Money Talking

Fours years after the collapse of the investment bank Lehman Brothers, the stock market is roaring back despite the sputtering economy. The Dow Jones Industrial Average has reached levels not seen since December 2007, and trading in S&P 500 companies has risen 14 percent this year. The financial crisis that followed the collapse of Lehman left millions without jobs, smashed nest eggs and sent stocks into a nosedive. Yet, on Wall Street recently, it's almost as if the crash never happened. This week on WNYC's Money Talking, contributors Joe Nocera of The New York Times and Rana Foroohar of Time weigh in on whether the stock market is entering another bubble and what could happen if that bubble bursts. Plus, one year after the first Occupy Wall Street protest in lower Manhattan, organizers say the movement has made the growing gap between the rich and poor an important talking point for politicians on both sides of the aisle. "Occupy Wall Street in just one year has really thrust the issue of income inequality into the mainstream and into the political dialogue," said organizer Justin Wedes. Nocera and Foroohar discuss how much influence Occupy Wall Street has had on the economy and politics.

Conventional visions of women were at the heart of the Republican and Democratic national conventions, especially in the speeches given by Ann Romney and Michelle Obama. The first lady and the Republican candidate's wife dazzled delegates and pundits alike when they used the lens of the family to make the case that their husbands should be president. Both women were clearly speaking from the heart, but the experiences of each have been very different.   While Mitt Romney built a career in business and then politics, Ann stayed at home to raise their five sons. He was the breadwinner and she was the caretaker. But family life was not as cut and dried in the Obama household. When Barack and Michelle first met, she was the high-powered lawyer and he was the community organizer and summer associate. This week on WNYC's Money Talking, contributors Rana Foroohar and Joanne Lipman look at where women stand in the workplace in 2012 as moms-in-chief take center stage at the conventions.

As Republicans gathered for their national convention in Tampa this week, President Barack Obama stole some of their thunder by announcing that automakers will have to nearly double the fuel efficiency of cars and trucks by 2025. The new standards mean vehicles will have to get 54.5 miles per gallon, a steep increase from the 29 miles per gallon now required and even the goal of 35 miles per gallon for 2019. "The car or light truck you'll be driving in 2025 will not be your grandfather's Oldsmobile," wrote U.S. Secretary of Transportation Ray LaHood on his blog "Fast Lane." The Obama administration said the regulations will reduce U.S. dependence on foreign oil, cut down on pollution, and save drivers thousands at the pump. The White House called them "monumental" and "historic." But the Romney campaign was quick to label the move “extreme,” saying it limits consumer choice and relies on unproven technologies. This week on WNYC's Money Talking, two veteran Detroit watchers examine what the fuel efficiency announcement means for the auto industry and whether we'll really see vehicles getting 55 miles per gallon by 2025. Paul Ingrassia is deputy editor-in-chief of Reuters News and author of the book Engines of Change, which tells the story of how 15 car models shaped American business and culture. Micheline Maynard has written about the auto industry for a number of publications and wrote the book The End of Detroit: How the Big Three Lost Their Grip on the American Car Market. They weigh in on how President Obama is making his mark on how we drive, what we pay at the pump, and how much oil we need.

Summer’s coming to an end and that means it’s back to the classroom for millions of students around the country. It's also back to school for the businesses trying to make a profit from teaching the nation’s children.   Whether they're selling digital textbooks and educational services or running for-profit schools, established technology, media and publishing companies, as well as a fleet of start-ups, are seeing dollar signs and investment opportunities in the classroom. Rupert Murdoch's News Corp is pushing into the digital textbook market with its education division, Amplify. Barnes & Noble, Apple and Amazon are all offering eTextbooks. And here in New York City, education entrepreneur Chris Whittle is opening a private for-profit school in Manhattan called Avenues for 700 to 800 students. Tuition is $39,750. So is all this money being funneled toward the education sector actually helping students? This week on Money Talking, WNYC's contributing editor for Education Beth Fertig and Rana Foroohar of Time weigh in on the private sector's growing influence in the classrooom and what it means for the future of American education.

Wall Street threw its support behind Barack Obama in 2008, but this election cycle the tables have turned. Now, it's funneling most of its donations to Mitt Romney and conservative super PACs. Employees in the securities and investment sector have donated $56.4 million to Republicans and $35.1 million to Democrats through individuals and PACs through May, according to the Center for Responsive Politics. It's a reversal from 2008, when they gave $96.6 million to Democrats and $72.2 to Republicans by the end of the election cycle. In addition, Wall Street's donations to Super PACs have gone almost exclusively to conservative groups supporting Romney and the Republican party. According to CRP, the Street has given $43.7 million to Super PACs through June, and 89 percent of that money went to conservative groups. In collaboration with the Center for Responsive Politics, WNYC has identified the top donors to the Obama and Romney election efforts from New York City. Read more about it on our politics website It's A Free Country. Or check out the map below. Goldman Sachs, Morgan Stanley, Bank of America and other financial institutions have flipped in four years, giving more to Romney and conservative super PACS than to President Obama and liberal groups. This week on WNYC's Money Talking, Joe Nocera of The New York Times and Rana Foroohar of Time weigh in on why Wall Street has shifted its support away from President Obama and whether it's a reflection of the president doing something wrong or Mitt Romney doing something right.  

