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Sorry, former Treasury Secretary Tim Geithner

Tue, 2014-05-13 14:29

Former Treasury secretary Timothy Geithner has a new book out, as you may have heard. 

As part of the publicity campaign, the website Charitybuzz auctioned off lunch with Mr. Geithner today, with proceeds to benefit the RFK Center for Justice and Human Rights.

$50,000 was the winning bid.

Nice and all, but a good deal shy of the 2013 record holder... a $610,000 lunch with Apple CEO Tim Cook.

 

 

The high-tech shop teacher of the future

Tue, 2014-05-13 12:28

Now that much of the grunt work in American manufacturing is done by machines, we need skilled, high-paid workers to run those machines. Specifically, workers with more math and engineering knowledge than in the past. And the manufacturing industry worries that schools aren't teaching future workers what they'll need to know.

Educators are working with industry to change that; in some cases by combining cutting-edge technology with an old-school educational concept. Some of this thinking is in action in upstate New York, on the tech-focused campus of Hudson Valley Community College. A group of high school students is huddled around teacher Darrel Ackroyd, who is showing them a 3-D printer. As the machine whirs and slices out patterns, one student wants to know if it could print out a person.

"In a plastic form, yes," Ackroyd answers.

This cracks the students up and they immediately start joking about the possibilities of "3-D selfies." But they take their tech seriously, and they pepper the teacher with thoughtful questions about speed, cost and potential uses of the technology.

Ackroyd is young, with a hipster beard and man bun. Despite his techie image, he's also a kind of a throwback to a character these students' grandparents would recognize: the high school shop teacher.

Schools are bringing back this tradition of showing students how to work with their hands, this time with a high-tech twist. Now, instead of a crappy birdhouse and a mouthful of sawdust, students get hands-on technology experience that could help them land well-paying jobs.

"We're preparing our students for jobs that don't exist yet," says Laurel Logan-King, assistant superintendent at Ballston Spa Central School District.

Ballston Spa runs the program, but students in districts from around the region are eligible. They can get college credit studying here, which saves them (and their parents) money. But the big draw is the chance to get their hands on some of the latest technology, from nanotechnology to green energy.

The program, a partnership between high school, higher education and industry, is new, so educators often have to explain the benefits of working with technology that some find strange, maybe even scary.

"It's really about creating that awareness, not only for the students, but also for the parents, so that they can have an understanding about what are these new opportunities that are going to be available for my children," Logan-King explains.

Bringing students from around the region to a well-equipped college campus gives them the chance to have experiences like the realization student Morgan Pakatar had when she first suited up to enter a nanotech lab.

"I'm just, like, I feel cool, this is awesome, this is what I wanna do," she remembers.

That's what educators and tech companies hope for from programs like this: a new generation of workers excited about the jobs of the future, with marketable skills that only hands-on learning can provide.

Taking the retail sales number too seriously

Tue, 2014-05-13 12:02

The Commerce Department released monthly sales data for the month of April. The number is $434 billion, which means sales are up one tenth of a percent from March. But what does 0.1 percent really represent?

Marlene Morris Towns, a professor of marketing at the McDonough School of Business at Georgetown University, says the uptick from the previous month's data -- sales for March were about three times as much -- could be explained by spring. Because who wants to shop in bad weather?  

But interpreting a tiny number like the April over March sales increase isn't so easy, or even useful.

“I don’t know that a small trend like that would really say anything major about consumers,” Morris Towns says. “I think it gets tricky when you start looking at small differences from month to month rather than bigger trends.”

Like, year over year. She says comparing monthly numbers can be like finding a picture of Elvis in our toast -- we could be searching for non-existent patterns. And then trying to explain them away with weather, job numbers or holidays. 

"So when you look from month to month," she says "we’re looking for patterns that a lot of times aren’t necessarily patterns, they’re just kind of blips, or small shifts, but don’t really represent a change in consumer attitudes or comfort level with their income or economic status."

