Obama will urge what is now a Republican senate and a Republican house to dump what the President sees as a loophole that allows the wealthiest of American families to pass on a big tax advantage to their heirs.

Along with raising capital gains taxes for some in the higher brackets, the idea is to use the money to let low income people keep $500 a year of their money when both spouses work, and among other things, to help families with under five years olds pay for child care. But let's start with a closer look at this trust fund business.  

Click the media player above to hear finance reporter David Cay Johnston in conversation with Marketplace Morning Report host David Brancaccio.

Can community colleges cope with being free?

Tue, 2015-01-20 02:00

President Barack Obama is expected to give a big boost to community colleges in his State of the Union address Tuesday night. The President has proposed making tuition at two-year public colleges free for students in good standing. If the proposal passes Congress—and that’s a big if—can community colleges handle a surge in students?  

Click the media player above to hear more.

The race to make the fastest supercomputer

Tue, 2015-01-20 02:00

Tennessee’s Oak Ridge National Laboratory may once again be home to the world’s fastest supercomputer. It was in 2012, but that title only lasted six months — then a computer in China took the top spot. But the U.S. recently put aside more than $400 million to keep itself in the race.

The supercomputer at Oak Ridge right now, called Titan, is the size of a basketball court and sounds like a jet engine. It can make 27 quadrillion — that’s 27 followed by 15 zeros — calculations per second.

“It’s almost like it’s alive,” says Buddy Bland, director of the Oak Ridge Leadership Computing Facility. “It has a pulse to it. You can feel it in your body when you walk in the room.”

These kinds of machines are used to do incredibly complex simulations of real-world things, such as analyzing weather patterns over time or predicting new chemical combinations in drugs. Faster computers mean more scientific breakthroughs.

But Bland says like any computer, whether it’s Titan or your personal laptop, will be basically obsolete in a few years.

“Because we can go out and buy a new machine for less than it costs to pay the maintenance of the old machine,” he says.

The U.S. has been a leader in supercomputing for decades, and staying up-to-date and ahead of the pack is pricy. Oak Ridge’s next computer, called Summit, could cost up to $280 million.

Yet Congress has funded supercomputing with gusto. In November, the Department of Energy pledged $425 million to help build Summit and a computer at Lawrence Livermore National Laboratory in California. Sen. Lamar Alexander (R-Tenn.) says it’s a priority that stretches across party lines.

“This is a case where the Obama administration and I and others in Congress since 2008 have had the same goal: We wanted to double funding for supercomputing,” he says.

Alexander gives two reasons: First, national security — some federally funded machines manage the country’s nuclear weapons.

Second, private companies can apply for time on the computers to develop products more quickly. For example, Procter and Gamble has used Oak Ridge’s Titan to research how the skin might react to its products.

And then there’s something that has non-monetary value: pride.

“It’s like being number one in football,” Alexander says. “We like the idea of having the fastest supercomputer in the world, and we have had that at Oak Ridge.”

Summit is expected to go live in 2017, but Oak Ridge isn’t calling it the fastest yet — By that time, some other country may be building one that’s even faster.

 

Gasoline prices are all over the map

Tue, 2015-01-20 02:00

You hear about the average national gasoline price, but it’s often different from the station down the block. So why are prices so inconsistent from station to station, not to mention state to state?

A gallon of gasoline costs about 50 percent more in New York than Missouri. Taxes vary by as much as 35 cents a gallon, according to the American Petroleum Institute. Geography plays a role, too. States like Missouri and Oklahoma are near lots of refineries, and those refineries have pipeline access to cheaper crude supplies from the U.S. and Canada. Finally, state and local regulations produce many different varieties of gasoline, with different ethanol blends, octane requirements and emissions standards. 

 

Disappointing economic growth in China

Tue, 2015-01-20 01:30
7.4 percent

With a low not seen in a quarter century, China's economic growth dropped to 7.4 percent in 2014. As reported by the WSJ, some economists predict that disappointing numbers from 2014 are just the start of a global deceleration of growth.

2,000

That's about how many times Ronald Reagan used the word "freedom" for every million words in his State of the Union addresses, the Atlantic reported. He also lead the pack on "god." The Atlantic has an automatic tool showing frequently-used words by president.

50 percent

You may have noticed disparities in gas prices from station to station, but what about state to state? For example, a gallon of gasoline costs about 50 percent more in New York than Missouri. Turns out, there's a lot of factors that play into why you'll pay more or less for a tank of gas in different states.

46 percent

President Barack Obama's approval rating heading into Tuesday's State of the Union address. It's a bump up from the past year, the New York Times' Upshot reported, and it'll become more important in the homestretch of Obama's second term and looking to Democrats chances in 2016.

27 quadrillion

That’s 27 followed by 15 zeros, and it's also the number of calculations per second the Titan supercomputer at Tennessee’s Oak Ridge National Laboratory can compute. And it's not even the fastest in the world. That title is currently held by a supercomputer in China. It's why Congress has begun funding supercomputing with gusto, pledging over $400 million to building Oak Ridge's next supercomputer.

80

That's how many of the world's richest people it would take to match the collective wealth of the poorer half of the population, Quartz reported. That's a sharp drop from 2010, when you would have needed 388 super-rich to do the same.

 

Want to track a snowplow? There's an app for that.

Mon, 2015-01-19 11:22

When a couple of inches of snow fell a few weeks ago in Washington, D.C., the new mayor took some heat – as mayors often do – for the poor condition of the city streets.

Now Chicago, New York and Seattle are among the cities to have smartphone apps that can be used to track snowplows in real time using GPS data, according to an AP report.

It is "a way to show skeptics that plow drivers are working hard and not just clearing the streets of the wealthy and well-connected," the report says.

But the data can be misleading. One woman in Chicago said the app indicated a snowplow had gone down her street. It had ... but the plow had its blade up.

The rich get richer, with no end in sight

Mon, 2015-01-19 11:12

In a new report, Oxfam says that by 2016, the wealthiest 1% of people may control more than 50% of the world's wealth.

Inequality has proven to be a durable and thorny problem, and economists are divided over how to tackle it. Some argue for the "redistribution" of wealth, in the form of higher taxes on the rich, or increased subsidies for the poor.

Some say it's better to tackle the root causes of inequality, like the millions of Americans stuck in low-wage jobs. They argue that better education and training are needed to prepare workers for better-paid jobs in science and technology.

Others, meanwhile, argue there's no problem. And while politicians and experts debate the issue, inequality is likely to grow.

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