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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 21, 2014 5:29pm
The Transportation Security Administration is increasing the fees it assesses travelers to $5.60 per leg of your flight.
What's that mean? If a layover is more than four hours, then the TSA considers that to be two trips and assesses the fee again. So, that could mean about $22 extra on your layover flight. That made us wonder what are we paying for air travel these days.... besides the actual airfare, that is.
Let’s say you’ve got a $500 round trip ticket from New York City to Los Angeles with a long layover in each direction, here's what you'll be paying.
(Numbers courtesy of Airlines for America.)
TSA 9/11 Fee: $5.6 per segment x 4 = $22.40
Federal Aviation Excise Tax: 7.5% = $37.50
Flight Segment Tax: $4 per segment x 4 = $16.00
Airport passenger facilty charge: $4.50 per segment x 4 = $18.00
Effective Tax Rate: 18%. This can vary depending on how many layovers and how expensive your fare is. If this example fare were for a direct flight, for example, it would be taxed at an effective rate of 9 percent.
Flying international? International flights have a whole additional set of fees depending on the country and the airport, and these fees can range into the hundreds of dollars.
And let us not forget the fees for some kind of basic rudimentary comfort, says airline analyst Robert Mann, Jr:
Want to pick your own seat? $0 to $25
What about a seat with legroom? $25 up to hundreds of dollars
Check a bag? $0 to $80
Oh, you want to carry on that bag? $0 to $100
Hungry? How does $5 for a snack and $15 for a sandwich sound?
The TSA has said historically, it spends significantly more money on aviation safety than it receives from airlines or passengers. However, the revenues raised from government fees and excise taxes do not directly go to their supposed purpose, says George Hobica, founder of AirfareWatchDog.com.
“A lot of the money actually ends up in the general fund to reduce the deficit and never sees its way as was intended to improve air travel.”
Monday, July 21, 2014 5:29pm
The quarterly earnings report from Netflix came out this afternoon and Netflix did just fine, making just about as much money as everybody expected.
But that's not really the point. The biggest takeaway?
Netflix's comedy-drama series "Orange Is The New Black" was the most watched show on Neflix So many people watched world-wide, the orange jumpsuits in the series have apparently become chic enough to irritate the sheriff in Saginaw County, Michigan.
"You see people wearing all-orange jumpsuits at the mall," he said.
The local sheriff has become so fed up that he's started ordering the old-style black and white striped uniforms for his inmates.
Monday, July 21, 2014 5:29pm
Tensions between Russia and the West over the downing of a Malaysian Airlines plane may have receded slightly Monday. But President Vladimir Putin is still facing a fresh wave of economic sanctions. Tuesday, European Foreign Ministers meet to consider tough new action to pressure the Russians into helping end the fighting in eastern Ukraine. These would follow last week’s additional U.S. measures.
The Europeans have bickered for months over stepping up sanctions against the Kremlin. Countries like Britain want to hit the Russians hard, but the Germans and Italians – who are heavily dependent on Russian energy – are afraid of antagonizing President Putin. The French are in the process of supplying two warships to Moscow and don't want to rock the boat.
However, Britain’s Foreign Secretary, Phillip Hammond, says the downing of flight MH17 changes everything, uniting the Europeans.
“What we need to do now is use the sense of shock, the sense of outrage to galvanize opinion behind a more robust stance. We have tools in our tool box,” says Hammond.
The UK wants to follow the U.S.'s example and slap Putin’s inner circle of oligarchs with visa bans and asset freezes, even though that could harm London’s financial sector. Nina Shick of the Open Europe think tank says Europeans could also use their leverage as Russia’s biggest trading partner.
“They could target European exports to Russia, which Russia is dependent on," she says. “We’re talking about things like machinery and medicine. These are things that Russia depends on, things that Russia won’t be able to source easily from other places."
Russia could retaliate by turning off the oil and natural gas that supplies 30 percent of Europe’s energy needs. But that would spark an all out economic conflict which – some analysts claim – Europe would win.
“Any economic war would be compounded five-fold on Russia compared to that of the EU. If it were to genuinely get serious, then the effects on Russia would be such that I think President Putin is actually a very worried man right now,” says James Nixey of the Chatham House Institute.
But as they prepare for their meeting on Tuesday, some European foreign ministers are also very worried. They feel they have to punish Putin but without driving up their own energy costs and tipping their fragile economies back into recession.
Monday, July 21, 2014 4:40pm
Tony Fadell is the founder and CEO of Nest, the company seeking to reinvent household techonolgy. The big idea... is an energy-saving, smart thermostat.
Fadell, a veteran of Apple., founded Nest Labs in 2010, which was acquired by Google earlier this year for $3.2 billion.
There are plenty of ideas floating around in Fadell's head, but here are four that came up in his interview with Kai Ryssdal:
Idea: We give too much power to one little switch.