Barbara Kahn, director of the Baker Retailing Center at the Wharton School, says that's why many retailers, like JCPenney and Macy's, have stopped reporting their own month-to -month same-store sales.

“It used to be, I don’t know, how many stores reported? Maybe 20 to 30? It’s down to very, very few stores report now, precisely for that reason, because it doesn’t give a clear picture.”

But Kahn notes, the month to month data can be useful. “One of the reasons it’s been looked at so much in the last three, four, five years was to see the signs of the economy. Because retail sales was a very good indicator of whether or not we’re fully out of the recession, and if the economy is rebounding.”

 Kahn says, if you look at April’s sales compared to last year – the numbers are better. The Commerce Department says they're up by 4 percent.

Fannie and Freddie are easing up. Carefully.

Tue, 2014-05-13 11:56

The new head of the government agency that oversees Fannie Mae and Freddie Mac laid out a new game plan Tuesday -- a change in direction, designed to get banks to lend more. The way it works now, Fannie and Freddie buy mortgages from banks and guarantee them. But Fannie and Freddie make banks buy them back if there’s a problem, even if it’s just a minor paperwork glitch. 

Now, Fannie and Freddie will ease up. Carefully.

“Since any stumbles along the way could have ripple effects in the $10 trillion housing finance market, there’s a lot at stake in getting this right," says Mel Watt, the new director of the Federal Housing Finance Agency.

If Watt gets it right, analysts say banks will be more willing to lend to first time or low-income homebuyers. That's because they won’t be so worried about having to buy their loans back. Will Watt’s plan be enough to rev up the housing market, which has been limping along in second gear?

“Well I think it’s going to stop us from going in reverse,” says Tim Rood, a former executive at Fannie Mae, now chairman of the Collingwood Group. 

But if the housing market speeds up too fast, will it overheat? Not a chance, says Guy Cecala, publisher of Inside Mortgage Finance. 

“We’re still nowhere near the speed limit," he says. "If the speed limit is 65, we’re still going along at 45, but it’s better than 30 or wherever we were at before." 

Cecala says, even with Watt’s changes, banks will still be cautious.

In North Dakota, making ribs for roughnecks

Tue, 2014-05-13 11:52

North Dakota's the land of opportunity for people looking for jobs in the oil and gas industry.

The fracking boom has transformed the western part of the state -- often overwhelming the small towns that dot the prairie. Todd Melby's been keeping track of the comings and goings of workers in the oil field.

Recently, he talked to a Razorback who moved there to make ribs for roughnecks, a guy named Oscar Everetts. You can take Oscar out of Arkansas, but you can't take Arkansas out of.... You know how it goes.

Todd Melby's series, "Black Gold Boom," is an initiative of Prairie Public and the Association for Independents in Radio.

Google vs. the 'Right to be Forgotten'

Tue, 2014-05-13 11:49

If you’ve ever Googled yourself and discovered some not-so-flattering photos from, say, the 2001 office Christmas party, or a break-up poem you published in the college online magazine, you’ll likely find this of interest: Today the European Union’s highest court ruled that individuals can ask Google, Bing, Yahoo, or any other major search engine to remove links that come up when their name is searched.

It's the so-called "right to be forgotten."

The European court said because search results have such a major impact on people’s lives, people should have the right to have certain material removed.

"You talked about your credit report, this is your Google report," says Danny Sullivan, founding editor of Search Engine Land. "On a personal basis, that’s a big impact for some people. There are cases where many people would be sympathetic to the idea that there’s something unflattering about them that’s also old or perhaps outdated."

One of the plaintiffs in the EU case is a surgeon, who requested the removal of a 1991 article, about an operation he’d performed that had gone badly. "There are a number of gray areas here that pit the right of the individuals to control his or her reputation against the public’s right to know," says Greg Sterling, an analyst with Opus Research in San Francisco.

What about this country? Can Americans expect to request the removal of bad haircuts and DUIs?