Investors have been flocking to money market funds for decades, and today their total value stands at $2.5 trillion. Businesses, non-profits, government and individuals seem to think they're a sound investment, but how safe are they? The funds aren't FDIC insured like certificates of deposit (CDs), bank accounts, and the high-yield savings accounts known as money market accounts. If there ever is a “run on the fund,” think George Bailey in "It’s a Wonderful Life."    With so much money at stake, Mary Schapiro, chairman of the Securities and Exchange Commission, is proposing new rules to protect investors. But the industry is pushing back, saying her plans could kill the funds all together. The SEC's five commissioners will vote on August 29. This week on WNYC's Money Talking, Rana Foroohar of Time and Joe Nocera of The New York Times assess the vulnerability of money market funds and weigh in on whether the proposed SEC rules are necessary. Then, as consumers get more comfortable paying with their smartphones, what'll it take for a tech company like Google, Amazon or the start-up Square to win the battle for your mobile wallet?

This week a technical glitch in electronic trading sent the stocks of nearly 150 companies, like Bank of America and GE, on a wild ride.   It was the latest in a string of stock market snafus, including NASDAQ's botched Facebook IPO in May and the "flash crash" of 2010 when the Dow Jones Industrial Average plunged 600 points only to recover minutes later. For some, the unwanted hubbub has shaken their faith in the soundness of the market. Bill Gross, co-founder of PIMCO, the world’s largest bond fund, called the steady 6.6 percent average return of the past 100 years "an historical freak" and "a mutation," in his August investment outlook.  In his view, the era of buying and holding stocks is over, and investors will fail to see the returns they're used to as the global economy slows. So, is it time to get out of the stock market? And if not stocks, then what? Rana Foroohar of Time and Joe Nocera of The New York Times weigh in on the state of investor confidence in a market that seems increasingly prone to screw-ups. "Eat Mor Chikin"? Plus, fast food chain Chick-fil-A is facing criticism and boycotts over statements by its president and COO Dan Cathy that show the company does not support same-sex marriage.  "We are very much supportive of the family: the biblical definition of the family unit," Cathy told the Baptist Press. "We are a family-owned business, a family-led business, and we are married to our first wives." While the comments alienated many gay marriage supporters, Chick-fil-A's "record-setting" sales Wednesday suggest the media attention has galvanized the support of gay marriage opponents (or maybe just chicken-lovers) across the country. Money Talking takes a look at what happens when the business arena becomes a battleground in a cultural war.

The American economy is slowing down. GDP grew at a 1.5 percent rate in the second quarter, down from 1.9 percent in the first quarter, and anticipation is growing over what the Federal Reserve's policy-making committee will decide when it meets next week. Fed Chairman Ben Bernanke recently told Congress that a third round of quantitative easing, or QE3, is on the table because it could stimulate the economy and bring down long-term interest rates. But the results of such a program remain to be seen, and economists can't seem to agree on what, if anything, the Federal Reserve can do to curb the unemployment rate and get the economy moving again. The Fed has pushed down its main interest rate to just above zero. It's been there since December 2008, but the recovery has done little more than sputter along. So what other tools does the Fed Chairman have at his disposal? And, could they succeed in the current economic climate? Rana Foroohar of Time and Joe Nocera of the New York Times weigh in on how Fed policy affects the daily economic life of millions of Americans.  Plus, as the United States continues to struggle with its worst drought in 50 years, how is the adverse weather affecting people and prices around the world?

Former tech darling, Yahoo, has been struggling in a world dominated by Apple, Amazon, Google and Facebook. Even with an estimated 700 million users around the world, it’s had difficulty turning that reach into profits.  This week, the company reported that revenues were down 1 percent for the quarter that finished June 30, and profits fell to $226 million from $237 million a year earlier. But now it thinks it can change all that.   Yahoo, like many other struggling companies, has hired a celebrity in the business tech world of Silicon Valley:  Marissa Mayer, a successful and prominent executive at Google. Can she turn the company around?  Do “star” CEOs work? Rana Foroohar of Time and Joe Nocera of the New York Times weigh on the search for the corporate savior. And the Olympics start next week, but for cities hosting the games, does it make economic sense?

