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Marketplace with host Kai Ryssdal produced and distributed by American Public Media focuses on the latest business news both nationally and internationally, the global economy, and wider events linked to the financial markets.
The only national daily business news program originating from the West Coast, Marketplace is noted for its timely, relevant and accessible coverage of business, economics and personal finance.
Monday, July 6, 2015 4:55pm
The fallout from Greece's vote on Sunday has continued into Monday morning, with Greek Finance Minister Yanis Varoufakis stepping down from his position. Here's an update on the situation in Greece:
- On Sunday, Greeks took to the polls to vote on a bailout deal, deciding against European austerity. As the New York Times reports, although the results may mean an even tougher road ahead for negotiations, it certainly solidifies Greeks' confidence in Prime Minister Alexis Tsipras.
- Monday morning, Greek Finance Minister Yanis Varoufakis announced his resignation, citing reports that the Eurogroup had expressed they would prefer not to negotiate with him any longer. As the Wall Street Journal reports, Varoufakis became known for a confrontational style that did not win him many allies in negotiations.
- Banks in Greece remain closed Monday. "The banks are the first fire that has to be put out. They're absolutely depleted of cash. They do not have a source of liquidity," says reporter John Psaropoulos of The New Athenian.
- The BBC reports that eurozone leaders have called an emergency meeting for Tuesday.
- TL;DR: Is Greece solvent yet? Nope.
Click the media player above to hear reporter John Psaropoulos' update on the situation in Greece from Athens.
Monday, July 6, 2015 4:54pm
Greek banks remained closed Monday, a day after citizens decisively voted no to the austerity terms of an international bailout.
The vote is considered a victory for Greek Prime Minister Alexis Tsipras, who says the country's leaders are prepared to go back to the negotiating table with the eurozone. The BBC reports that European leaders will meet Tuesday, but in the meantime, Greek banks will stay shut through Wednesday and capital controls have been in place since June 29.
"The banks are the first fire that has to be put out," says reporter John Psaropoulos of The New Athenian. "They're absolutely depleted of cash. They do not have a source of liquidity," he says.
Also Monday, Greek Finance Minister Yanis Varoufakis resigned, citing reports that eurozone ministers prefer not to negotiate with him. Varoufakis became known for a confrontational style that did not win him many allies in negotiations, according to the Wall Street Journal.
Greece failed to repay the International Monetary Fund $1.8 billion June 30, becoming the first developed nation to miss an IMF loan deadline. It’s not an official default yet, nor is Greece officially bankrupt, but the missed payment compounds an already fraught financial situation.
So how did Greece rack up $360 billion in debt with no way to pay it? Here are a few explanations:
- A “notoriously inefficient tax system” and complex pension system.
- The Syriza political party rise in power in January, promising to reverse austerity measures.
- “Unsustainable debts” amassed by pension payments and other public sector benefits.
And then there’s the human face of the crisis. From sole breadwinners to sandwich-makers to pharmacists, Greeks are struggling to keep afloat. They tell their own stories to Marketplace’s Stephen Beard.
Monday, July 6, 2015 7:00am
It's a new day in Greece after voters say no to deeper austerity. More on the latest in the ongoing financial crisis. Plus, if you've ever wondered why Styrofoam isn't recycled very often, it's because the economics don't work — Recycling needs markets for recycled materials. And as we find out, the global economy is putting stress on the markets that make recycling possible.
Monday, July 6, 2015 6:00am
The city of Chicago is cutting its public school budget by $200 million after making a major payment into its teachers' pension system.
The move comes just a couple of years after the city closed almost 50 elementary schools, in what was at the time a historic number of public school closures.
Still, the school district's budget problems persist.
"Chicago Public Schools faces a significant budget crisis," says Sarah Wetmore of the Chicago-based Civic Federation, a government watchdog group. Wetmore says the city's schools have had deficits that won't go away.
"The structural deficit has been in existence for some time, and it's been papered over by ... accounting gimmicks to balance the budget," she says.
The Chicago Public Schools' cash crunch got worse last week when the city had to make a pension payment of more than $600 million. The budget cuts followed a day after, including layoffs in mostly administrative positions.
