Current Events in May 2014

Trying to pin down Google privacy policies is like discussing the weather: whatever you say about it today will probably be obsolete by next week.

Just a couple weeks ago, on April 15, we discussed how Google, in response to an attempted class-action suit alleging privacy violations in California, changed its Terms of Service for Gmail users to say outright that Google will scan the contents of your emails.

As of May 1, Google's online terms of service page is still dated April 14 and still says, in part, that:

Our automated systems analyze your content (including emails) to provide you personally relevant product features, such as customized search results, tailored advertising, and spam and malware detection. This analysis occurs as the content is sent, received, and when it is stored.

However, despite these terms, Google has announced intentions to stop scanning the contents of certain emails—specifically, those attached to students' Apps for Education accounts (which have been made available to schools for seven years), and also, those attached to various government or business accounts.

Privacy implications

For all the privacy implications involved in Google's scanning the contents of everyday Gmail accounts (which, according to its terms of service, it still does), the privacy violations inherent in scanning student or workplace accounts are arguably worse. Consider the opening paragraph of Google's April 30 announcement on the official Google Enterprise blog: “Protecting students with Google Apps for Education”:

Today more than 30 million students, teachers and administrators globally rely on Google Apps for Education. Earning and keeping their trust drives our business forward. We know that trust is earned through protecting their privacy and providing the best security measures.

Nitpick: actually, driving that particular business forward requires only the trust (or at least cooperation) of school administrators, and possibly the teachers. Students, by contrast, can be required to use Google at school whether they trust Google or not, which is one of the reasons why scanning their Gmail activities is more fraught with privacy violations than usual.

A similar problem involves workplace accounts, whether government agencies or the private sector: while no adult is legally mandated to hold down a particular job (in the same sense that minors are legally mandated to attend school or otherwise acquire an education), it's still disquieting to think that, for example, letting Google analyze your workplace communications should be a prerequisite for government employees. However, Google has said it will stop scanning their emails, too.

InBloom withers

Google is not the only company to recently step back from data-mining captive-audience public school students. Last week, data-harvesting company inBloom announced its intention to close up shop altogether, after its CEO Iwan Streichenberger posted a head-smackingly self-serving letter blaming his business failure on overprotective parents who don't want third-party data harvesters vacuuming up all available data about their children and themselves:

Over the last year, the incredibly talented team at inBloom has developed and launched a technical solution that addresses the complex challenges that teachers, educators and parents face when trying to best utilize the student data available to them. That solution can provide a high impact and cost-effective service to every school district across the country, enabling teachers to more easily tailor education to students' individual learning needs. It is a shame that the progress of this important innovation has been stalled because of generalized public concerns about data misuse, even though inBloom has world-class security and privacy protections that have raised the bar for school districts and the industry as a whole.

What were these world-class high-impact utilize-the-data corporate buzzspeak services inBloom offered?

Sopho's Naked Security blog, writing about inBloom's shutdown on April 24, noted:

Since inBloom's rollout in 2013, privacy and security experts and parents have been aghast at schools sucking up everything from students' tax ID numbers to intimate family details (including options to identify family members as "foster parent" or "father’s significant other") with inBloom.

So, between Google's recently announced intention to stop data-mining Apps for Education accounts, and inBloom's intended closing, American students this week theoretically enjoy more privacy protections at school than a month or so before. (Even so: you should probably tape over the webcam on any school-issued laptops your kids have, so school administrators can't spy on them at home.)

Good news for Internet Explorer users, especially those who continue to run their computers on Windows XP even though Microsoft officially stopped supporting the 12-year-old platform last month: Microsoft has developed and released an emergency security patch to fix the recently discovered zero-day exploit which left users of all versions of Explorer from IE6 through IE11 at risk of letting hackers gain control of their computers.

No surprise there; what is surprising is that Microsoft also released a fix for Windows XP, despite having officially stopped supporting it.

Microsoft announced on its security blog that most customers will have the security patch added automatically in their next update. However:

For those manually updating, we strongly encourage you to apply this update as quickly as possible following the directions in the released security bulletin.

We have made the decision to issue a security update for Windows XP users. Windows XP is no longer supported by Microsoft, and we continue to encourage customers to migrate to a modern operating system, such as Windows 7 or 8.1.

On the surface, the latest housing numbers appear benign. Home prices were steady from January to February, according to the S&P;/Case-Shiller Home Price Indices.

The leading measure of U.S. home prices shows both the 10-City and 20-City Composites were relatively unchanged month-over-month, with 13 of the 20 cities declining slightly in February.