"No, not at all," says Sterling. "In the U.S., the First Amendment would prevent such an outcome. They [the EU] see any data associated with an individual as personal, private information and the view in the U.S. is more skewed toward making that information not the property of an individual, but something that can be utilized by other parties."

Search engine companies would not have to comply with every request, and it's so far unclear how exactly the ruling will play out.

Google told Marketplace that it was disappointed in the decision, but needed time to analyze the implications.

How Sega broke Nintendo's monopoly on video games

Tue, 2014-05-13 10:34

Chances are, if you've ever played a video game in your life, you've heard of Sonic the Hedgehog, Super Mario, or both.

Before they started appearing in video games together, though, their parent companies were a whole lot less friendly, sparking what is now widely known as the "console wars."

In the early '90s, Nintendo was a video game giant, holding 90 percent of the market. Sega, meanwhile, was fighting other companies for the other 10 percent. 

"And they got absolutely whooped," says Blake Harris, author of the book "Console Wars: Sega, Nintendo, and the Battle That Defined a Generation". "Things weren't going well until [then-CEO of Sega] Tom Kalinske* took over, and a certain blue hedgehog began to change their fortunes."

That certain blue hedgehog was part of Sega's strategy to knock Nintendo down a peg or two.

"To take down Nintendo, they really wanted to create a Mario-killer," Harris said. "So they held an internal mascot contest, and the selection that won was this hedgehog that was called Mr. Needlemouse originally."

And, for a few years, it worked. Sega went from holding just five percent of the domestic video game market to 55 percent at one point. Mr. Needlemouse, later rechristened as Sonic the Hedgehog, is still as pervasive as ever. Sega, on the other hand, not so much.

"As much as we remember Sega as successful on this big battle against Nintendo in America, Sega in Japan never surpassed 25 percent," he said. "I think there was enmity, jealousy, and spite at times, which led to Sega cutting off the nose to spite the face. And that spite really led to Sega's downfall."

*CORRECTION: In a previous version of this story, Tom Kalinske's last name was misspelled. The text has been corrected

A week to make you miss manners

Tue, 2014-05-13 09:46

From the Marketplace Datebook, here's a look at what's coming up Wednesday, May 14:

In Washington, the Labor Department releases the Producer Price Index for April.

Macy's is scheduled to report quarterly earnings.

Hold that door, dude. National Etiquette Week continues.

On May 14, 1973, America's first space station was launched into orbit. Skylab was a home away from home for three crews.

And she recently won an Oscar for her work in "Blue Jasmine." Cate Blanchett turns 45.

Do Quora, Jelly and Ask.com answer things correctly?

Tue, 2014-05-13 07:47

There is a TV screen in Kartik Ramakrishnan's office that displays an endless loop of questions. He is the COO of Ask.com, which you may remember from the early '90s as the search engine Ask Jeeves. One question scrolling over his screen reads, “What causes hiccups?”

That, Ramakrishnan says, is a question everyone has either wondered about or been asked. Ask.com is hoping it can be the go-to place for the answer. We'll give you the answer about hiccups later. First though, some history.

In the early days of the web, Google crushed competitors in the search engine market and established itself as the entry point for the internet. Ramakrishnan talks ruefully about scars from Google's thorough lashing. After some soul-searching, Ask.com decided to refocus.

“We are the granddaddy of going to ask the world how to answer questions,” Ramakrishnan says. So the company decided it should re-brand itself as a question-and-answer site. Ask.com may be the granddaddy, but there are plenty of upstarts.

Social networks, search engines, and new apps are trying various strategies to answer your questions. At the same time, all of them have one big question to answer for themselves. If someone wants to know something, why shouldn't they just Google it? Ramakrishnan is quick to point out, “there is not one way in which you can actually come up with answers to peoples' questions.”

Google's search engine framework has limitations that are being exploited by a new wave of companies. For instance, with Google you can't use your phone to pose a question with a picture. You also can't ask for responses from experts or friends.