"This could be the tip of the iceberg," says Jackson Potter of the Chicago Teachers Union. "The city hasn't laid down its hand to exactly spell out: is this the first of a wave of cuts?"
Chicago Mayor Rahm Emanuel is asking state lawmakers to change the pension system to relieve some of the city's burden. Emanuel is also floating the idea of a property tax hike to increase school funding.
The fate of those initiatives may decide whether there are further school budget cuts in the fall.
Monday, July 6, 2015 6:00am
Plastic foam is perfectly recyclable. There are machines the size of a refrigerator which can melt it down into blocks that can then be shipped to China and used to make patio furniture. Manufacturers who deal with large amounts of the stuff do recycle it, but in general, consumers don’t.
Why not? The economics just don’t work.
Its density is low, it’s often dirty and the price one can get for those blocks shipped off to China is not lucrative enough to motivate cities or recyclers to collect and recycle it.
Recycling could not be what it is today without the good will and conscientiousness of people all over the world. But recycling is made possible in the first place by markets. Aluminum, glass and plastic from recycling plants are sold by the ton as a raw material just like steel or wheat.
“This industry is based on creating markets for those recyclables — today's plastic bottle can become tomorrow’s carpeting,” says Sharon Kneiss, CEO of the National Waste and Recycling Association. Aluminum cans can go from recycling bin to new cans full of soda on store shelves in about 40 days.
But recyclers don’t set the prices at which they sell their materials. Those prices are set by the global market, and they have fallen drastically over the past year.
“On a lot of recyclables, the economics are starting to challenge it,” Kneiss says. “We have heard that from our industry over the past year plus. That because it is a commodity market, and the commodities are significantly challenged right now, the economics of recycling are also challenged.”
Robert Anderson, a regional business development manager for the Northeast and mid-Atlantic regions for ReCommunity Recycling, says he’s been in the waste industry for 30 years. “The current market environment has been the most difficult of my career,” he says.
He offers up a litany of price shocks to make the point: “We’ve seen highs in aluminum at $2,000 per ton. Until recently it was $1,800 per ton, and today we’re less than $900 per ton. Corrugated cardboard has gone from $200 per ton to $80 per ton. PET, the plastic water bottles, were $699 per ton, now $250.”
Anderson says the current downturn is different from previous ones — the recession saw similar price falls. “In the past they were brief, and we were able to sustain it and work our way through it and wait till commodity markets return,” he says. But he now worries this could be the new normal, “which means we need to rethink our business.”
There are other phenomena undermining recycling’s profitability — and even viability in some circumstances.
Many companies have made significant progress in reducing the amount of material used to make packaging, a practice called lightweighting.
“Today’s PET water bottle is 30 to 40 percent lighter than its brothers and sisters from even five or 10 years ago,” Anderson says. It’s a boon for resource conservation, but another burden for recyclers. “It takes 11,000 more aluminum cans to make a bale today due to lightweigthting than it did five or 10 years ago.”
Lightweighting has meant that the makeup of the stream of recyclable content has become less lucrative. More and more of it, by mass, is made of glass these days — one of the least remunerative recyclables.
The combined pressures have contributed to several recycler bankruptcies and plant closures.
Those pressures have also started to change the cost-benefit analysis of recycling versus old fashioned throwing away. In urban areas, recycling has long been cheaper than landfill dumping, which has its own fees associated with it, because the value of the material subsidizes the costs of disposal, and landfill fees are high (as much as $150 per ton). New York, for example, saves 20 percent on recycled waste versus non-recycled waste that goes to landfills or incinerators.
As recyclable materials have lost their value, landfills look more cost competitive, particularly in regions where landfill fees are cheaper, such as the Midwest. Landfill fees there can be as low as $20 per ton, according to Anderson.
In some instances, it has also contributed to commodities that have long been staples of recycling starting to go the way of plastic foam. The city of Harrisburg, Pennsylvania, is among several municipalities that have stopped recycling glass altogether.
If prices stay low, towns and cities will have to pay more to recycle or recycle less.