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The NFL wants artists to pay to perform at the Super Bowl

Wed, 2014-08-20 13:55

There are three finalists for next year’s Super Bowl show at halftime: Katy Perry, Coldplay and Rihanna. According to the Wall Street Journal, the NFL has asked the artists if they'll pay to play.

“I think it probably is worth it to be honest with you," says Bill Werde,  an entrepreneur at Guggenheim Digital Media, and former editor of Billboard Magazine

"The only thing that comes close is arguably the Grammys,  and that’s only if you have a Norah Jones kind of night – you perform, you do an amazing job, you win a bunch of Grammys and it’s just, kind of, your night. Then you’ll see the kind of sales spikes and lifts that are associated with a Super Bowl performance,"  he says. "Even when you’re an established artist, the lift that you get from playing this halftime show is undeniable.”

After playing halftime, notes Werde, you can raise ticket prices, and get bigger and better brand sponsorships worth millions.  

Victor Matheson, a professor of economics at the College of the Holy Cross, says even if this year’s finalists won’t pay up, the NFL could still ask other musicians to – after all, it has a monopoly on halftime.

“You can come up with a list pretty quickly, of other folks who might be willing to pay a little bit of money to have their act featured on a show that over 100 million people are watching," he says.

But, points out Russell Scibetti, founding editor of industry blog The Business of Sports, maybe fans shouldn’t get to watch the NFL’s negotiations.

"The way that they went about it maybe wasn’t the best. They could have had those conversations privately with the artists," says Scibetti about the NFL's requests.

A different approach, says Scibetti, like the NFL asking artists to help promote it through charity work, would have been better received.

Notes Werde, musicians want their music in the spotlight – not their negotiations.

“I promise you that there are people in the head office of the NFL on a witch hunt right now, trying to figure out how this news got out there,” he says.

Had the negotiations taken place in complete secrecy, says Werde, "These artists would all be considering what it’s worth to them and what part of that value they should be willing to share with the NFL – out in the public it takes on a very different patina."

Graphic by Shea Huffman/Marketplace

Your money's worth more in Mississippi

Wed, 2014-08-20 13:55

The Tax Foundation, a Washington think tank specializing in tax policy, has created a map that shows just how much stuff you can buy for a $100 in each state, as compared to how much stuff you can buy for $100 as a national average. 

When adjusted to reflect how prices differ state by state, you could get $100 worth of goods in Washington, D.C. at a price of $84.60, and in Hawaii at $85.32.

On the other hand, it's worth most in states like Mississippi at $115.74, and Arkansas at $114.16.

 

 

Tax Foundation

How can you be sure a medical app actually works?

Wed, 2014-08-20 10:53

Your smartphone will see you now: the wild west of medical apps

If you take a virtual stroll through the iTunes store or Google Play, you will find nearly a hundred thousand health apps – everything from fitness trackers to blood glucose monitors. Out of all these apps, only about 100 have been cleared by the Food and Drug Administration. Some lawyers are calling for more regulation.

Nathan Cortez went to law school in Silicon Valley. He wears a black Fitbit bracelet and his iPhone is stocked with apps like WebMD. But some apps scare him.

“I’ve got an app that you can use to record your heartbeat or bowel sounds,” he says. “And it spits out a diagnosis. Just the thought you can hold your cell phone up to your chest and receive a serious diagnosis of a heart problem is a little mind blowing.”

Scary diagnoses

Cortez is a law professor at SMU in Dallas. He outlined the potential dangers of medical apps in an editorial in the New England Journal of Medicine. And while Cortez talks about hypothetical dangers, he has real life examples of malfunctioning apps.

For example, a rheumatoid arthritis app created by Pfizer in 2011: “It was basically a calculator,” he says, “trying to calculate a score for how severe your rheumatoid arthritis is.”

And it wasn’t working.

“In that case, you may have seen treatment decisions made based on erroneous calculations.”

The blood glucose app from drug company Sanofi was recalled because it miscalculated insulin doses.

Right now the FDA categorizes apps on three levels of risk. It only has jurisdiction over the riskiest products, and does not even review all of those.

Why? Cortez says it’s mainly politics, and a fear of stifling innovation.

The FDA is sensitive to accusations of over-regulation. This month the agency announced even more exemptions for mobile health products that allow users to track, log, trend, and share data with doctors. New rules clear Apple’s product HealthKit, an app to track everything from blood pressure to lung capacity, from regulation.