There are about 250,000,000 U.S. thermostats operating in residential and light commercial buildings. The industry standard, Honeywell thermostat, has been around since 1953.
"When we look at the data," Fadell said, "less than 10 percent of those were ever programmed to save any energy."
Fadell said he was taken aback by how much power we give to the little on-and-off switches on the thermostats common in most homes: "[They're] controlling what amounts to be 50-to-60 percent of your total energy consumption for a year.. . That's really where the genesis of this whole idea started."
Idea: Making products people love matters.
"If you want to change people's behaviors or the way they think about something, you have to change the exterior," he says. "If you look at...thermostats on the wall today, they're ignored. People don't want to program them, people don't really use them."
Fadell said Nest wanted to make sure the thermostats they were creating were eye-catching and engaging.
Their plan? Get customers "intrigued — that's how you grab them — through something that looks great, and then, ultimately, works great."
Idea: Nest isn't a quick-hit, one-product company.
Fadell feels like it will take for him ten years to consider Nest (Nest Labs) profitable. And they have plenty of things to work on: Nest not only has the thermostat, but smoke and carbon monoxide detectors. The company also they just closed their acquisition of Dropcam.
"We could be profitable if we wanted to stop, but we have very, very big ambitions. This is a ten year kind of investment that we're making."
Idea: The disruption-innovation era isn't over yet.
In response to the idea that innovation and disruption are overrated, Fadell said that's simply not true.
Fadell said one innovation or disruption has the ability to unseat a market leader overnight - think Sony, Nokia and Blackberry.
"Look where Sony used to be just 15 years ago," he said. "These kinds of disrutptive techologies allow us to create all kinds of new businesses and new services. Look at Uber."
He said these kinds of disruptions are innovations that are packaged well enough for consumers to understand and embrace.
"I think we're only going to see more of these types of changes coming, not less and less."
Monday, July 21, 2014 4:40pm
About a year ago, Cora Blinsman’s mom passed away. Needless to say, it was a really hard on her. She started taking stock of her own life. Blinsman had been a full-time, stay-at-home mom for 20 years, and she was feeling burnt out. She needed space.
So she got a lot of it.
Blinsman applied to be a home manager with Showhomes, a nationwide home staging company. Basically, she pays a monthly fee to live in a really nice house for sale in one of the nicest upscale communities in Chapel Hill, N.C. Her latest is currently going for $430,000. It's got four bedrooms, two baths. The kitchen has two cooking surfaces; gas and electric. The backyard has three descending layers of gardens.
The idea behind Showhomes is that when someone lives in a home, it just feels warmer. More attractive to buyers.
"You’ve got your slippers by the bed," Blinsman said. "I mean, I kept it very neat, but you could tell somebody lived there."
Fred Pierson is the franchise manager for Showhomes in the Chapel Hill area. Pierson says the home manager method is the company’s most effective service. Seventy percent of the homes with managers living in them get an offer.
"Buyers are smart. They can tell when they’re walking into a staged home," said Pierson.
These are not always easy homes to sell — they’re often worth more than $1 million. The home Blinsman is in had been on the market a year before she moved in two months ago. Now, she pays $1,100 a month for a home that would normally have mortgage payments two or three times that amount. So, it’s a good deal. But there are drawbacks.
"If home managers are doing this just for the savings, it will not work," said Pierson. "It has to be a lifestyle they are willing to compromise."
For example, Blinsman only lived in her first home for five weeks before it sold. Some managers can move up to five times a year. And there are rules.
"They’re very basic," said Pierson. "You make your bed every day. Towels are not hung up over the shower, they’re placed in the dryer... You know, pick your stuff up and make sure it looks nice... The stuff I was always telling my kids," said Blinsman.
Also, home managers can't keep anything too personal lying around. No religious insignia. No family photos. One of Pierson's homes had a mural of the Dallas Cowboys up on the wall. Showhomes needed to remove it because there's always the chance someone looking to buy a home might love the house, but hate the Cowboys.
Blinsman says the rules haven’t been so bad. On the contrary, she says, being in this kind of home at this kind of time has been really good for her. Living in a wealthy community has opened her eyes to an entirely different lifestyle.
"I can be a part of the community and I can fit in pretty well," she explained. "But if I had a little broken down car, I could never drive through this neighborhood. I’d be like, 'Oh my God, they’re gonna want to throw me out.'”
This is the real trick behind Showhomes. It’s not just about giving those looking for a home a look into someone else’s life – it’s about doing the same for the home manager. Giving them a chance to be someone else, if only for a little while.
Clarification: An earlier version of this story used the phrase "buyers" to describe situations home managers find themselves as part of their arrangement with Showhomes, as opposed to those looking to buy a home that is on the market. The text has been clarified throughout the story.
December 19, 2013