Beneath the headlines, however, there are some warning signs. The increase in price is based on the sale of fewer homes.

There are also fewer foreclosures and other distressed properties on the market. Sales of those homes, usually at steep discounts, drag down the average sale price.

In light of that, the S&P; Case-Shiller numbers have to be at least somewhat disappointing. David Blitzer, Chairman of the Index Committee at S&P; Dow Jones Indices. doesn't disagree.

Cooling off

“The annual rates cooled the most we’ve seen in some time,” he said.

Other trends may be working against housing. Household formation has declined slightly, meaning fewer people are in the market to buy homes, or even rent apartments for that matter.

That's apparent in the latest mortgage numbers. The Mortgage Bankers Association index of mortgage application activity fell 5.9% last week, following a 3.3% decline the week before.

Mortgage interest rates, meanwhile, have started to fall again and remain near historic lows. So why aren't more people buying homes?

Answers to that question might be found outside the numbers.

Fear of rejection

LoanDepot, a mortgage lender, believes fear of not qualifying for a mortgage has stopped nearly half of today's potential buyers from making an offer. It commissioned a survey of consumers and found that while the demand for homes is still here, relatively few prospective buyers have actually taken any steps to see if they'll qualify for a home loan.

It says its survey found that nearly one in three Americans expressed interest in buying a home in the next two years. However, another survey questioned people who already owned a home and found a big case of home-buyer's remorse.

Buyer's remorse

A Harris Poll commissioned by real estate broker Redfin found 1 in 4 American homeowners who bought the home they’re currently in said that they would not buy their home again if they had to do it all over.

Homeowners in the Midwest had the greatest amount of buyer's remorse, followed closely by those in the Northeast. The older the homeowner the less likely they were to second-guess their purchase.

While the survey didn't delve into the reasons for the remorse, it's easy to speculate that owning a home that is worth less than the mortgage – the fate of many who bought in 2005 and 2006 – could be an explanation.

A review of complaints to ConsumerAffairs shows many homeowners are still struggling, despite the fact that the foreclosure is supposed to be behind us. Some also suggest the buying process remains more difficult than it should.

Peg, of Phoenix, Ariz., thought she was moving smoothly toward closing of her Wells Fargo mortgage.

“We were pre-approved, our loan originator did a good job of putting our loan package together,” Peg wrote in a ConsumerAffairs post. “Within 2 days of sending our paperwork to her processor, Wells Fargo laid off half their processors, including the one we were talking to. It was next to impossible to find out what was going on with our loan package.”

The last bit of disappointing data comes from the Commerce Department, which recently reported that starts on new residential construction rose 2.8% in March, which on the surface seems acceptable. However it's 5.9% below March 2013's activity.

Hoping to stake out the pole position in the Convergence Derby, AT&T has reportedly approached DirecTV to talk about an acquisition. Earlier this week, the telecom and cable giant announced it was butting into the airborne broadband business.

If AT&T manages to acquire DirecTV, it will be roughly the same size as Comcast will be if it completes its merger with Time Warner Cable.

The rumored deal comes as cable, telecom and satellite companies face several grim realities: the satellite TV market is beginning to shrink; the cable TV market has just about maxed out its growth; and, most significantly, new players like Netflix and Amazon are becoming major content providers and are using streaming video to get around the cable-satellite stranglehold.

What all this urge to merge means for the consumer is always open to question. The stock answer is that having fewer, bigger companies leads to less competition and higher prices.

But an opinion piece in today's Bloomberg News takes the opposite tack.

"What a customer can ultimately get out of these mergers is seamless connectivity. With a single contract and a single set of credentials entered into a device such as a laptop, smartphone or tablet, you will eventually stop paying attention to how you are connected and what you're connected to," Bloomberg contributor Leonid Bershidsky writes.

Could be. It's a bit early in the game to worry excessively, since any deal is likely at least a year away from consummation and would no doubt face energetic regulatory scrutiny and organized opposition from consumer groups.

You don't need any help to wear your heart on your sleeve but if you want to wear your minicam or your heart monitor there, you may need a little help.

This is where Amazon comes in. It's launching a new section on its website dedicated to wearable technology.

Besides fitness trackers, wearable cameras and Android-powered smartwatches, there's an Editor's Corner, which we're told will feature the latest news about wearable devices and pass on tips for finding the gadget that's just right for you or a Significant Other.

