Marketplace on RADIO IQ with BBC
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.
Tuesday, March 31, 2015 10:00am
The Case-Shiller 20-city housing price index for the month of January came out Tuesday morning—Home prices increased 4.6 percent percent over last year.
So, does that mean the housing market is on the rebound?
The answer is complicated, due in part to that basic economic rule: supply and demand. On the supply side, people anticipate interest rates going up, says Craig Lazzara, of the S&P Dow Jones Indices. So they think, “If I can borrow at 3 percent, that’s better than borrowing at 6, so I’m going to borrow today at 3,” he says.
Another thing driving demand: there’s not that much out there for sale, especially in the $200,000 range, which is the median right now.
Danielle Hale of the National Association of Realtors says a lot of people want to buy right now, especially millennials. As for supply, she says for one thing, smaller construction firms are running up against stricter borrowing regulations, “which is keeping that inventory lower than the market is calling for right now.”
So are housing prices going up because of a) an improving economy b) pent up demand or c) limited supply?
The answer: d) all of the above.
Tuesday, March 31, 2015 6:00am
Christine Holst teaches geometry and pre-calculus at Pioneer High School in San Jose, CA. Lately, she has been worried about one of her students. Holst says he asked for advice because he’s overworked and stressed.
“I just want my students to do the best that they can and make the best decisions for them and not comparing each other,” says Holst. “But then we live in this area where, how do we not compare? How do we not look at the house next to us compared to our own?”
You get the sense just being in Holst’s classroom that she has the ability to make pre-calculus fun. The walls are covered in homemade posters that are part inside joke, part math lesson.
“This is where I want to serve the community and what’s sad to me is I can’t serve my community and feel like I can live in my community. I feel like it has to be one or the other,” says Holst.
She and her husband, a sound engineer, have a young daughter; they make between seven and eight thousand dollars a month, but that’s not nearly enough to buy a home here.
“You need to earn about $140,000 a year to buy the median priced house. So homeownership is a real question in the future economy,” says Derecka Mehrens, executive director of Working Partnerships USA, a community labor organization just up the road from Pioneer High School. They recently issued a cost of living report on Silicon Valley. Data from the report showed that the vast majority of job growth was at the bottom.
“What we know is that for every tech job created there are four additional jobs in the regional economy created. What's unknown or not talked about is what the quality of those other four jobs are and who gets those jobs,” says Mehrens.
Christine Holst genuinely loves her job but her salary isn’t enough to have the traditional middle class life that she expected. “I am very grateful to live in this area. I think it has a lot to offer, but there’s not a lot of peace here. I love my students but it’s just the pressures of this area to do well and to succeed that I find challenging,” says Holst. “So if everywhere were like the Silicon Valley it would make me sad.”
That’s an especially harsh reality for Holst who grew up in the valley. Her family is from here, and she would like to stay.
Tuesday, March 31, 2015 6:00am
Following the annexation of Crimea, Russian President Vladimir Putin said he would intervene to protect ethnic Russians from persecution wherever they may be. So how about Latvia? The tiny Baltic state has a large and disgruntled Russian-speaking minority, representing more than a third of the total population of 2 million. Are they eager for secession? Could Latvia be Putin’s next target?
Many of Latvia’s Russians — who arrived in the country when it was still a part of the Soviet Union — are certainly disaffected today .
“As Russian speakers we are not welcome, we are not wanted in this country,” claims Latvian lawyer and activist, Elizabete Krivcova. “I was born in this country. It’s my country. But I’m treated as a foreigner here," she says. Native Russian speakers face restrictions on using their language in business and public life. They cannot get citizenship unless they speak Latvian. 300,000 of them are non-citizens.
“As a country, this is our key problem,” says Simona Gurbo, a political scientist at Rīga Stradiņš University. “Many of these people are living in a kind of cultural bubble. They don’t speak Latvian. They get their news from Russian TV and so they sometimes have no idea what is going on in Latvian politics but they follow closely everything that’s going on in Russia.”