The regulatory hurdle 

In the past decade, the FDA has confirmed the medical claims of roughly 100 apps, or .1 percent of what’s out there. One app that has been cleared is called My Vision Track.

MyVision Track App 

MyVision Track

“We believe that a regulatory approved medical app costs you about 10 times as much and takes about 10 times as long as doing one that’s not regulated,” says creator Mike Bartlett, with Richardson-based company Vital Art and Science Inc.

Bartlett had to organize multiple months-long clinical studies to prove that My Vision Track can monitor the progress of retinal diseases such as macular degeneration. But he’s not upset about the expensive, arduous process.

“I would be very cautious about using something that’s unproven,” Bartlett says. “And we know that there are vision tests that absolutely don’t work.”

Regulators walking a fine line

Regulators are walking a fine line between letting snake oil salesmen roam free and discouraging legitimate developers.

Chuck McCoy, head of North Texas Angels Network, says so far he hasn’t heard complaints from investors about too much red tape.

“The FDA over regulates in many areas,” he says, “but if you are going to make clinical claims about a device, there has to be some scientific basis for those claims.”

So far, the FDA has taken a fairly lenient view of the medical app ecosystem, says Dr. Chandra Duggirala, a physician with the San Mateo Medical Center. Last year, he made an experimental device for Type 2 diabetes with promising early results. But he wasn’t able to secure funding that would have brought it to market. Duggirala says the lenient stance could change once people start using medical apps that don’t just track, but also diagnose health conditions.

“So far, not many medical apps are hugely popular in a way that would attract FDA attention," he says. "Once that happens, I’m sure there will be some regulatory hurdles for everybody to cross."

Most entrepreneurs agree the FDA over-regulated medical devices. Now, the question is whether they’re under-regulating mobile medical apps.

The business of pop music

Wed, 2014-08-20 10:52

It's hard to think of a side of the music industry Linda Perry hasn't seen; from playing out of a coffee bar in San Francisco to producing music to having her own VH1 reality show. It's a career path some might call unstable, even with all of her successes.

"I've lived out in a park sleeping on the grass with no place to go, I've not eaten, I've been there," says Perry. "There's nothing you could do to me, nothing you could take away from me that would make me feel like I wasn't going to be all right. I would just start all over again."

But even when she's had success, Perry doesn't feel she's actually tasted it.

"Honestly, I don't feel ever very successful because I haven't had a hit in a while, because I don't search for them," Perry says. "To be where I am now, I love it -- I love writing songs, but I don't want to write the songs everyone else is asking me to write. I'm waiting for when people want the real thing again, and that's when you'll start hearing my hits again."

Part of the reason music has become so big, she says, is because of the business that drives a sort of endless cycle.

"Things get greedy, music gets s***ty, movies start losing the plot, we complain, independents show up, there's going to be a girl who's going to sell a million records out of the trunk of her car, you know what I mean?" she says. "And then the next time it'll be even bigger."

The business of pop music

Wed, 2014-08-20 10:52

It's hard to think of a side of the music industry Linda Perry hasn't seen; from playing out of a coffee bar in San Francisco to producing music to having her own VH1 reality show. It's a career path some might call unstable, even with all of her successes.

"I've lived out in a park sleeping on the grass with no place to go, I've not eaten, I've been there," says Perry. "There's nothing you could do to me, nothing you could take away from me that would make me feel like I wasn't going to be all right. I would just start all over again."

But even when she's had success, Perry doesn't feel she's actually tasted it.

"Honestly, I don't feel ever very successful because I haven't had a hit in a while, because I don't search for them," Perry says. "To be where I am now, I love it -- I love writing songs, but I don't want to write the songs everyone else is asking me to write. I'm waiting for when people want the real thing again, and that's when you'll start hearing my hits again."

Part of the reason music has become so big, she says, is because of the business that drives a sort of endless cycle.

"Things get greedy, music gets s***ty, movies start losing the plot, we complain, independents show up, there's going to be a girl who's going to sell a million records out of the trunk of her car, you know what I mean?" she says. "And then the next time it'll be even bigger."

Got a tax credit you can't use? You can sell it

Wed, 2014-08-20 10:04

States spend billions on tax incentives for all kinds of business activity. Here’s one example of the growth in state tax credits: In the year 2000, only four states gave film tax credits. Now, almost 40 do.