“Wearable technology is an exciting category with rapid innovation and our customers are increasingly coming to Amazon to shop and learn about these devices,” said John Nemeth, Director of Wireless and Mobile Electronics at Amazon.

“We’re thrilled to bring our customers a store with the largest selection and great prices that helps eliminate the guesswork when deciding which wearable devices best fit their needs — whether that is tracking activity, staying connected through smart watches or capturing their next adventure with wearable cameras,” Nemeth said.

It had to happen eventually. What with sleeping, eating, working, commuting and just generally staying alive, folks can't squeeze in any more TV viewing time.

This is the discovery of Nielsen, the ratings service that has for decades measured audiences for broadcast television. Now, with video streaming out of laptops, phones, tablets and every other nook and cranny, Nielsen says we've essentially maxed out our viewing time.

In a new report, Nielsen says the number of channels viewed by the average household has stabilized at about 17.5 since 2008, even as the number of available channels has grown by 60 since then.

Nielsen, which will start measuring Internet and mobile Web viewing later this year, admits it is still trying to figure out how to define the concept of "channels" as new video sources like Netflix, Amazon and YouTube turn the distribution system on its head.

Since the primary purpose of ratings is to set advertising rates, this is not just an academic exercise -- there are big bucks at stake.

So maybe that means that serious minds will take it seriously and do something to expand the time available for viewing. Could this be where Google's driverless car comes in? After all, with an average commute of 30 minutes or so each way, that could open up another hour of video- and commercial-viewing time.

The good news is that the White House is starting to acknowledge that there may indeed be disturbing privacy and even civil-liberty implications to having all Americans' data indiscriminately sucked up and analyzed without their consent.

The bad news is that so far, this acknowledgment only stems toward private businesses' collection of this data; NSA performing warrantless searches of Americans' calls and emails is still apparently just fine.

Politico reports that the White House recently ended a three-month “big data review” and reached a conclusion which should surprise nobody. According to the White House study:

“An important conclusion of this study is that big data technologies can cause societal harms beyond damages to privacy, such as discrimination against individuals and groups …. Just as neighborhoods can serve as a proxy for racial or ethnic identity, there are new worries that big data technologies could be used to ‘digitally redefine’ unwanted groups, either as customers, employees, tenants or recipients of credit. A significant finding of this report is that big data could enable new forms of discrimination and predatory practices.”

Arguably, such forms of predatory or discriminatory practices already take place, such as “price optimization” in the insurance industry – charging higher auto or home insurance premiums to certain (usually low-income) customers not because they represent a higher risk, but simply because they don't realize they're being overcharged.

The question of just who owns or controls your personal data anyway does indeed need to be asked. Consider: given the current law (or lack thereof) there is nothing, literally nothing, an ordinary American could have done to, for example, guarantee that their data would not be included on the database which Experian made available to a ring of Vietnamese identity thieves.

If you hold a job, pay taxes, enjoy legal-licensed-driver status or have passed any of the traditional American adult-financial milestones, your data is out of your hands. Have a nice day.

Shopping -- whether it's for material goods or experiences -- doesn't guarantee happiness, a new study from San Francisco State University finds.

Earlier studies have found that experiences create greater happiness than material goods, the SFSU study finds it's not necessarily so. 

"Everyone has been told if you spend your money on life experiences, it will make you happier, but we found that isn't always the case," said Ryan Howell, an associate professor of psychology at SF State and co-author of the study. "Extremely material buyers, who represent about a third of the overall population, are sort of stuck. They're not really happy with either purchase."

Researchers found that when material buyers purchase life experiences, they are no happier because the purchase is likely out of line with their personality and values. But if they spend on material items, they are not better off either, because others may criticize or look down upon their choices.

"I'm a baseball fan. If you tell me, 'Go spend money on a life experience,' and I buy tickets to a baseball game, that would be authentic to who I am, and it will probably make me happy," Howell said. "On the other hand, I'm not a big museum guy. If I bought tickets to an art museum, I would be spending money on a life experience that seems like it would be the right choice, but because it's not true to my personality, I'm not going to be any happier as a result."

Happiness boost

Howell and his colleagues surveyed shoppers to find out if there were any factors that limited the happiness boost from experiential purchases. The researchers found that those who tend to spend money on material items reported no happiness boost from experiential purchases because those purchases did not give them an increased sense of "identity expression" -- the belief that they bought something that reflected their personality.