Venture capitalists think these approaches have the potential to make some money. The website Quora is a good example. It operates kind of like a social network. Users can post questions, write answers, and vote up responses they like. Venture capitalists recently poured an additional $80 million of investment into the site.

Quora has found an essentially free way to generate content. Like Wikipedia, it is all written by users, like Alon Amit. He says, “I can't stand seeing an answer or someone needing an answer that I have and not responding.” Quora encourages users to produce answers by acknowledging top writers and fostering social interactions.

Quora currently has no revenue stream, and it relies on the social network for its content. If that network falls apart, so does the site. Venture capitalist Josh Elman says an investor might take the risk with a company like this because they believe there is a, "fundamental behavior that is happening in the product that someone will pay for.”

Plus, there is a fallback plan. Even if Quora's content, data, or interactions cannot be leveraged somehow in the future, the company could always just put up advertising on the site.

Elman is putting his money where his mouth is—not in Quora, but in the company called Jelly. His firm, Greylock Partners, has invested in the new mobile question-and-answer app.

Jelly allows people to take a picture on their phone and use it to ask a question. Imagine, Elman says, someone has an emergency with a leaky pipe. The person snaps a picture of it, and asks what's wrong. A nearby plumber replies with a solution. Elman believes this kind of connection could one day generate revenue.“I think that there are just so many questions that aren't just easily answered by a three or four word search, because the answer isn't always on a website,” he says, “the answer might be in somebody's head.”

Quora and Jelly are taking two different approaches to answering questions, and in the end, they yield different results. Quora provides opinion and community, while on the other hand, Jelly provides solutions to local problems. While they both deal with questions, their users are seeking fundamentally different results. Ramakrishnan thinks that's the key to this whole business: understanding what users are really asking for. And that's no easy task.

Ramakrishna says over the years we have all become so “Googlized,” that we expect to prod the Internet with a few keywords and get results. He thinks of these keywords as under-formed questions that need to be fleshed out. Does the user want concise information? Opinion and community? Maybe all the person needs is a good local plumber. He says “our angle on this is, 'Lets do a better job at helping the user craft and formulate what those questions themselves might be.'”

Ask.com throws a wide net for answers. They give search results, peer-written responses, even content they pay to produce. But not everyone is pleased.Computer scientist Jerry Feldman is a particularly harsh critic. "The notion that either an automated system or some social networking system will be a reliable source of information about everything you want to know is very unlikely," he says. People aren't even that good at figuring out what other people want, Feldman argues, so it's an extremely difficult task for a computer.

But there is money to be made even without all the answers. Companies just need to figure out what it is their users want, and find some way to reliably deliver it.

By the way, Ask.com can tell you what causes hiccups. It's a lot of things: carbonated beverages, an irritated diaphragm, alcohol.

As for why we get them? Well, some things we still don't have a good answer for.

Is there a better way to find answers than 'Googling'?

Tue, 2014-05-13 07:47

There is a TV screen in Kartik Ramakrishnan's office that displays an endless loop of questions. He is the COO of Ask.com, which you may remember from the early '90s as the search engine Ask Jeeves. One question scrolling over his screen reads, “What causes hiccups?”

That, Ramakrishnan says, is a question everyone has either wondered about or been asked. Ask.com is hoping it can be the go-to place for the answer. We'll give you the answer about hiccups later. First though, some history.

In the early days of the web, Google crushed competitors in the search engine market and established itself as the entry point for the internet. Ramakrishnan talks ruefully about scars from Google's thorough lashing. After some soul-searching, Ask.com decided to refocus.

“We are the granddaddy of going to ask the world how to answer questions,” Ramakrishnan says. So the company decided it should re-brand itself as a question-and-answer site. Ask.com may be the granddaddy, but there are plenty of upstarts.

Social networks, search engines, and new apps are trying various strategies to answer your questions. At the same time, all of them have one big question to answer for themselves. If someone wants to know something, why shouldn't they just Google it? Ramakrishnan is quick to point out, “there is not one way in which you can actually come up with answers to peoples' questions.”