The message from Russian TV is increasingly hostile to the west, to NATO, and to the European Union. Latvia itself has been described as a “failed state” in Russian broadcasts.
But while they are bitter and disillusioned over the relegation of their language to second class status, most Russian speaking Latvians express no desire to separate from Latvia and join the Russian Federation.
“No, no, no. Absolutely no. I wouldn’t like it,” insists Josiph Korens, another Latvian Russian activist. Korens was speaking on the sidelines of a march through central Riga commemorating the Latvian soldiers that fought with Hitler’s army against the Soviet forces during the Second World War. Korens was staging what he called an “anti-fascist protest” against the march, wearing a mock bio-suit. “I want to make the point that we must disinfect Nazism,” he says.
Korens denied an allegation by the police that he’d been paid by the Russian Federation to stage the protest as a way of embarrassing and weakening the Latvian state. “I am loyal to Latvia,” he says. “Russian speakers here are not trying to separate.”
A leading economist in Latvia agrees. Morton Hansen of the Stockholm School of Economics in Riga detects no real separatist sentiment among the country’s Russians.
“They have incomes that are, in most cases, better than in Russia,” he says. "And therefore there are not really that many reasons for wishing that you had something from Russia here.”
Tuesday, March 31, 2015 6:00am
The $12.8 billion merger between health insurer UnitedHealth Group and drug benefits manager Catamaran Corp. is the latest of a spate of deals in the pharmaceutical industry.
"Certainly it's been a trend that's been happening between manufacturers and supply chain partners," says Charles Rhyee, an analyst with Cowen and Co. "There's a lot going on in terms of jockeying for purchasing power."
Both drug buyers and sellers want to scale up to get more leverage as drug prices rise, says Rhyee. UnitedHealth and Catamaran, a pharmacy benefits manager, will control up to a fifth of the industry's business.
Mergers are also being driven by short supplies of certain generic drugs.
"There are companies out there acquiring manufacturing capacity for sterile injectibles, ophthalmology drugs, and topical drugs," says Donald Ellis of Avondale Partners.
Those particular types of drugs are hard to manufacturer and have few suppliers, says Ellis. And shortages could grow now that some foreign firms have left the U.S. market.
At the same time, George Hill of Deutsche Bank says the Affordable Care Act has meant more patients and more prescriptions, "which makes more companies comfortable that future revenue and earnings trends are sustainable."
Which means that mergers are likely to continue, analysts say.
Tuesday, March 31, 2015 6:00am
The market for streaming music just got more competitive: rapper Jay Z launched Tidal, his new service, this week. Tidal promises, “high fidelity sound quality, high definition music videos and expertly curated editorial,” as well as equity to musicians who decide to join Jay Z in owning the service.
Tidal will also not be offering any free content. Instead, it will offer two monthly subscriptions based on audio quality: $9.99 for standard compressed audio and $19.99 for higher quality files, such as CD.
“There are some of us audiophiles who believe that this higher quality audio is better but most people, including, for example, my mother-in-law just don't’ care,” says Ian Sherr, executive editor at CNET. “And Jay Z has got to convince us all that this is worth paying potentially more money.”
The only way Tidal can compete, Sherr adds, is if there are more “audiophiles” out there who would be willing to pay higher prices for better quality.
“What we do know is that the landscape is littered with people who have failed at this,” says Sherr. “And failed at streaming in general. It’s expensive.”
Does Jay Z offer no advantage? He does, according to Sherr: “Him. He has the Jay Z brand behind him. He also has the Beyonce brand.”
So far that’s helped him successfully court musicians for exclusive access to their tracks, at least for a limited time.
“That could be compelling,” says Sherr. “People love to be the first to hear things. People love to be the first to see things.”
Jay Z might be late to the game, but that doesn’t mean the move won't work. There are other pitfalls, however.
Says Sherr, “What Jay Z has at stake is obviously money, but also if he isn’t able to pull this off, it’s going to raise questions about, does the music industry understand how to actually sell to consumers?”