"There are a lot of reasons someone might buy something," Howell said, "but if the reason is to maximize happiness, the best thing for that person to do is purchase a life experience that is in line with their personality." He invites people to learn more about how their spending habits are affecting their happiness and contribute to further research by visiting his website, BeyondThePurchase.org.

The study is detailed in an article to be published in the June edition of the Journal of Research in Personality.

Sometimes it's what you're not expecting that winds up causing the most damage. Take sinkholes, for example. We all know about tornadoes, hurricanes and fires but, really, who expects his house or car to fall into a sinkhole?

Sure, it's rare but it does happen. And it often brings with it an unpleasant surprise -- sinkhole damage may not be covered in your homeowners insurance.

There's only one sure way to find out, and that's to read your policy carefully. This is, of course, easier said than done since policies often appear to be written in the most obtuse language possible.

In Florida, the state with the dubious distinction of being the nation's sinkhole leader, the state requires insurers to cover  “catastrophic ground cover collapse,” but state regulators warn that not every catastrophic ground cover collapse is a sinkhole.

The logic may be a little hard to follow but, basically, if your home is damaged by a ground collapse but is not condemned as uninhabitable, the damage may not be covered by your policy. However, Florida requires all insurers to offer sinkhole coverage at an extra charge, so that may be worth looking into. 

Other states don't seem to have thought through the problem quite as extensively. In Baltimore, a street collapsed into a sinkhole yesterday, taking many cars with it. Several homes were evacuated and it's not yet known if they sustained severe damage.

As for the cars, city officials had little advice to offer and suggested the motorists contact their insurance companies.

Sinkholes occur worldwide but are most common in areas with a long history of erosion, or those with an abundance of caves and abandoned mines or tunnels. They also occur frequently in urban areas, where water mains and sewers may break and undermine the ground surface.

If your home falls into any of these categories, it may be wise to talk to your insurance agent and, if you're not satisfied with the answers, contact your state insurance commission for more answers. 

The economy continued to crank out jobs at a fairly brisk pace in April.

According to the ADP National Employment Report, another 220,000 private sector jobs were added from March to April.

The report, which is produced by payroll-processing firm ADP in collaboration with Moody’s Analytics, is derived from ADP’s actual payroll data,and measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

"The 220,000 U.S. private sector jobs added in April is well above the twelve-month average,” said Carlos Rodriguez, president and chief executive officer of ADP. “Job growth appears to be trending up and hopefully this will continue.”

Goods and services

Goods-producing employment rose by 24,000 jobs in April, down 4,000 from March. Most of the gains again came from the construction industry which added 19,000 jobs. Manufacturing continued to be sluggish adding just 1,000 jobs last month.

Service-providing employment rose by 197,000 jobs -- 16,000 more than in March. Professional/ business services led the way, adding 77,000 jobs. Trade/transportation/utilities employment grew by 34,000 positions, and financial activities added 8,000 jobs, marking the strongest pace of growth in the industry since June 2013.

Who's hiring

Payroll growth for businesses with 49 or fewer employees added 82,000 jobs -- 1,000 more than in March and almost reaching the twelve-month average of 84,000. Job growth accelerated over the month for medium-sized firms while dropping for large firms. Employment among medium-sized companies with 50-499 employees rose by 81,000 -- the most since December 2012, while large companies -- those with 500 or more employees -- added 57,000 jobs -- down 16,000 from the previous month.

"The job market is gaining strength,” said Mark Zandi, chief economist of Moody’s Analytics. “After a tough winter employers are expanding payrolls across nearly all industries and company sizes. The recent pickup in job growth at mid-sized companies may signal better business confidence. Job market prospects are steadily improving.”

The government is scheduled to release its April jobs report May 2.

U.S.-based firms announced plans to cut 40,298 jobs from their payrolls in April -- up 17% from 34,399 workers let go in March and 6.0% higher than the 38,121 job cuts recorded in April of last year.

So far this year, outplacement firm Challenger, Gray & Christmas has tracked 161,639 announced job cuts -- 12% fewer than we saw in the first four months of 2013.

“Despite the April increase, the pace of downsizing remains relatively low,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “We just saw the lowest first-quarter total in 19 years and the year-to-date monthly average of 40,410 is the lowest since 1997.”

Challenger points out, though, that the economy still has a lot of room for growth, adding, “It is unlikely that monthly layoffs will experience a precipitous decline. Even during the economic boom of the late 1990s, employers still averaged about 550,000 announced layoffs annually.”

