Marketplace - American Public Media

Rich and looking to invest? Don't buy a mansion

Thu, 2014-05-08 02:52

The highest end of the high end real estate market is buzzing. Already this year three homes in the U.S. have sold for more than $100 million. 

Just last week, a property in the Hamptons (outside New York) sold for $147 million -- the most ever paid for a single-family house in the U.S. Still, UCLA's Eric Sussman says real estate that gets this kind of attention is full of risk.

"I don't think any economist, any real estate expert ... would say that buying a $100 million home is a safe place to put your money. Because let's face it you're talking about a very scarce asset with very few potential buyers," says Sussman.

Below is a list of the top real estates sales in the U.S.: 

Address City State Price paid Date of sale 60 Further Lane East Hampton N.Y. $147,000,000 May 2014 Blossom Estate Palm Beach Fla. $140,000,000 Dec 2012 Broken O Ranch Augusta Mont. $132,500,000 2012 Copper Beech Farm Greenwich Conn. $120,000,000 April 2014 360 Mountain Home Road San Francisco Calif. $117,500,000 January 2013 Further Lane Hamptons N.Y. $103,000,000 2007 The Fleur de Lys Los Angles Calif. $102,000,000 2014

Credit/Compiled by: Miller Samuel Real Estate Appraisers

Jonny Greenwood's radio moves

Thu, 2014-05-08 01:36

Yeah, I'll admit it. I'm a Radiohead fan

We're a devoted lot, and because of that, we're pigeon-holed, stereotyped, etc. But everybody should have that one band they love, right? And because "The Bends" came out when I was in high school, Radiohead was that band for me.

I actually liked the later stuff better -- "Hail to the Thief" is my favorite album, the peak before the band's lesser works of recent years. But even better than the recordings were the live shows. Somehow, here was a group of musicians that was doing stadium rock without the Aquanet and tights.

A Radiohead live performance was truly odd and yet still had mass appeal. But I saw guitarist Jonny Greenwood do something in the early 2000s that really blew my mind. It gave me a new understanding of both improvisation and the art of making every performance unique. 

Greenwood pulled out a radio at the beginning of the song "National Anthem" and just started madly switching channels. Static spat, voices barked, music played over his brother Colin Greenwood's driving bassline -- it was awesome. And the beauty of it was that every time he pulled the move it was different.

In Germany, it was German radio. In Japan, the voices chirped in Japanese. Here's an example. 


Jonny Greenwood's move was part of the inspiration for this week's Marketplace Tech series Playing With Machines. Musicians are great ambassadors and early adopters of technology. Unless you're a staunch classicalist or a virtuoso on an acoustic instrument, you're always trying to figure out ways to make new sounds or bring forth new ideas.

That can mean picking up an instrument you don't understand, or trying to push an instrument you know to the limit for a surprising result. It can mean something as simple as playing to a metrinome, or something as complex as composing music for a robot guitarist with 78 fingers.

Like most artists, good musicians are a wonderful mix of technical ability and whimsy. So the way they think about and interact with technology is a treat to witness. 

Computers are jerks: a conversation with Dan Deacon

Thu, 2014-05-08 01:00

If you're going to see a Dan Deacon show, chances are the composer and electronic musician won't ask you to put your cell phone away. In fact, he'll probably encourage you to keep it handy. That's because having a smartphone loaded with Deacon's app turns the audience into a makeshift light show.

It looks something like this (skip to :55 to see the start of the show):

The app, made in conjunction with Wham City Lights, reacts to a tone which then syncs your phone to the next song in the set. It blurs the line between audience and performer in a way that Deacon enjoys -- rather than just going to see a show, attendees contribute to the performance. The app also invites smartphones into a concert setting, an area in which it is usually strictly banned. It's part of Deacon's M.O.: to use technology in a way that enhances his vision of what a Dan Deacon show should look and sound like.

This in spite of the fact that he also refers to the computer as "the biggest jerk I've ever worked with."

It overheats, it is unreliable, and it quits unexpectedly. Deacon points out, though, that it also has a right to be as fickle as it is, seeing as its advanced capability allows him to do so much with his compositions.