Google's search engine framework has limitations that are being exploited by a new wave of companies. For instance, with Google you can't use your phone to pose a question with a picture. You also can't ask for responses from experts or friends.

Venture capitalists think these approaches have the potential to make some money. The website Quora is a good example. It operates kind of like a social network. Users can post questions, write answers, and vote up responses they like. Venture capitalists recently poured an additional $80 million of investment into the site.

Quora has found an essentially free way to generate content. Like Wikipedia, it is all written by users, like Alon Amit. He says, “I can't stand seeing an answer or someone needing an answer that I have and not responding.” Quora encourages users to produce answers by acknowledging top writers and fostering social interactions.

Quora currently has no revenue stream, and it relies on the social network for its content. If that network falls apart, so does the site. Venture capitalist Josh Elman says an investor might take the risk with a company like this because they believe there is a, "fundamental behavior that is happening in the product that someone will pay for.”

Plus, there is a fallback plan. Even if Quora's content, data, or interactions cannot be leveraged somehow in the future, the company could always just put up advertising on the site.

Elman is putting his money where his mouth is—not in Quora, but in the company called Jelly. His firm, Greylock Partners, has invested in the new mobile question-and-answer app.

Jelly allows people to take a picture on their phone and use it to ask a question. Imagine, Elman says, someone has an emergency with a leaky pipe. The person snaps a picture of it, and asks what's wrong. A nearby plumber replies with a solution. Elman believes this kind of connection could one day generate revenue.“I think that there are just so many questions that aren't just easily answered by a three or four word search, because the answer isn't always on a website,” he says, “the answer might be in somebody's head.”

Quora and Jelly are taking two different approaches to answering questions, and in the end, they yield different results. Quora provides opinion and community, while on the other hand, Jelly provides solutions to local problems. While they both deal with questions, their users are seeking fundamentally different results. Ramakrishnan thinks that's the key to this whole business: understanding what users are really asking for. And that's no easy task.

Ramakrishna says over the years we have all become so “Googlized,” that we expect to prod the Internet with a few keywords and get results. He thinks of these keywords as under-formed questions that need to be fleshed out. Does the user want concise information? Opinion and community? Maybe all the person needs is a good local plumber. He says “our angle on this is, 'Lets do a better job at helping the user craft and formulate what those questions themselves might be.'”

Ask.com throws a wide net for answers. They give search results, peer-written responses, even content they pay to produce. But not everyone is pleased.Computer scientist Jerry Feldman is a particularly harsh critic. "The notion that either an automated system or some social networking system will be a reliable source of information about everything you want to know is very unlikely," he says. People aren't even that good at figuring out what other people want, Feldman argues, so it's an extremely difficult task for a computer.

But there is money to be made even without all the answers. Companies just need to figure out what it is their users want, and find some way to reliably deliver it.

By the way, Ask.com can tell you what causes hiccups. It's a lot of things: carbonated beverages, an irritated diaphragm, alcohol.

As for why we get them? Well, some things we still don't have a good answer for.

PODCAST: The shoppers who never showed

Tue, 2014-05-13 06:50

Forecasters were expecting a spike in retail sales during April. The government said there was nothing of the kind. Retail sales last month rose just a tenth of a percent, with consumers proceeding cautiously, despite warmer weather. Taking out volatile spending on cars, gasoline and food, so-called "core" retail sales fell slightly. Not exactly a boom in the making.

Meanwhile, economic data from China covering April suggested across the board weakness in economic activity there -- from output to investment to consumption -- all missing the expectations of experts. These are leading to renewed calls for Beijing to ease up on its efforts to rein in its bubbly credit markets.  Marketplace regular Christopher Low, the chief economist at FTN Financial in New York is traveling in Hong Kong and joins us to discuss.