Still, lots of businesses never rack up enough of a tax liability to actually use the tax credits states give them. Perhaps they’re an out-of-state film company with a low tax bill, or a nonprofit or start-up with none at all. One way for states to entice those groups is with transferable, or sellable, tax credits. So the secondary market for those credits is growing too.

To show you how sophisticated the market for buying and selling state tax credits is getting, let’s follow the path of an incentive named Betsy.

Okay, it’s actually "BETC", which stands for Business Energy Tax Credit – but it’s pronounced Betsy.

BETC is from Oregon. The state said to businesses there: "Invest in renewable energy or energy conservation, and you can get this tax credit."

Our BETC’s story starts at the Port of Portland, an economic hub that relies on a dredge, called  the Dredge Oregon, to clear navigation channels along the Columbia River.

The dredge was getting old.

“It wasn’t particularly environmentally friendly,” says Tatiana Starostina, the Port’s senior finance manager.

So the Port undertook a $20 million project to overhaul the Dredge Oregon’s engine, pump and generators. The Port says the overhaul will reduce the dredge’s greenhouse gas emissions by 40 percent.

To help pay for all this, the Port got a BETC from the state. But there was a wrinkle: “Well, because the Port is a government entity,” says Starostina, “obviously we cannot use the tax credit to its original purpose.”

The Port doesn’t pay taxes, so a tax credit doesn’t do much good unless it can monetize it.

“Monetize means we literally sell it,” says Starostina – at a discount, of course. Then the company that buys BETC gets to apply the full credit to its state tax bill.

“It would be like a Groupon,” says Rob O’Neill, the man the Port asked to sell BETC.

O’Neill is a partner with Moss Adams, an accounting firm that’s helped facilitate the transfer of over $500 million in state tax credits since 2007. He says the firms that buy larger tax credits, those worth more than $1 million, are typically Fortune 500 companies.

He also says the secondary market for tax credits is growing.

By some estimates, there are up to 200 state tax credits that are transferable or directly cashable (called refundable). Companies are selling their unused film credits, credits for historic preservation, job creation, renewable energy, even farmworker housing.

But O’Neill says, until now, the market’s been a bit of a black box.

“A lot of people were calling tax directors, and CFOs, and people they meet on the golf course, and try and sell them a tax credit,” he says. “And no one really had transparency with respect to the market.”

Now, O’Neill was preparing to list BETC on a new digital exchange, kind of like a Craigslist of tax credits. Buyers and sellers would be able to log in, click on Oregon, and then see BETC’s listing: a $647,190 credit available for 73.6 cents on the dollar.

Then, at the last minute, BETC sold the old fashioned way, off-exchange. O’Neill got a call from “a large, public, transportation equipment manufacturer.”

He described the buyer on the condition it not be named.

Still, O’Neill wants to nudge more tax credit business online. Moss Adams is one of at least half a dozen companies starting private exchanges through a platform called The Online Incentives Exchange, which also hosts a new public exchange.

“What’s critical is to bring the tax credit market into the modern era,” says OIX’s co-founder Danny Bigel.

Rob O’Neill agrees. “Everything’s moving to the web, and so I think it’s just a matter of time before the business community starts to accept that this is the way credits will transfer in the future,” he says.

Meanwhile a company with almost $2 billion in revenue gets a deal on a state tax credit. The Port of Portland gets to use BETC’s proceeds for its dredge project. Oregon achieves its energy efficiency goal, although it does lose more than half a million dollars in tax revenue from a business that might not need public help.

That’s all from the path of one little tax credit in a market of incentives worth billions.

Got an Oregon tax liability? This $2.6 million credit is available for 25 percent off.

D'oh! FXX will air 552 episodes of The Simpsons

Wed, 2014-08-20 08:00

In a crowded cable marketplace, FXX is trying to make a name for itself with a little help from Homer Simpson. 

The fledgling cable channel bought the syndication rights to The Simpsons, and on Thursday, it kicks off a 12-day marathon of 552 Simpsons episodes.

In September, FXX will run the episodes regularly, except for those getting their first run on FOX. FXX will also launch an app with special digital access to Simpsons shows.