He also feels that technology is putting the music world on the precipice of its next big change:

"The last 100 years saw such an insane change in music, it's almost impossible to think about the next 100 years having any less. There was a time before music, there was a time before opera, and there was a time before what we're about to enter into."

More Americans going online to find cremation urns

Wed, 2014-05-07 22:00

Google. Amazon.—These aren’t the first places that people think of when planning a funeral service. But more people are shopping online for cremation urns. 

David Thompson lives in Carson City, Nevada, and he buys a lot of stuff on Amazon. Recently, he bought an urn a few days before his wife passed away. He was looking for a wider selection than what the funeral home offered.

“To be honest, I was really glad to be home, near my wife, while I was going through this process of finding her cremation urn,” he says. “The one that I chose just jumped off the computer screen and told me essentially that, ‘This is the right thing. This matches your wife’s personality'."

Cremation has become commonplace. Two years ago, 43 percent of Americans were cremated. By 2017, it’s expected, there will be more cremations than burials. 

In Traverse City, Michigan, Stardust Memorials has built its entire business around selling cremation urns online. Owner Jordan Lindberg started the company four years ago, after his father got sticker shock while looking for an urn for his grandmother. 

“I wasn’t interested in selling any kind of normal product, anything that you’re likely to find when you go into Target,” he says. 

Potter Phil Wilson is molding clay into an urn on the wheel. He and Gretchen Palmer of Spinner Ceramics are creating a line of ceramic urns for Stardust Memorials. 

Palmer says the handmade aspect offers a personal touch. “These are not made by a machine. They're all made by hand by Phil, with glazes that he mixed and he designed,” she says. Neither potter said they would purchase a cremation urn online. But the new work has made family members think about their final wishes. 

“When I told my mom and her husband what I was doing, they were like, ‘Oh, I wonder what color urn I would like.’ I was like, ‘Mom, seriously?'," she says.

Stardust Memorials did $1 million in sales last year, and expects to double that this year.

Coca-Cola cancels its 'You're on. Diet Coke.' campaign

Wed, 2014-05-07 14:40

In a Diet Coke ad released recently, a series of young people face nervy challenges — giving a speech, making a presentation, doing the best man’s toast at a wedding. Each has a cool, fresh pick-me-up — a Diet Coke — at their side.

Then, singer Taylor Swift is seen backstage before a concert. The stage manager steps into her dressing room and says “You’re on.” Which then echoes the tagline of the campaign: “Diet Coke. You’re On.”

But there’s a hitch. In print ads — on billboards and bus shelters — the campaign also tells short tales of young people taking risks — like moving to New York to become a DJ. Only in some of those ads, the tagline is reversed: “You’re on. Diet Coke.” And the word “Diet” appears off-baseline, in smaller red script, superimposed over a shadow from a soda can.

The result? That tagline can easily be seen as “You’re on Coke.” Which is exactly what some people pointed out and roundly made fun of. Which led to a series of parody print ads and flying tweets that adapt the drug-addled tagline to any number of dark-and-twisted up-your-nose scenarios.

“Whenever a brand puts its message out there,” says advertising professor Tony Kelso at Iona College, “if it’s open to interpretation, then they’re just asking for people to have fun with it. We’re in the age where we’re not just receiving advertising. Everybody is participating.”

Jack Myers is a media ecologist and author of the book Hooked Up: A New Generation’s Surprising Take on Sex, Politics and Saving the World. He says this generation of consumers “are digital activists who see content as a creative opportunity to express themselves and to fundamentally change the nature of the intended communication."

Myers says there’s an irony here: companies desperately want consumers to respond to, and interact with, advertising. They want them to contribute their own words and experiences about the companies' brands. They also want consumers to share — endorsements, ‘likes,’ links to ads — with friends and family. Yet, says Myers, some of those same brands are still trying to control what happens to their messaging after it’s released into the marketplace.

But he thinks that’s misguided and ultimately futile. “Advertisers just have to be comfortable being less careful,” says Meyers, “and letting the market take their messages and hack at will, and take the response with a grain of salt.”