Representatives from Vallejo, California are visiting the White House Tuesday to talk about "participatory budgeting," a unique democratic process where residents propose and choose city-funded projects. Residents in this small San Francisco Bay Area city voted-in participatory budgeting after the city went through a bankruptcy in 2008. A small portion of the city's overall budget is allocated to the process, made available through a sales tax. This year, residents have $2.4 million to work with.

 

New book tells of China's modern awakening

Tue, 2014-05-13 04:12

If someone forced you to name the biggest economic and social transformation of the last 35 years, what would you say? The internet, probably.

But what about China, where more than half a billion people have moved up from poverty? Like so much good writing about vast topics, New Yorker writer Evan Osnos tells it from the grassroots.

Osnos' new book, Age of Ambition: Chasing Fortune, Truth and Faith in the New China is out today. Click the above audio player to listen to our discussion.

New books tells of China's modern awakening

Tue, 2014-05-13 04:12

If someone forced you to name the biggest economic and social transformation of the last 35 years, what would you say? The internet, probably.

But what about China, where more than half a billion people have moved up from poverty? Like so much good writing about vast topics, New Yorker writer Evan Osnos tells it from the grassroots.

Osnos' new book, Age of Ambition: Chasing Fortune, Truth and Faith in the New China is out today. Click the above audio player to listen to our discussion.

Weak retail sales and the danger of discounts

Tue, 2014-05-13 02:50

(Story updated Tuesday, May 13, 2014; 9 am P.T.)

A new report shows that April's retail sales increased 0.1 percent. That's a surprisingly weak report -- and follows a strong showing in March, when sales jumped 1.1 percent.

That followed dismal sales numbers earlier in the year, attributed to the nasty winter weather that kept shoppers in many states indoors. Syracuse University retail professor Amanda Nicholson says retailers she talks to are "much more hopeful. People are actually smiling occasionally because the warmth brings people out."

But nice weather only goes so far in making the sale. Many who follow the retail market are concerned that stores are being forced to aggressively slash prices.

"To get people enticed, it seems to take a lot more effort than it used to," says Morningstar economic analysis director Bob Johnson.

Now we all love deals, but stores having to resort to massive sales can signal troubling news about shoppers' lives. If consumers aren't buying until they see a 50 percent off tag, that could mean they're still hurting financially.

If consumer hesitancy affects retailers' bottom lines, stores could cut back on hiring, expanding and investing, affecting the larger economy.

Some retailers may be smiling a little bit more often as they enjoy the sunshine, but there will need to be several months of sustained retail strength before those grins become widespread.

Retail numbers and the danger of discounts

Tue, 2014-05-13 02:50

UPDATE, 8:30AM ET April 15, 2014: A new report shows that U.S. April retail sales increased 0.1%.

Original story:

April's retail numbers could follow a strong showing in March, when sales jumped 1.1 percent.

That followed dismal sales numbers earlier in the year, attributed to the nasty winter weather that kept shoppers in many states indoors. Syracuse University retail professor Amanda Nicholson says retailers she talks to are "much more hopeful. People are actually smiling occasionally because the warmth brings people out."

But nice weather only goes so far in making the sale. Many who follow the retail market are concerned that stores are being forced to aggressively slash prices.

"To get people enticed, it seems to take a lot more effort than it used to," says Morningstar economic analysis director Bob Johnson.

Now we all love deals, but stores having to resort to massive sales can signal troubling news about shoppers' lives. If consumers aren't buying until they see a 50 percent off tag, that could mean they're still hurting financially.

If consumer hesitancy affects retailers' bottom lines, stores could cut back on hiring, expanding and investing, affecting the larger economy.

Some retailers may be smiling a little bit more often as they enjoy the sunshine, but there will need to be several months of sustained retail strength before those grins become widespread.

Pinterest starts selling Pins to business

Tue, 2014-05-13 02:45

Pinterest, the social media site where people build collections, said this weekit will start taking paid ads for the first time. They're called "Promoted Pins," and look a lot like the other content on the site.