“For FXX, it's almost like a coup to help them to create an identity early on,” says Tuna Amobi, Equity Analyst with S&P Capital IQ.

Amobi says The Simpsons' move to cable was highly anticipated and likely drew lots of bids. FXX, the winner, is another unit of the same parent company, 21st Century Fox. Amobi says the deal, whose terms were not disclosed, probably cost hundreds of millions of dollars.

Jonathan Taplin, Director of the Annenberg Innovation Lab at the University of Southern California, says the average person watches nine cable channels and has 400 to choose from, so FXX faces big odds.

But he thinks the Simpsons could give FXX some legs. And its digital presence could pull in revenue.

“They can attach a lot of advertising to it,” he says.

Taplin says it remains to be seen whether The Simpsons will compel viewers to stick around and watch other FXX shows.

Sam Craig, Director of the Entertainment, Media and Technology program at New York University, agrees.

“If the Simpsons can't do it,” he says, “it's a question of what else is out there that can.”

Economic lessons according to "The Simpsons"

In more than 20 seasons of "The Simpsons", there are more than a few lessons about business and the economy. So many, in fact, that the show has inspired academic papers on ways to use the show in the classroom and a new book, "Homer Economicus: The Simpsons and Economics." We scoured the web to find a few clips featuring lessons on business and the economy.

Lesson: Mobs shouldn't determine public spending

In this classic clip, a smarmy Harold Hill type, played by Phil Hartman, tries to convince the residents of Springfield to spend their unexpected surplus on a monorail. The song is a wry comment on mob mentality and public spending, as Marge points out there are many other places the town's resources could be used.

Lesson: Always consider opportunity cost

Speaking of trade-offs, Homer and the members of the local 643 (part of the International Brotherhood of Jazz Dancers, Pastry Chefs, and Nuclear Technicians) make one when they nearly give up their dental insurance for a keg at every meeting. Assuming Mr. Burns is being honest about his funds, this could be a lesson in opportunity cost. But of course he's not.

Lesson: Sometimes, a monopoly has advantages

Speaking of Burns, he looks for further expand his energy empire by blocking out the sun. Joshua Hall, editor of "Homer Economicus," writes that Burns' plan presents an opportunity to discuss the nature and advantages of a monopoly.

(Courtesy:MySimpsonsBlogIsGreaterThanYours.tumblr.com)

Lesson: Don't let other business determine your prices

On a much smaller scale, Bart learns some business basics when he tries to severely undercut bars by selling stolen beer at a nickel a cup. Had Homer not come home and wrecked the scheme, Bart would have soon run out of supplies and jacked up prices anyway.

Lesson: The law of demand always matters

Finally, for the advanced "Simpsons" economist, R. Andrew Luccasen and M. Kathleen Thomas write in their paper "Simpsonomics" that this clip illustrates — and bends — the law of demand.

Homer is sent to hell for his gluttony and the devil forces him to head "all the doughnuts" as punishment. The marginal benefit should drop into the negative over time, but Homer, of course, is no ordinary glutton.

PODCAST: Macy's settles profiling charge

Wed, 2014-08-20 07:40

After the shooting of unarmed teenager Michael Brown and the recent clashes in Ferguson, Missouri, racial profiling has returned to the national spotlight.

That department store chain Macy’s reached a $650,000 settlement Wednesday with the New York Attorney General’s office over racial profiling practices shows how deep the issue runs. This is the second settlement since 2005 for Macy’s, and the deal comes about a week after a similar agreement was reached with the Madison Avenue luxury store Barney’s.

Plus, the Dow could pass $17,000 again by labor day, but amid geopolitical crises all over the world, how is that possible?

And finally, British pubs have been closing at a rate of 31 a week, and that rate is accelerating. The Campaign for Real Ale is warning that a world-famous British institution is in danger of severe decline. The group has called for urgent measures to save the pub and preserve a valuable piece of the fabric of British life.

Macy's settles up in profiling case

Wed, 2014-08-20 06:55

After the shooting of unarmed teenager Michael Brown and the recent clashes in Ferguson, Missouri, racial profiling has returned to the national spotlight.

Department store chain Macy’s reached a $650,000 settlement Wednesday with the New York Attorney General’s office over racial profiling practices, which shows how deep the issue runs. This is the second settlement since 2005 for Macy’s, and the deal comes about a week after a similar agreement was reached with the Madison Avenue luxury store Barney’s.