Retail and financial services lead the way

One area that has continued to struggle in the wake of the recession is retail, which announced an industry-leading 6,993 job cuts in April. To date, retailers have announced 25,224 job cuts, just slightly below the 31,297 retail job cuts reported in the first four months of 2013.

“Among the retailers announcing cuts in April was Coldwater Creek, which never found its footing after the recession and was forced to declare bankruptcy and shutter 350 stores,” said Challenger. “Like other retailers, it struggled amid a changing retail landscape, where more and more competition is coming from the Internet.”

The financial sector announced 4,124 job cuts in April, bringing the 2014 total to 19,430. While that ranks second among all industries, the pace of downsizing in the banking industry is actually down 44% from 2013.

“We are seeing some stabilization in the banking industry. We may continue to see cutbacks in the mortgage departments, as banks shed the extra workers hired to handle the flood of foreclosures, but those areas are getting back to normal staffing levels,” said Challenger.

Aerospace/Defense (4,075 cuts), Health Care/Products (3,242 cuts) and Food (2,865 cuts) round out the list of the top 5 job-cutting sectors last month.

Jobless claims

More people than expected filed first-time applications for state jobless benefits last week.

Government figures show initial claims jumped by 14,000 in the week ending April 26 to seasonally adjusted total of 344,000 -- the highest reading since February. The consensus expectation from economists surveyed by Briefing.com was for a total of 330,000.

Claims remain volatile week-to-week, teasing the market with the possibility of breaking through the lower bound of 300,000 one week only to shoot higher in the following week's report, according to Sterne Agee Chief Economist Lindsey Piegza. “What is clear,” she adds, “is that there remains an unclear trend in claims. Greatly improved from two to three years ago, in the near-term, claims have broken little new ground.”

The 4-week moving average, which is considered a more accurate gauge of the labor market, was up 3,000 to 320,000.

The complete report is available on the Labor Department website.

General Motors is recalling 51 model year 2015 Chevrolet Silverado HD, and GMC Sierra HD vehicles manufactured February 11, 2014, through February 19, 2014, and equipped with diesel engines and dual fuel tanks.

The fuel pipe connections on both sides of the diesel fuel transfer pump in the affected vehicles may not be properly torqued which may result in a diesel fuel leak, possibly resulting in a vehicle fire.

GM will notify owners, and dealers will tighten the fuel pipe connections to the proper torque. The recall is expected to begin on May 19, 2014.

Owners may contact GM customer service at 1-800-222-1020 (Chevrolet), 1-800-462-8782 (GMC). GM's number for this recall is 14067.

General Motors is recalling 50,571 model year 2013 Cadillac SRX vehicles manufactured May 29, 2012, through June 26, 2013, and equipped with 3.6L engines.

In certain driving situations, there may be a three to four second lag in acceleration due to the transmission control module (TCM) programming, which could increase the risk of crash.

GM will notify owners, and dealers will reprogram the transmission control module, free of charge. The manufacturer has not yet provided a notification schedule.

Owners may contact Cadillac customer service at 1-800-458-8006. General Motors' number for this recall is 14132.

White-Rodgers of St. Louis, Mo., is recalling about 1.43 million home heating and cooling thermostats.

The alkaline batteries used in the thermostat can leak onto the circuit board posing a fire hazard.

The firm has received seven reports of burn damage to the thermostat, including two involving minor property damage. No injuries have been reported.

This recall involves four models of White-Rodgers digital thermostats. The thermostats are white with blue lighted screens and have one of the following names printed on the front of them:

• “COMFORTSENTRY,”
• “DICO,”
• “Emerson,”
• “Frigidaire,”
• “Maytag,”
• “Nutone,” “
• Partners Choice,”
• “Rheem,”
• “Ruud,”
• “Unico,”
• “Water Furnace,”
• “Westinghouse,” “White-Rodgers” or
• “Zonefirst.”

The thermostats have a battery door on the top left corner. There are three or four buttons to the right and also below the thermostat screen. Recalled thermostats do not show a battery icon on the left side of the blue lighted screen.

The thermostats, manufactured in China, were sold at heating ventilation and air conditioning (HVAC) equipment manufacturers and distributors, and at hardware retailers nationwide from January 2006, through December 2013, for about $30 to $70.

Consumers should check thermostats for battery icon on the left side of the blue lighted screen, if the battery icon is not shown, contact White-Rodgers to receive a free repair or a replacement thermostat.

Consumers may contact White-Rodgers toll-free at (888) 624-1901 from 7 a.m. to 6 p.m. CT Monday through Friday.