With millions of users, will this be Pinterest's golden ticket? For a company valued at nearly $4 billion, but still not making money, selling ads is a smart move, says Noah Abelson, CEO of Shareroot, which works with brands to promote themselves on Pinterest.

"You express yourself through what you're interested in," Abelson says.

And because Pinterest is about interests, he says, "It's very, very easy for a brand to be a part of that conversation."

General Mills, Target, and Banana Republic are among the companies buying promoted pins. The price could be more than $1 million, depending on how many people the ads reach. Pinterest has tens of millions of users.

"So if you're a cosmetics company or a fashion company, it could be very, very effective to advertise on Pinterest," says Karsten Weide an analyst with IDC. On the other hand, he says Pinterest has a limited audience: mostly younger women, with kids.

'Participatory budgeting' goes to the White House

Tue, 2014-05-13 02:40

Representatives from Vallejo, California are visiting the White House Tuesday to talk about "participatory budgeting," a unique democratic process where residents propose and choose city-funded projects.

Residents in this small San Francisco Bay Area city voted-in participatory budgeting after the city went through a bankruptcy in 2008. A small portion of the city's overall budget is allocated to the process, made available through a sales tax. This year, residents have $2.4 million to work with.

That pot of money has sparked ideas. On a weekday evening in February, about 60 residents broke up into small groups at Glen Cove elementary school for a brainstorming session. They proposed everything from more street lighting to a day-use center for the homeless. One 28-year old resident proposed an outdoor fitness center.

"Similar to Venice Beach, like a 'muscle beach' type, but at the waterfront," says Vincent Trujillo.

Other Vallejo residents want a public bank, more ice cream trucks and meditation classes to end student truancy.

"Often participatory budget events are quite cathartic," says Alea Gage, an administrative analyst at the city manager's office who acts as a liaison for the participatory budging process.

Gage says residents may even have fun while getting closer to government.

"At our final [brainstorming] assembly... we had Motown tunes on, and we even got some of our city council members to boogey a little bit," says Gage.

Vallejo residents are now in the process of wittling down 620 ideas. The projects go for a city-wide vote in October after nine months of work shopping. Last year, potholes and street repair got the most city-wide votes.

"Potholes represent a basic level of service, and they indicate quality of life," says Gage.

But participatory budgeting is not just repairing streets. City Manager Dan Keen says it's also restoring confidence.

"What we earned was some good will, from... a segment of the community that 'the city cares about us, they want to know what we have to say, and when we give them our feedback, they followed through and they did what we asked,'" says Keen.

Keen says at first, he didn't believe residents would show up for something as mundane as city budgeting.

"I was dead wrong about that," he says.

One city council member says residents need to use the process or they might lose it. Less than 600 people showed up for the brainstorming sessions.

The challenge for them is fitting their imagination inside city limits.

A canary in the coal mine... and in your Mac

Tue, 2014-05-13 01:00

Canaries can be useful creatures. Coal miners used to bring them into the mines as a warning sign of methane or carbon monoxide. A dead canary meant the miners needed to get out of there pronto.

Now a clever loophole in the rules regarding NSA requests for information is letting companies warn their customers in the same way a little yellow bird might signal trouble. 

It's called a "warrant canary", and several major companies like Apple have already used it in their "transparency reports."

The idea is that while the NSA can enforce rules on companies to not tell their customers when their information has been acquired, it is still within a company's rights to tell their customers what they haven't been asked. If a transparency report gets released without a statement saying that the NSA has not requested information, then a customer can infer that the request has been made.

The idea originated from a public library that posted a sign on its door each day saying that the Government had not yet asked for any information on the patrons. The insinuation was that if ever the library did not post the sign, it meant that the NSA had made a request.

According to Jonathan Zittrain, Professor of Law at Harvard and co-founder of the Berkman Center for Internet and Society, it's not only a clever way to let customers know if their information may have been acquired by the NSA, but also a way for the private sector to agitate Government agencies on the issues involved in privacy.