The most recent investigation has found that African-American and Hispanic shoppers were detained at  “significantly higher rates” for alleged shoplifting than white shoppers.

Retail researcher Paula Rosenblum says racial profiling is frequently an afterthought in the industry.

“They mostly advise their store associates to watch out for people who look suspicious,” she says.

Milton Pedraza, founder and CEO of the Luxury Institute, says retailers have every incentive to train front-line and security staff so every customer feels welcome.

“Even if you didn’t have moral clarity on the issue, at least you should have economic clarity on the issue,” he says.

Pedraza says stealing a shirt is insignificant compared to the additional sales that come from building a reputation as a kind and generous merchant. 

For its part, Macy’s has agreed to make several changes, including an effort to improve its anti-shoplifting practices and plans to distribute an anti-racial-profiling memo to workers.

Simma Lieberman, who works with retailers on diversity and what she calls "cultural intelligence" says employers should know profiling is often unconscious. Lieberman trains her clients to monitor their own personal biases. Often, she says, shop clerks are quick to make assumptions, and “they don’t get to behavior, they just look at what somebody looks like.”

The danger, says Lieberman, is in our rush to judgment, when we “assume someone is going to have a certain behavior, which they may not have.”

Who created that app? A teacher

Wed, 2014-08-20 04:02

Laura Fenn was teaching fifth grade in North Carolina when her school cut back on physical education and recess. "They actually started to count time walking from the classroom to the cafeteria as physical activity time," Fenn says.

That gave her an idea:  create podcasts that students can listen to, and learn from, while they walk. You can find audio samples here.

Fenn’s nonprofit, The Walking Classroom Institute, is now her full-time job.

She’s one of many current and former teachers developing digital classroom tools.  

NoRedInk, BetterLesson, SmarterCookie are just a handful of education tech companies founded by teachers.

"It’s not until you’re in the classroom until you realize and really understand the pain points," says Benjamin Levy. He was teaching eighth graders in California and got frustrated that educational videos weren’t more interactive.  Now he’s CEO of eduCanon, which lets teachers add questions to online videos.

High school physics teacher Peter Bohacek was stymied by teaching physics from a book. "Physics is about the analysis of an event, not an abstract, contrived text description," he says. So he and Dr. Matthew Vonk created “Direct Measurement Videos,”which allow teachers to illustrate the basics of physics from the speed of sound to Newton’s Second Law.

Bohacek’s videos are free online. He wants to keep them that way.

But others see the booming market for education technology and want a piece of it. It's an $8 billion industry.

There's also a new distribution model that bypasses administrators and school districts.

"As a teacherpreneur it can be easy to get it in the hand of teachers, especially if it’s free, which appears to be the most teachers will pay for an app these days," said Frank Catalano, an edtech industry consultant.

He says the challenge for teachers is the challenge for most educational tech start-ups: how to turn a good idea into a sustainable business.

British pubs: popular but disappearing

Wed, 2014-08-20 03:25

British pubs have been closing at a rate of 31 a week, and that rate is accelerating. The Campaign for Real Ale is warning that a world-famous British institution is in danger of severe decline. The group has called for urgent measures to save the pub and preserve a valuable piece of the fabric of British life.

Stephen Langdon is one of a group of regulars trying to save his local — The Maiden Over in Reading — from closure.

“It will damage the community no question about it.” Langdon says. “ The pub has been a real focal point for the families and local community. If we lose it, there will be nowhere else for us to have a social evening in our neighborhood. There is no other pub within easy, convenient walking distance from where we live.”

Langdon's pub is scheduled to be turned into a supermarket. A similar fate befell Gareth Epps’ local pub, with negative consequences for his social life.

"I don’t see my friends so often now, I don’t see my neighbors so often." Epps says. "It means I lose the chance to pay cricket for my pub team. It diminishes the quality of life in our neighborhood."

Many of the pubs that have closed their doors were making money but not as much money as the supermarkets that replaced them. Indeed, supermarkets now pose a big competitive threat to pubs as retailers of booze.

"Supermarkets are selling beer so cheap that people on low incomes are driven into the arms of the supermarkets because pub beer is so much more expensive." explains Roger Protz, author of "300 Beers to Try Before You Die." "So people buy cheap beer from the supermarket and drink it at home.”