Animal New York

According to the New York Times, Coca-Cola has pulled its “You’re On” campaign. The company didn’t respond to Marketplace’s request for comment by our deadline.

All the buzz and attention that Diet Coke is getting — even if some of it is negative — might be a positive for the brand. Diet Coke and the carbonated soft drink category in general need more young consumers. Those consumers are grabbing bottled water, vitamin-fortified water, juice drinks and especially energy drinks, instead of soft drinks. According to Beverage Digest, Diet Coke’s volume fell nearly 7 percent in 2013 from the year before; Diet Pepsi fell about the same amount. Diet Mountain Dew and Coke Zero have also slipped.

Stanford will divest stakes in coal. Will it matter?

Wed, 2014-05-07 13:38

Stanford will be the first major university to divest itself of carbon-producing fossil-fuel investments - but only coal producers. So how easy will it be for Stanford to cancel out coal-related investments? After all, coal is used widely by utilities and still generates nearly 40 percent of U.S. electricity. 

Kristoffer Inton, an equity analyst with Morningstar, says not investing in coal is as easy as "If you don’t want it -- don't buy it... Clearly if you don't want to invest in coal, you can not invest in the coal miners,” he says.

Companies that mine coal, like Peabody and Consol Energy, are listed individually on the S&P 500 so they’re easy to target, says Inton. But avoiding the energy source gets more complicated if you try to become a coal vegan, even avoiding companies that burn it – like steel manufacturers and utilities.

Inton notes that for investors, institutional or otherwise, not buying coal investments right now is not a hardship. Prices are down.

“Any time there’s been press on potential EPA regulations or anything like that, we’ve always seen a direct impact on coal miners’ stocks,” he says.

But even if more institutions like Stanford stop investing in coal, it’s not likely to have much impact on sellers. David Beard, managing director of energy equity research at Iberia Capital Partners, says look no farther than conscience investing campaigns of the past.

“I don’t see any real economic impact just given how the stock of Coke and Pepsi and Philip Morris have performed over time," he says. "And just because you sell a stock, it really doesn’t affect how much money a company has in their bank account to invest in their business.”

Beard says the bigger risk for energy companies would be a global carbon tax, which would raise the cost of electricity. But in the meantime, he notes, for coal producers, it's business as usual.

“It’s supply and demand, if the price is higher than the cost, people will mine it.”

Stock exchanges want Alibaba, bad

Wed, 2014-05-07 13:35

Alibaba is huge. We know that. It received $5.6 billion in revenue in 2013 with $1.6 billion in income, and has a nearly unheard of profit margin of 48 percent. 

You would imagine any stock exchange would be dying for Alibaba to decide to list with it. They do want Alibaba, bad. But not necessarily for the reasons you might think.

It’s not totally about the money. Yes, the stock exchange that hosts Alibaba will receive annual fees for being listed. And an exchange will also receive fees every time a stock is traded. 

But as far as stocks go, those fees are minimal. Listing fees top out at around $500,000 a year, for the largest of companies, and trading fees are on the order of hundredths of a cent per trade.

So why do exchanges care about listing Alibaba? Prestige. The flip side of prestige is advertising. If a huge flashy tech company like Alibaba lists with a certain exchange, that might attract other huge flashy tech companies to do the same.

Alibaba & the exchange windfall

Wed, 2014-05-07 13:35

Alibaba is huge. We know that.  It received $5.6 billion in revenue in 2013 with $1.6 billion in income, and has a nearly unheard of profit margin of 48%. 

You would imagine any stock exchange would be dying for Alibaba to decide to list with it.  They do want Alibaba, bad.  But not necessarily for the reasons you might think.

It’s not totally about the money.  Yes, the stock exchange which hosts Alibaba will receive annual fees for being listed. An exchange will also receive fees every time a stock is traded. 

But as far as stocks go, those fees are minimal.  Listing fees top out at around $500k a year, for the largest of companies, and trading fees are on the order of hundredths of a cent per trade.

So why do exchanges care about listing Alibaba?  Prestige.  The flip side of prestige is advertising.  If a huge flashy tech company like Alibaba lists with a certain exchange, that might attract other huge flashy tech companies to do the same.

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