July 21 marks the two-year anniversary of the Dodd-Frank financial reform law, but the vast majority of the rules have yet to be finalized. Those two years have seen no shortage of big bank scandals, many of them recent. Barclays admitted to manipulating the LIBOR interest rate. JPMorgan suffered a multi-billion trading loss. Commodities brokerage firm MF Global collapsed. Then this week, another brokerage firm, PFGBest, filed for bankruptcy, and $215 million in customer money appears to be missing. Rana Foroohar of Time and Joe Nocera of the New York Times weigh in on whether Dodd-Frank would have prevented these snafus if it had already been in place and discuss how effective the law will be once all the rules are written. Then, in this age of 24/7 email and information overload, how responsible should companies be for making sure their employees unplug and get some sleep? Should companies be responsible for their workers' health? Plus, a look at what will make news in the weeks ahead.

Heads are rolling at the British bank Barclays after it admitted to rigging a key interest rate known as the LIBOR — short for "London Interbank Offered Rate." It’s an interest rate banks charge when they borrow from one another, and it matters because by some reports, about $800 trillion in loans, securities and other contracts are tied to it. Many adjustable rate mortgages, including some in the United States, are indexed to LIBOR. So if the rate goes up, so could your monthly payments. Elected officials and regulators want to know if other banks are involved? And pundits are asking why aren't Americans more outraged? Megan McArdle of Newsweek and Joe Nocera of the New York Times weigh in on how serious the LIBOR scandal is and what effect it's having on the economy. Meanwhile, there are just five unemployment reports until the presidential election in November. Economists (and journalists) pounce on the economic indicator when it's released each month, but is it really the best measure of how the economy is faring? Plus, a look at what will make news in the weeks ahead.

The long wait is over.  The Supreme has ruled.  The health care law stands (mostly). As Supreme Court watchers analyze the ruling for the legal precedents it sets or breaks, and political pundits debate whether the decision fires up the Republican base and gets them to the voting booth in November or strengthens the odds of President Barack Obama's re-election, what about the reason for the health care law in the first place?  Will it rein in health care costs that are rising at twice the rate of inflation? Will the nearly 50 million American without health care now sign up or simply pay a penalty perhaps as low as $695? Rana Foroohar with Time and Joe Nocera with the New York Times weigh on what the decision will mean for our out-of-pocketbook expenses. Meanwhile, in corporate America, Rupert Murdoch announces News Corp will split in two and Google’s CEO skips a three-day developer conference.  Are we too invested in celebrity CEOs? And a look at what will make news in the weeks ahead. 

Next week, the Supreme Court will decide the fate of President Barack Obama’s signature piece of legislation, the Affordable Care Act, which attempts to reorganize one fifth of the U.S. economy. The court’s decision could have come earlier, and it's become a bit of a nail-biter. Will the justices decide the law is constitutional, will it only allow certain parts to stand or will it strike down the ACA completely? Rana Foroohar with Time and Joe Nocera with The New York Times discuss what the Supreme Court's upcoming decision and what other recent court decisions mean for American business. Also, when a CEO throws a subordinate under the bus, what does it say about his personality and character? Does a decisive management style require business leaders to be unsympathetic and cold? Finally, Rana and Joe run down what they’re watching to make news in the weeks ahead.

Remember the headlines just a few months ago? People predicted gas would reach $5 a gallon  This week, the price is $3.57, according to the Energy Information Administration. It’s been falling every week since April. Rana Foroohar with Time and Joe Nocera with The New York Times discuss why gas prices are falling and what it means for the upcoming presidential election.  Also, when it comes to making predictions, be it gas prices or the global economy, no MBA or mathematician or JPMorgan Chase trader appears to hold the secret.  Why can’t we do a better job of measuring risk and making the right call? Finally, Rana and Joe run down what they’re watching to make news in the weeks ahead.

For more than two years, the European economy has see-sawed between potential collapse and stability. Look at just this past week. On the one hand, Spain saw strong demand for bonds it offered for sale, auctioning off $2.6 billion. And while the interest rate was higher (6.04%) than the previous sale (5.74%), it didn’t go as high as some anticipated.  At the same time, however, there are increasing worries that Spain’s banking sector may need a 100 billion euro bailout ($126 billion) or face potential collapse, dragging down the rest of Europe. If worrying about Europe feels like the boy who cried wolf, remember, the wolf did show up eventually. Is Europe’s day of reckoning upon us? On the other side of the globe, one disaster you can count on is Hollywood's annual summer mega-blockbuster disaster films. But is this the best economic model in an age of where people can watch videos on mobile phones and computer screens? And Rana Foroohar with Time and Joe Nocera with The New York Times run down what they’re think will make news in the weeks ahead, including the much anticipated testimony of JPMorgan Chase CEO Jamie Dimon before Congress about how his bank lost at least $2 billion.