"To mix my fowl, it’s a game of chicken played with a warrant canary. Under the first amendment, it may well be much more dicey for the government to insist that a company lie rather than to tell a company it may not speak."

Explainer: Why dollar cost averaging is stupid smart

Mon, 2014-05-12 23:32

Retail investors – you know, people like you and me and the guy next door who day-trades in his PJs – are investing again. In an interview with Fox Business, TD Ameritrade president and CEO Fred Tomczyk described individual investors as "more bullish now than at any time since we started measuring."

"The retail investor is definitely back, our trades in the first quarter, the March quarter, were up 30 percent year-over-year," he told Fox Business. "They have been coming in increasingly over the last nine months."

Tomczyk said the conditions in the market are perfect for retail investors right now.

"They are getting lower trading commissions. They're getting lower bid ask spreads. They're getting quicker execution. There is a lot of liquidity in the market," he said.

But are we keeping it simple?

Are we sticking to tried and true investing strategies like using tax advantaged investments, diversification and my personal flavor of the month, dollar-cost averaging?

Maybe. And maybe not.

Tomczyk says we retail investors are using risky strategies like buying on margin, which means borrowing money to make wagers on stocks. That's the kind of risky behavior that led to the financial crisis, and in an environment when the stock market feels a bit frothy, isn't going to change the way institutional investors see individuals: as "dumb money."

Why are we so dumb?

Because we do the opposite of what the pros think they should do. We're supposedly always late to the game; we supposedly always buy high and sell low; we supposedly always buy stocks when we should be snagging bonds, and pile into bonds when stocks make most sense.

We're certainly doing the polar opposite of the professionals right now. Banks are  increasingly moving out of the trading business, peppered by the twin shotgun barrels of harsh regulation and heavy losses. Trading just isn't profitable anymore – or at least it's not as profitable as it was – and the stock market is seen as rigged by high-frequency trading firms. So anyone getting into trading right now must be dumb, right?

Well, hold on there. If you want to be the kind of investor who's trading in and out of stocks all day long, and trying to compete with the big guys – like that guy in his PJs – then maybe you are at a disadvantage (actually, let's be honest, there's no maybe about it – that particular game IS rigged).

But most retail investors aren't that guy. Most of us are doing things the simple way, in many cases managing our own money because we can't trust professionals who are increasingly compromised and conflicted by their relationships with the makers of the financial products they shill.

Most of us are using the dead simple, tried and true methods of long-term, diversified investing that really build wealth over time. If that makes us dumb, than I'm happy to be called stupid.

A star-studded plea for ad money

Mon, 2014-05-12 14:07

Each year, the leading TV networks stage star-studded events displaying their best new programming and most reliable talent to advertisers. And while "The Upfronts," currently underway in New York City, can be great entertainment for those invited, they are also a competition for billions of dollars in ad revenue. On Monday, at the NBC upfronts, buzz surrounded the forthcoming show, "State of Affairs," starring Katherine Heigl.

The formula: well-known movie star + popular genre (the national security spy thriller) = likely to pique the interest of advertisers. 

When the upfronts have finished, negotiations begin. 

"The advertisers meet with sales representatives of the networks and they negotiate how many commercials they're going to buy, [and] what the cost [is] going to be," said Brad Adgate, the Senior Vice President for Research at Horizon Media, who says more than $20 billion in ad revenue is at stake. 

The spectacle of the upfronts hasn't changed much over the years. But these days, due to competition from digital endeavors, advertisers are shying away from a quick committment. 

"It's really because of the TV marketplace in general," said Jeanine Poggi, who reports on television for Advertising Age. "We talk about the other digital opportunities that are out there. And the ability to shift some money out of TV and into digital." 

Digital producers like Maker Studios, Hulu and Buzzfeed, have grown so powerful that they now have their own version fo the upfronts, called the NewFronts, which took place last month. 

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