Adding to the plight of the British pub is a corporate malaise. The handful of big companies that own most of the pubs are heavily in debt and they need to sell off more of their assets. The supermarket chains are willing buyers.

CAMRA used the occasion of its annual Great British Beer Festival last week to highlight the threat to the British pub and to call for closure of what it calls a loophole in UK planning law.

"Something that is as intrinsic to British culture as the British pub can be closed down, can be knocked down, it can have its use changed, with no reference to the local community." CAMRA’s spokesman Tom Stainer says. The group wants a planning application to be required before a pub can be demolished so that the local community has a chance to save it.

The group has launched an unusual crusade for the sake of the country’s social health: to drive the British people back to drink, in a pub.

China levies record antitrust fines on foreign firms

Wed, 2014-08-20 03:21

In its latest effort to wield its power against foreign companies, China has levied more than $200 million in fines against a dozen Japanese auto parts makers for price-fixing.

German and American automakers are also being investigated. They were the largest fines placed on foreign companies in China since the government rolled out new anti-trust laws six years ago, and they're making a big impact on the world's largest auto market.

The investigation is the latest to target foreign companies within a select group of industries from pharmaceuticals to PR firms. CLSA analyst Scott Laprise says the investigation into price fixing among foreign companies in China's auto market is reasonable from a consumer perspective.

"If we look at it from a U.S.-style consumer protectionist view: What would you think if you found out your car was being sold two, three, four [or] in the case of some cars five times more expensive in another country?" Laprise asks. "Aren’t you taking advantage of that country?"

While some analysts may see this as the latest example of China's government unfairly targeting foreign firms, others point out that Chinese consumers are the fastest rising consumer group in the world, and this investigation is an effort on the part of China's government to protect them from unfair business practices.

 

China levies record antitrust fines on foreign firms

Wed, 2014-08-20 03:21

In its latest effort to wield its power against foreign companies, China has levied more than $200 million in fines against a dozen Japanese auto parts makers for price-fixing.

German and American automakers are also being investigated. They were the largest fines placed on foreign companies in China since the government rolled out new anti-trust laws six years ago, and they're making a big impact on the world's largest auto market.

The investigation is the latest to target foreign companies within a select group of industries from pharmaceuticals to PR firms. CLSA analyst Scott Laprise says the investigation into price fixing among foreign companies in China's auto market is reasonable from a consumer perspective.

"If we look at it from a U.S.-style consumer protectionist view: What would you think if you found out your car was being sold two, three, four [or] in the case of some cars five times more expensive in another country?" Laprise asks. "Aren’t you taking advantage of that country?"

While some analysts may see this as the latest example of China's government unfairly targeting foreign firms, others point out that Chinese consumers are the fastest rising consumer group in the world, and this investigation is an effort on the part of China's government to protect them from unfair business practices.

 

Uber launches home delivery service

Wed, 2014-08-20 02:39

Uber — the company known for on-demand taxi rides — is getting into the on-demand delivery business. Its foray into the delivery world is in Washington, D.C., where it has unveiled an experimental delivery service it calls Corner Store. 

Here's how it works: Say my baby is sick, and I need some infant cold medicine.

Uber will send one of its drivers out to pick up whatever I need. 

“Just think about a mom who’s at home with a sick kid and she doesn’t want to leave the child alone. It’s the perfect opportunity,” says Paula Rosenblum, managing partner at Retail Systems Research.

Rosenblum says Uber is competing with lots of other companies who are experimenting with on-demand delivery: Google, eBay, Walmart. And, of course, Amazon.

How can Uber compete with the likes of Amazon? Think of Amazon as a bus, and Uber as, well, a taxi.

“Amazon is going to have the low-cost delivery because of all those passengers on the bus, whereas Uber is going to have one package on the taxi, ” says Rob Howard, founder and CEO of Grand Junction, a company that provides software for shippers.

Uber is offering its Corner Store delivery service for free at first, although you have to pay for the products you order. If Corner Store becomes permanent, it'll have to charge for delivery.

While Uber may not be able to match Amazon’s low prices, but Howard says consumers may be willing to pay more to get stuff fast. 

More housing starts don't mean more first-time buyers

Wed, 2014-08-20 02:36

Home builders are having a party, thanks to a host of new numbers suggesting the backhoes and construction workers are busy. Home construction rose 22 percent over last year. Building permits are up 7.7 percent. And a measure of builders’ confidence has exceeded expectations.

But first-time buyers are largely absent. According to the National Association of Homebuilders, new buyers historically purchased around 30 percent of newly built homes. Now it’s around 16 percent.

“Underwriting criteria are tighter now,” says David Crowe of the association. “And that’s the age group that usually falls out if you are restrictive in terms of credit scores.”

Young buyers also face job instability, lower incomes, and increased down payments. One brokerage found the median down payment for starter homes rose from around $6,000 in 2007 to more than $9,000 last year.  

But first-timers are a key to unlocking the whole housing market. Susan Wachter, a professor of real estate at the Wharton School, says at some point, lots of first-timers will buy existing starter houses.

“When they come in the market, that’s going to give a boost to existing home sales,” Wachter says, “which will allow those who are in their homes, still not getting the price they want, still underwater, they’ll be able to sell. Then they’ll be able to buy the new homes, which tend to be trade-up homes. New homes are trade-up homes generally.”

It’s a cascade effect. And right now, new demand has to flow in.

Can Barnes & Noble find success with Samsung?

Wed, 2014-08-20 02:00

Samsung has unveiled a partnership with bookseller Barnes and Noble to create a new version of the Nook tablet, in a bid to compete with Amazon and their Kindle device. To get a read on whether such a device would work, we spoke to New York Times tech columnist Molly Wood.

Wood described the prospects for the partnership as uncertain at best.

“I would say that moderate non-failure is the best we can hope for right now,” Wood said.

However, she also noted that Samsung can make media and publisher deals that would bring more attention to the Nook, as competition in the tablet market is no longer is about the hardware.

Samsung and Barnes & Noble could even take advantage of the tension between Amazon and other publishers to negotiate deals, but this would likely lead to higher prices for consumers. 

Renewed attention on Terms of Service agreements

Tue, 2014-08-19 15:30

With the recent controversies over both Facebook and Google apps and their use of user data, Marketplace Tech host Ben Johnson joined Kai Ryssdal to talk about the power we give tech companies when we use their services.

Google’s location tracking data, for example, is key in the ongoing conversation about what permissions we give to apps.

“Depending on the app permissions and settings you've agreed to," Johnson says, "I could track your every move for any day you've had Google Maps running on your phone.”

This discussion has resurfaced because of Google’s Location History feature, which lists all location data the company has collected from your account. The good news is you can delete all that data by clicking on a link there.

Apple manages application permissions differently from Android; Google has the user accept conditions before downloading, while Apple uses “just-in-time” permissions, which allow the user to accept or deny permissions as one begins to use the app.

Terms of Service — a legal document which a consumer must agree to simply to use a website or service, let alone the mobile app — are another issue. Facebook's alone is is 4,500 words long. A recent study said it would take six weeks to read privacy sections in the terms of service for online services.

Health records are an easy target for identity thieves

Tue, 2014-08-19 13:46

Community Health Systems, a large hospital operator, got hacked. The word is Chinese hackers stole some 4.5 million health records from the company.  The files included everything from patient Social Security numbers to birth dates and addresses, a veritable goldmine of information for identity theft.

Healthcare providers have been digitizing our records to make everything from treating patients to filing for insurance more efficient. But in their rush towards efficiency, cyber security has gotten lost, says Stephen Cobb, a security researcher at ESET.

“I think a lot of the problem is cultural,” says Cobb. “Doctors and nurses get up and go to work everyday to help people" -  not to protect people from criminals, he says. “An example would be, 'how many hospital systems have chief security information officers'?”

His answer: not many. Plus, he says, many computer systems were put in place before cyber crimes became a real threat, and so a lot of those systems have holes.

Protecting medical records is more difficult than say, protecting your banking records, because they’re constantly being shared and transferred online, says Mac McMillan, CEO of CynergisTek.

“If you look at the average number of people who have access to your information in a hospital encounter, the number I’ve heard is around 150 people,” McMillan says. Each of those people are potential security threats.

Complicating cyber security even further is the "Internet of Things," says Michael Coates, director of product security at Shape Security. He says almost everything in a hospital is wired these days - from printers to “imaging devices or tablets being used by doctors on the wireless network."

Coates says many of these devices aren't secure, and if hackers can break into one device, they can potentially break into the whole system. 

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